Chemical companies: “This winter is especially cold””

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Chemical companies: “This winter is especially cold.” The sharp drop in oil prices, as reported by the International Financial News, has led to a plunge in the prices of chemical products, putting multinational chemical giants facing financial crises under severe strain. Chemical giant Lanxess announced last Friday adjustments to a range of investment plans worldwide. Three major multinational companies, including Dow, 3M, and DuPont, have also recently announced large-scale layoffs in order to cope with the combined impact of the financial and chemical crises. 　　According to Lanxess’ forecasts, market demand will be extremely weak in the first quarter of 2009. “Demand for chemicals in the global market is declining, and the company has decided to delay some investment plans. ”Dr. He Deman, Chairman of the Lanxess Board of Directors, said, “If market demand remains at its current low level, we will take further measures on a global scale.” ” 　　It is reported that the construction of the butyl rubber production plant, for which Lanxess originally planned to lay the foundation in Singapore in January 2009, has now been postponed to the autumn of 2009. In addition, Lanxess’s plans to expand the production capacity at its plants in Leverkusen and Antwerp, as well as the plan to move the group’s headquarters from Leverkusen to Cologne, will also be postponed. 　　Among the 3 companies that announced layoffs, Dow Chemical had the highest total number of layoffs. The world’s largest chemical company said it would undergo a transformation in January 2009, cutting 5,000 full-time jobs, closing 20 production facilities in high-cost areas, and selling several non-strategic businesses. A spokesperson for Dow Chemical in China said that 5,000 people represent 11% of Dow’s total global workforce, and it is not yet known how many Chinese companies are involved in these layoffs. 　　DuPont issued a statement saying it plans to cut 4.2% of its workforce, which is around 2,500 employees, close 10 factories, and reduce the operating capacity of more than 100 other factories. According to German media reports, DuPont’s layoffs will focus on the automotive and construction market divisions of its companies in the United States and Europe. Another company, 3M, also announced the layoff of 2,300 employees in the fourth quarter, while reducing its profit forecasts for 2008. Yu Junxiong, Executive Director and General Manager of 3M in Greater China, said that in the coming years, 3M’s sales growth in China will remain in double digits. “The company has no plans to lay off employees at the moment, but expenses are indeed being reduced.” ” 　　As the third-quarter reports of various major chemical companies were released, profits across these firms showed a downward trend: BASF’s third-quarter financial results indicated that its net profit decreased by 38% on a year-on-year basis ； Dow Chemical’s net profit fell by 12% in the first three quarters ； DuPont’s net profit declined by 30% in the third quarter. Industry experts analyze that layoffs and production cuts, mergers and divestitures, as well as accelerated investment in emerging industries, will serve as key strategies for international chemical giants to get through the coming winter months.