Monsanto Co. said yesterday that it would sell divisions, lay off workers, and shut plants in a sweeping reorganization meant to redirect the company from the manufacture of basic chemicals to one that markets specialty products.
The chemical giant, based in St. Louis, said it would close a chemical manufacturing facility in Texas City, Tex., and an elemental phosphorus facility in Columbia, Tenn.
The reorganization just announced is by far the most sweeping to date, said Richard Mahoney, the company's chief executive.
"These changes are vital as we adapt to a radically altered and highly competitive global economy," he said. "The Monsanto which emerges from this process will be much leaner, less cyclical, produce fewer hazardous materials, be more sharply focused on corporate strengths and prepared to compete aggressively throughout the world."
The company has been restructuring its businesses over the last few years. For example, it has said it will sell its oil and gas operations and spin off G. D. Searle's consumer products division. It purchased G. D. Searle earlier this month for $2.7 billion. It has also agreed to sell its Seal Sands chemical facility in Britain to BASF, a German firm.
In the latest restructuring, the company will lay off at least 1,300 workers out of the 8,800 it has in the St. Louis area. Employe reductions will include early retirement provisions for those eligible that accept by Dec. 1.
The Texas City plant will continue to be operated until it is sold. However, the Columbia facility will be closed by the end of 1986, and its operations consolidated with the company's phosphorus operations at a plant in Soda Springs, Idaho.
The reorganized company will be composed of the newly formed Monsanto Chemical Co. and Monsanto Agricultural Co., plus G. D. Searle & Co., Fisher Controls International Inc. and Monsanto Electronic Materials Co. effective Jan. 1.
The company said it would consider the sale of other assets but declined to elaborate which assets.
The company will take a non-recurring after-tax charge of $559 million in the fourth quarter for a write-down of certain assets associated with the withdrawal from businesses and the costs of an early retirement program. Businesses being discontinued contributed $600 million in sales through the first three quarters, but earnings were essentially break even, the company said.
Gains from other asset sales anticipated in the fourth quarter would reduce the charge against 1985 corporate net income to between $225 million and $250 million, the company said. Monsanto reported profits of $242 million ($3.14 per share) on revenue of $5 billion for the first nine months of this year, down from profits of $398 million ($4.87) on sales of $5.1 billion for the same period last year.
"For the past several years, Monsanto has been involved in the transition from heavy dependence on commodity chemicals to higher value specialty products," said company spokesman Tom Slocum. Commodity chemicals are basic chemicals used by a variety of different industries as opposed to speciality products such as agricultural chemicals, engineering plastics and other products, he said.
The company will concentrate on strengthening its current and developmental programs, such as fibers, plastics and human health care products, withdraw from selected low-return businesses and production facilities, sell certain assets that have no strategic importance and reduce employment levels, he said.
Meanwhile, Norton Co., the Worcester, Mass., maker of abrasives and natural and synthetic diamond drill bits, said it would lay off 1,200 employes as part of a 15 percent reduction of its salaried work force in 27 countries, effective Oct. 31.
"Business hasn't been good for a number of years," said company spokesman Ronald B. Harrison. Sales were down $14 million for the first nine months of this year as compared with the same period in 1984, he said.