Switzerland: Management Strategy Clariant to Rightsize and Focus on Core Business Areas
Clariant is in the process of transforming its portfolio into a higher-value specialty one by focusing on its core business areas – Care Chemicals, Catalysis and Natural Resources. The company will also rightsize its regional organisations and service units in order to avoid remnant cost.
Muttenz/Switzerland – Clariant has recently announced its plans to adapt and refocus its organisation post divestments. With the divestments of Healthcare Packaging in October 2019 and Masterbatches in July 2020 as well as the anticipated divestment of Pigments, Clariant is transforming itself towards a higher-value specialty portfolio focusing on its core Business Areas: Care Chemicals, Catalysis and Natural Resources. The Group plans to rightsize regional organisations and service units in order to avoid remnant cost, thereby reducing complexity and increasing agility post the expiration of transitory service agreements following the closing of the divestitures.
The rightsizing programme foresees a reduction of approximately 1,000 positions in service and regional structures. Approximately one third of the reductions will be included in the divestment transfers. After a careful review of the scope of all measures under consideration, Clariant has decided to make a provision in the magnitude of 77 million dollars in discontinued operations in the fourth quarter of 2020 for the rightsizing programme.
The timeline for these measures shall extend over a maximum of two years and will include departures attributable to natural fluctuation. With the rightsizing programme, Clariant will preserve itself from remnant cost from the recent and impending divestments. The previously announced efficiency programme is in full implementation to reduce approximately 600 positions and realise 55 million dollar cost base savings in the continuing business till the end of 2021.
“As we progress towards completing the next of the non-core business disposals, we must utilise this opportunity to further strengthen Clariant’s core for a successful future. By avoiding remnant cost and consequently reducing complexity, putting an even stronger focus on innovation, sustainability and operational excellence, we put our company’s high value specialty businesses in a position to operate in an even more focused and agile manner. This will help us deliver above-market growth, higher profitability and stronger cash generation,” said Hariolf Kottmann, Executive Chairman ad interim of Clariant.
In addition to the efficiency and rightsizing measures, Clariant continues to emphasise organic and inorganic growth to drive its portfolio upgrade. Clariant's transformational change offers unique opportunities for higher value creation in 2021 and beyond.