In order to reduce debt and lower costs, Clariant AG is undertaking a ``huge transformation program'' that will cut 4,000 jobs by the end of 2005.
Officials at the Swiss firm announced the plan Feb. 24. Most of the proposed cuts - 1,500 of the 4,000 - will come from manufacturing operations, according to spokesman Christoph Hafner. An additional 1,250 will come from infrastructure and services, with 800 coming from general overhead and 450 from the firm's supply chain.
``We found we were overstaffed in some areas,'' Hafner said Feb. 25 via phone from Muttenz, Switzerland. ``We won't be closing any sites, but we might be closing some smaller plants.''
Hafner offered no details as to how the cuts would be divided geographically or by business unit. Clariant operates five units, including Clariant Masterbatches, one of the world's largest makers of plastic concentrates.
The plan will be up for approval at an April 2 meeting of the company's governing board. A proposed share sale also is expected to raise 920 million Swiss francs ($733 million) to improve Clariant's financial picture.
Total sales at Muttenz-based Clariant in 2003 were down about 9 percent to SFr8.5 billion ($6.8 billion). The firm showed a profit of SFr161 million ($129 million), partly because of the sale of its cellulose ethers business. Clariant currently is negotiating to sell its electronic materials business.
Sales at Clariant's Masterbatches unit roughly were flat in 2003 at SFr1 billion ($838 million). The Holden, Mass.-based Masterbatches unit was the smallest of Clariant's five units in 2003, bringing in 12 percent of the firm's total sales.
Masterbatches' pretax profit dropped about 12 percent to SFr112 million ($90 million) in 2003.
In spite of these financial challenges, Clariant Masterbatches remained active in 2003, opening its third Chinese plant and opening a Color Works design studio in New York. The company also formed an online partnership with eDesigner Studio and forged a marketing alliance with Ingenia Polymers, a Houston-based concentrate maker.
New Splash Streak-brand, black-and-white concentrates, thermochromatic concentrates for trilayer bottles and a new color palette for PET-based concentrates also were commercialized by Clariant in 2003.
Clariant Masterbatches operates about 50 manufacturing plants worldwide. The unit has 14 plants in North America, including 10 in the United States.