September 28, 2004 Bayer
New joint venture
strengthens business in China
LANXESS in China ー managing chemistry
Weifang: New site sets LANXESS on course for growth
Bayer AG has
reorganized practically all of its chemicals operations and large
parts of its polymer activities into a new company called LANXESS, which is subject to the
approval of Bayer AG's stockholders'
be spun off and its shares will be distributed to the existing
shareholders of Bayer AG.
With 50 sites on all continents and around 20,000 employees, LANXESS is a globally operating group. Last year, LANXESS achieved sales of around EUR six billion (US$ 7.2 billion). "This means LANXESS will be one of the world's leading chemicals manufacturers," said Dr. Axel C. Heitmann, Chairman of the LANXESS AG Board of Management, at a press conference in Beijing on September 28.
LANXESS - strong roots for a strong future
LANXESS supplies specialist industries with a broad range of raw materials, intermediates, end products, additives and active substances, and supports its partners in developing and implementing optimum system solutions. The company remains focussed on its core skills, namely developing, manufacturing and selling high-quality chemicals, rubber and plastics.
LANXESS traditionally occupies a strong position in Europe and earned around half of its total sales here in 2003. The company also has a strong presence in Asia-Pacific (16 percent of its sales) and in the North American market, which accounted in 2003 for around 21 percent of its sales.
Aiming for success with clear objectives - in China and worldwide
Optimum cost management and increasing efficiency, including the right choice of locations, are at the heart of all the company's external and internal activities. "The right locations are of crucial importance for us to ensure that the company secures a lasting increase in value," said Dr. Heitmann. "That's why we're looking to increase our involvement in regions where we can actively share in continuous growth." According to Heitmann, the company therefore intends to boost its presence in China, the fastest growing market in the world, as experts predict that the country is set to become the world's largest chemicals market over the next few years.
LANXESS has over 550 employees in Mainland China and Hong Kong and currently has three production facilities in Shanghai, Qingdao and Wuxi.
The LANXESS Shanghai Pigments Company manufactures color pigments in Shanghai for use in the Chinese construction and paint industries. Bayferrox® and chrome oxide pigments for coloring a diverse range of products, such as concrete parts, roofing tiles, paints and coatings, plastics, paper and special pigments for toners and other applications, have been proving their mettle for many years now. The products offer high standards of quality as well as being simple and environmentally friendly to process.
In 1999, the Rhein Chemie (Qingdao) Ltd. began producing additives for the rubber and mineral oil industries. Lubricant additives, for example, are used everywhere where there is a need to prevent friction, frictional heat and wear and to protect material against corrosion. Rhein Chemie has established itself in the lubricant industry as one of the leading additive manufacturers for industrial lubricants.
Today the leather business unit has the highest sales volume amongst all the business units of LANXESS in China. The company offers its customers cutting-edge products and technologies coupled with application-specific expertise. The LANXESS Wuxi Leather Chemicals Company, founded in conjunction with the Wuxi Dyestuff Factory, has been producing leather chemicals since 1998 in Wuxi, north-west of Shanghai.
LANXESS - Top company in a growth market
Following its objective to remain efficient and growth-oriented, LANXESS is currently tapping into the particularly fast-growing Chinese market for hydrazine hydrate, an intermediate for the chemical industry. Hydrazine hydrate is used by the agro and pharmaceutical industry as well as for the production of plastic additives and for water conditioning.
A joint-venture company is therefore to be set up in collaboration with the Weifang Yaxing Chemicals Company in Beijing on September 28, 2004. This is a further instance of LANXESS' concept of flexible, goal-focussed management of the chemicals business. The purpose of the joint venture is to manufacture hydrazine hydrate, whose market is currently enjoying annual growth rates running into double figures. ヒドラジン水和物
With its involvement in Weifang LANXESS (* LANXESS Yaxing Chemical (Weifang) Company Ltd. )expects to become one of the leaders on the Chinese hydrazine hydrate market for three reasons: "We will have a production unit with very high capacity, we will offer the best quality and we also will be way out in front in terms of process engineering," said Wang Yongli, President of the LANXESS Chemical Company in China.
Weifang - a viable location with a strong partner
Weifang Yaxing Chemicals Company is an ideal joint-venture partner for manufacturing top-quality hydrazine hydrate. And Weifang is also the perfect location for such a facility. For this reason, LANXESS will transfer its hydrazine hydrate plant from its site in Baytown, Texas, USA, to Weifang, which is intended to begin supplying the Chinese and international market from the end of 2005.
"Our sites have to work efficiently and be growth-oriented," said Dr. Heitmann, summarizing the main criteria and LANXESS' new involvement in China. "The joint-venture company and the new Weifang site meet both of these requirements, meaning we can remain true to our mission: ‘We aim for success'."
July 12, 2006 Lanxess
LANXESS inaugurates hydrazine hydrate plant in Weifang
Successful relocation of plant from Texas, USA, to China
The LANXESS chemicals group today inaugurated a plant for producing hydrazine hydrate in Weifang in the Chinese province of Shandong. The plant had previously been dismantled in the USA and transported to China. This marks a further key milestone for us in boosting our profitable growth in Asia," said Axel C. Heitmann, Chairman of the LANXESS Management Board, at a press conference in Weifang. Relocating the plant enables us to become one of the leading hydrazine hydrate producers in China," adds Heitmann. China is the fastest growing hydrazine hydrate market in the world.
LANXESS - a leading hydrazine hydrate producer in China
With an initial capacity of 12,000 metric tons a year, the new plant is one of the largest of its kind in the world and complies with the latest US standards in environmental protection and occupational safety. Hydrazine hydrate is used in the agro, pharmaceuticals, automotive and leisure industries, for example. Most of the raw materials required are being supplied by the joint venture partner Weifang Yaxing Chemical Company Ltd. LANXESS has a 55 percent share in the joint venture LANXESS Yaxing Chemical (Weifang) Company Ltd., founded in September 2004. LANXESS is the first international investor in the new Weifang Industry Park.
Relocation of the plant started in January 2005. Overall, LANXESS transported over 3,000 individual parts weighing over 1,100 metric tons in total on five ships from Texas to the Chinese port of Qingdao. From there, the plant was carried on special trucks to Weifang, 120 km away.
Hydrazine hydrate - a wide range of applications
Hydrazine hydrate is a key component for the pharmaceuticals industry in manufacturing medicines, including those for the treatment of tuberculosis, forms of depression and hypertension. And in crop protection, for instance, hydrazine is a vital intermediate for growth regulators. It is also used as an intermediate in chemical synthesis, for example in the production of a blowing agent for foaming plastics. Plastic foams are processed into a wide range of consumer goods such as shoes, furniture and cars.
A further important application for hydrazine hydrate is corrosion protection in closed water cycles. As an antioxidant, it protects pipes from rust and premature aging, particularly in the steam circuits of heating and power plants, thus significantly increasing plant reliability.
While demand for hydrazine hydrate worldwide is on the downturn, for a number of years China has experienced double-digit growth rates in this sector.
The new plant in Weifang means that LANXESS now has a total of four production sites in China, alongside Shanghai, Qingdao and Wuxi. It has sales offices in Shanghai and Hong Kong. LANXESS employs a total of about 700 staff in China.
The Functional Chemicals business unit is part of the Performance Chemicals Segment, which recorded sales of approximately EUR 2 billion in fiscal 2005.
2004 Bayer WEIFANG ：山東省維坊
Weifang Yaxing Chemical ：維坊亜星化学
LANXESS intensifies operations in China
New chemicals joint venture
chemicals company LANXESS and the Weifang Yaxing Chemical Company
Ltd. of Weifang are founding a joint-venture company to
manufacture hydrazine hydrate, an intermediate for the chemical
industry. Hydrazine hydrate is used by the agro and the
pharmaceutical industry as well as for the production of plastic
additives and for water conditioning. LANXESS will own 55
meaning the Weifang
Yaxing Chemical Company's stake will be 45 percent.
"We're looking to achieve concerted growth in China," says Dr. Axel C. Heitmann, Chairman of the LANXESS Board of Management. "And we're collaborating with expert partners in order to reach this goal. It means we can cost-effectively tap into new markets and develop existing market positions without having to make large investments."
LANXESS: Top company in a growth market
This involvement means that LANXESS is aiming at becoming a leading company on the Chinese hydrazine hydrate market. LANXESS will have a production unit with very high capacity, producing hydrazine hydrate at the best levels of quality available in China, and is worldwide one of the technology leading companies in terms of process engineering.
As part of the joint venture, LANXESS is transferring key parts of its hydrazine hydrate operations to the fastest growing hydrazine hydrate market in the world. In 2003, approx. 75,000 metric tons of hydrazine hydrate were processed in China and consumption is set to significantly rise in the next few years. The plant in Weifang will be one of the largest of its kind in the world and is expected to begin supplying customers at the end of 2005. The production facility is currently located at the LANXESS site in Baytown, USA, and dismantling work is set to begin later this year.
Partnering for better performance
The joint-venture company will be called LANXESS Yaxing Chemical (Weifang) Company Ltd. and headquartered in Weifang in Shandong province, China. Dr. Ming Guang Chen of LANXESS is the designated general manager of the new company.
LANXESS has over 550 employees in Mainland China and Hong Kong and currently three production facilities in Shanghai, Qingdao, Wuxi and a soon to count Weifang among these sites.
is a colorless liquid with a smell similar to ammonia. The
substance was synthesized for the first time by German chemist
Julius Wilhelm Theodor Curtius in 1887. He had his discovery
patented in Germany and the USA.
Hydrazine hydrate is sold in different concentrations. The LANXESS Yaxing (Weifang) Chemicals Company Ltd. production facility will be capable of manufacturing 64 %, and therefore the best quality hydrazine hydrate. With the launch of production in Weifang, it will be the only plant in China to produce hydrazine hydrate of this quality.
The possibilities for use and potential application areas of this inorganic substance as an intermediate for the chemicals industry are extremely varied. Hydrazine hydrate is used by the agro- and pharmaceutical industry as well as for the production of plastic additives.
