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LANXESS increases competitiveness

September 25/2013

MOSCOW (MRC) -- LANXESS, German specialty chemicals company, is countering the challenging business environment with a comprehensive efficiency program, according to the company's press release.

Currently, it is foremost the synthetic rubber activities that are experiencing a temporary weakness in demand, increased competition in the market and volatile raw materials prices. As part of the "Advance" program, the company therefore plans to reduce costs and headcount, as well as optimize its portfolio.

"Due to the current situation we must now take action," said LANXESS Chairman of the Board of Management, Axel C. Heitmann, at todays Media Day. "We have a strong track record of managing our business in challenging economic environments. We will undertake all necessary steps in order to return to sustainable and profitable growth as soon as possible. We are seeing first signs of stability in the market but it is too early to say when and how quick a recovery will take hold."

Heitmann confirmed the companys full-year guidance for 2013 of EUR 700-800 million EBITDA pre exceptionals, excluding potential inventory devaluations.

As part of the "Advance" program, LANXESS is aiming to achieve about EUR 100 million in annual savings from 2015 onward through efficiency improvements and targeted restructuring. This will lead to a headcount reduction of about 1,000 employees worldwide by the end of 2015.

Restructuring has already been implemented within the Rubber Chemicals business unit, which is closing a site in South Africa and downsizing its operations in Belgium. In addition, LANXESS will adjust its business operations globally to reflect the current market situation. The company will also continue with its proven flexible asset management strategy.
 
In total, some EUR150 million in one-off charges will be booked in 2013 and 2014 to cover the "Advance" program.

LANXESS will maintain its current structure of 14 business units under its three established segments. At the same time, the company is pursuing strategic options for specific non-core businesses.

As part of its portfolio management activities over the mid- to long term, LANXESS is predominantly targeting acquisitions that will strengthen its Advanced Intermediates and Performance Chemicals segments and thus further diversify the Groups structure.

LANXESS is currently pushing ahead with three important investment projects serving the megatrend mobility. They are a neodymium polybutadiene rubber (Nd-PBR) plant in Singapore, an ethylene propylene diene monomer (EPDM) rubber plant in China and a polyamide plant in Belgium. Construction is progressing according to plan.

As MRC wrote before, LANXESS celebrated the opening of its first production facility in Russia. In the new plant at the Lipetsk site, LANXESS subsidiary Rhein Chemie manufactures polymer-bound rubber additives for the markets in Russia and the Commonwealth of Independent States (CIS), primarily for the automotive and tire industries. A production facility for the bladders used in tire production is to be added in 2016. The overall investment volume in euros amounts to a seven-digit figure and 40 new jobs will be created at the new plant in the medium term.

LANXESS is a leading specialty chemicals company with sales of EUR 9.1 billion in 2012 and roughly 17,400 employees in 31 countries. The company is currently represented at 50 production sites worldwide. The core business of LANXESS is the development, manufacturing and marketing of plastics, rubber, intermediates and specialty chemicals.


mrcplast.com
Author:Margaret Volkova
Tags:poliamid, propylene, ethylene, car components, neftehimiya, adhesives, tyres, Lanxess, Germany.
Category:General News
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