Dutch chemicals group DSM NV said on Tuesday it would cut about 500 jobs at its Chemelot site near the town of Geleen as part of an earlier announced reorganisation of operations in the Netherlands.
"In the next two years DSM aims to cut costs by more than 50 million euros per year," DSM, the world's biggest vitamin maker, said in a statement.
DSM said the restructuring operation will lead to a further improvement of the site's performance in the field of manufacturing, safety and environmental protection. It will also investigate whether a number of services can be out-sourced."
The firm, which already took charges for the job losses in the fourth quarter of 2003, said the cuts would affect workers in support services and manufacturing staff as a diverse and fragmented organisational structure there was too costly.
About 2,400 people work at DSM's Chemelot site in manufacturing operations and in service units that support those operations. The company employs around 26,000 people globally.
Traders said the move was positive, but DSM's shares showed little reaction as the news was already priced into the market.
They rose 0.66 percent at 38.15 euros by 0945 GMT, in line with the benchmark DJ Stoxx Chemicals index which gained 0.5 percent.
"Well, there are no surprises here, but it is a good sign that they are willing and able to take a critical look at their operations," one trader said.
"A lot of things - the dollar, market demand and so on - are out of their hands, but at least the company is showing a willingness to make decisions to help get back on track again."
DSM, which makes chemicals that go into nylon fibres, furniture and crockery, has felt the pinch of a weak dollar and falling demand for its plastics and coatings from clients such as carmakers, builders and electronics manufacturers.
Those factors, as well as rising raw materials costs, bit into DSM's 2003 results, seeing net profit from ordinary activities down sharply year on year.
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