It is used as an intermediate for chemical synthesis and, for example, for the production of azodicarbonamide, a blowing agent for the foaming of plastics. Foam plastics are processed in many consumer goods as for shoes, furniture and cars.
The pharmaceuticals industry requires hydrazine hydrate to manufacture medicines, including those for the treatment of TB, forms of depression and hypertension. And for crop protection products, hydrazine is a vital intermediate for growth regulators, for instance.
A further important application for hydrazine hydrate is corrosion protection in closed water circuits. As an antioxidant, it protects pipes from rust and premature aging, particularly in the steam circuits of the power industry, thus significantly increasing plant reliability.
Bayer sets allotment ratio for Lanxess shares at 10 to 1
- Stockholders to
vote on the spin-off on November 17
- Lanxess issues EUR 200 million mandatory convertible bond to Bayer
In connection with the planned spin-off of new chemical company Lanxess, stockholders of Bayer AG will be granted one Lanxess share for every ten Bayer shares that they hold. This is provided for in the Spin-Off and Acquisition Agreement to be voted on at an Extraordinary Stockholders' Meeting in Essen on November 17. If the shareholders approve the plan by a majority of at least 75 percent of the capital stock represented, Lanxess AG will be listed on the stock market at the beginning of 2005. A total of 73,034,192 no-par bearer shares of Lanxess will be allotted to Bayer stockholders. The spin-off is intended to have retroactive economic effect from July 1, 2004. To bolster the financial condition and credit rating of Lanxess, Bayer has purchased a EUR 200 million mandatory convertible bond issued by Lanxess.
In the run-up to the Stockholders' Meeting, Bayer CEO Werner Wenning once again emphasizes the opportunities created by the spin-off: Lanxess will be one of the largest chemical companies in Europe," he said. As an independent enterprise, it will have more scope to improve its competitiveness in the future." The spin-off would implement the strategic realignment of the Bayer Group as approved by the Board of Management and the Supervisory Board in November 2003 and confirmed by the Annual Stockholders' Meeting in April 2004. Bayer will thus separate most of its chemicals activities and about one third of its polymers operations in order to concentrate on the primarily innovation- and technology-driven core businesses of health care, nutrition and high-tech materials, with the Bayer HealthCare, Bayer CropScience and Bayer MaterialScience subgroups holding responsibility for business operations. Lanxess, on the other hand, possesses an extensive portfolio of products with a higher level of market maturity - basic, specialty and fine chemicals as well as polymers. These more cost-driven businesses demand the establishment of leaner structures and the systematic optimization of production facilities and processes.
Detailed information about Lanxess and the planned spin-off is contained in the Spin-Off and Acquisition Agreement and the Spin-Off Report, which are published today. Based on combined financials that present Lanxess as if its future structure had already existed in the past, sales of the company in the first half of 2004 remained steady year-on-year at EUR 3,283 million (2003: EUR 3,247 million). By contrast, Lanxess' operating result (EBIT) improved to EUR 80 million from minus EUR 39 million, while the net loss was just EUR 3 million compared with EUR 58 million for the same period of last year.
It is not yet possible to predict the future dividend policy of Lanxess AG. The Board of Management and Supervisory Board of Lanxess will decide on this at the appropriate time, taking into account the company's earnings situation. However, the possibility cannot be ruled out that Lanxess AG will not pay a dividend for the 2004 and 2005 fiscal years.
Lanxess net debt EUR 1.5 billion
Lanxess will have net debt of approximately EUR 1.5 billion, including pension commitments, when the spin-off takes effect. The financial liabilities to the Bayer Group are to be redeemed by drawing on a syndicated credit line. This EUR 1.0 to 1.5 billion credit line will consist of a short-term and a long-term tranche.
In addition, Bayer is bolstering the financial position of Lanxess through the purchase of a EUR 200 million mandatory convertible bond from the new company. The bond was issued on September 15, 2004, and acquired in its entirety by Bayer. Its terms reflect going market rates, with a three-year maturity and an interest rate of 6 percent. Conversion to Lanxess shares is possible on July 20, 2005 at the earliest, but will take place on maturity of the bond at the latest. This does not alter the Bayer Group's goal of wholly divesting Lanxess through the planned spin-off. Neither company will hold shares of the other immediately following the spin-off, nor does Bayer intend to hold the shares acquired through the bond conversion for the long term or use them to influence the policy of Lanxess AG. Rather, Bayer intends to divest these shares with the smallest possible impact on the market price.
Bayer expects the bond to favorably influence Lanxess' credit rating. The company is striving for an investment-grade - or BBB" - rating. Since rating agencies generally regard a mandatory convertible bond as having primarily the character of stockholders' equity, this instrument is expected to strengthen the balance-sheet structure of Lanxess and its position on the capital market. In the context of the spin-off, this convertible bond is an innovative financing instrument that offers equal advantages to both Lanxess and Bayer," explains Bayer CFO Klaus Kuhn. The amount by which Lanxess' capital stock increases as a result of the conversion will depend on the share price. Bayer expects to hold an interest of less than 20 percent in Lanxess after the bond is converted.
Additional financial details are provided in the Spin-Off Report. The placement of chemicals and polymers activities into Lanxess and the spin-off of this subgroup will result in external one-time charges of approximately EUR 75 million, which are to be borne by Bayer and recognized in fiscal 2004.
Trading relationship will continue
Bayer and Lanxess will continue to trade with each other despite their separation, with supply and service agreements running for between one and seven years. Some of these agreements include exclusive supply relationships, especially for strategically important products. On the basis of the agreements, the companies of the Lanxess Group are expected to supply goods and services to the value of approximately EUR 0.7 billion to Bayer in 2005. For its part, Bayer is expected to supply approximately EUR 0.5 billion worth of goods and other services to Lanxess next year. This figure includes mainly product shipments and also services provided by Bayer Business Services (BBS) and Bayer Technology Services (BTS). Furthermore, Lanxess is expected to purchase approximately EUR 0.5 billion worth of site-specific services from Bayer Industry Services GmbH & Co. OHG (BIS) in 2005. While BBS and BTS will remain wholly owned subsidiaries of Bayer AG, Lanxess will own a
40 percent interest in BIS.
Bayer and Lanxess will also jointly operate the chemical park sites in the future. Lanxess will use large sections of Bayer's main site in Leverkusen, where approximately 5,200 people work for the company. Lanxess has approximately 2,000 employees in Krefeld-Uerdingen and about 1,200 in Dormagen. The company has roughly 20,000 employees in all, about half of whom are based in Germany. Following the spin-off, the Bayer Group will have about 93,500 employees worldwide, including 37,800 in Germany.
独バイエル 化学子会社を完全分離 来年１月上場 事業絞り込み
November 25, 2004 LANXESS
itself as an independent company that is well-positioned for the
・ Major European chemicals producer makes
competitiveness and earnings power elements of its core strategy
・ Sales in first nine months grow 4.5 percent to EUR 5.0 billion
・ EBITDA margin increases to more than 7 percent
・ First investments announced
A new global company presents itself to the public today: formed from the chemicals arm and some of the polymers activities of Bayer AG, LANXESS will begin operating as an independent company at the start of 2005. A completely new company with some 20,000 employees, its own corporate structure and 2003 sales of EUR 6.3 billion (based on the combined financial statements) has been created in record time since the decision was taken to spin off these operations in November 2003. 99.66 percent of the capital stock represented at the Extraordinary Stockholders' Meeting of Bayer AG on November 17, 2004, formally approved the spin-off of LANXESS, paving the way for the stock to be listed on the capital market. The spin-off is scheduled for early 2005. It is expected that LANXESS will then rank sixth among Europe's listed chemicals companies.
Dr. Axel C. Heitmann, Chairman of the Board of Management of LANXESS, outlines the company's strategy and three main goals: independence, competitiveness and profitability. Independence will be ensured by focusing on the opportunities and challenges of the global chemicals and plastics markets. "Activities that were classified as non-core at Bayer are now part of LANXESS' core business," explains Heitmann.
LANXESS has four segments, each of which already reports annual sales of well over EUR 1 billion. The Performance Rubber segment specializes in solid rubber for the rubber and tire industries. LANXESS is thus a leading partner to the global tire industry.
Engineering Plastics focuses on the production of high-quality plastics for electrical and electronics appliances, furniture, sports and leisure applications and automotive engineering.
The Chemical Intermediates segment comprises basic chemicals, intermediates for the pharmaceuticals and crop protection sectors and inorganic pigments for coloring concrete and coatings.
Performance Chemicals is a classic area of the specialty chemicals business. Its portfolio comprises material protection products, processing chemicals for leather, textiles and paper, ion exchange resins, polymer additives such as flame retardants.
Heitmann acknowledges that the company faces major challenges in the next few years. Nevertheless, he is confident that LANXESS will achieve all its strategic goals in the medium term: "I am convinced that we will make it".
The uptrend on the chemicals market that started this year is expected to peak in 2006 or 2007. However, LANXESS is not relying solely on positive market trends. Consequently, it expects to derive more benefit from future upswings than it has in the past.
LANXESS has a 40 percent stake in Bayer Industry Services, enabling it to influence decisions at individual sites. Reducing its EUR 1.1 billion net debt (excluding pension obligations of EUR 0.4 billion) has high priority for LANXESS. The company already has a sound capital structure and an investment-grade credit rating (BBB-).
The principal goal at first will be to quickly raise the efficiency and effectiveness of the company and improve its cash flow. LANXESS has already identified immediate measures with a savings potential of millions of euros that should have a full impact on earnings next year.
Moreover, it has achieved its aim of introducing far-reaching changes. In the initial stages, the spotlight was on establishing a completely new organizational structure. This was accomplished in the first half of the year. Worldwide, 150 appointments were made to management positions.
The clear structure comprising 17 business units grouped in four segments optimizes the company's ability to focus on its other strategic goals: a long-term improvement in performance and profitability.
