Arkema Group Announce €300M Euro Plan to Maintain Competitiveness in Vinyl Market

Arkema confirms its wish to remain a leading European player in the activities covered by its Vinyl Products business segment, and today presented the Central Works Council with a draft consolidation plan to secure its long-term competitiveness and ability to ride out the economic climate. The plan entails no plant closure and no redundancies, and is backed by a € 300 M capital expenditure programme over 5 years.

Arkema consists of three business segments – Vinyl Products, Industrial Chemicals and Performance Products –, generating sales of 5 billion euros and employing 18,600 people.

The Vinyl Products business segment – Chlorochemicals, PVC (polyvinyl chloride), Vinyl Compounds, and Pipe and Profile Converting – accounts for 27 % of Arkema’s turnover, achieved to a large extent in the European market.

With its overcapacity and acute competition, this market is also characterised by very clear economic cycles and an ongoing erosion of margins over many years.

Arkema confirms its wish to remain a leading player in Vinyl Products. However, the ongoing problems beleaguering these activities constitute a threat to the long term of this business segment. 2004, half-way through the cycle, produced a small profit, whereas 2003, at the trough of the cycle, generated a major operating loss. In the light of this situation, it is vital to consolidate the Vinyl Products business segment in order to restore its long-term competitiveness and its ability to ride out the economic climate, in particular with the need for a return to profitability at the bottom of the cycle.

A draft plan to consolidate the Vinyl Products business segment was today presented to Arkema’s Central Works Council. The implementation of the plan is subject to the legal information and consultation process involving the trade unions.

Vital for the future of the activity, the project would be backed by a € 300 M major investment programme over 5 years, based on the following points:

  • The expansion of the most efficient plants,
  • The closure of structurally loss-making plants,
  • Ongoing efforts in terms of safety and environmental protection,
  • The consolidation of initiatives increasing productivity.

The project concerns every production facility in France within Arkema’s Vinyl Products business segment:

Saint-Auban, Saint-Fons, Balan, Jarrie, Fos, Lavéra and Berre.

This draft plan entails no site closure. It should result in the loss of 548 jobs overall (including 11 at the Paris-La Défense Head Office). Arkema will make no personnel redundant, by facilitating mobility and solidarity within the Company and the Total Group, and by offering voluntary early retirement packages on a local basis; the latter would be entirely funded by the Company, and could potentially concern 318 people.

Arkema’s management undertake to put in place the necessary resources to assist everyone concerned in finding a solution as soon as possible. In particular, a central cell will be set up to coordinate the local cells established specifically at each site in order to assist employees opting for mobility or a personal project. A specific training plan will be drawn up to promote and assist with internal mobility.

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