A screen granb of Henkel AG website
A screen granb of Henkel AG website

Henkel to cut 1,200 jobs in adhesives as China demand slows

The brunt of the layoffs will be borne in Asia, with 250 in Europe and 100 in Germany and completed by the end of the March

Munich: Henkel AG, the maker of Loctite glue and Persil detergent, plans to cut 1,200 jobs at its adhesives unit as it adapts capacity to waning Chinese industrial demand.

The brunt of the layoffs will be borne in Asia, with 250 in Europe and 100 in Germany and completed by the end of the March, a company spokesman said by telephone. In 2013, Henkel opened what it said was the world’s largest adhesives plant in Shanghai. The company, which derives about half of its revenue from its adhesives business, had about 50,000 employees globally at the end of June.

Henkel said in August that the Loctite glue business, which is traditionally its most profitable, was facing mounting pricing pressure. The Chinese slowdown sideswiped chief executive officer Kasper Rorsted, who had previously said his greatest concern was increasing margins at the US consumer business, which also makes Schwarzkopf shampoo and Fa deodorant.

US manufacturing fell in June for the third month in a row to its lowest since October 2013, according to the Markit Economics index. After rebounding in July, it slumped again in August and remained flat in September. China’s industrial slowdown meant that demand for Henkel’s glues, which are used in packaging and the automotive industry, grew less than 5 percent, Rorsted said in August.

Germany’s WirtschaftsWoche magazine reported the cuts earlier today. Bloomberg

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