Swiss chemicals company Clariant has announced it will slash its workforce by ten per cent and reduce its product range as part of a new restructuring round.
Clariant, which began a four-year restructuring programme in 2004, expects to cut 2,200 jobs - most of them in Europe - and shrink the number of its products by a quarter.
The group said on Tuesday it would spend SFr500 million ($404.2 million) on the new initiatives, including closing one in ten of its sites, as it strives for new financial goals.
The number of jobs lost in Switzerland is not yet clear, but company spokesman Walter Vaterlaus said that the firm hoped natural attrition would help avoid layoffs.
Clariant decided to take these measures after spending six months analysing its situation.
"Our clear goal is reaching a top-quartile position among our peers in value creation," chief executive officer Jan Secher said in a statement from the group's headquarters near Basel. Secher took over the post in April.
The company has set itself a target of a ten per cent return on invested capital by 2009.
"This is a positive move for the share value as well," said Nina Baiker, an analyst at the Zurich Cantonal Bank. She added that the mix of restructuring, cost cutting measures and profit targets were reachable.
Baiker said that with this latest restructuring move, Clariant was moving ahead much faster than its local rival Ciba Specialty Chemicals.
Clariant shares have fallen more than five per cent this year at a time when most chemical stocks have for the most part been on the rise.
The company has struggled since it acquired British chemicals group BTP for SFr3.2 billion six years ago. Soaring commodity prices cut into the bottom line, and cutthroat competition from Asian rivals has stalled its recovery.
The company, which makes pigments for products from textiles to cars, posted a net loss for the third quarter of 2006 because of one-off charges, although sales and operating profit beat expectations thanks to strong demand.
Clariant had previously said that it wanted to lower costs by SFr250 million in 2006 and again by SFr90 million and SFr190 million next year. The four-year restructuring programme should save the company between SFr800 million and SFr900 million.
The main trades union, Unia, on Tuesday criticised the job cuts and accused the company of only thinking about profits.
swissinfo with agencies
Clariant currently employs over 22,000 people worldwide, down from 28,000 three years ago.
Costs, jobs and production sites - 130 today - are to be cut by 10% by the end of 2009.
The number of products will also be slashed by at least 25%.
In its textile dye business, the portfolio has already been cut from 3,000 to 500 products.
Basel-based Clariant is a global leader in the field of fine and specialty chemicals.
It produces dyes, pigments, functional chemicals, additives and masterbatches for the textile, paper, leather, plastics, synthetic fibres and paint industries.
Sales totalled more than SFr8 billion in 2005.
The company has a strong heritage going back to the 1850s, with roots in both Sandoz and Hoechst Specialty Chemicals.