Heitmann lists the action required: "Steadily reduce costs, optimize processes, improve the product mix, develop new price/volume strategies and generate organic growth." On the basis of these criteria, strict portfolio management is to be introduced for LANXESS' extensive product range.
The consistent result-driven strategy is already bearing fruit. In the first nine months of this year sales increased 4.5 percent to EUR 5.0 billion, up from EUR 4.8 billion in the same period last year. In the first nine months of 2004 the EBITDA margin before special items increased to 7.6 percent, compared with 6.7 percent in 2003.
On 60 percent of its sales LANXESS already achieves an EBITDA margin before special items of over five percent. The margin on half of these is over ten percent. "That is a sound basis. We should therefore be able to report an EBITDA margin of around seven percent in 2004," reports Heitmann. That would be a substantial improvement on the previous year - even though the far-reaching cost-containment and restructuring drive is not yet having full impact. "However, it will become clear very soon," according to Heitmann. Profitability should then rise further: "From seven percent this year to an estimated nine to ten percent in 2006."
According to Heitmann, portfolio management will also include restructuring: "Under-performing business units need to ensure a rapid and sustained improvement in their performance so they make a positive contribution to cash flow."
The key criterion for portfolio management will be improving profitability. Targeted divestments are therefore possible. In the medium to long term LANXESS will also be examining selective acquisitions to strengthen its operations. However, no acquisitions are planned at present. Alliances are another cornerstone of the new company's strategy.
LANXESS intends to step up internationalization of its business. It already has 50 production sites and more than 50 companies in 21 countries. Asia and above all China will still enjoy high priority because this region is the main growth driver in the global chemical industry. In September LANXESS announced that it would be transferring its hydrazine hydrate facility from the United States to China.
Organic growth is concentrated on selected areas that are profitable. For instance, a EUR 40 million investment program is planned for the Butyl Rubber Business Unit. This will increase production capacity at its facilities in Canada and Belgium by 25 percent in the next two years. The market for butyl rubber is growing steadily and LANXESS is assuming average annual global growth of three percent in the period between 2002 and 2008.
"There are even opportunities for basic chemicals, which are often viewed with skepticism," stresses Heitmann. This business would benefit from a genuine upswing in many regional markets. "We have a clear strategy, we know we have to work hard, and we are convinced that we will make it," concludes Heitmann.
1) Bayer includes LANXESS' key data in its discontinued operations. LANXESS itself has prepared combined financial statements. The different approaches used in combined financial statements generally lead to higher sales and lower profits.
Lanxess closes rubber, fiber plants at Marl, Goch, Germany
Lanxess announced Thursday it has closed down two plants in Germany as part of a major restructuring program to save Eur25-mil ($33-mil). "Reducing debt will be a main priority for Lanxess," according to a company spokesman. The plants that have been closed were the polybutadiene rubber facility at Marl and elastic rotro garn fiber plant at Goch, the company said. The fiber plant producers Lanxess's trademark Dorlastan fiber. The 150 staff affected would be transferred to Dormagen. The move is seen as a way of increasing profitability and competitiveness to secure jobs, with the decision to reduce personnel made in conjunction with workers' representatives, Bayer said. At its first ever news conference following the decision by Bayer shareholders to approve the Lanxess spin-off, the new chemical company said that if restructuring was not possible, alliances or possibly even divestment would be considered. In particular Lanxess said it was looking to form alliances for business units which cannot expand quickly enough on their own.
February 28, 2005
Joint venture established with two partners in China
LANXESS accelerates growth in China
Access to the
world's most dynamic tire market Doubling of capacities for
LANXESS AG is stepping up its growth in the rapidly developing Chinese chemicals market. With a new joint venture, LANXESS intends to be the first western player to set up a production facility in China for antioxidants for the rubber industry. The joint venture, in which LANXESS is a minority shareholder, will begin manufacturing the well-proven high-tech product in the second half of 2006. The plant is located in an industrial park in Tongling in the Chinese Province of Anhui.安徽省銅陵市
The new company is called Anhui Tong Feng Shengda Chemical Co. Ltd. The two major partners are Xinda, which is involved on the production side and is an established chemicals manufacturer, and TongFeng, a financial investment company listed on the Shanghai stock market. "With this joint venture, we will gain access to the fastest growing tire market in the world," said Dr. Martin Wienkenhover, member of the LANXESS Board of Management responsible for Asian business, talking at an international press conference in Shanghai on February 28. Rubber was the most important raw material for the tire industry, and with this joint venture, LANXESS would be able to expand its leading position on the Chinese market, he said. "Studies show that tire production in China has grown by around 30 percent a year since the new millennium started," Wienkenhover added.
A second project that will drive LANXESS's Chinese and Asian business involves the doubling of production capacity for leather chemicals. For this, two new production plants have been built in the Wuxi無錫Industrial Park in a record time of 15 months, and these are now to be formally dedicated. "We are taking advantage of the opportunity to expand our leading position on the Chinese leather chemicals market," said Wienkenhover.
The third project involves a hydrazine hydrate facility, for which the groundbreaking ceremony will be held on March 1 in Weifang山東省維坊. It will put LANXESS in an excellent position to become the market leader in China. Hydrazine hydrate is an important intermediate used above all in the agricultural, pharmaceutical and plastics industries. At present, the facility is still located at the LANXESS site in Baytown, USA. "We are right on schedule with this project, which involves relocating the plant to the Chinese Province of Shangdong," said Wienkenhover. The facility, which is among the largest of its kind in the world, should be producing at full capacity by the end of 2005.
"China offers the highest growth potential for chemicals in the world. We want to make full use of this potential with these three new capital-efficient projects," explained Wienkenhover. With the increasing prosperity in the region, it is likely that there will be a strong and sustained growth in demand here for consumer durables. LANXESS products constitute an important part of many of these products," added Wienkenhover.
The alignment to Asia and above all to China had special priority, and LANXESS was keen to find flexible and intelligent investment solutions, said Wienkenhover. "We are looking for reliable Chinese partners who are well suited to us," he continued. LANXESS would then contribute its know-how or become a production partner in a joint venture. "With these business models we want to tap new markets or build on our market positions without making any major investments," said the LANXESS Board member, describing the key aspects of the company's Asia strategy.
Under the roof of LANXESS AG, 50 companies in 18 countries have taken over the vast majority of the former chemical activities of the Bayer Group and about one third of its polymer activities. With a comprehensive product portfolio in the fields of polymers and basic, specialty and fine chemicals, LANXESS is one of the key European players in the chemical and polymer segments. In the first nine months of fiscal 2004, LANXESS achieved sales of around ?5 billion. The Group has a global workforce of about 19,600, 1,800 of them in Asia/Pacific. In China, LANXESS so far has three production sites, in Shanghai, Qingdao and Wuxi.
LANXESS invests more than EUR 20 million in new capacities in Germany
Expansion of performance polymers production / Start-up of second facility to manufacture cold sterilants for beverages
Chemicals group LANXESS
is investing more than EUR 20 million to expand production
capacities in Germany.
At its Krefeld-Uerdingen site, the LANXESS Semi-Crystalline Products (SCP) business unit is spending around EUR 12 million expand the production of polyamide-6 for its Durethan（R） engineering plastic. The enhanced unit is scheduled to come on stream in early 2007 and would give LANXESS one of the world's largest production facilities for polyamide-6. In the coming five years, the company is aiming for a 50-percent increase in sales of its high-tech plastics Durethan（R） and Pocan(R).
At its Dormagen site, LANXESS has invested more than EUR 10 million in an entirely new facility to manufacture Velcorin(R), a cold sterilant 滅菌剤 for beverages, for the Material Protection Products (MPP) business unit. Test operation has been successfully completed and the facility can now start regular production. This expansion of capacity is in response to growing demand from the beverage industry, especially in North America and western Europe. Until now, LANXESS produced Velcorin only in Uerdingen. With the second unit, the company aims above all to grow its market position outside Europe.
The high-performance polymers manufactured in Krefeld-Uerdingen are used in the electrical, electronics, household appliance and, above all, automotive applications. One use of Durethan(R) is in hybrid technology, an innovation patented by LANXESS which combines steel and plastic in a new component. This technology couples the benefits of both materials, helping make cars both lighter and safer.
Velcorin(R) is already approved for use in many countries, where it has proven its reliability and high quality. Pending registration in Latin America and Asia offers interesting growth opportunities for this product.
April 27, 2006 Lanxess
LANXESS opens compounding plant in China
The LANXESS chemical group's Semi-Crystalline Products (SCP) Business Unit has opened its first production site in Asia, located some 120 kilometers northwest of Shanghai. A state-of-the-art compounding plant for the engineering plastics Durethan(R) (polyamide) and Pocan(R) (polyester) started production on April 27, 2006 on the site of LANXESS Wuxi Chemicals Ltd. Annual production of some 20,000 tons of plastic is envisaged in the first phase. The total investment is in the region of EUR 20 million.
"The new plant will help us to increase sales of our high-performance polymers DurethanR and PocanR by 50 percent over the next five years," explained Dr. Axel C. Heitmann, Chairman of the Board of Management at LANXESS AG. The company intends to add a further line at the plant and double its capacity in the near future. Market growth for products like PocanR and DurethanR, which are used in the electrical engineering and electronics, automotive and domestic sectors, is currently around eight percent in Asia, and as high as 13 percent in China.
At the heart of the plant is a compounding system that is designed for a throughput of more than 3000 kg/h. Upstream of the twin-screw compounder are feeding and unloading stations for sacks and big bags. Operations downstream of the compounding machine include pelletizing, grading, pellet cooling, and transfer of the finished pellets to silos.
LANXESS has successfully completed qualification of the products at its customers in Asia. Furthermore, all test runs of the plant have been conducted without problems. Employees from Wuxi were trained in the compounding plant at Uerdingen to ensure things ran smoothly from the outset.
"We are a development partner and supplier to the injection molding industry ? a sector that is increasing its presence in China to serve the automotive and electrical markets there. We offer our customers individually tailored solutions. In doing so we occupy a high-quality market segment outside the mass market", said Dr. Hubert Fink, head of the SCP Business Unit.
