DuPont and Dow launch restructuring programmes as sales fall
The chemical industry was hit by news of nearly 4000 planned job cuts, and multiple site closures, yesterday as two iconic firms, DuPont and Dow, announced dramatic restructuring plans alongside their financial results for the third quarter (Q3) of 2012.
DuPont said it would reduce its global workforce by 1500 (2%) over the next 12–18 months with the aim of saving $450 million (£280 million) in annual costs. The move will cost the company $152 million in 2012.
Sales from continuing operations fell 9% to $7.4 billion in Q3 as a result of weaker than expected demand in the markets for titanium dioxide and photovoltaic materials, said chief executive Ellen Kullman. But there was some better news as well, with sales for the agriculture business up 4% to $1.4 billion.
Most notably, sales of performance chemicals fell 19% to $1.7 billion as a result of weak demand for titanium dioxide and fluoropolymers. Reduced expenditure on infrastructure, as part of weak construction markets, in Europe and the Asia–Pacific region was to blame, the company said.
The new reality is that we are operating in a slow-growth and volatile world
Meanwhile, Dow said it would cut 2400 jobs, representing 5% of its global workforce, and close 20 manufacturing plants, in a bid to shave $500 million off its annual costs over the next two years.
Sales at Dow fell 10% – 7% when adjusted for recently sold business activity – to $13.6 billion in Q3, with economic instability in Europe leading to lower prices cited as a key factor. Sales dropped across all businesses except the agriculture business, which experienced an 8% rise in sales to $1.3 billion.
Worst hit was the feedstocks and energy business, which reported a 13% drop in sales to $2.5 billion as a result of a weak polyvinyl chloride market, despite strong demand for caustic soda (sodium hydroxide).
Dow chief executive Andrew Liveris said: ‘We previously outlined $2.5 billion of levers we could pull to mitigate a slowing world economy. These actions are not only in motion, but are beginning to take hold, as we demonstrated this quarter… The new reality is that we are operating in a slow-growth and volatile world.’