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EUROPEAN BUSINESS
After foundering since its 2000 acquisition of BTP, Clariant has embarked upon a wide-reaching transformation to reestablish itself as a leading specialty chemicals company.
And in presenting Clariant's first-half results last week, CEO Roland Lösser, who took over the post in March, waved warning flags about several other units--life sciences and textile dyes, in particular--that are underperforming. After considering all other options, he said, the firm has decided that internal restructuring is the first priority for these units. In life sciences, which is largely the former BTP, Lösser announced that Clariant would close four agrochemical plants in the U.S. and Germany, resulting in the elimination of about 200 jobs. And the company added that "job losses throughout the whole of Clariant will be unavoidable" because of other cost-cutting actions. Lösser said he wants to focus Clariant on businesses where it can combine its strong customer service capabilities with its leading-edge surface and color technologies. He cited its plastics masterbatches, performance and process chemicals, textile chemicals, and coatings units as successful examples of such businesses. The businesses Clariant has decided to sell either are not central to the company's new focus, carry high investment requirements, or cannot achieve leading market positions, Lösser said. The aim of the divestment program--which Lösser expects to have wrapped up by the end of 2004--is to raise some $1.1 billion. Initial proceeds are expected within nine months, by which time net debt will have fallen to below $1.9 billion, from $2.7 billion now. The firm's first-half loss came on sales of $3.2 billion, down 7% (although up 2% in local currencies). The loss reflected an exceptional charge of $105 million relating to the previously announced closure of a bleach activator plant in the U.S. (C&EN, June 23, page 14). Excluding that, Clariant showed a profit of $69 million, compared with $108 million in first-half 2002. The results for the first half also reflected savings of nearly $45 million from cost-reduction measures launched at the beginning of the second quarter. "We are not satisfied with these results," Lösser said. "They underline our determination to refocus the company and significantly improve our performance over both the short and long term." Any gains will come solely from the company's own efforts, he added. "We expect little or no help for the rest of 2003 from a market environment that remains difficult." |
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