Specialty Chemicals Producer Albemarle To Cut Expenditure In 2024

Specialty chemicals manufacturer Albemarle Corporation ALB has outlined a series of measures to re-phase its organic growth investments and optimize its cost structure.

These actions are designed to unlock cash flow over the near term and generate long-term financial flexibility. 

Albemarle expects its 2024 capital expenditures to be $1.6 billion – $1.8 billion, down from approximately $2.1 billion in 2023.

The reduction in spending reflects a re-phasing of larger projects in the near term to focus on those that are significantly progressed, near completion, and in startup.

The company will prioritize permitting activities at the Kings Mountain spodumene resource and defer spending at the Richburg mega-flex lithium conversion facility.

It will defer investment for the Albemarle Technology Park in North Carolina and limit sustaining capital spending to the most critical health, safety, environmental, and site maintenance projects.  

Albemarle will also optimize its cost structure, slashing costs by about $95 million annually, primarily related to sales, general, and administrative expenses.

The company expects to realize more than $50 million of these cost savings in 2024.

Related to the above actions, Albemarle will record a charge in the first quarter of 2024, associated with severance and related benefit costs, exit and disposal activities, and asset write-downs.  

“The actions we are taking allow us to advance near-term growth and preserve future opportunities as we navigate the dynamics of our key end-markets,” said CEO Kent Masters.

Price Action: ALB shares are trading higher by 0.86% at $125.95 in premarket on the last check Wednesday.

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