Clariant's Performance Improvement Program (CPIP) has now reached its full implementation phase, meaning that all projects are operational and delivering positive results. The program is creating efficiencies throughout the organization and cutting costs. There are now some 5,500 measures identified, of which more than half are in process.
The program is on-track to create savings of more than 800 CHF million by the end of 2007. Cost savings of CHF 70 million were delivered in the second quarter on top of CHF 50 million in the first quarter, bringing the total savings generated by the program so far to CHF 270 million. These savings are being achieved amid overall sales growth.
The number of employees in the Clariant workforce has been reduced by 8 percent since the program began 18 months ago. This excludes employees transferred because of asset sales. The workforce now stands at some 24,000 at the end of the first half.
As an example of the complexity reducing benefits of CPIP, the number of warehouses used by the company has been sharply reduced worldwide, by more than half in Europe and by about one-fifth in Asia.
“The performance improvements are now a permanent part of Clariant and positively impacting every aspect of company business,” Loesser said. “The next stage is transformation continually for improving processes and lifting the profitability.”
Part of Clariant's transformation includes focusing on businesses where service and innovation are strong components of the business model and selling those that do not fit the profile. To that end, the company closed the sale first announced in June of Clariant (Acetyl Building Blocks) GmbH & Co. KG to the Gilde Buy-Out Fund for CHF 74 million on July 29.
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