2013 Exhibitions
Against the backdrop of the upcoming elections and a slow economy, the US industry is consolidating as noted recently by two major chemical firms. Having posted lower third quarter results, both Dow Chemical and DuPont have announced restructuring programmes that will cut 2,400 and 1,500 jobs respectively.
Designed to accelerate cost reduction actions and advance the next stage of the company’s transformation in the midst of persistently slow macroeconomic growth, Dow says it will reduce its global workforce by 5%. The restructuring also includes the shutdown of approximately 20 manufacturing facilities. Once fully implemented, these actions are expected to result in approximately US$500 million of annual operating cost savings by the end of 2014.
In addition, Dow will further reduce capital spending and investments for targeted growth programs that are no longer a priority in this environment. These measures are expected to deliver an additional US$500 million cash impact. Taken together with the US$1.5 billion of measures Dow has already initiated, this will bring the company’s stated cumulative intervention goal to $2.5 billion.
Dow will shut down a HDPE facility in Tessenderlo, Belgium, a sodium borohydride plant in Delfzijl, the Netherlands, as well as a number of Performance Materials manufacturing facilities, including: an Automotive Systems Diesel Particulate Filters manufacturing facility in Midland, Michigan; Formulated Systems manufacturing facilities in Ribaforada, Spain, Birch Vale, UK and Solon, Ohio; and an Epoxy resins facility in Kina Ura, Japan.
Meanwhile, DuPont’s Performance Coatings business, now pending divestiture, has been reclassified and reported as discontinued operations. The firm’s third-quarter sales from continuing operations were 9% below last year, primarily reflecting volume declines in Electronics & Communications and Performance Chemicals, particularly in Asia Pacific.
The company’s restructuring plan is set to deliver pre-tax cost savings of US$300 million in 2013. It will eliminate about 1,500 positions globally in the next 12-18 months.
(PRA)
