New business platform paying off for Lanxess

CLEVELAND (Nov. 10, 2015)  —  Specialty chemical maker Lanxess A.G.'s restructuring efforts are paying off for one of its newly formed business units.

Rhein Chemie Additives — which featured Lanxess' former Rhein Chemie, Functional Chemicals and the specialty chemicals line from its Rubber Chemicals unit — combines the traditional Rhein Chemie offering with other specialty products to reduce overlap and create new business opportunities.

“It's truly global. It adds a critical mass for the various regions,” Johannes Samwer, director of sales for Rhein Chemie Additives North America, said during an interview at the recent International Elastomer Conference in Cleveland.

“The footprint in Europe has always been fairly large, but combining all additives activities adds to the platform for growth in terms of personnel, exchange and best practices within the business. We're through streamlining, now the platform we have is really dedicated toward growth. We've put together what belongs together, both on the polymers side with the backwards integration and on the additives side with the business model.”

The model was part of a companywide restructuring effort that saw Lanxess consolidate to 10 business units from 14. The new unit operates 15 sites globally, 11 of which are within the Rubber Additives business line, including two in Argentina, two in the U.S., two in Germany and one each in Brazil, Russia, India, China and Japan.

Philipp Junge, head of the global rubber business line for Rhein Chemie Additives, said the new unit combined knowledge both on the technical and sales side. The units had shared the same basic business model of selling technology, so Rhein Chemie Additives has the same approach to the market. But most of the customers were being served by multiple business lines, which created overlap under the old structure.

“We historically haven't spoken as much technically and commercially with the other lines because they were in the other units,” Mr. Junge said. “This dialogue is a lot more intensified now. There is a technical dialogue across business lines because there is some great technical expertise, especially in the plastics additives business, that we can transfer to the rubber side. Also the lubricant people and the plastics people talk much more efficiently these days based on the fact they share the same chemistries.”

The new unit combines Lanxess' crosslinking systems and anti-reversion agents with Rhein Chemie's offerings. For instance, Perkalink 900 and Vulkacit come from the previous Rubber Chemicals unit. Mr. Junge said the combination creates positive synergies.

“Internally we call it a hybrid sales force,” Mr. Samwer said. “We combine territories or accounts where our sales people go to represent two or three additives business line. Customers can get all the additives they need — from plastics, rubber, lubricants and colorants — essentially from one person. The team we have gives us flexibility in terms of assigning new accounts for new sales.”

“This offering out of one hand didn't exist before,” Mr. Junge said. “It's always been there, but through the more focused effort we can approach the market better than we did before.”

The unit also has added capabilities to two of its production sites — in Little Rock, Ark., and Porto Feliz, Brazil. Each has installed new extruders for producing rubber compounds used to manufacture the firm's Rhenoshape bladders. Brazil implemented the company's new Rhenowave quality control system, which uses ultrasonic pulses to monitor key properties of the rubber compound during the extrusion stage.

The firm said the technology helps reduce both rejection rates and production costs. It will install Rhenowave at the Little Rock plant at the beginning of 2016.

Bladders continue to be a focus for Rhein Chemie Additives. The unit just opened a new facility in China.

“The bladder business is obviously very, very different from the chemical business, but it is also one of our major growth areas,” Mr. Junge said.

“The trend of outsourcing non-core processes in the tire companies continues,” he added. “All the new tire plants that you see now in the U.S. won't have bladder production in-house, so they're looking for outside partners.”

This report appeared on the website of Rubber & Plastics News, an Akron-based sister publication of Tire Business.