Huntsman Corporation (HUN) is planning to cut headcount as part of its efforts to improve the competitiveness of its pigments and additives business. The Utah-based chemical maker plans to cut roughly 900 positions (around 8% of its workforce). The move will allow it to achieve cost savings of around $130 million by mid-2016.
Huntsman is also mulling titanium dioxide (TiO2) capacity cuts as it looks to build a market-leading pigments and additives business with superior technology and cost competitive manufacturing, the company’s CEO Peter R. Huntsman noted. The company plans to execute these strategic actions in sync with local procedures and by working with appropriate associate representative groups.
Huntsman’s shares fell as much as around 2.4% in the trading session following the announcement. The stock is down 2.2% since the news release based on yesterday’s close of $24.95.
Huntsman has the broadest specialized pigments portfolio in the industry following its acquisition of Rockwood Holdings’ (ROC) performance additives and TiO2 pigments businesses.
The latest moves are part of Huntsman’s ongoing efforts to restructure its business. The company recently completed a significant restructuring in its Advanced Materials and Textile Effects units which is expected to garner annual benefits of around $150 million.
Huntsman closed the acquisition of Rockwood’s assets on Oct 1, 2014. The company paid around $1 billion in cash for the buyout and assumed certain pension obligations.
With the acquisition, Huntsman is now well placed to better serve its customers through a broader range of products. The acquisition has also offered the company an attractive opportunity to unlock value within its pigments business. The buyout is expected to offer meaningful cost saving opportunities.
Huntsman is a Zacks Rank #3 (Hold) stock.
Other companies in the chemical space worth considering include Innospec Inc. (IOSP) and Valhi, Inc. (VHI) with both holding a Zacks Rank #1 (Strong Buy).
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