ROTTERDAM, The Netherlands, April 8 /PRNewswire/ -- LyondellBasell today announced that it has increased its fixed-cost reduction target to $700 million by year-end 2010. The new target is part of a total performance improvement plan of $1.3 billion, which also encompasses variable and energy cost reductions, as well as revenue enhancement initiatives.
"The original merger plan targeted a fixed-cost reduction of approximately $200 million. Based on our efforts through the second half of 2008 and particularly in the first quarter 2009, we have increased our goal to $700 million," said Ed Dineen, LyondellBasell's Chief Operating Officer. "More importantly, we believe we will demonstrate a substantial part of this target in the 2009 bottom line, given first-quarter performance."
The plan encompasses a reduction in employee headcount of more than 3,000, or approximately 17 percent, and a reduction in contractors approaching 2,000, or nearly 30 percent. It includes the closure of 20 offices and research & development sites and the closure of 10 or more manufacturing plants, most of which have been announced or completed. "The detailed program identifies actions and timelines, and implementation is well under way as momentum built rapidly throughout the first quarter," said Dineen.
"This cost reduction plan is a key part of our effort to offset the current sales volume and margin weakness. It will also be incorporated into the financial projections that will inform our Plan of Reorganization," said Alan Bigman, LyondellBasell's Chief Financial Officer. "We are working toward confirmation of a plan consistent with the milestone schedule set forth in our debtor-in-possession loans."
"Market conditions continue to be extremely challenging, and we are driving hard across all our organizations to enhance our earnings," said Dineen. "We are pleased with our progress, but are committed to doing more and doing it more quickly. I am confident that we will emerge from Chapter 11 as a stronger, more competitive company that will continue to be a leader in innovation, customer satisfaction and the manufacturing and development of products that improve quality of life for people around the world."
LyondellBasell Industries is one of the world's largest polymers, petrochemicals and fuels companies. We are the global leader in polyolefins technology, production and marketing; a pioneer in propylene oxide and derivatives; and a significant producer of fuels and refined products, including biofuels. Through research and development, LyondellBasell develops innovative materials and technologies that deliver exceptional customer value and products that improve quality of life for people around the world. Headquartered in The Netherlands, LyondellBasell (www.lyondellbasell.com) is privately owned by Access Industries.
This press release contains forward-looking statements. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from the future results, performance or achievements expressed or implied by the forward-looking statements. Assumptions and other important factors that could cause our actual results to differ materially from those anticipated in our forward-looking statements include, among other things: (i) the ability of LyondellBasell to develop, prosecute, confirm and consummate one or more Chapter 11 plans of reorganization; (ii) the potential adverse impact of the Chapter 11 filing on LyondellBasell's operations, management and employees, and the risks associated with operating businesses under Chapter 11 protection; (iii) the ability of LyondellBasell to comply with the terms of the DIP financing facility; (iv) the availability, cost and price volatility of raw materials and utilities; (v) uncertainties associated with the United States and worldwide economies, including those due to political tensions in the Middle East and elsewhere; (vi) the supply and demand balances for LyondellBasell's and its joint ventures' products, and the related effects of industry production capacities and operating rates; (vii) legal, tax and environmental proceedings; (viii) the cyclical nature of the chemical and refining industries; (ix) operating interruptions, including leaks, explosions, fires, weather-related incidents, mechanical failure, unscheduled downtime, supplier disruptions, labor shortages or other labor difficulties, transportation interruptions, spills and releases and other environmental risks; (x) current and potential governmental regulatory actions in the United States and in other countries; (xi) terrorist acts and international political unrest; (xii) competitive products and pricing pressures; (xiii) risks of doing business outside the United States, including foreign currency fluctuations; (xiv) LyondellBasell's ability to service its substantial indebtedness; (xv) available cash and access to capital markets; (xvi) customer response to the Chapter 11 filing; and (xvii) the risk factors or uncertainties listed from time to time in Lyondell Chemical Company's filings with the Securities and Exchange Commission and with the U.S. Bankruptcy Court in connection with the company's Chapter 11 filing. Other factors and assumptions not identified above are also relevant to the forward-looking statements, and if they prove incorrect, could also cause actual results to differ materially from those projected.
Forward-looking statements speak only as of the date of this release. We disclaim any obligation or undertaking to provide any updates or revisions to any forward-looking statement to reflect any change in our expectations or any change in events, conditions or circumstances on which the forward-looking statement is based.
SOURCE: LyondellBasell Industries
Web site: http://www.lyondellbasell.com/