Tick tock goes the Clariant clock ...... 2008 was no better!

Clariant has continued its now medium-term downward spiral, announcing another set of poor results for 2008.  Having spent millions on trying to cut its SG&A costs, used consulting company after consulting company, introduced an expensive (and inneffective price management system), suffered the indignity of the resignation of an effective CEO in Jan Secher ........ along came the economic downturn.  The Swiss/German clock has been ticking for a while and surely it is now time for Clariant to participate in the ongoing re-structuring of the chemicals industry in Europe. The share price continues to tumble and recommendations not to buy continue to haunt Clariant - the big issue is now whether anyone would want to buy some or all of Clariant. 

The impression is that the paper chemicals business remains rudderless, caught up in 'supporting' efforts aimed at helping the larger Clariant survive (especially in Germany and Switzerland) rather than helping the pulp and paper industry through the economic downturn.  The focus seems to be on cutting jobs, closing plants, and reducing R&D.  There is again very little mentioned of the Paper Business in Clariant's pitch to the media.  Waffle such as, 'The Paper Business held up relatively well in the economic downturn'. And, the old mis-management issue of the, '..... supply shortage resulting in escalating raw material costs in the Paper Business'.  This is covered in other blogs - the shortage was avoidable.  What is Clariant proposing to help its customers?  Higher prices, less service and support and fewer (cheaper and less competent?) people?

The end of year report goes on to say that, ' ...... restructuring efforts and cost-cutting measures, in particular in SG&A, proceeded as planned but were not sufficient to compensate for the capacity underutilization that worsened the gross margin.'  What management drivel.  No mention of the customer in all this stuff.  As expected, the exodus of key personnel has continued (willing or not).  The sad thing for the paper industry is that many have decided to go into other industries.

Clariant figures for 2008 are available on their web site.  An analysis is also carried by sites such as Bloomberg.