Cuts to continue at LyondellBasellCuts to continue at LyondellBasell
As part of a $1.3 billion “performance improvement plan,” LyondellBasell (Rotterdam, Netherlands) announced plans to increase its fixed-cost reduction target to $700 million by year-end 2010. To achieve the $1.3 billion figure, LyondellBasell is targeting energy-cost reductions and what it calls revenue-enhancement initiatives. Ed Dineen, COO, said that the initial Lyondell and Basell merger plan targeted a fixed-cost reduction of approximately $200 million, with the combined company now nearly quadrupling that figure.
April 9, 2009
The plan includes a headcount reduction of more than 3000, or approximately 17%, as well as a cut in contractors of 2000, or 30%. In addition, LyondellBasell will close 20 offices and R&D sites, as well as 10 or more manufacturing plants, most of which it says have been announced or completed.
In a release, Dineen says the company has accelerated its reaction to a rapidly deteriorating market and likely will speed it further. “Market conditions continue to be extremely challenging, and we are driving hard across all our organizations to enhance our earnings,” Dineen says. “We are pleased with our progress, but are committed to doing more and doing it more quickly.”
On April 2, the company announced it would cut low-density polyethylene (LDPE) production in France, and on March 24, it said it would close down its Chocolate Bayou olefins site (Alvin, TX). On Feb. 11, the company idled its LDPE operations in Carrington, UK and Fos-sur-Mer, France, which was closed down earlier this month. When the announcement was made on the plants in the UK and France, the company said it would keep both idled into the second quarter. The Carrington unit has a nameplate capacity of 185,000 tonnes/yr. Last October, the company’s Equistar Chemicals division said it would temporarily idle its olefin unit at La Porte, TX. The unit was expected to remain out of service until early 2009. It has a nameplate capacity of 1.7 billion lb/yr of ethylene and 700 million lb of propylene. —[email protected]
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