AkzoNobel will phase out its organic peroxide chemical production at Deventer, The Netherlands by 2016, to focus on R&D.
The announcement comes as the company prepares to step-up its restructuring activities to increase savings in 2014 and beyond. Approximately 215 jobs will be axed.
Production activities carried out in Deventer will be moved to one of its other existing production facilities in Europe, North America, and China over the next three years.
More capacity than demand
Werner Fuhrmann, executive committee member Specialty Chemicals business, AkzoNobel, said the whole market has more capacity than demand right now and the company will save money in the long term by consolidating production and increasing efficiency at its other sites.
“The organic peroxides market faces over-capacity," he said.
"Global demand patterns for organic peroxides are trending away from mature markets in Europe and becoming increasingly concentrated in Asia and North America."
No secret Europe is suffering
A spokesman for AkzoNobel told FoodProductionDaily.com ‘it’s no secret that Europe has been suffering’ in terms of the economic situation.
“Growth hasn’t materialized here but it is happening elsewhere. There is still demand in Europe but it is unfortunate that this decision will have an impact on some 200 employees,” he said.
“It is most regrettable but we have contingency plans in place and as a company we are conscientious in the way we go about these things.”
The chemicals produced by AkzoNobel's are used in applications including the rubber, packaging and polymers industry and consumer product sectors.
Phase out process
During the phase out process, the site’s regional R&D and Technology Center will remain in operation, employing approximately 235 personnel.
The production facility on the Deventer site is one of 11 organic peroxide manufacturing plants operated globally by AkzoNobel.
"Consolidating production and following demand will lead to lower costs to serve our customers, improving our competitiveness and performance," added Fuhrmann.
AkzoNobel does not expect the plans to have any impact on existing customers.