LANXESS Wuxi Chemicals Co. Ltd.
Leather business unit:
・ Production of leather chemicals
・ Distribution of leather chemicals for the entire Asia Pacific region
・ Research and development in the field of leather chemicals
Semi-Crystalline Products business unit:
・ From today: Production of high-performance plastics
Milestones 1998: Launch of leather chemicals production (Bayer) in Wuxi 2005: Commissioning of two new production plants for leather chemicals after only 15 months of construction, thereby doubling production of leather chemicals,and
opening of largest and most modern R&D center for leather chemicals in the region
2006: Commissioning of a new production plant for the high-tech plastics Durethan(R) and Pocan(R), further expansion planned
New name for LANXESS business unit
Lustran Polymers - a new strong ABS brand
Focus on colored ABS and ABS specialties
The LANXESS business unit
Styrenic Resins has a new name: Lustran Polymers. With this name
change, the chemical group's business unit is focusing on the top
brand Lustran(R). The name change is a consequence of the
repositioning of the business, which has already taken place, to focus on ABS
specialties and pre-colored grades. The name Lustran Polymers
visualizes the color-intensive new beginning of the LANXESS
business unit Styrenic Resins. A new graphic with a
color-balanced logo gives vivid expression to the claim: The
colorful difference". With its wealth of technical expertise
and cutting-edge technology, Lustran Polymers will make its debut
as a distinctive and independent brand on October 1, 2006.
On gaining its independence, LANXESS started an exemplary restructuring of the previously unsatisfactory business. The key feature of this process is regionalization with independent management teams who manage the business under their own regional and operational responsibility from product development and production through to marketing. This allows them to deal with customer requirements more quickly, on a more individual basis and with more focus, because they are familiar with the peculiarities of the regions and product portfolios concerned. Regionalization extends to production capacities and product portfolios being adapted to local conditions and being concentrated at one site if possible. We want to further emphasize the outstanding technological position of our business and the excellent market position of our products," explained the head of the business unit, Hans-Joachim Kogelnik.
The initial economic success of the new structure was recently announced by the Chairman of the Board of LANXESS AG, Axel Heitmann, when he presented the figures for the 2nd quarter of 2006: The restructuring of the styrenics business is going more quickly than planned. Profitability is continuing to improve. This is a clear indication of the effectiveness of our new strategy."
Lustran Polymers is one of the biggest suppliers in the sector. ABS specialties from LANXESS are plastics with high mechanical strength, outstanding processing properties and excellent surface quality. In addition, LANXESS offers a wide range of customized colors and a broad spectrum of products for special applications. Lustran ABS specialties are used in the following areas: electrical engineering, IT, bath/sanitary ware, automotive engineering and toys as well as medical technology. Typical applications include interior and exterior components for cars, housings for all types of equipment, toys and garden furniture. The Lustran Polymers business unit is part of the LANXESS Engineering Plastics segment, which achieved sales of EUR 1.737 billion in the 2005 business year.
Lanxess portfolio Bayer／Lanxess
Lustran Polymers a major global supplier of ABS, SAN and PA-ABS plastics.
ABS grades: Novodur®, Lustran® and AbsolacTM
SAN grades: Lustran® and AbsolanTM
ABS/PA grades: Triax®,
ASA and AES
Semi-Crystalline Products Durethan®, engineering plastics based on polyamide 6 and 66,
Pocan®, engineering plastics based on polybutylene terephthalate,
range of glass fibers as reinforcements for plastics, caprolactam, adipic acid,
Perlon®, Atlas® and Bayco®, Polyamide monofilaments
Dorlastan Fibers（スパンデックス） LANXESS has sold its Dorlastan fibers business (the former Business Unit Fibers)
to the Japanese company Asahi Kasei Fibers Corporation
Technical Rubber Products
Basic Chemicals Producer of high-quality industrial chemicals and aromatic compounds Inorganic Pigments for the coloration of construction materials and special applications for toner pigments and catalysts. Saltigo fine chemicals and intermediates for the agrochemical and pharmaceutical industries.
Material Protection Products Full range of biocides and specialty products for wood preservation, disinfection and industrial
and beverage preservation._
Functional Chemicals Plastics additives, phosphorus and specialty chemicals, and organic and inorganic colorants. Leather One of the the major suppliers of leather chemicals and systems solutions for all stages
in the manufacture of leather goods.
Textile Processing Chemicals Development of chemicals for a wide range of textile processing applications Rhein Chemie additives for the rubber, lubricants, polyurethanes and plastics industries Rubber Chemicals High-quality rubber chemicals for the tire industry and the production of technical rubber products. Ion Exchange Resins Lewatit® ion exchange resins are used in water treatment and in the production of food and pharmaceuticals. LANXESS has sold its former Business Unit Paper to the Finnish chemicals group Kemira Oyj
September 27, 2006 Lanxess
Official opening of the
new European headquarters of Lustran Polymers in Tarragona
Investments of more than EUR 20 million / LANXESS business unit is largest ABS manufacturer in Spain
The LANXESS chemical company today officially opened the new European headquarters of the recently renamed Lustran Polymers business unit in the Spanish city of Tarragona. Part of the production facilities for manufacturing ABS plastics had earlier been transported from Dormagen in Germany to Tarragona. Regional management for business in Europe and Latin America was also transferred from Germany's Lower Rhine region to Catalonia in July. This increased the Lustran Polymers workforce in Spain to 300.
"With targeted investments in excess of EUR 20 million at the Tarragona site and the clear strategy of making Tarragona the hub of ABS operations for Europe and Latin America, we will see Lustran Polymers becoming more competitive," commented Chairman of the LANXESS Board of Management Axel C. Heitmann at an international press conference in Tarragona. The business unit, which was previously the biggest loss-maker within the LANXESS Group, has made an impressive turnaround in a very short period of time, he added. "Today's inauguration of the European headquarters is an important milestone in the repositioning of our ABS operations and a clear commitment to Tarragona," said Heitmann.
Lustran Polymers: The largest ABS manufacturer in Spain
The official opening of the European headquarters of Lustran Polymers is also the first official event for the newly rebranded unit. Changing the name of the business unit from Styrenic Resins to Lustran Polymers reflects the repositioning of the business. The focus is now firmly on ABS specialties and colored plastics. The Lustran Polymers business unit makes LANXESS one of the world's leading companies in this sector. Lustran Polymers already leads the way in Spain, being the largest manufacturer of high-grade ABS plastics in the country. The relocation of three large-scale reactors from Germany to the Spanish Mediterranean coast will bring about a significant further increase in capacity. Once the relocation is complete, customers in Europe and Latin America will be supplied directly from Tarragona.
BMW chooses ABS plastics from Lustran Polymers
Typical applications for ABS products from Lustran Polymers include all types of housings for appliances, toys, and garden furniture, as well as interior and exterior automotive components. The very latest area of application for the high-tech plastic Triax® 3157 is for the fenders of the new BMW 3 Series Coupé. "LANXESS plastics have exceptionally good processing properties and give us wide freedom of design for our cars," remarked Dr. Albin Dirndorfer, project manager at BMW for the 3 Series Coupé. Car owners also benefit from the advantages of this high-tech plastic. The material reduces vehicle weight, thereby also reducing fuel consumption, and, as it offers greater flexibility than conventional automotive components, minor bodywork damage is much less common.
The Lustran Polymers business unit is part of the LANXESS Engineering Plastics Segment, which recorded sales of EUR 1.737 billion in fiscal 2005. Lustran Polymers has a worldwide workforce of 1,650.
〜 オランダの投資会社エゲリアと、繊維加工用化学品ビジネスユニットの経営陣が同事業を獲得 〜
売却完了後、この事業は、タナテックス ケミカルズ（Tanatex Chemicals BV）に社名変更されます。
January 16, 2007 Lanxess
LANXESS plans package of
measures to speed development at Saltigo
EUR 30 million investment to modernize the production base /
EUR 10 million to build a high-tech multi-purpose plant /
New, specially tailored worktime models
LANXESS, the Leverkusen-based chemicals group, plans to develop the business of its fine chemicals subsidiary Saltigo. EUR 30 million has been earmarked for plant modernization, and new worktime models are to be introduced. A state-of-the-art multi-purpose facility costing a further EUR 10 million is already under construction. "The decision made in early summer 2005 to realign the fine chemicals business, which had been making substantial losses, led to a turnaround," said LANXESS Management Board Chairman Dr. Axel C. Heitmann. However, despite higher capacity utilization and a steady increase in earnings in recent quarters, profitability is not yet satisfactory by international standards. This makes further action necessary on the production side and in the area of human resources. Negotiations on this are now to begin with the employee representatives.
Investment in high-tech
"Saltigo's employees have put in a remarkable effort and succeeded in turning the business around," said Heitmann. "LANXESS is supporting their endeavors with an investment package to drive forward the company's development." The EUR 30 million is to be spent to modernize existing production facilities at the Saltigo sites in Leverkusen and Dormagen and adapt them to changing market needs and customer requirements. "We want to secure our share of the growing demand in the fine chemicals market," said Saltigo's Managing Director Dr. Axel Westerhaus. "The most important condition for that is an appropriate, state-of-the-art plant structure." The first implementation phase, which is already under way, involves converting existing plants in Leverkusen to the production of pharmaceutical active ingredients or intermediates. This EUR 10 million capital expenditure project is specifically designed to strengthen activities in pharmaceutical active ingredients that are still in the early stages of development. "Here we can make optimum use of our expertise, our technology and the Leverkusen plant structure," said Westerhaus. "This investment will give us substantial additional capacity by as early as mid-2007 and enable us to meet the increased demand." The modification and expansion of existing facilities allows a rapid response to the growing demand and the realization of first-class technological solutions.
