Huntsman HUN is looking to cut 120 positions as part of a planned restructuring of its color pigments unit. The planned action is the latest step in the Utah-based chemical maker‘s ongoing efforts to restructure its global pigments and additives business.
The restructuring of the color pigments business is expected to deliver cost synergies of $20 million by the middle of next year. Initially, the restructuring will include closures of manufacturing sites, cost cutting initiatives and actions to centralized shared services.
Manufacturing sites, all of which are leased, are expected to be closed by end-2015. Facilities that will be closed include Cartersville, GA, East St. Louis, IL, King of Prussia, PA, and Hainhausen, Germany. Products produced in these sites will be supplied by other facilities of the company including its soon to be completed site in Augusta, GA.
Huntsman expects that the planned restructuring will allow it to improve its competitiveness and better address customer needs as it is looking to build a market leading pigments and additives business.
Huntsman’s shares fell around 1.4% in the trading session following the announcement. The stock is down roughly 3.8% since the news release based on last Friday’s close of $21.44.
Huntsman announced a plan to restructure its pigments and additives business in Dec 2014. The company said that it is planning to cut roughly 900 jobs (around 8% of its workforce) as part of the move.
Huntsman is on track to deliver over $140 million in total cost synergies with $60 million expected in 2015. The company, last month, said that it is planning to shutter certain operations at its Calais site in France as part of its efforts to cut its titanium dioxide (TiO2) capacity in Europe by roughly 100,000 tons. The move is expected to deliver around $35 million of annual savings.
Huntsman has the broadest specialized pigments portfolio in the industry following its acquisition of Rockwood Holdings’ performance additives and TiO2 pigments businesses. The acquisition has allowed Huntsman to better serve its customers through a broader range of products.
Huntsman currently has a Zacks Rank #4 (Sell).
Better-ranked stocks in the chemical space include Asahi Kasei Corp. AHKSY, Innospec Inc. IOSP and Air Products & Chemicals Inc. APD. While Asahi Kasei and Innospec sport a Zacks Rank #1 (Strong Buy), Air Products carries a Zacks Rank #2 (Buy).
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