Huntsman Corp., the chemical-maker fighting to complete its buyout by a unit of Apollo Management LP, will cut 470 jobs in a new effort to trim costs in the unit that makes textile dyes and chemicals.
The cuts represent about 12 percent of the 3,900 employees in the textile-effects unit, acquired from Ciba Specialty Chemicals in June 2006, said Huntsman spokesman Guy Wolff. Production of textile chemicals will be reduced in Langweid, Germany, affecting 150 of 350 jobs at the site, Wolff said. Sales offices and customer laboratories will be reduced by half, he said.
Most of the moves will be implemented in a year and are intended to cut annual costs by $60 million, the company said Tuesday in a statement. Apollo unit Hexion Specialty Chemicals cited weak textile-effects earnings in a failed lawsuit to cancel its $6.5 billion Huntsman acquisition. Salt Lake City-based Huntsman, which is run from The Woodlands, Texas, eliminated 650 jobs in the unit in a restructuring effort announced in October 2006.
"The intent of the restructuring is to simplify the organization and move the center of gravity more toward Asia, because this is where the industry is moving," Wolff said Wednesday in a phone interview from Basel, Switzerland. "This is part of a five-year plan that started in October 2006."
The current cost cuts are focused on businesses that serve apparel and home-textile markets, Wolff said. The specialty- textiles business, which serves carpet and automotive markets, will remain centered in Europe and North America, he said.
Huntsman is closing a dozen technical labs available to customers and about 20 sales offices, Wolff said. Unprofitable products are being eliminated, and some customers will be shed, he said. New products will be developed to serve faster-growing markets in China and India, he said.
Profit in Huntsman's materials-and-effects segment, which includes textile effects, fell 14 percent through the first nine months of the year, while the company's earnings from all units before interest, taxes, depreciation and amortization doubled, the company said in a Nov. 6 statement.
Huntsman fell 23 cents, or 3.7 percent, to close Wednesday at $5.91, the lowest closing price since the shares were sold to the public in February 2005. The shares have declined 77 percent this year.