Specially tailored, innovative human resources concepts
In parallel with plant flexibilization, LANXESS is also planning the introduction of a new human resources concept for Saltigo. The increased demand for complex and sophisticated production processes means the skilled workforce needs to have greater flexibility and be more intensively deployed. An innovative and specially tailored human resources concept is required that will enable the sustained implementation of the investment package and do justice to Saltigo's special type of business. Negotiations are therefore to take place on increasing the work week to 40 hours without a raise in pay, a new shift roster, a uniform flextime system and more flexible personnel deployment. Westerhaus: "The talks must of course take into account the economic situation at Saltigo as well as the 2005 solidarity pact encompassing all LANXESS employees in Germany, which enabled the realignment and restructuring of the Saltigo business in the first place. I am confident that an agreement can be reached with the employee representatives that is acceptable to both sides.
Saltigo is a high-tech, innovative company with global operations. It has special expertise in the custom manufacturing of fine chemicals, which means products are manufactured on an exclusive basis according to customer requirements. Saltigo has approximately 1,400 employees in Leverkusen and Dormagen and posted sales of about EUR 400 million in 2005.
February 15, 2007 Lanxess
LANXESS steps up expansion in India
Significant investment possible in 2007 / Objective is to grow sales appreciably
As part of its Asia strategy, the LANXESS chemicals group is to step up its activities in India considerably in its drive for profitable growth. A significant investment in new projects is possible this year, in addition to the capacity expansion projects already under way. "For us India is the most important growth market in Asia after China. We are working on the assumption that the country will take over from Japan and move into second place in terms of sales by 2010", said LANXESS Management Board Chairman Dr. Axel C. Heitmann at a press conference in Mumbai today. In 2005, LANXESS's sales in India rose by 14 percent. In the first nine months of 2006, India already accounted for almost 15 percent of the company's sales in the Asia-Pacific region - just two percentage points behind Japan.
Only recently, LANXESS launched two projects to accelerate profitable growth in India. In January, a new plant for the production of the polymer-bound rubber chemical Rhenogran went on stream in Madurai. This was the response from the LANXESS Rhein Chemie Business Unit to the rapidly growing demand from Indian tire manufacturers and other rubber processors for polymer-bound chemicals to improve product quality, processing, economic efficiency, health and environmental protection.
At the same time, LANXESS is in the process of building a new facility in Moxi for coloring ABS plastics. With double-digit growth rates, India is the strongest-growing market for ABS plastics in Asia, and Lustran Polymers boasts the highest sales of any LANXESS business unit in India. In 2006 LANXESS ABS Ltd., which is listed on the Mumbai stock exchange and belongs to the Business Unit Lustran Polymers, increased its operating profit by around 40 percent compared with the previous year. LANXESS is the market leader for engineering thermoplastics in India. The biggest growth driver is the emergent Indian automotive industry. Typical applications include fenders, radiator components and headlamp housings.
The new facility is a further step towards the expansion of ABS capacity from 60,000 to 80,000 t/y. Capacity can be further raised to 100,000 t if needed. The project will enable LANXESS to consolidate its leading position with this business in India and to continue participating in the strong market growth.
The Asia-Pacific region is of central importance to LANXESS. In 2005, the company recorded an increase in sales in the region of around 21 percent compared with 15.8 percent in 2004. The strong sales growth also continued in the first nine months of 2006.
Lanxess March 5, 2007
LANXESS invests in new site in China
As part of its Asia strategy, the LANXESS chemicals group is building a new plant for the manufacture of lubricant additives in Qingdao, China. The production facility, which belongs to LANXESS's subsidiary Rhein Chemie, will go on stream at the latest in the fourth quarter of 2008 and will initially employ 50 people. It is estimated that the amount in euros to be invested will be a single-digit million value. "The new facility is a further step in our drive to increase profitable growth in Asia, said LANXESS Management Board Chairman Dr. Axel C. Heitmann. "We are rigorously expanding our presence here.
With an annual volume of around 4.4 million metric tons, the market for lubricants in China is about four times as big as in Germany. Annual growth is estimated to be eight percent. The industrial lubricants segment, which is of particular interest to Rhein Chemie, is likely to double by 2012 with an even higher growth rate at the current time of one million tons per year.
At the new facility Rhein Chemie will focus on the manufacture of customized additive formulations for lubricants. These not only improve performance and service life in industrial applications but also aid environmental protection as they can replace products currently used in China that impact on the environment.
In Qingdao Rhein Chemie has been producing rubber chemicals since 1999 within a joint venture. Capacity of polymer-bound chemicals (Rhenogran) was doubled last year with the commissioning of a second production unit. LANXESS currently employs more than 800 staff in China, of which 160 work for Rhein Chemie in Qingdao.
Asia-Pacific region of central importance
The Asia-Pacific region is of central importance to LANXESS. In 2005, the company recorded an increase in sales in the region of around 21 percent compared with 15.8 percent in 2004. The strong sales growth also continued in the first nine months of 2006.
This development was made possible through the start-up of new and additional production capacity. In China alone the chemicals company commissioned three new facilities in 2006. In future LANXESS will continue to focus on achieving profitable growth in the Asia-Pacific region. "We're keeping a sharp lookout for opportunities, said Heitmann. "We want to share in the enormous growth taking place in Asia by making targeted investments.
To advance its expansion plans in Asia, LANXESS will take on up to 1,000 new employees in the region in the next two years. LANXESS currently employs more than 2,000 people in the region.
April 3, 2007 Lanxess
capacities for EPDM rubber
Optimization measures take effect
To meet rising consumer demand for ethylene-propylene(-diene) rubber (EPDM), the LANXESS chemicals group wants to increase its annual production capacities to more than 140,000 metric tons. To this end, the company is investing in debottlenecking and modernization measures such as enhanced process control. "Since optimization measures taken in the past are already taking effect at our production sites in Marl and Texas, the investments will remain fairly small-scale, says Robert Gnann, manager of the EPDM business that is handled by LANXESS's Technical Rubber Products business unit. "We are confident that we can complete the capacity expansion by the beginning of 2008.
Last year LANXESS
realigned its EPDM business. Marketing, research, production and
controlling were assigned to LANXESS Buna GmbH in Marl, Germany. In the USA,
LANXESS is to pool its EPDM operations in LANXESS Buna LLC, which became a separate legal
entity on March 1, 2007. The new structure helps the company to
meet customer demand more quickly, respond more speedily and
expand its position as the world's biggest supplier of technical
rubber. LANXESS is the only manufacturer of EPDM rubber to apply
both the solution and slurry process. "We shall continue to
combine the strengths of the two manufacturing processes and
offer our customers a unique broad range of crystalline,
amorphous, branched and linear EPDM products, adds Gnann.
Fields of use for EPDM rubber are hoses, extruded profiles and injection molded goods. LANXESS's Buna EP rubber is being used to seal the roof of the soccer stadium in Tianjin for the Olympic Games in Beijing in 2008.
LANXESS projects significant new investment in rubber business
With costs of a magnitude of roughly EUR 400 million, the new production facility would be the largest investment in the company's history / Locations under consideration include sites in Singapore, Malaysia and Thailand
Chemical group LANXESS
seeks to expand its global position in the butyl rubber
is pursuing plans to build a new facility in Asia. "This
would be the largest investment in the history of our
company," said LANXESS Management Board
Chairman Axel C. Heitmann during a visit to Singapore. "In
the next few months we will hold talks with possible host
locations to determine the feasibility of the construction of a
new plant. Should we decide upon a location, we will be able to
bring the facility on stream in 2010."
LANXESS projects an
investment of a magnitude of EUR 400 million. Negotiations at
three possible sites, Singapore, Kuantan in Malaysia and Map Ta
Phut in Thailand, will begin immediately. In the last several
months, LANXESS has analyzed sites across Asia to assess their
LANXESS is focused on satisfying the growing demand for butyl rubber in Asia. Tire production will continue to be the main use of butyl. LANXESS's potential investment is designed to serve tire production which is increasingly shifting from the US and Western Europe to Asia. Additionally, the capacities of local Asian manufacturers are rapidly increasing.
LANXESS intends to increase sales in Asia in the future through continued cooperation with global customers and pursuing growth with local partners. Following the completion of the expansion of the Zwijndrecht site in Belgium and the expansion in butyl rubber capacity currently being executed at LANXESS's site in Sarnia, Canada, the commissioning of a new facility in Asia could be another milestone on the road to further profitable growth.
The Butyl Rubber Business Unit belongs to the Performance Rubber segment, which achieved total sales in 2006 of EUR 1,776 million.
July 6, 2007 LANXESS
LANXESS presses ahead with worldwide butyl rubber expansion
North America: Plant
expansion by more than 40 percent implemented, further expansion
by 10 percent started - Europe:
Capacity increase by 10 percent completed - Asia: New world-scale plant projected
The chemicals group LANXESS is pressing ahead with the worldwide expansion of its butyl rubber business. At its Canadian Sarnia site the company has completed the first phase of a plant expansion that will increase its butyl rubber capacity there by 42 percent. LANXESS has already started a second phase of expansion at the Sarnia plant, increasing annual capacity by another 10 percent in 2009.
In order to satisfy the
growing global demand for butyl rubber the company is also
accelerating its expansion in Europe and Asia. At the Zwijndrecht,
Belgium facility LANXESS
already increased capacity by 10 percent in 2006. In addition,
LANXESS announced plans last week to build a new butyl rubber
facility in Asia.
"We are highly committed to the future of butyl rubber," Dr. Axel C. Heitmann, Chairman of the Board of Management, LANXESS AG said at the dedication ceremony of the expanded Sarnia facility. "With the capacity expansions we are boosting our profitable growth in this innovative business segment."
LANXESS' butyl rubber is predominantly used in inner liners which keep the air in tires thus maintaining them inflated. This makes vehicles safer, more fuel efficient and reduces emissions. Other uses for butyl rubber include ball bladders to keep the air in and pharmaceutical stoppers to keep the air and moisture out of the medicine.
The market growth of butyl rubber is particularly driven by the increasing production of radial tires in Asia. As a result, additional capacities of butyl rubber are necessary in this region. "We estimate that this endeavor will require an investment of approximately 400 million Euros," commented Heitmann on plans to build a new butyl rubber facility in Asia. "This would be the largest investment in the history of our Company." In the next few months LANXESS will hold talks with possible host locations to determine the feasibility of the construction of a new plant. Should a decision be reached upon a location, LANXESS will be able to bring the facility on stream in 2010.
