Issue Date: November 12, 2007
Good Times Roll In Europe
DISCUSSING HIS COMPANY'S third-quarter results at its annual fall press conference, Bayer Chairman Werner Wenning could have been speaking for the European industry. "We again achieved a gratifying performance in the third quarter," Wenning said. "This business trend has strengthened our confidence that this will be another very successful year. In fact, we are targeting another record for full-year 2007."
At ICI, which will soon be merged into Akzo Nobel, "the third quarter was particularly strong," according to Chief Executive John McAdam. "The expected outturn for the year as a whole has improved. Results for the fourth quarter and the year are forecast to be ahead of our previous expectations."
A strengthened business portfolio boosted Rhodia's sales by 7% in the quarter. In fact, Rhodia said, the third-quarter results confirm its 2007 outlook of strong growth in operating profits.
Many companies said they were able to surmount high raw material and energy costs by passing them on to customers in the form of price increases. Foreign-currency effects were more problematic. Rhodia, for one, noted that its sales increase came from a 9% volume growth and a 3% boost from price increases; the growth in sales, though, was offset by a negative impact of more than 4% from foreign exchange rates.
Several companies accompanied their third-quarter results announcements with cost-cutting news.
Bayer MaterialScience announced the goal of saving roughly $440 million per year by the end of 2009 by cutting about 1,500 jobs from its polymers operations in the U.S., the Netherlands, and Germany. About half those jobs will be from production and half from administration. According to Patrick W. Thomas, chairman of Bayer MaterialScience, the streamlining reflects the reduced needs of a unit that during the past few years has divested businesses with nearly $3 billion in sales.
At Clariant, decentralization measures will eliminate about 100 jobs at its headquarters near Basel, Switzerland. The company said in a statement it is shifting the accountability for its businesses "closer to customers and markets."
Clariant booked about $100 million in restructuring costs in the third quarter to cover closing a specialty chemicals site in Selby, England. The company also announced that it will close a pigments and additives facility in Rhode Island and a masterbatches plant in Mexico, taking the charges in the fourth quarter. For the full year, it added, restructuring costs will total roughly $215 million.
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