Huntsman Corp. is launching a cost-cutting plan likely to result in job cuts and closings of sites outside North America.
The company wants to cut fixed costs and overhead expenses by $200 million within 18 months.
In a Nov. 10 news release, Huntsman President and Chief Executive Officer Peter Huntsman described the move as ``an opportunity to reposition our business at the bottom of the cycle.''
``The severe economic slump the chemical industry has been experiencing for the last three years continues unabated,'' he said. ``The resulting squeeze on profitability necessitates that companies that wish to remain competitive ... must fundamentally change their way of doing business.''
Officials with Salt Lake City-based Huntsman - a major producer of polyurethane, polypropylene, expanded polystyrene and specialty chemical products - had no estimate as to how many jobs or sites will be affected. Huntsman generates more than half its annual sales from businesses outside North America. Those businesses also employ about 9,000 of the firm's 15,000 staffers.
The plan probably will include site consolidations and cutbacks in travel and office expenses, but will not include selling any businesses, according to spokesman Don Olsen.
``If we don't take this step, we'll be worse off for it,'' Olsen said.
The move comes two years after Huntsman cut 1,200 jobs, mostly in North America, as part of a plan to save more than $150 million.
``North America is more in fighting trim now,'' Olsen added. ``But we've made some acquisitions in Europe where we can start to share services like human resources and information technology across the entire enterprise.''
Huntsman - operating as HMP Equity Holdings Corp. - also reported its third-quarter earnings Nov. 10. In the first nine months of 2003, Huntsman's overall sales were up 15 percent to almost $6.9 billion, but its pretax profit dipped almost 30 percent to $427 million.
The company is privately held, but the Huntsman family last year sold a 49 percent stake to Maitlinpatterson Global Opportunities Partners of New York.
Huntsman said the firm intends to ``pay down debt ... and invest in projects that will ensure our stability and growth.'' According to the earnings report, Huntsman's total debt is about $5.8 billion.
Huntsman said last year that the firm's future was likely to include an initial public offering or merger with a publicly held company.