Wacker Chemie announced today that it is embarking on a major restructuring program, dubbed Shape the Future, to increase competitiveness and profitability. Last month, the company announced the biggest full-year loss in its history.
Wacker reported a full-year 2019 net loss of €630 million ($680 million), swinging from a net profit of €260 million in 2018.
Wacker says the new efficiency program aims to save an annualized €250 million by reducing material costs and in-house services, and creating a leaner company structure. More than 1,000 jobs are expected to go by the end of 2022, about 7% of the group total. The job cuts will affect Wacker’s administrative departments and the indirect, nonoperational functions of its business divisions. More than 80% of the cuts will be in Germany where the company employs about 10,000 of its 14,500 workforce. Wacker says that together with employee representatives, it intends to prepare a package of measures to reduce its workforce in a socially responsible manner. The options under consideration include retirement, semi-retirement, and severance agreements. Wacker says that if these measures are successful, there should be no need for compulsory layoffs.
“We are preparing for a harsher competitive environment—both in our polysilicon business and at our chemical divisions…Our aim is not only to achieve significant cost savings, but also to decisively strengthen Wacker for tomorrow’s challenges and secure a long-term competitive edge,” said CEO Rudolf Staudigl, announcing the restructuring.
Christian Hartel, a Wacker board member, said the company had made a thorough analysis of the situation and presented its first outline of the company’s new structure to employee representatives. Wacker has confirmed to CW that there are no plans for plant closures.
Wacker issued a profit warning in December and announced a major impairment charge against the company’s polysilicon plants because of more pessimistic expectations for future earnings prospects in solar-grade polysilicon. Reported EBITDA in 2019 declined 16% to €780 million but was flattered by a €112.5-million insurance payment in the third quarter for damage incurred at the company’s Charleston, Tennessee, polysilicon plant in 2017. Excluding this one-off effect, EBITDA dropped 28% to €667.5 million. Reported EBIT collapsed from €390 million in 2018 to a loss of €540 million last year, largely due to the one-time impairment charge of €760 million against the company’s polysilicon assets. Excluding this charge and the insurance gain, like-for-like EBIT fell from €390 million to €117.5 million.
By Natasha Alperowicz
Source: Chemical Week
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