Adapting to economic change

Global chemicals company, Arkema, has announced that it will reduce production at 40 global sites in response to falling orders and difficult financial conditions.

The company’s shares have declined rapidly since September, with a significant number of orders cancelled in the automotive and construction markets.

Several product lines, including PVC, PMMA and functional additives, have also seen considerable cutbacks.

Despite a resilient performance by several divisions, sales in the fourth quarter are estimated to fall by 15 per cent compared with the same period last year, while earnings before tax are forecast to remain at nine per cent.

The company’s latest cost reduction programme involves the temporary shutdown of a number of its global operations, and the strict use of its cash in controlling administrative costs.

Arkema hopes to reduce its costs by €500m (£450m) between 2005 and 2010, of which more than €330m is expected to be cut by the end of this year.