manufacturer Clariant International Ltd. has announced a series of cost-cutting,
performance-strengthening initiatives, with the goal of creating value and achieving long-term
top-quartile performance. The initiatives, estimated to cost 500 million Swiss francs over the next
four years, will encompass the closure of 10 percent of sites across all businesses and a
corresponding reduction in the company’s global workforce — representing a loss of 2,200 jobs; as
well as a 25-percent reduction in the number of products it offers. Performance-strengthening
initiatives include increasing leadership skills and entrepreneurial behavior.
“Our clear goal is reaching a top-quartile position among our peers in value creation,” said
Jan Secher, CEO. The company looks to achieve a 25-percent increase in the return on invested
capital by the end of 2009.
In order to become more customer- and market-focused, Clariant will revamp its sales and
distribution operations. “Our product-driven businesses, which represent 40 percent of our
portfolio, need to be managed with an intense focus on efficiency, maintaining an extremely
cost-competitive structure, while our service-driven businesses need to combine cost leadership
with application technology and solutions know-how,” Secher said.
In addition, the company will further centralize certain group functions — such as site
services, sourcing and supply chain management — that support its four divisions: Textile, Leather
& Paper Chemicals; Pigments & Additives; Masterbatches; and Functional Chemicals.
Plans also call for expansion of capacity to supply product to the company’s growing markets
in Asia, especially in China and India. At the same time, Clariant will close sites, particularly
in Europe, in order to tighten its global site network.
In addition to the planned 25-percent reduction in product variety, the company reported it
already has reduced its offering of textile dye products from approximately 3,000 to some 500,
resulting in much improved operational efficiency.
“The approach is one of strategic simplicity and increasing versatility,” Secher said. “That
means being highly intelligent about how we both reduce and manage complexity. This is being done
so that it lowers our production, sales and delivery costs in a long-term, sustainable way,” he
added, noting that the company offers a mix of specialized and standard products.
The company’s recently established Clariant Academy will offer its employees opportunities
for professional development, pinpointing proficiency in performance management and creating
programs for sharing expertise across all businesses.
November 21, 2006