Clariant, a Swiss specialty chemical company, and Saudi Basic Industries Corporation (SABIC) suspended plans to set up a chemicals venture after Clariant reported a first-half profit loss.
SABIC, which owns 25 per cent of Clariant, and the Swiss company have been working to combine Clariant’s additives and specialty masterbatches businesses with parts of SABIC’s specialty chemicals business.
“Given the current market conditions, both parties have decided that temporarily suspending the negotiations is in the best interests of the respective shareholders of both companies,” Clariant said in a statement.
Clariant reported a first-half net loss of 101 million Swiss francs (US$102.6 million), down from 211 million francs a year earlier. It said its figures were negatively impacted by one-time project costs related to the carve-out of the discontinued operations as well as the one-off provision of CHF 231 million, as a result of further developments in an ongoing competition law investigation by the European Commission into the ethylene purchasing market.
Meanwhile, SABIC looks “forward to continuing the discussions with Clariant once conditions improve,” it said in a bourse statement.
Clariant, whose CEO Ernesto Occhiello decided to abruptly leave the company for personal reasons with immediate effect, will see chairman Hariolf Kottmann assume the responsibilities in the interim until a successor is found.
The Swiss company said that it would continue to focus on its core sectors of care chemicals, catalysis and natural resources after shelving its speciality chemicals business. It also said it would continue to divest its pigments business.
The proceeds from the divestments will be used to invest in innovations and technological applications within the core business areas, to strengthen Clariant’s balance sheet and to return capital to shareholders.