The Butyl Rubber Business Unit is a leading manufacturer in its field and belongs to the Performance Rubber segment, which achieved total sales in 2006 of EUR 1,776 million.
LANXESS is one of the leading European chemicals suppliers, with 2006 sales of EUR 6.94 billion and more than 16,000 employees in 18 countries. The company is represented at around 50 sites worldwide. The core business of LANXESS is the development, manufacture and sale of chemicals, rubber and plastics.
builds new ion exchange facility in India
Around 200 new jobs / Investment volume approx. EUR 30 million
LANXESS chemicals group is to build its new ion exchange
in the Indian state of Gujarat. Construction work on the EUR 30
million site at the new Jhagadia Chemical Park near Baroda is set
to begin in the second quarter of 2008. Production is scheduled
to start at the beginning of 2010, with 200 new employees being
In terms of investment volume this is the biggest project undertaken by LANXESS's Ion Exchange Resins business unit since the end of the 1990s. "This represents a commitment to one of the fastest growing and most future-proof areas of industrial chemistry. The aim of this move is to generate profitable growth and further strengthen our position on the global market," explains Rainier van Roessel, the member of the LANXESS Management Board responsible.
The new plant will manufacture products for industrial water treatment and the generation of ultra-pure water for the semiconductor and pharmaceutical industries. The portfolio will comprise a selection of the ion exchanger grades in Ion Exchange Resins business unit's current product range such as anions, cations and mixed bed.
In March of this year, LANXESS launched an international competition that sites in China, India and Singapore entered. The Jhagadia Chemical Park in India was selected because it already has an excellent industrial infrastructure in place.
The Ion Exchange Resins business unit belongs to the Performance Chemicals segment, which achieved total sales in 2006 of EUR 1,812 million.
The Asia-Pacific region is of crucial significance for LANXESS. With sales increasing to EUR 1.23 billion, Asia accounted for nearly 18 percent of the Group's sales in 2006. Driving this growth are the Chinese and Indian markets, where double-digit increases in sales were recorded. The Leverkusen-based chemicals group has inaugurated five new plants in China as part of the "LANXESS goes Asia" strategy launched in April 2006. The company also plans to hire up to 1,000 new employees in Asia by 2009.
Germany's Lanxess invests Eur10 million in Dormagen EVM facility
chemicals group Lanxess announced Friday that it is to invest
Eur10 million ($13.875 million) to expand its ethylene-vinyl
(EVM) plant at Dormagen. A current permit allows for a maximum
volume of 15,000 mt/year at the site, an amount that could be
realistic by 2009, the company said.
The capacity expansion comes in response to "continually growing demand for this rubber specialty," Lanxess said.
The synthetic elastomer supplied under the product names Levapren and Levamelt is suitable for oil and heat-resistant applications in the automotive sector in particular for seals and hoses.
The Technical Rubber Products business unit is part of the Performance Rubber segment, which recorded sales of Eur1,776 million in the 2006 fiscal year.
LANXESS September 19, 2007
invest about EUR 1 billion by 2009
New segment structure for the 13 business units / Earnings targets will now be reached in 2008
LANXESS AG, Leverkusen, will now position itself as a specialty chemicals group following the divestment of its Lustran Polymers business unit. "Our place is as a specialty chemicals group at the core of the chemical industry," declared Management Board Chairman Axel C. Heitmann at this year's Investor and Media Day in London. As part of a systematic market orientation, LANXESS will organize its 13 business units into three segments starting in October 2007 following the divestment of the commodity plastics activities. The new segments are named Performance Polymers, Advanced Intermediates and Performance Chemicals.
合弁会社の社名は INEOS ABS で、Lanxess のABS事業のLustran Polymers を引き継ぐ。
cornerstones of new business model
Heitmann pointed out that LANXESS is now a more profitable and a more competitive enterprise than at the time of its spin-off and establishment as an independent company. Earnings have improved significantly, with the EBITDA margin pre exceptionals coming in at 12.5 percent for the first half of 2007. LANXESS has also sharpened its business focus after divesting a total of four business units. Said Heitmann: "LANXESS will continue to establish itself as a leading specialty chemicals group. That's the way for us to make the best use of our expertise and our applications know-how. All units have to meet three criteria in future: they must offer premium products, processes and services, promote business stability and help to reinforce LANXESS's leading role in this industry sector."
The company plans to invest about EUR 1 billion over the next three years to further strengthen its businesses. "The focus of the investment program through 2009 will be on the ‘LANXESS goes Asia' initiative," the LANXESS CEO explained, with some 60 percent of planned capital expenditures going for capacity expansions. LANXESS's capex budget for the current year is just over EUR 300 million.
Only acquisitions that create value
Heitmann defined the company's future acquisition strategy: "We don't plan on following in the footsteps of some of our competitors, who made overpriced acquisitions years ago and have since paid dearly for their mistakes in the form of low margins and declining competitiveness. Let me be quite clear about this: acquisitions are not a matter of urgency." A central criterion for an acquisition, said Heitmann, is that it must be accretive to earnings per share within three years at the latest. LANXESS is well prepared for acquisitions, he went on, but "we will never pursue an acquisition simply for the sake of size. We will act only when the time is right."
New three-segment structure
In light of LANXESS's systematic market orientation and consistent portfolio management, the divestment of Lustran Polymers made it necessary to modify the segment structure. All the polymer-based businesses - in other words, the former Performance Rubber segment and the Semi-Crystalline Products business unit - are being grouped together to form the new Performance Polymers segment. The Chemical Intermediates segment is renamed "Advanced Intermediates." And the Inorganic Pigments business unit becomes part of the Performance Chemicals segment, reflecting the specialty nature of this business. The Engineering Plastics segment therefore ceases to exist.
|Engineering Plastics - Semi-crystalline
|Engineering Plastics - Lustran Polymers
|Chemical Intermediates - Basic Chemicals
|Chemical Intermediates - Fine Chemicals
|Chemical Intermediates - Inorganic Pigment
Chief Financial Officer Matthias Zachert emphasized LANXESS's greatly increased profitability, citing the improvement in the return on capital employed (ROCE). In the space of four years this indicator moved out of negative territory to reach 15.9 percent in 2006. And regarding financial constancy, LANXESS has a clear edge over major competitors in terms of improving its margin from year to year. For that reason, said Zachert, LANXESS will now reach its 2009 earnings targets a year early.
LANXESS to acquire Petroflex chemicals group of Brazil
specialty chemicals group LANXESS is to acquire an interest of
approximately 70 percent in Petroflex S.A, Brazil, at a provisional price
equivalent to EUR 198 million. Petroflex, a listed company based
in Rio de Janeiro, is among the world's large-scale producers of
synthetic rubber. The stake to be purchased by LANXESS includes
the holdings of the current major shareholders Braskem and
transaction requires the approval of the relevant antitrust
"Petroflex ideally complements our product portfolio and strengthens our position in one of the world's most important growth markets," said LANXESS Management Board Chairman Axel C. Heitmann. "In this way we are significantly expanding our position in Latin America as a whole."
LANXESS will submit a public takeover offer for the remaining ordinary shares at the proper time under Brazilian law. "As is customary with such transactions, the final purchase price, including financial liabilities to be assumed, will be determined after closing," explained Chief Financial Officer Matthias Zachert. "We are financing the acquisition from liquidity and existing credit facilities," he added. The financial liabilities as of September 30, 2007, amounted to EUR 109 million.
In 2006 Petroflex had some 1,300 employees and sales equivalent to about EUR 500 million. The group's 2007 output at its three sites in Brazil - Cabo in Pernambuco State, Duque de Caxias in Rio de Janeiro State and Triunfo in the State of Rio Grande do Sul - will exceed 400,000 tons. Its elastomer products range from solution rubber to emulsion rubber and comprise 70 brands. The products are used especially in the manufacture of tires as well as for tubing and plastics. One third of its output is exported to more than 70 countries.
The market for rubber in Latin America is expected to grow rapidly in the coming years. According to the information available to LANXESS, the major global tire manufacturers are spending around EUR 1 billion to increase their production capacities in Latin America, said Heitmann. Consumption of synthetic rubber in the region is currently well below that in the industrialized countries and also below the global average.
Petroflex S.A. was founded in 1962 as part of Petrobras, a Brazilian chemicals group that was already a leader at that time. In the 1970s Petroflex became independent. In the following decade, Petroflex S.A. extended its international activities to Europe, Asia and North America.
LANXESS currently employees more than 400 people in São Paulo, Porto Feliz and São Leopoldo, Brazil. Since LANXESS became independent in January 2005, it has experienced double-digit growth rates in Brazil, posting sales of approximately EUR 160 million in 2006. In terms of sales, Brazil is now the second-largest market for LANXESS in the Americas region after the United States.
Said Heitmann: "We are pleased that we so quickly succeeded in implementing a major factor for our company's successful positioning as announced at our Capital Markets and Media Day in September." The Management Board Chairman also confirmed previous guidance that LANXESS will post EBITDA pre exceptionals of between EUR 700 million and EUR 720 million for the full year 2007, against EUR 675 million in 2006.
At their meetings on Thursday the Management Board and the Supervisory Board agreed on a realignment of LANXESS's dividend policy with the intention of significantly and sustainably raising the dividend. The final dividend proposal will be made on the basis of the confirmed financial statements of LANXESS AG for fiscal 2007 and published together with the Notice of the Annual Stockholders' Meeting of LANXESS AG, to be held in Cologne on May 29, 2008.
LANXESS is a leader in specialty chemicals with 2006 sales of EUR 6.94 billion and around 14,500 employees in 21 countries. The company is represented at 47 production sites worldwide. The core business of LANXESS is the development, manufacture and sale of specialty chemicals, plastics, rubber and intermediates.
