Degussa is closing its Radebeul location
Drastic measures due to tightening competition
Due to the continuing deterioration of the economic situation at its Radebeul location near Dresden, Degussa AG of Dusseldorf, Germany, will have to close the plant, which employs about 300 staff, by the end of 2004. The closure will be carried out in accordance with social responsibility considerations.
Dr. Thomas Schoeneberg, Degussa Management Board Member and Human Resources Director, states: "We are currently engaged in intensive talks with companies in the region around Radebeul concerning jobs for our staff." At the same time, talks are being assumed with employee representatives at Radebeul on the basis of proven instruments and courses of action; operational dismissals cannot be excluded, however, in view of the scope of the closure.
Degussa mainly produces generic drug ingredients for the pharmaceutical industry in Radebeul. As Dr. Bernhard Hofmann, head of Degussa's Fine & Industrial Chemicals Divison, explains, "For some time now this segment of the fine chemicals market has been characterized by considerable excess capacity and strong price pressure all over the world, particularly as a consequence of the strong competition coming from Asia. This development has stepped up again in intensity over the past few months."
Degussa began to react to these difficult market conditions early on, starting to implement a number of measures all over the world, including cost-cutting programs and capacity reduction measures, during the past year. This also applies to the Radebeul location. However, since an end to the fierce price pressure concerning drug ingredients is not in sight, Degussa see itself as having no other choice than to close its Radebeul location. Dr. Peter Nagler, head of Degussa's Fine Chemicals business unit, explains, "A definitive role in arriving at this decision has been played by the poor earnings situation caused by an unfavorable product structure and sustained dissatisfying utilization of production capacity."
Other news from the department business & finance
