Following reaching an agreement with employee representatives, Lanxess AG has announced its plans to cut back or shut down production at 23 out of 45 of its German production facilities over the Christmas period and into January 2009. These arrangements, planned for the company’s Leverkusen, Dormagen, Krefeld-Uerdingen and Brunsbuettel sites, will directly affect around 1,400 employees.
Special chemicals group Lanxess AG has announced the formation of an alliance with Japan-based Tokyo Zairyo to sell rubber chemicals to Japanese companies engaged in the industrial rubber product sector within China. This cooperative agreement took effect on December 1, and the German company expects that the partnership will also help its sales in Japan and other Asian countries.
The consistent further development of synthetic rubber has resulted in a significant improvement in the overall performance of vehicle tyres. Synthetic rubber manufacturer Lanxess AG highlighted recent progress in this area at the recent 4th Intelligent Tire Technology Congress, held on October 21 and 22 in Wiesbaden, Germany.
Newly developed production processes have paved the way for the use of solution styrene-butadiene rubbers (S-SBR), reports Lanxess. Trials performed at the company’s test laboratories and in customer trials have shown that, with these new tyre tread elastomers, it is possible to simultaneously raise wet grip and rolling resistance – formerly totally contradictory properties – to a completely new level.
Specialty chemicals company Lanxess AG has increased its net sales for the third quarter of 2008, however in keeping with the current economic climate these higher sales figures have not equalled greater net income. Quarterly sales of 1.81 billion euros for the period ending September 30 represented an increase of 6.4 per cent. Pre exceptionals EBITA, at 191 million euros, was also up on last year’s 175 million euros in the third quarter. BBIT, pre exceptionals, was 119 million euros, 6.3 per cent higher than the corresponding quarter of 2007. The company’s quarterly net income of 56 million euros represented a decrease of 25.3 per cent.
The Performance Butadiene Rubbers business unit belonging to Lanxess AG and Taiwanese tyre manufacturer Cheng Shin Rubber have put their cooperation on a firm footing with the conclusion of a long-term supply agreement. Over the next four years Lanxess will supply solution SBR and polybutadiene rubber to Cheng Shin, and the company plans to nearly double the volume of high-performance rubber it supplies over this period.
The German chemical manufacturer Lanxess expects to see significant growth in its South American operations, in the main thanks to increasing business in Brazil. Marcelo Lacerda, the firm’s Brazil-based operations chief stated to news sources last week that it was all part of the company’s plans.
In Q2 sales in South America grew by more than 10 per cent, thanks largely to its polymers unit, which produces synthetic rubber used in tires. Earlier in the year the company acquired a 70 per cent controlling stake in Brazilian rubber maker Petroflex. Soon it will make a mandatory offer to buy the company’s remaining shares. Lanxess expects Petroflex to provide 35-40 million euros ($52-59 million) this year in pre-exceptional earnings before interest, taxes, depreciation and amortization.
Specialty chemicals company Lanxess AG plans to move its headquarters from Leverkusen to Cologne, Germany, with the relocation process to be completed by 2011. Lanxess reports it will now begin discussions with the city of Cologne to identify possible sites.
“Lanxess is today a well-positioned and globally successful enterprise,” explained Axel C. Heitmann, chairman of the Lanxess Board of Management. “If we are to continue efficiently steering and supporting our growth course in the future, we need a Group headquarters building that provides us with optimal conditions.
Global number two producer of butyl rubber for use in tyres, Lanxess AG, believes the decline in demand from US tyre manufacturers will more than be compensated for by sales in China and India. CFO Matthias Zachert informed Bloomberg that the company’s experience in the US, where rising fuel prices are prompting motorists to drive less and therefore require fewer tyres, is a ‘relatively moderate decline.’
“The growth rates you have in India and China are, in absolute terms, clearly outpacing whatever little percentage you are going to lose on miles being driven,” he said.