February 1, 2008 LANXESS
LANXESS Corp. announces restructuring of LANXESS Inc. Sarnia Site to maintain competitive leadership in global rubber industry
LANXESS Corporation today announced three business initiatives at the LANXESS Inc. Sarnia Site aimed at strengthening LANXESS' business in the global rubber industry. LANXESS Inc. will restructure its Sarnia, Canada operations; LANXESS AG will consolidate global NBR production at its La Wantzenau, France facility; and LANXESS Inc. plans to move its Canadian research activities from Sarnia to an interdisciplinary university setting in Ontario.
Sarnia butyl operation
At the site of the company's recently completed $100 million butyl plant expansion, LANXESS Inc. is implementing a 24 month restructuring aimed at improving the global competitiveness of its butyl products. The move is aimed at removing increased operating expenses due to higher energy and raw material costs in addition to the impact of the Canadian dollar on labor.
The expansion of the Sarnia butyl plant made it the largest, most modern facility of its kind in the world. By December of 2008, total production capacity will be 150 thousand metric tonnes. Together with today's announced site restructuring, the plant modernization will improve the plant's productivity. Over the next 24 months the site will reduce its manpower operating requirements by approximately 270 positions.
Global NBR production consolidated
LANXESS AG will consolidate global NBR production in La Wantzenau, France over the next few months. The process will involve closing a 64 year old nitrile butadiene rubber production facility located in Sarnia, Canada by the end of May, 2008. While many customers in the NAFTA region are already receiving LANXESS NBR grades manufactured at the La Wantzenau plant, LANXESS Corporation sales and technical support for Technical Rubber products will work closely with customers during the consolidation process to ensure a smooth transition. LANXESS NBR is marketed under the tradenames KRYNAC® NBR, PERBUNAN® NBR and BAYMOD® N.
butyl research to be relocated to university setting
In an initiative aimed at global growth and innovation of both pure and applied polymers research, LANXESS Inc. is actively searching for an appropriate Ontario, Canada university site that can accommodate relocation of its global butyl research functions from the Sarnia production site. By locating LANXESS Inc. researchers closer to their peers in a multidisciplinary environment, the company is gearing for a significant increase in both pure and customer research.
The biggest market for LANXESS butyl rubber and halobutyl rubber is the tire industry, but its remarkable properties make it a key polymer for a variety of technical rubber applications. Butyl offers an attractive range of properties including low permeability, high damping, good resistance to ozone and weathering and chemical resistance. LANXESS Inc.'s Sarnia Site produces both regular butyl and halogenated butyl grades for customers around the world.
LANXESS halogenated butyl rubber products are also widely used in pharmaceutical products, such as closures for infusion containers, injection vials, lyophilization, and blood collection tubes. They are also used as Orings and gaskets in a variety of aerosol containers and inhalers and as plungers for applications such as infusion pumps, pre-filled syringes, insulin injectors and dental anesthetics.
Chewing gum is one of the most interesting applications of LANXESS food grade butyl which is also manufactured in kosher grades. LANXESS applies the most stringent quality control standards for this grade consistent with national and international food regulations and standards to this application.
KRYNAC® NBR and PERBUNAN®
KRYNAC® is the trade name of a series of oil-resistant acrylonitrilebutadiene rubbers (NBR) manufactured by emulsion polymerization. KRYNAC® is used for hydraulic hoses, fuel and oil supply hoses, seals, rollers, drive belts, fabric linings and gaskets. Other applications are shoe soles (sport shoes and safety footwear) and flooring. In addition, KRYNAC® (or BAYMOD® N) is the base polymer for several automotive applications, such as hoses, oil seals and friction linings.
PERBUNAN®, makes it possible to obtain oil-resistant vulcanizates that can resist extremely low temperatures. In comparison with vulcanizates based on other NBRs, PERBUNAN® vulcanizates show better physical properties, heat aging resistance and abrasion and wear behavior. It is widely used in the automotive industry for oil filter seals, torsional vibration dampeners, membranes, membranes in fuel injection systems, fuel and oil pipes, and hydraulic hoses.
February 26, 2008 LANXESS
make record investment in Singapore
Expenditures of up to EUR 400 million for a new chemical site /
Production of halobutyl for tire industry from 2011 /
Around 200 new highly-skilled jobs
chemicals group LANXESS AG is set to make the biggest single
investment in its history in Singapore. A new chemical production
site for synthetic rubber is to be built at the chemical park on
Jurong Island. LANXESS has earmarked a record amount of EUR 400
million for this investment. From 2011, the site in Singapore
will produce up to 100,000 tons of butyl rubber annually, making the LANXESS plant
the largest facility of its type in Asia. Construction is due to
begin in the first quarter of 2009 and will be completed by the
end of 2010. Some 200 new jobs will initially be created.
The new chemical facility will produce butyl and halobutyl, synthetic rubbers that are used in the production of tires. “By setting up this new location in Singapore, LANXESS is responding to the significant growth in global demand for butyl rubber,” said Chairman of the LANXESS Board of Management Axel C. Heitmann at an international press conference in Singapore.
“The boom in Asia as an economic region is playing a particularly important role in this,” added Heitmann. Market analyses confirm that the global market for butyl rubber will rise steadily in the coming years. Growth is most pronounced in China, where it corresponds to six percent annually, and in India, where it is more than eight percent. “With the new capacities, we will consolidate the good market position we already occupy,” said Heitmann.
LANXESS began evaluating potential locations in Malaysia, Thailand and Singapore in June 2007. The Asian city state won over the competition from Malaysia and Thailand due to its excellent infrastructure, large sea port, and very good raw materials supply. Additional arguments in favor of Singapore were the highly qualified specialists and logistics arrangements.
“Our new site in Singapore is the world’s first new facility for butyl rubber to be built since the beginning of the new millennium,” said Heitmann. The JTC Corporation, an authorized agent of the Singapore Ministry for Trade and Industry, has offered LANXESS attractive terms for the site on Jurong Island that covers approximately 20,000 square meters. Construction will start at the beginning of 2009, with 150 engineers and around 1,500 workmen to be employed on the building site. The facility is scheduled to start production in 2011. Some 10 to 15 percent of the construction expenditures are expected to go into installing pioneering environmental technologies.
Already today, LANXESS is a global market leader in the synthetic rubber business. In the past two years, LANXESS significantly expanded its production rubber facilities in Zwijndrecht, Belgium, and Sarnia, Canada. The Singapore site will complete the global production network. In combination with the completion of the latest expansion phase in Sarnia, the company will have an annual capacity totaling 280,000 metric tons of butyl rubber in 2010.
Up until now, LANXESS’s representation in Singapore has comprised a sales center with more than 70 staff. The record investment at the new production site in the Jurong Island Chemical Park will create more than 200 new highly-skilled jobs. In addition, future sales activities for this important region for LANXESS will be directed from Singapore. The global headquarters of the Butyl Rubber business unit is in Switzerland.
In addition to regular butyl rubber, halogenated products, particularly bromobutyl rubber, are becoming increasingly important. Tire inner liners ? the innermost, air- and humidity-impermeable layer of a tubeless tire ? are the major area of application for halobutyl rubber. They keep tire pressure constant over a long period. This makes vehicles safer and ensures they consume less fuel and therefore produce fewer harmful emissions. Market growth is being accelerated in particular by the expansion of radial tire production in Asia.
The Butyl Rubber business unit is worldwide one of the leading producers of synthetic rubber, with annual sales of over EUR 500 million, and is part of the Performance Polymers segment. The segment recorded sales of EUR 1,996 million in the first nine months of 2007.
LANXESS is a leading specialty chemical company, with sales of EUR 6.94 billion in 2006 and approximately 14,500 employees in 21 countries around the world. The company has operations at 47 sites worldwide. LANXESS’s core business comprises the development, manufacture and sale of specialty chemicals, plastics, rubber and intermediates.
June 26, 2008 Lanxess
makes first acquisition in China
Take-over of one of China's largest iron oxide pigment facilities
first acquisition in China, specialty chemicals company LANXESS
AG is expanding the Asian business of its Inorganic Pigments
business unit. In Jinshan near Shanghai LANXESS is to acquire two
production units from its previous cooperation
partner Jinzhuo Chemicals Company Ltd, one of which it had already
leased since 2007. With this acquisition LANXESS will expand its
global production capacity for inorganic pigments by five percent. The parties have
agreed not to disclose the purchase price.
New facility ensures an independent raw material supply
“This acquisition is a further significant step in our Asia strategy,” said Rainier van Roessel, member of the LANXESS Board of Management responsible for the Asia-Pacific region. “This strategy is based on an increased commitment to markets in which LANXESS is already well positioned. The take-over of pigment production in Jinshan strengthens the position of the Inorganic Pigments business unit on the global market,” he added. With this acquisition LANXESS also safeguards the raw material supply for its pigment mixing unit in Shanghai, thereby becoming completely independent of local suppliers.
Demand for the Inorganic Pigments business unit's products is rising sharply as a result of the ongoing construction boom in China. In the next few years, growth rates of around five percent are expected, especially in Asia. The most important customers for pigments are the construction industry, followed by the paints and coatings sector and the plastics and paper industries.
Jinshan: The most modern iron oxide pigment facility in China
The site started producing iron oxide yellow pigments last year and has a total capacity of 30,000 metric tons per year. Half of this capacity was already utilized by LANXESS. The facility is one of China’s largest and uses state-of-the-art and environmentally compatible production methods.
LANXESS’s Inorganic Pigments business unit is one of the world’s leading iron oxide pigment manufacturers and produces approx. 300,000 tons per year of iron oxide and chrome oxide pigments at its facilities in the United States, Brazil, Australia, Asia and Europe. With sites in Krefeld in Germany, Porto Feliz in Brazil and Jinshan, LANXESS operates the largest facilities for the manufacture of iron oxide pigments in the world. The business unit currently employs around 350 people in China.
The Inorganic Pigments business unit belongs to the Performance Chemicals segment, which achieved total sales in 2007 of EUR 1.97 billion. LANXESS earned sales of around EUR 6.61 billion in 2007. LANXESS currently employs around 15,200 staff in 21 countries and has operations at 44 sites worldwide.
