Sabic to Cut About 1,050 Jobs, Close Some Assets in Europe
Saudi Basic Industries Corp., (SABIC) the world’s biggest petrochemicals maker, plans to cut about 1,050 positions and close some assets in Europe as the company responds to diminished demand.
Saudi Basic Industries, also known as Sabic, has started talks with works councils and trade unions on the plan, it said in a statement today. The job cuts will take place across Europe, a third of which will be contracting staff and two- thirds Sabic employees, it said.
“The European market is facing structural changes that are likely to set a new course for future competitive challenges,” Sabic said. “Our industry continues to face slow growth.”
Sabic joins peers including Akzo Nobel NV (AKZA) and BASF SE (BAS) in slimming down operations that are taking the brunt of a prolonged slump affecting construction and infrastructure as well as consumer spending on cars and appliances. The company in 2007 bought General Electric Co. (GE)’s plastics unit for $11.6 billion as part of a global expansion drive.
The company, based in Riyadh, also faces stiffer competition from a revived U.S. chemical and plastics industry that’s benefiting from shale gas supplies, as well as increased production among Asian peers seeking to satisfy their demand locally.
BASF earlier this year announced 400 jobcuts at its construction chemicals operation, along with plans to reduce capacity at paper-ingredient plants in Europe.
Sabic, controlled by the Saudi government, may report a 10 percent decline in first-quarter profit, according to the average estimate of eight analysts surveyed by Bloomberg.
“We have stronger ambitions in terms of revenue, market position and innovation,” Koos van Haasteren, vice-president Sabic in Europe, said in the statement.
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