Degussa restructures and takes €500m charge
million charge in its fine chemicals business unit as it continues
to feel the impact of adverse changes in market conditions.
Germany's third-largest chemicals company Degussa has taken a €500 million charge in its fine chemicals business unit as it continues to feel the impact of adverse changes in market conditions.
Announcing the charge this week - €250 million for goodwill from mergers and acquisitions and €250 million for other intangible assets - the company added that it will overhaul the structure of the unit, reorganising activities to reflect the integration of new businesses linked to the merger with SKW Trostberg in 2001.
"Now that we have completed integrating all fine chemicals activities within the new Degussa, we are aligning ourselves to best meet the needs of our customers in accordance with our strategic 'Solutions to Customers' approach," said the chairman of Degussa Prof. Utz-Hellmuth Felcht.
Since the merger, Degussa has combined the fine chemicals operations of Hüls, SKW Trostberg, the old Degussa and Laporte at 19 locations worldwide into functioning units.
Under the new structure agrochemicals and intermediates will fall into the newly created Building Blocks unit of the Fine Chemicals division. The two remaining units - also newly created - in the division are Peroxygen chemicals and Exclusive synthesis & catalysts.
The idea behind the restructuring is to pool 'activities that follow similar strategies and face comparable operative market and customer requirements', said Degussa in a statement this week.
In August this year the German company posted a set of figures for the first half that fell below those of last year, reflecting the impact of weak figures on currency factors, higher raw materials costs and a drop in demand for some products as customers were hit by the downturn in the global economy.
The company saw a 6 per cent decline in sales at its core businesses (fine and industrial chemicals, construction chemicals, performance materials, coatings and polymers) to €2.7 billion.