Huntsman Textiles

In a move that will eliminate about 350 jobs, mostly in the U.S. and Europe, Huntsman Corp. is reorganizing the textile chemicals business it purchased in July from Ciba Specialty Chemicals for $250 million.

Huntsman will spend about $150 million over the next three years to consolidate the business in North America and Europe and expand it in Asia, particularly China. The company will shed some 650 jobs, about 450 in Europe, 150 in the U.S., and 50 in Asia. It will also add 300 jobs; two-thirds will be in Asia. Its goal is to boost the business' before-tax profit margins from about 10% of sales, which were $1.03 billion last year, to 14-16% of sales.

By early 2009, the company will have closed plants in Saint-Fons, France; Schweizerhalle, Switzerland; St. Gabriel, La.; and Charlotte, N.C. At the same time, it is opening a technical center in Qingdao, China, as well as two formulation and distribution centers in that country.

"We knew when we bought the business that one of the primary challenges facing the textile chemicals and dyes industry has been the ongoing migration of its customers from North America and Europe, principally to Asia," says Paul Hulme, president of Huntsman's materials and effects division.

Huntsman competitor DyStar has also been restructuring to respond to the shift of textile production to Asia. In 2004, the company launched a streamlining of its German plants, and in 2005, it started building a $55 million textile dyes plant in Nanjing, China.