Huntsman cuts to bypass Utah

Utah operations apparently will be spared from some cost-cutting planned by the Huntsman Cos.

The combined companies on Monday said they will undertake fixed-cost reductions totaling at least $200 million over the next 18 months. Each of the six business segments — polyurethanes, advanced materials, performance products, pigments, base chemicals and polymers — will be affected.

Changes include site consolidations and staff reductions, but spokesman Don Olsen on Tuesday said Utah will not face cuts.

"When we did this two years ago, cutting in excess of $150 million in fixed costs, a few of our Utah employees took an early retirement package or a full retirement," he said. "We have about 80 employees there now, and we don't anticipate they will be impacted at all by this. Last time around, it was primarily based in North America. This initiative will primarily hit our European businesses."

HMP Equity Holdings Corp. and operating subsidiaries Huntsman LLC, Huntsman International Holdings LLC and Huntsman Advanced Materials LLC have about 15,000 workers.

The combined Huntsman companies, founded by Utahn Jon M. Huntsman and headquartered in Salt Lake City, constitute the world's largest privately held chemical company, manufacturing products for the plastics, automotive, footwear, paints and coatings, agriculture, furniture and packaging industries, among others.

The combined companies said Monday they had a net loss of $88.6 million for the quarter ended Sept. 30. Earnings before interest, taxes, depreciation and amortization totaled $170 million, including $10.7 million in restructuring charges and losses on the sale of accounts receivable. A year ago, pro forma EBITDA was $210.5 million, including $53.7 million and $16 million in restructuring charges and losses on the sale of accounts receivable, respectively. In the 2003 second quarter, EBITDA was $136.3 million.

Revenues for the most recent quarter totaled $2.3 billion, up 9 percent from $2.1 billion a year ago.

"We are pleased that EBITDA at the Huntsman companies stabilized in the third quarter relative to second quarter at a time when earnings in our industry generally have been soft," Peter R. Huntsman, president and chief executive officer, said in a prepared statement. "We believe this reflects the strength of our differentiated product portfolio and our vigilance in managing costs as the chemical industry remains in the trough of the cycle."