July 17, 2008 Lanxess
within “LANXESS goes Asia”
LANXESS opens Rubber Research Center in Qingdao
Win-win situation for LANXESS and Chinese rubber industry
specialty chemicals company LANXESS AG today opened a new Rubber
Research Center (RRCQ) in Qingdao, Shandong Province. Established
in close cooperation with Qingdao’s University of Science and
Technology (QUST), the world-class research center is located
within the university’s vicinity. It is jointly operated
by the LANXESS business units Technical Rubber Products, Butyl
Rubber and Performance Butadiene Rubbers, and marks an investment
of some USD 16 million.
“The RRCQ will cover complete functions, ranging from fundamental research involving the development of new products and techniques, to technical customer support and preparing the commercialization of future inventions,” explained Juergen Gunther, Head of the Business Line Specialties from LANXESS Technical Rubber Products business unit and project manager responsible for the RRCQ. Recently, LANXESS announced in Shanghai the acquisition of a raw iron oxide pigments production plant to strengthen its production network in China. “With the opening the RRCQ today, we now expand our R&D network in this important market,” said Guenther Weymans, Head of Technical Rubber Products business unit. “Through our research network, LANXESS is strategically building up key competencies for sustainable success in China. It enables us to train skilled and loyal staff with high technical expertise to develop high quality products, which are environment-compatible and appropriate for the Chinese market.”
September 3, 2008 Lanxess
study on the future of the German chemical industry
Rüttgers: "For the chemical industry, it's time to take off!"
chemical industry is of major importance for Germany's position
in the global economy. LANXESS has initiated a study depicting
the challenges facing the industry in the future. After its
presentation by Professor Horst Wildemann from the Technical
University of Munich, the State Premier of North-Rhine
Westphalia, Dr. Jürgen Rüttgers, and the President of the
German Chemical Industry Association (VCI), Professor Ulrich
Lehner, outlined some of the main problems for this key industry.
Professor Horst Wildemann from the Faculty of Economics at the Technical University of Munich considers the chemical industry to be in the middle of a process of change. The market is currently shifting from a seller's to a buyer's market, he told a press conference at the representative office of the State of North-Rhine Westphalia in Berlin. By stepping up efforts through individual marketing channels, spending more money on research and development, and improving the basic positions on energy and education policy, the chemical industry could create 140,000 new jobs in Germany by 2015 and thus increase the workforce to 580,000.
Wildemann underlined the importance of the industry as a driving force for other major branches of industry and as a solution provider for climate protection issues, for the food and agricultural industry and for water treatment. Consequently, about 2.5 times as many jobs were dependent on the performance of this industry as the "core chemical industry" provided itself ? in other words around 1.1 million ? he said.
Despite this, the industry had some problems. Research and development expenditures had dropped appreciably internationally speaking, capital market returns were too low to assume leading positions internationally, and environment taxes for the German chemical industry had multiplied ten times since 1990. All this was having a very unfavorable effect on innovative growth areas such as biochemistry.
Need for new energy policy
State Premier Rüttgers called for a new energy policy and a national raw materials concept for the industry. While other countries, particularly China, made strategic decisions on such matters, he said, there was a lack of clarity and calculability with regard to Germany's energy and feedstock policy. He also pointed to the need for greater efforts in the training of upcoming engineers because this was the only way to retain high added value. North-Rhine Westphalia was setting a good example in this respect and had recently decided to build three new technical colleges.
Gradual deindustrialization through emissions trading
The VCI sees the plans of the European Commission for emissions trading as the biggest problem for chemical production in Germany. VCI President Lehner warned that if the plans were to come into force without amendment, it would result in major deindustrialization. According to conservative calculations, the industry would suffer additional costs of one billion euros by 2013. By 2020, the costs would rise to at least 2 billion euros. This threatened the loss of a large share of the world market, he said. At the same time, since 1990, the industry had reduced its energy consumption by 27 percent and the related carbon dioxide emissions by 38 percent, thereby setting global standards for energy efficiency.
Lehner called on the German government and the EU not to overburden the industry and proposed the allocation of emissions allowances without payment. Furthermore, he continued, electricity-intensive plants should be excluded from the threat of additional indirect burdens. Steps should be taken now rather than waiting for 2010, otherwise the industry had no guarantee for its urgently needed investment.
To catch up with other countries as far as research conditions are concerned, Lehner is in favor of improving government support for research. Germany also needed research funding through tax relief. In addition to their currently deductible research and development expenditures, companies should be able to deduct a further 10 percent of their research expenses from their tax debt.
October 17, 2008 Lamxess
Petroflex to become a wholly owned subsidiary
Successful tender offer for remaining shares in Brazil
Petroflex to be delisted
Way cleared for squeeze-out of minority stockholders
tender offer by specialty chemicals group LANXESS AG for the
remaining shares of Petroflex S.A. in Brazil has been met with
great interest. Under the public tender offer to the minority
stockholders LANXESS has acquired a further 27 percent of
Petroflex shares, giving it a total interest of around 97 percent
in the company. The offer period ended on October 16, 2008. This
high acceptance rate enables LANXESS to acquire all the remaining
shares by way of a squeeze-out and thus to become the sole owner
of Petroflex. The success of the offer also means that Petroflex
can be delisted from the stock exchange. The purchase price for
the 27 percent of the share capital now acquired is equivalent to
about EUR 60 million. In the tender offer, LANXESS had offered
the minimum price which is required by law to be paid to holders
of common shares. As previously announced the total price for 100
percent of the shares including net debt therefore amounts to
about EUR 370 million.
Said LANXESS CEO Axel C. Heitmann: “I’m pleased with the positive response to our offer. Now that we are about to successfully complete the acquisition procedure, we can focus our energies on further integrating Petroflex into the Group.” The German based group purchased a majority shareholding in Petroflex earlier this year. This acquisition has allowed LANXESS, one of the leading global suppliers of synthetic rubbers, to significantly improve its presence in the South American region.
December 19, 2008 Lanxess
LANXESS responds to
global economic crisis and shifts investments
Specialty chemicals group LANXESS AG responds to the global economic crisis by taking further measures. “We have decided to put off some investment projects given the decline in demand for chemical products we are seeing throughout the world. In addition, this will ensure the necessary financial flexibility for the difficult fiscal year 2009,” explained Axel C. Heitmann, Chairman of the Board of Management of LANXESS AG.
Affected by the decision is the construction of the Butyl Rubber plant in Singapore. According to the revised plans, the new Butyl Rubber facility is expected to commence operations in 2012, with groundbreaking - previously scheduled for January 2009 - postponed until the fall. Additionally, plans for capacity expansions in Leverkusen and Antwerp and the planned move of the group headquarters from Leverkusen to Cologne will also be postponed.
Despite the decline in demand in the fourth quarter 2008, LANXESS adheres to its EBITDA pre exceptionals guidance for 2008. The EBITDA figure will be influenced by the valuation of inventories at the end of the year. The company still expects EBITDA pre exceptionals to come in at between Euro710 million and Euro730 million.
LANXESS expects demand to be very weak in the first quarter of 2009 and is preparing for a difficult year on the whole. “If demand stays at its current low level, we will implement further measures globally,” added Heitmann.
LANXESS: Production in Singapore to start in 2014
Postponement made necessary by drop in demand / New technology for the large-scale project / Bulk order from tire manufacturer Hankook
the continuing global economic crisis, specialty chemicals group
LANXESS AG is postponing the construction of its
new butyl rubber facility in Singapore. Production is now scheduled to start in 2014. LANXESS will use the time to
finish developing an innovative technology for butyl rubber
production that will then be used at the new facility. The 100,000 tpa plant originally planned for
Singapore, which would have cost up to EUR 400 million to build,
had been due on stream in 2012.
“We expect the new capacity to be needed in 2014 at the earliest,“ said LANXESS Board of Management Chairman Axel C. Heitmann in Singapore. “Deferring the project by two years will enable us to continue development work based on a recent technological breakthrough to the point where a new process can be deployed on an industrial scale. We can then use this process in the future butyl rubber production facility on Jurong Island. That way Singapore will have the world’s most modern plant with a unique process technology,” Heitmann added.
Development of the technology, which so far has been successfully tested only on a pilot scale, will be vigorously driven forward over the next 24 months to enable the process to be used in Singapore. “We will invest a substantial sum for this purpose in the coming years. The new technology uses far less resources and is considerably more energy-efficient and environmentally friendly,” explained Heitmann. From today´s perspective, the capital expenditures for the new plant will be slightly lower than originally planned.
Independent of the project postponement, LANXESS will continue to expand its presence in Singapore. The company is currently negotiating with the Singapore Economic Development Board (EDB) with a view to managing the global business of the Butyl Rubber business unit from there in the future. Said Heitmann: “This dynamic city is the hub of our activities in Southeast Asia and continues to play a key role in our highly successful strategy for the Asian region.” The Group currently runs the Southeast Asian business of all its 13 business units from Singapore.
LANXESS is a technology leader in the global market for synthetic rubber and supplies all the leading tire manufacturers and other customers worldwide. The focus is on the premium segment, including numerous new grades of rubber for energy-saving tires with improved running properties such as braking characteristics. A five-year agreement recently signed with South Korean tire manufacturer Hankook underlines the growing importance of the Asian market. This new supply agreement for butyl rubber covers the period from 2010 through 2014. LANXESS already concluded a long-term supply agreement with Hankook, the world’s seventh-largest tire manufacturer, for styrene-butadiene rubber and polybutadiene rubber in 2007. Hankook has a workforce of 14,000 and had sales equivalent to about EUR 2.5 billion in 2008.
LANXESS is a leading specialty chemicals company with sales of EUR 6.58 billion in 2008 and currently around 14,600 employees in 23 countries. The company is represented at 44 production sites worldwide. The core business of LANXESS is the development, manufacturing and marketing of plastics, rubber, intermediates and specialty chemicals.