HOECHST
PP, PE and technical polymers in loss for 1993 / Management mum on strategy
At Hoechst AG (D-65926 Frankfurt), the polymers division – which includes both plastics and manmade fibres – was the only one of the group's six corporate units to operate in the red in 1994. Losses totalled DM 248m, compared with a profit of DM 97m in 1993. Within the polymers division's overall turnover of DM 7.3bn, sales of plastics and films declined 16% to DM 2.9 bn, while turnover in technical plastics eased forward 2% to DM 1.32 bn. Sales of coatings and synthetics resins sales fell 7% to DM 3bn.
Highlighting the group's 1993 performance in Frankfurt, Chairman Prof Dr Wolfgang Hilger painted a dismal picture of the business situation for commodity plastics. In view of overcapacities in Europe, the operating loss in the plastics and films business unit widened considerably. Hoechst has had to put up with losses on polypropylene "for some time", Hilger said, while adding that European capacities for high density polyethylene recently have expanded "more rapidly than the markets". As a result, prices "have fallen apart" and this commodity, too, has moved into the red. Without spotlighting any specific improvements, Hilger said the joint venture with Wacker-Chemie GmbH (Hans-Seidel-Platz 4, D-81737 Munich), Vinnolit Kunststoff GmbH (Carl-Zeiss-Ring 25, D-85737 Ismaning), has eased the pressure on PVC somewhat.
Due to sinking demand from the European automobile industry, Hoechst's technical plastics also began to lose money in 1993. One weak spot was acetal polymers producer Ticona Polymerwerke GmbH (PO Box 1320, D-65451 Kelsterbach), which posted an operating loss of DM 28m after earning a profit of DM 22m in 1992. Sales declined to DM 183m from DM 226m.
Both Hilger and deputy chairman Dr Günter Metz, who oversees Hoechst's worldwide plastics and fibres businesses, declined to comment on which strategic moves the Hoechst group may be planning to relieve pressure on its plastics business, especially in view of Europea-wide overcapacities. Metz acknowledged that Hoechst – "like everyone else in the business" – is still talking to potential partners about alliances. But he suggested his group may be willing to watch the markets further before making far-reaching decisions.
In 1993, the Frankfurt group cut personnel in commodity plastics and improved productivity by trimming less profitable types from its portfolio. In HDPE, Hoechst is now concentrating on materials for pipes and containers; in PP, moves also have been made to reduce the number of types.
Outside the plastics division, Hoechst's 1993 performance also was disappointing. Operating profit declined 31% to DM 1.5bn and net earnings 30% to DM 750m, as sales remained flat at DM 46bn. Hilger said the group will press forward with its cost management and restructurisation scheme, which will emphasise divestments and workforce reductions. After slashing personnel by 12,000 over the past three years, a further 8,000 jobs are to go by 1995.
READER SERVICE: Spring financial press conference, speech by Hilger (English): PIE-No. 35761 – Annual report 1993 (German): PIE-No. 35711 – Annual report 1993 (English, short version): PIE-No. 35762.
Highlighting the group's 1993 performance in Frankfurt, Chairman Prof Dr Wolfgang Hilger painted a dismal picture of the business situation for commodity plastics. In view of overcapacities in Europe, the operating loss in the plastics and films business unit widened considerably. Hoechst has had to put up with losses on polypropylene "for some time", Hilger said, while adding that European capacities for high density polyethylene recently have expanded "more rapidly than the markets". As a result, prices "have fallen apart" and this commodity, too, has moved into the red. Without spotlighting any specific improvements, Hilger said the joint venture with Wacker-Chemie GmbH (Hans-Seidel-Platz 4, D-81737 Munich), Vinnolit Kunststoff GmbH (Carl-Zeiss-Ring 25, D-85737 Ismaning), has eased the pressure on PVC somewhat.
Due to sinking demand from the European automobile industry, Hoechst's technical plastics also began to lose money in 1993. One weak spot was acetal polymers producer Ticona Polymerwerke GmbH (PO Box 1320, D-65451 Kelsterbach), which posted an operating loss of DM 28m after earning a profit of DM 22m in 1992. Sales declined to DM 183m from DM 226m.
Both Hilger and deputy chairman Dr Günter Metz, who oversees Hoechst's worldwide plastics and fibres businesses, declined to comment on which strategic moves the Hoechst group may be planning to relieve pressure on its plastics business, especially in view of Europea-wide overcapacities. Metz acknowledged that Hoechst – "like everyone else in the business" – is still talking to potential partners about alliances. But he suggested his group may be willing to watch the markets further before making far-reaching decisions.
In 1993, the Frankfurt group cut personnel in commodity plastics and improved productivity by trimming less profitable types from its portfolio. In HDPE, Hoechst is now concentrating on materials for pipes and containers; in PP, moves also have been made to reduce the number of types.
Outside the plastics division, Hoechst's 1993 performance also was disappointing. Operating profit declined 31% to DM 1.5bn and net earnings 30% to DM 750m, as sales remained flat at DM 46bn. Hilger said the group will press forward with its cost management and restructurisation scheme, which will emphasise divestments and workforce reductions. After slashing personnel by 12,000 over the past three years, a further 8,000 jobs are to go by 1995.
READER SERVICE: Spring financial press conference, speech by Hilger (English): PIE-No. 35761 – Annual report 1993 (German): PIE-No. 35711 – Annual report 1993 (English, short version): PIE-No. 35762.
15.04.1994 Plasteurope.com [21470]
Published on 15.04.1994