DSM, Netherlands-headquartered life science and material science company is carrying out provisional plant shut downs and reduction of workforce in order as cost saving mechanism amid the difficult global macroeconomic and financial environment. As per the company statement, DSM is carrying out temporary plant shutdowns in business groups including DSM Fibre Intermediates, DSM Engineering Plastics, DSM Resins and some parts of the Base Chemicals and Materials cluster due to drastic decline in demand in Q4. Also, the company will axe 5% of total employees or 1,000 positions to increase profitability.
The above stringent measures are expected to result in structural cost savings of around EUR 100 mln pa by 2010. The company's prioritization of cash over short term profitability is projected to earn a revised 2008 operating profit of above EUR 900 mln, around 10% up compared to 2007 and a record result for the company. The company says that its Life Sciences businesses have been virtually insulated from the economic turmoil; however, its Materials Sciences businesses, particularly those exposed to automotive, building and construction, coatings and electrical and electronics, have seen a decline in the Q4-2008.