Lanxess reports healthy growth in Q2, but will restructure NBR operations

Leverkusen, Germany -- Lanxess AG reported sales 11 percent ahead of the equivalent quarter in 2004. Sales in the company's performance rubber unit were 17 percent ahead of the same period last year, at Euro 432 million (Q2, 2004: Euro 368 million.. The company said, "As in the previous quarter, the favourable market environment enabled us to raise selling prices. The higher prices more than compensated for the medium-term rise in raw materials and energy costs. Volume sales also increased, despite the consistent implementation of our "price-before-volume" strategy."

The company converted a pre-tax loss of Euro 17 million to a profit of Euro 29 million in the period. Meanwhile, EBITDA in performance rubber rocketed to 126 million in the first half of 2005, compared with Euro 81 million in the six-months period of 2004.

Axel Heitmann, chief executive outlined a series of restructuring measures. Most significantly, the company's nitrile rubber (NBR) manufacturing facility at La Wantzenau in France is to undergo substantial restructuring.,

Heitmann said, "Despite investing a total of EUR 150 million in the past ten years, we incurred losses of approximately EUR 200 million over the same period. [in the NBR business]". Heitmann continued, "That's why we asked the management of this business unit to present a restructuring plan that would sustainably reduce its cost base as quickly as possible by improving efficiency and optimizing processes. We expect to achieve a considerable improvement next year already and realize the full savings starting in 2007. "

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Listing of statementsfrom Lanxess

Speech by Axel Heitmann