Solvay announces that it plans to reinforce its position as a world leader in soda ash and improve the activity's long-term profitability by reducing its 2012 European cost base by €100 million per year as of 2016.
Solvay will focus on a breakthrough competitiveness improvement of its key synthetic soda ash plants in Europe, while expanding its trona mining-based operations in North America.
As announced at the end of last year, Solvay has been working on an action plan to address different regional market dynamics for soda ash, a white mineral product used in applications like glass and detergents. While demand worldwide has been growing at global GDP rates, demand in Europe has been suffering from the economic downturn which has caused structural overcapacity.
"We are determined to strengthen our cost-leadership as the best-in-class producer of both synthetic and natural soda ash," said Pascal Juéry, President of Solvay Essential Chemicals. "Our ambitious three-year action plan will enable the Group to rise up to the challenges and adapt to changes in the competitive landscape while ensuring our profitability for the long term."
In North America, with limited investments, Solvay is gradually expanding its production capacity by about 12%, at Green River, Wyoming, where it operates best-in-class trona-mining industrial assets.
In Europe, Solvay will run an in-depth transformation program at its 6 main soda ash plants*. The breakthrough improvement in the production of synthetic soda ash will strengthen its position as the region's cost leader. The Group will build on its unique know-how and technical capabilities to deliver substantial savings in all fields, including raw material and energy efficiencies and maintenance excellence of its plants, combined with an organizational redesign.
More specifically, Solvay plans to address structural overcapacity in the Mediterranean basin by closing its soda ash unit in Povoa, Portugal, by January 2014. Furthermore, in Rosignano, Italy, the Group will run production capacity according to market needs on top of making significant productivity improvements. Solvay will also use more efficiently the full potential of its world-class synthetic plants in Torrelavega, Spain and in Devnya, Bulgaria to enhance its competitiveness both in Europe and export markets.
These European restructuring measures will affect about 450 job positions by 2016, including Povoa. Solvay will do its utmost to alleviate the social impact by prioritising relocations, allowed by the significant number of job openings at its European sites.
These measures will improve Solvay's soda ash European cost base by €100 million per year as of 2016 against 2012 levels and start enhancing profitability as of 2014. The Group will be able to better serve its local and global clients thanks to an optimal production network in Europe.
