Rohm and Haas to cut North American production capacity

Specialty chemical producer shifts more production overseas to battle costs

By Dave Hannon -- Purchasing, 6/17/2008 7:26:00 AM

Specialty chemicals maker Rohm and Haas said this week it plans to reduce its workforce and cut its installed capacity in the company’s emulsions network in North America by 30%, “reflecting equally the impact of productivity improvement efforts and reduced market demand.”

According to a statement released this morning, the Philadelphia-based company also said it plans to adjust the infrastructure for its Electronic Materials group, reflecting the increased shift of the business to Asia.Late in 2007, Rohm and Haas said it hoped to recover 80% of its raw materials cost escalation in the first quarter through higher prices. Last month the company began applying an indexed raw material and energy surcharge to all products in its Specialty Materials business to offset increasing costs. And earlier this week, the company announced price increases of up to 40¢/lb for acrylates, methacrylates and specialty monomers sold in North America. It also pushed hikes for acrylic and styrene acrylic polymers.

In a statement, CEO Raj Gupta said: “The actions announced today complement the pricing surcharge implemented recently to address rising raw material, energy and freight costs. Taken together, these actions demonstrate leadership on our part to remain a viable, valued supplier to our customers.”

Like many chemicals industry players, Rohm and Haas has been focusing more on low-cost global markets and less on North America for production due to high costs. In April, Rohm and Haas signed a joint venture to produce materials in Saudi Arabia and more recently it has announced plans to build a new plant in Vietnam.