Crain News Service report
COLOGNE, Germany (Aug. 7, 2015) — Synthetic rubber producer Lanxess A.G. revealed in its financials for second quarter 2015 that it has initiated a process that will transfer its rubber business to a legally independent business entity within the Lanxess Group.
The plan is for the new entity to comprise the Cologne-based company's Tire & Specialty Rubbers and High Performance Elastomers business units. The two combine to operate 20 production facilities with about 3,700 employees.
This process is part of Lanxess' three-phased realignment program, which CEO Matthias Zachert said is on schedule. The third phase is focused on improving the competitiveness of the business portfolio through potential alliances in the rubber business.
“In this connection, we are currently engaged in very constructive discussions and assume that we will achieve concrete results in the course of the second half of the year,” Mr. Zachert said in an Aug. 6 news release.
The firm said the first phase has been successfully implemented. It resulted in about 1,000 job decreases worldwide and the consolidation to 10 business units from 14. A recent development in the realignment included U.S.-based Rhein Chemie Corp. merging into Lanxess Corp.'s Rhein Chemie Additives unit, no longer operating as a separate legal entity, the firm said.
Lanxess has initiated measures of the second phase, which involves the restructuring of its EPDM and neodymium-based performance butadiene rubber production, affecting about 140 employees worldwide. The firm will halt EPDM rubber production at its facility in Marl, Germany, and will realign both its EPDM and Nd-PBR production to four strategic regional facilities.
Lanxess reported increased sales and net income for the second quarter, causing it to increase its guidance for 2015. Sales improved by 4.3 percent to about $2.29 billion. The firm cited higher volumes and positive currency effects offsetting raw material induced lower selling prices.
Net income also increased by 58.2 percent to about $94.7 million thanks to operational development and proceeds from the sale of noncurrent assets.
Lanxess now projects its EBITDA pre-exceptionals to come in between about $914 million and $958 million compared to its original projection of about $893 million and $936 million.