Lanxess seeks long-term pricing

Nuremberg, Germany - Lanxess' technical rubber goods business is offering an open proposal to all customers to discuss long-term price and supply contracts. Dr Günther Weymans, head of Lanxess technical rubber products business, said the company already has negotiated 5-year contracts with some customers and would like to see more such contracts.

Weymans said Lanxess will insist on raw materials and energy clauses in these contracts, linking the price payable to movements in input costs. On the other hand, Lanxess is willing to negotiate productivity clauses which include progressive price reductions over the term of the contract, in line with automotive companies' demands for continual cost-down.

Weymans said long term contracts will guarantee supply in times of shortage, and remove the necessity to spend a lot of time in hard negotiations on price. For Lanxess, it will allow them to reliably plan part of the capacity of the plant, which helps in the company's long-term planning processes.

Weymans said the contracts would be 'take or pay' so that if customers chose not to take the contract volume, they would have to pay a penalty. Asked if he would take legal action against a customer who defaulted, Weymans was non-committal.