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Improving our cost structure through restructuring |
Restructuring and Reorganization
Cost savings in million €
- Ludwigshafen: € 480 million
p.a. as of mid 2005
- Antwerp: € >70 million p.a.
as of end of 2006
- Europe: € 250 million p.a.
as of end of 2006
- NAFTA: 400 million $ p.a.
as of end of 2006
Plant and site closures
Global Efficiency Improvement Program (estimated):
- € 210 million p.a.
as of end of 2007
- € 300 million p.a.
as of end of 2008
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Improving our cost structure is one important measure to achieve our goal of earning a premium on our cost of capital. Our Cost reduction programs are progressing as planned:
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Ludwigshafen site project
- Ludwigshafen Site Project successfully completed in 2005: Costs at production site in Ludwigshafen were reduced by € 480 million and has thus exceeded the original target of 450 million €.
- The project encompasses various measures of optimization and efficiency enhancement in production, technical services and infrastructure.
- Individual continuation in the different business units.
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Europe projects
- In Europe, we aim for additional € 250 million in savings as of end of 2006.
- The project encompasses the optimization of European business structures and processes.
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NAFTA project
- Total fixed cost reductions for the restructuring program announced in early 2003 to $400 million annually
- This goal was reached earlier than scheduled.
- In addition to the cost reductions, the company expects to see its earnings before interest and taxes (EBIT) rise by $200 million on an annualized basis by 2007 as a result of the company's Commercial Effectiveness program.
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