Lanxess Seeks to Increase Competitiveness
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 optimize its portfolio.
Lanxess confirmed the company's full-year guidance for 2013 of € 700-800 million EBITDA pre exceptionals, excluding potential inventory devaluations.
As part of the "Advance" program, Lanxess is aiming to achieve about € 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.
The positions will be phased out through a voluntary separation program, which includes early retirement packages and severance pay. In addition, the variable compensation for the current business year will be reduced for those who are eligible. This includes the Board of Management. All measures are being coordinated with employee representatives.
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 their business operations globally to reflect the current market situation. Lanxess will also continue with its proven flexible asset management strategy.
In total, some € 150 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 will explore strategic options for specific non-core businesses.