China’s Qingdao region is firmly established as a tyre and rubber product manufacturing region of growing significance, and in recent years numerous domestic and global operators have set up facilities there. Newly added to the list of companies with a presence in Qingdao is chemical producer Lanxess, who on July 17 opened a joint operated rubber research centre. Established in cooperation with Qingdao’s University of Science and Technology (QUST), the Rubber Research Center (RRCQ) will conduct work for the company’s Technical Rubber Products, Butyl Rubber and Performance Butadiene Rubbers business units. Lanxess has invested 10 million euros in the centre’s establishment.
The Jacobs Engineering Group announced on June 24 that it has received a contract from Lanxess to provide Front End Loading services for a butyl rubber manufacturing plant project located on Singapore’s Jurong Island. Jacobs will provide the services from its Singapore office.
In making the announcement, Jacobs group vice president Chris Nagel stated, “We are excited that Lanxess has involved us in this project to support their growth in Asia. We are fully committed to delivering a safe, environmentally friendly plant.” Officials estimate the project’s total installed cost will amount to approximately US$700 million. Construction is expected to start early next year and be completed by the end of 2010.
The Rubber Chemicals business unit of Lanxess AG is increasing prices for the antioxidants (Vulkanox), accelerators (Vulkacit) and specialties (Vulkazon, Coagulant, KS 95) as of July 1, 2008. Increases will be in the range of up to US$1,200 per tonne, depending on the product and region. The company reports that continued cost increases have, in spite of cost-cutting programmes previously introduced, made a price rise unavoidable.
Lanxess Inc. announced on May 9 it has entered into a multi-year tenancy agreement with the University of Western Ontario (U.W.O.) Research Park in London, Ontario (Canada), which will become the new home for the Lanxess Butyl Rubber Business Unit polymer research group. Presently operating out of the company’s Sarnia site, the new facility will have global responsibility for the research and development of butyl and butyl-like elastomers. Three global rubber manufacturing sites – Belgium, Canada and Singapore – will be supported from this new facility. It is expected that relocation to the Ontario site will be completed by the end of 2009.
German specialty chemicals group Lanxess AG reports it is banking on growing demand for more environmentally compatible products and systems solutions in China, its most important Asian sales market. At an international press conference held during the Chinaplas 2008 plastics fair in Shanghai (held between April 17 and 20), chairman of the Lanxess Board of Management, Axel C. Heitmann, stated ”Sales of our “green” premium products in China have risen significantly in the past twelve months. We expect this trend to continue and to have a positive impact on our business in China.”
An analysis conducted by Lanxess indicates that growth of this “green business” could provide double the rate of overall market growth in China. ”Therefore we will focus increasingly on green chemistry products in our portfolio,” added Heitmann. Among the measures to be implemented will be an increase in development of new, innovative products and systems solutions.
Specialty chemicals group Lanxess AG has completed the acquisition of an approximate 70 per cent holding in Petroflex S.A., Latin America’s largest rubber producer. Lanxess is paying some 200 million euros for the package of shares. The transaction took effect on April 1, 2008. Petroflex S.A. will be included in Lanxess’ consolidated financial statements from the second quarter of 2008. In accordance with local regulations, Lanxess will shortly issue a public takeover offer for the remaining shares.
“Petroflex ideally complements our product portfolio and strengthens our position in one of the world’s most important growth markets,” said chairman of the Lanxess Board of Management Axel C. Heitmann. “In this way we are decisively reinforcing our position in Latin America and welcome our new employees with whom we want to continue growing.”
Martin Krämer, currently head of the Lanxess Group Function Treasury, is to be the specialty chemicals group’s new CFO for Greater China. Krämer, aged 41, will begin the Shanghai based position on April 1, 2008. In this function, which in future will also include responsibility for Hong Kong, Krämer will continue to report to Lanxess CFO Matthias Zachert. The successor to Krämer as head of the Group Function Treasury, effective March 1, 2008 is Christoph Koch, currently head of the Corporate Finance department within this Group Function. The present CFO in China, Marc Horn, is returning to Group headquarters in Leverkusen to take up new duties.
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