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July 28, 2003
Volume 81, Number 30
CENEAR 81 30 p. 10
ISSN 0009-2347


MANAGEMENT

MILLENNIUM CEO OUT
New loss estimate prompts job cuts and a dividend suspension

RICK MULLIN

Landuyt
MILLENNIUM CHEMICALS PHOTO
Millennium Chemicals Chairman and CEO William M. Landuyt resigned last week as the company announced a greater than expected loss for the second quarter and suspension of its dividend. Millennium also announced it would cut 175 jobs and move its headquarters from Red Bank, N.J., to Hunt Valley, Md.

Landuyt, 47, who said in December that the firm would not change its dividend policy, will be succeeded as CEO by Robert E. Lee, 46, currently executive vice president and director. Worley H. Clark Jr., 70, a company director and former Nalco Chemical CEO, will become chairman.

Millennium said it expects to report a second-quarter net loss of between 25 and 30 cents per share. Wall Street analysts were expecting a loss of 11 cents.

Millennium said price pressure and lower than anticipated TiO2 sales due to the poor economy and the weather's impact on painting this spring are mostly to blame for the anticipated loss. Sales volume of TiO2 for the second quarter is expected to be even with the first quarter and 15% lower than second-quarter 2002 sales.

Titanium dioxide accounted for more than 75% of Millennium's sales of $1.6 billion in 2002. Paints and coatings, in turn, make up 60% of the firm's TiO2 sales. U.S. TiO2 consumption was down 14% for the first four months of 2003, according to Commerce Department figures.

Millennium says it hopes to realize about $20 million of annual savings from the cost cutting. It expects to record charges associated with these measures totaling $20 million to $25 million over the next several quarters.

According to Merrill Lynch analyst Donald D. Carson, poor results left Millennium's board of directors little choice but to suspend the dividend. In addition, Equistar Chemicals--which is one-third owned by Millennium--is not expected to pay a dividend until 2005.

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