Lanxess Realignment Ahead of Target
Lanxess is proceeding more quickly than expected toward its realignment goals, CEO Matthias Zachert said at the company’s Media Day in Cologne, Germany. Thanks to this success, he said, management has raised its 2015 guidance for the second time this year. From today’s perspective, Lanxess now expects to post EBITDA pre-exceptionals of €860-900 million.
Following a global analysis of the company’s plants and processes, which will extend into 2016, Zachert said additional annual savings potential of €150 million has been targeted. Steps toward the goal will be taken progressively up to 2019, with about €10 million of the cost relief expected to be booked this year.
Around €100 million of the targeted savings is planned to be generated through a process improvements at production sites, resulting in particular in lower consumption of energy and raw materials and in optimized maintenance processes, the CEO said.
The rubber business, which has recently been the root of the company’s woes, will be at the forefront of savings. Lanxess projects that capacity reduction and efficiency measures at sites in Latin America and France will contribute up to €30 million toward the target. The reorganization of the production network for EPDM and (Nd-BR) rubber is expected to generate further savings of €20 million.
Going forward, Lanxess plans to focus on mid-sized markets, with the proceeds of up to €400 million from the sale of part of its rubber business to Saudi Aramco helping to fund growth projects.
In future, the former Bayer chemicals arm will focus on chemical intermediates and additives, agrochemicals, color pigments and high-tech plastics, as well as specialty chemicals for water treatment, material protection and the leather industry.
“In these businesses, we have leading positions in diversified, less cyclical markets, which we plan to expand,” Zachert explained. “We will thus be able to increase our profitability and simultaneously become more resistant to cyclical fluctuations.” China, North America and Southeast Asia have been identified as major growth regions.
