Total SA has announced that it is taking the first steps to reorganising its global downstream business, with a view to merging refining and petrochemical activities without job cuts. Chairman and Chief Executive Christophe de Margerie told reporters that the reorganisation was needed as the "market isn't doing well these days" in mature countries. "It's been some time now that the market in Europe hasn't grown, in fact, it's been contracting," he said.
Meanwhile, de Margerie added that markets outside the Organization for the Economic Cooperation and Development (OECD) would become more important. De Margerie explained that, in addition to merging its refining and petrochemical arms, the company expected the marketing businesses will now work on autonomously, also operating as a barometer of customer needs.
Without discussing specific figures, de Margerie said that he expects to achieve significant savings from the plan with relatively low investment. "Figures will come later...I expect a lot from it," he said.
The plan is expected to boost the originally forecast profitability of the refining and petrochemical activities for the 2010-2014 period from 4% to 5%. De Margerie said that the programme was not intended as a way to divest assets, or as a response to negative European refining margins from August and early September.
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