 "LANXESS looks for strategic options for non-core businesses; may affect Jhagadia site")
At the Media Day 2013 on September 18, the Germany-based global specialty chemicals major, LANXESS AG, which registered sales of Euro 9.1 billion in 2012, has announced that it was pursuing strategic options for its specific non-core businesses. The decision may have an impact on its Jhagadia (Gujarat) facility, along with its other global sites. LANXESS added that it will maintain its current structure of 14 business units under its three established segments.
“These non-core activities have combined sales of roughly Euro 500 million, close to Euro 30 million in EBITDA pre-exceptionals, and a headcount of roughly 1,000. The activities include the High Performance Materials (HPM) business unit’s Perlon-Monofil business line, Rubber Chemicals’ (RUC) accelerators and antioxidants business lines, and High Performance Elastomers’ (HPE) nitrile butadiene rubber business line. The affected sites are in Brunsbuettel and Dormagen, Germany; Kallo, Belgium; Bushy Park, USA; Jhagadia, India; La Wantzenau, France; and Nantong, China. All options for these sites will be considered in line with legal frameworks and local employee participation,” stated the company in a press release.
“Each of these businesses is well positioned in its market, but can develop better over time with a different partner,” said Axel Heitmann, Chairman of the Board of Management of LANXESS AG, in the release.
As per the information available on the LANXESS India website, at its Jhagadia site, LANXESS has production facilities, which belong to business units of Rubber Chemicals, Ion Exchange Resins, Material Protection Products, Rhein Chemie and High Performance Materials.
According to the press release, LANXESS is countering the challenging business environment with a comprehensive efficiency program. 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 optimise its portfolio.
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“Due to the current situation we must now take action. 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,” said Heitmann, at the Media Day.
He confirmed the company’s full-year guidance for 2013 of Euro 700-800 million EBITDA pre-exceptionals, excluding potential inventory devaluations.
As part of the ‘Advance’ program, LANXESS is aiming to achieve about Euro 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.
“These non-core activities have combined sales of roughly Euro 500 million, close to Euro 30 million in EBITDA pre-exceptionals, and a headcount of roughly 1,000. The activities include the High Performance Materials (HPM) business unit’s Perlon-Monofil business line, Rubber Chemicals’ (RUC) accelerators and antioxidants business lines, and High Performance Elastomers’ (HPE) nitrile butadiene rubber business line. The affected sites are in Brunsbuettel and Dormagen, Germany; Kallo, Belgium; Bushy Park, USA; Jhagadia, India; La Wantzenau, France; and Nantong, China. All options for these sites will be considered in line with legal frameworks and local employee participation,” stated the company in a press release.
“Each of these businesses is well positioned in its market, but can develop better over time with a different partner,” said Axel Heitmann, Chairman of the Board of Management of LANXESS AG, in the release.
As per the information available on the LANXESS India website, at its Jhagadia site, LANXESS has production facilities, which belong to business units of Rubber Chemicals, Ion Exchange Resins, Material Protection Products, Rhein Chemie and High Performance Materials.
According to the press release, LANXESS is countering the challenging business environment with a comprehensive efficiency program. 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 optimise its portfolio.
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ALSO READ: LANXESS working on new materials for lighter, fuel-efficient cars
“Due to the current situation we must now take action. 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,” said Heitmann, at the Media Day.
He confirmed the company’s full-year guidance for 2013 of Euro 700-800 million EBITDA pre-exceptionals, excluding potential inventory devaluations.
As part of the ‘Advance’ program, LANXESS is aiming to achieve about Euro 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.