Company to strengthen manufacturing footprint to reduce costs,
increase efficiencies and serve customers more effectively
Restructuring will better position company for growth in Asia,
Middle East and Europe
MIDDLEBURY, Conn.--(BUSINESS WIRE)--June 4, 2007--Chemtura
Corporation (NYSE: CEM) announced today that the company plans to
restructure its global supply chain for standard antioxidants in order
to position itself to be more competitive in the world plastics market
and to more effectively serve its global customers. The restructuring
supports Chemtura's overall objectives of reducing costs and
optimizing its global manufacturing footprint, while maintaining the
company's strong commitment to the antioxidants business.
This restructuring, which includes the closing and/or divesting of
selective sites in Europe, as well as potential investments in other
parts of the world to better meet customer needs, will result in
pre-tax charges, principally severance costs, of approximately $15
million to $20 million and accelerated depreciation of approximately
$30 million to $35 million in the second and third quarters of 2007.
Chemtura's manufacturing facilities at Pedrengo and Ravenna,
Italy, and Catenoy, France will be affected by these changes. During
the third quarter of 2007, the company intends to end standard
antioxidant production and to close the antioxidant facilities at
Pedrengo and Ravenna and also proposes to shut down two intermediate
chemical products at Catenoy. The intermediates produced at Catenoy
are used at the Pedrengo facility.
Approximately 125 to 135 employees would be affected at Pedrengo,
about 25 to 35 at Ravenna and around 35 at Catenoy.
"Although significant gains in productivity have been made in
recent years at Pedrengo and Ravenna, those gains have been
overshadowed by increasing operational and raw material costs," said
Anne Noonan, president of Chemtura's Polymer Additives Group, which
operates the sites. "As a result, the current manufacturing position
for standard antioxidants at these sites continues to fall below
"We remain highly committed to our antioxidants customers," Noonan
said. "To replace the products manufactured at Pedrengo and Ravenna
and to ensure consistent supply to our customers, Chemtura will
continue to supply antioxidants through a combination of local
sourcing agreements and through the company's own large, global
The network includes facilities in the United States, Germany,
Saudi Arabia and South Korea.
"These strategic changes underscore the need for competitive
sites," said Chemtura Chairman and CEO Robert L. Wood. "These actions
will give us a stronger, more competitive manufacturing base, which is
necessary for success in a very competitive global marketplace and
will allow us to take advantage of growth opportunities in Asia,
Europe and the Middle East. We will continue to examine our global
manufacturing footprint to ensure that our operations are as efficient
as possible and serve our customers as effectively as possible."
Chemtura's standard antioxidants, which are sold under the
Chemtura trade names Anox(R) 20, Anox(R) PP18 and Alkanox(R) 240, are
widely used in the manufacture of plastics to increase end-product
strength and durability.
Chemtura Corporation, with 2006 sales of $3.7 billion, is a global
manufacturer and marketer of specialty chemicals, crop protection and
pool, spa and home care products. Learn more about us on our Web site
This document includes forward-looking statements. These
forward-looking statements are identified by terms and phrases such as
"anticipate," "believe," "intend," "estimate," "expect," "continue,"
"should," "could," "may," "plan," "project," "predict," "will" and
similar expressions and include references to assumptions and relate
to our future prospects, developments and business strategies.
Factors that could cause our actual results to differ materially
from those expressed or implied in such forward-looking statements
include, but are not limited to:
General economic conditions.
Significant international operations and interests.
The ability to obtain increases in selling prices to offset
increases in raw material and energy costs.
The ability to retain sales volumes in the event of increasing
The ability to absorb fixed cost overhead in the event of
Pension and other post-retirement benefit plan assumptions.
The ability to recover lost volume in our non-flame retardant
Plastic Additives business or execute other portions of the
recovery plan for this business.
The ability to sustain profitability in our Crop Protection
business due to new generic competition, or the failure to
secure new products and technology.
The ability to sell methyl bromide due to regulatory
Energy and raw material prices, availability and quality.
Changes in interest rates and foreign currency exchange rates.
Changes in technology, market demand and customer
The enactment of more stringent environmental laws and
The ability to realize expected cost savings under our
cost-reduction initiatives, including Six Sigma and Lean
The ability to successfully execute our portfolio divestiture
The ability to reduce our indebtedness levels.
The ability to recover our deferred tax assets.
The ability to remain compliant with our debt covenants or
obtain necessary waivers.
Other risks and uncertainties detailed in Item 1A.Risk Factors
or in our filings with the Securities and Exchange Commission.
These statements are based on the Company's estimates and
assumptions and on currently available information. The
forward-looking statements include information concerning the
Company's possible or assumed future results of operations, and the
Company's actual results may differ significantly from the results
discussed. Forward-looking information is intended to reflect opinions
as of the date this press release was issued and such information will
not necessarily be updated by the Company.
William Kuser, 203-573-2213
Debra Durbin, 203-573-3005
SOURCE: Chemtura Corporation