Swiss Clariant restructure

The takeover of the British BTP Group has proved to be a millstone for the Clariant Group. Three years on from the expensive purchase of BTP for SwF2.75 billion (US$2.03 billion), the Swiss group are to restructure. The Group are said to be planning drastic job cuts, affecting just under 1,500 of their 28,000 employees (1,400 in Switzerland). By building up regional service centres, the intention is to reduce sales and administrative costs by 10% and to reduce capacities in fine chemicals. Clariant also want to separate themselves from the 7% of turnover which does not form part of their core business. The reason for the second consecutive loss-making year was again high write-offs on BTP. Because the expected high growth in primary products for the pharmaceuticals industry was not achieved, Clariant wrote off the remaining difference between the purchase price and book value for BTP (goodwill) of SwF790 million. There was also a value adjustment on assets of SwF100 million. These losses completely exhausted the operative profit. Nevertheless, the net loss in 2002 of SwF648 million was only half the previous year's loss. Turnover fell by 3% to SwF9.3 billion and the Group are expecting a difficult 2003 in economic terms.