Further cost-cutting measures at Clariant
Clariant is to introduce further cost-cutting measures as a result of the economic downturn. The company posted sales of CHF8.1 billion ($6.9 billion) for 2008 compared with CHF8.5 billion in 2007. This translates as 1% growth in local currency and a 5% decline in CHF.
In the first nine months, demand was fairly stable and the company coped with rising raw material costs and adverse currency movements by substantially increasing sales prices. However, in the fourth quarter, the company was significantly impacted by an unprecedented decline in global economic activity that led to a weaker demand from customer industries such as leather, textile, automotive and construction. Clariant countered this by reducing the number of temporary employees and cutting overtime as well as introducing extended plant shutdowns over Christmas.
As a result of the deterioration of the leather and textile markets and their uncertain evolution in 2009, Clariant revised the business plans for these two businesses, which led to an impairment of CHF180 million.
By the end of 2008, Clariant had cut roughly 1,650 of the 2,200 of the jobs that were agreed to be cut in 2006. Production sites were closed in Horsforth, Coventry, Selby and Naucalpan.
Clariant’s Textile, Leather & Paper Chemicals Division was significantly impacted by the deterioration of the leather and textile markets that commenced in early 2008 and continued with increasing momentum after the Olympic Games, when the demand decline reached the markets in Asia. Divisional sales decreased 6% in local currencies and 13% in CHF.
