Lanxess cuts 1,000 jobs in new restructuring

ERJ staff report (EPN)

Leverkusen, Germany – Thermoplastic and rubber materials producer Lanxess has announced a major restructuring which will lead to 1,000 jobs being cut at its worldwide operations by the end of 2015, reports European Plastics News. The Germany-headquartered group will exit from non-core elastomer and monofilaments businesses in the restructuring, which it hopes will achieve €100m in annual savings.

Lanxess said it is facing challenging markets and has launched the “Advance” programme, which involves efficiency improvements as well as the job cuts.

Axel C Heitmann, chairman of the board of management at Lanxess, said: “We have a strong track record of managing our business in challenging economic environments. We will undertake all necessary steps in order to return to sustainable and profitable growth as soon as possible. We are seeing first signs of stability in the market but it is too early to say when and how quick a recovery will take hold.”

The main efficiency focus for Lanxess is in its rubber-related businesses. It has already restructured parts of its Rubber Chemicals business unit and is closing a site in South Africa and downsizing its operations in Belgium.

In the latest announcement, Lanxess said it is “pursuing strategic options” for three non-core activities: the High Performance Materials (HPM) business unit’s Perlon-Monofil business line, Rubber Chemicals’ (RUC) accelerators and antioxidants business lines, and High Performance Elastomers’ (HPE) nitrile butadiene rubber business line.

The affected sites are in Brunsbuettel and Dormagen, Germany; Kallo, Belgium; Bushy Park, USA; Jhagadia, India; La Wantzenau, France; and Nantong, China. “All options for these sites will be considered in line with legal frameworks and local employee participation,” Lanxess said.

These non-core activities have combined sales of approximately €500m and close to €30m in EBITDA pre exceptionals. Their headcount is roughly 1,000.

In addition to the cuts, Lanxess will also reduce its capital expenditure from €696m in 2012 to about €600m in 2013. But the group said that it will continue with three important investment projects: a neodymium polybutadiene rubber (Nd-PBR) plant in Singapore; an ethylene propylene diene monomer (EPDM) rubber plant in China; and a polyamide plant in Belgium.

Lanxess will book €150m in one-off charges in 2013 and 2014 to cover the “Advance” programme.

Heitmann confirmed the company’s full-year guidance for 2013 of €700-800m EBITDA pre exceptionals, excluding potential inventory devaluations. This compares with €1.225bn EBITDA pre exceptionals in 2013.

Lanxess produces polyamide and PBT as well as rubber materials and chemicals.