World's top chemical makers are shrouded with uncertain prospects for 2009 triggered by persistently deteriorating demand amid a global economic meltdown coupled with frozen credit markets.
Dow, USA's largest chemical company is currently going through a restructuring plan - closing 20 plants, suspending work at another 180 factories and laying off 5,000 of its 46,500 employees across 175 countries. It's Indian arm plans to exit the petrochemical business to focus on specialty chemicals.
DSM has implemented temporary plant shutdowns across a spectrum of products in engineering plastics, resins and fibres businesses. Out of a work force of almost 20,000, the company will slash 5% jobs.
Eastman Chemical Co., Chemtura Corp. and A. Schulman are among other chemical companies slashing payrolls.
DuPont has also cut jobs and delayed an expansion in China. DuPont will lay off 2,500 employees from businesses that support the motor vehicle and construction markets in Western Europe and the United States.
Canada's ethylene, polyethylene and styrene maker Nova Chemicals plans to cut capital spending for the rest of this year and through 2009. The company expects 2008 expenditures to total US$160 mln from its initial range US$200-225 mln. This figure will be further reduced to US$100 in 2009.
Lanxess plans temporary production cuts and shutdowns at 23 of its 45 sites in Germany over the Christmas and New Year holiday period.
Several mergers and acquisitions scheduled for completion this year have fallen through. Hexion abandoned a US$6.5 bln takeover of specialty chemicals firm Huntsman Corp. KPIC has scuttled its proposed JV with Dow, which in turn could affect Dow's acquisition of Rohm & Haas. Dow had planned to use proceeds from the Kuwaiti deal to help pay down debt from its agreed purchase of Rohm & Haas.
LyondellBasell, formed in a December 2007, was saddled with a large debt load. World Number 3 petrochemical company LyondellBasell is weighing the option of filing for Chapter 11 bankruptcy protection as it tries to restructure its debt. It also reflects the unwinding of debts piled up in recent years as banks lent money cheaply, especially in leveraged buyouts. LyondellBasell was created when Dutch-based Basell bought Houston-based Lyondell for about US$12.7 bln. LyondellBasell, which has a total of US$26 billion in debt, disclosed in a recent regulatory filing that it had begun negotiating with lenders on extending payment dates and restructuring debt. It negotiated one postponement on US$160 mln in loan-related fees. Its lenders include Merrill Lynch, Goldman Sachs, Citigroup, ABN AMRO and UBS Securities LLC.