C&EN: More cuts in the European chemical industry
In C&EN, this news (article by Alex Scott):
Economic turmoil led to sales and profit declines at several major European chemical industry firms in the fourth quarter or all of 2023. Two big challenges for the sector are soft demand for its products and high energy prices. A number of companies, including Germany’s Evonik Industries, see no near-term uplift in market conditions.
Evonik says in its earnings announcement that it will respond to the “continuously challenging” market conditions with a program to cut annual costs by about around 400 million euros ($435 million). As part of the initiative, the firm will eliminate 2,000 jobs, 1,500 of which are in Germany. Many of the jobs will be management positions.
The company recorded a net loss of $159 million in the fourth quarter and a 17% decrease in sales to $4.0 billion. Evonik recorded an even bigger loss for the whole of 2023. “The general conditions will not get any easier, which is why we will continue our fundamental revamp of the group,” CEO Christian Kullmann told journalists at a briefing. “What we are currently experiencing are not cyclical fluctuations but massive, consequential changes of our economic environment.”
...Evonik’s announcement of job cuts follows a similarly downbeat briefing by BASF, which disclosed plans to cut expenditures by about $1.1 billion at its headquarters site in Germany by the end of 2026 because of high costs and slow demand. BASF already has a cost reduction program in place that will affect 700 workers.
Grim news out of Europe just continues week after week. Here's hoping it ends soon.