Clariant to halt project in the U.S.
Clariant announced that a project in the Functional chemicals Division would be terminated with immediate effect. Expenditure on the U.S. plant to date will be written off; however immediate measures to compensate for this write down have already been initiated.
As previously reported the start-up of a large-scale plant for detergent raw materials in the U.S. has been delayed due to technical difficulties.
Intensive testing of the plant has now demonstrated that the required specifications cannot be achieved in time. Furthermore there is no indication that the requirements can be met within adequate time and budget. Therefore Clariant has decided to terminate the project with immediate effect.
The plant manufactures a customer specific product and will therefore be entirely written off in the second quarter. The write-off charge amounts to CHF 120 m. This charge will be balanced by short-term cost reduction measures that have already been initiated. These include a number of savings in the area of administrative and personnel cost, which are set to benefit Clariant's second quarter results significantly. These measures are in addition to the rationalization programs already planned in the Life Science and overhead costs areas.
The project termination does not impact overall liquidity and equity levels remain as at year-end 2002.
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