In the coming years, the bulk salt market is expected to grow modestly. According to Floris A. Bierman business unit manager Salt, Akzo Nobel has a solid position in this segment. However, there is significant overcapacity in the packaged salt segment pushing prices down to unsustainable levels. In addition, rock and solar salt have entered the Northwest European Market. In some specific segments, the application of vacuum evaporated salt has suffered considerably.
In recent years, investments in modern packaging equipment and several reorganizations in order to reduce cost, were not enough to see the specialty business through into a secure future given the developments in the market. These factors have led Akzo Nobel Salt to the conclusion that a gradual close down of packaging lines in Hengelo is necessary and that some 200 jobs will become redundant. According to the proposed plan, the packaging department will be fully closed end 2002. How to best handle the consequences for the employees concerned will be discussed with the Unions. The free salt production capacity will be used to produce bulk salt for the chemical industry. The Hengelo location excels in the production of bulk salt.
By concentrating packaging activities in the existing production locations in Germany, Denmark and the Netherlands, Akzo Nobel Salt will increase its competitive strength in this segment as well.