Lanxess records solid quarter, implements first phase of realignment

Cologne, Germany – German chemical giant and the world’s number 1 maker of synthetic rubber, Lanxess, confirmed today its plans to cut 1,000 jobs, aiming to make €150 million annual savings.

In a press release on 6 Nov Lanxess said it would cut about 1,000 jobs, equivalent of 6 percent of its workforce by end of 2016.

Lanxess sales had remained steady at €2.04 billion in the third quarter of 2014, with only 0.5 percent drop compared to the same period last year. The statement said the volume of the sales were marginally higher compensating slightly lower prices.

Year-on-year, third quarter earnings (EBITDA), pre exceptionals, rose by 12.3 percent from €187 million to €210 million. According to Lanxess, the increase was attributable among others to savings in administration, higher plant utilisation rates and the absence of inventory write-downs.

However, the company reported an overall decline in its performance polymer segment, reporting a 4.3-percent fall in sales due to “falling prices and lower volumes”. Year-on-year third quarter sales dropped €1.05 billion.

Earnings, however, were improved by lower manufacturing costs, reduced spending on R&D and the absence of inventory write-downs. EBITDA pre exceptionals of the segment advanced by 10.7 percent to EUR 93 million.

Lanxess started a three-phased restructuring in early 2014 aiming to reduce the impact of Asian rivals and low-demand market in its main synthetic rubber business.  At the beginning of November 2014, LANXESS initiated the second phase of the realignment program, which is aimed at increasing its operational competitiveness. This phase focuses on the optimization of sales and supply chains and of production processes and facilities. The relevant measures will be implemented in 2015 and 2016.