Lanxess preparing tyre, rubber business units for partnership
Specialty chemicals manufacturer Lanxess states it has initiated a carve-out process to transfer its rubber business to a legally independent business entity within the Lanxess Group. The plan is for the new entity to include the company’s Tire & Specialty Rubbers (TSR) and High Performance Elastomers (HPE) business units, which together operate 20 production facilities and have some 3,700 employees.
“In this way, we are creating the conditions that will enable us to bring the rubber business into an alliance,” commented Matthias Zachert, chairman of the Lanxess Board of Management. Although Lanxess is a global market leader in the synthetic rubber business, competition and overcapacity has taken its toll and therefore the company has sought a partner for this business for some time now. Zachert has stated that discussions between Lanxess and a number of suitors have taken place, and these talks have gone well. Russian petrochemical manufacturer Nizhnekamskneftekhim and the Saudi Arabian Oil Company (Aramco) are two names already associated with these discussions.
Lanxess is currently in the midst of a three-phase ‘realignment’ programme initiated to counter weak business development. The first phase of this is already complete and saw the company’s global workforce reduced by about 1,000. The next round of measures are underway and include the reorganisation of production networks for EDPM and Nd-PBR rubber. The third phase of the programme is focused on improving the competitiveness of the company’s business portfolio, especially through potential alliances in the rubber business. “In this connection, we are currently engaged in very constructive discussions and assume that we will achieve concrete results in the course of the second half of the year,” said Zachert.
News of the carve-out was announced along with the release of Lanxess’ financial results for the second quarter of 2015. During the three months from 1 April to 30 June, the company’s sales rose 4.3 per cent to €2.12 billion, EBIDTA increased 13.0 per cent to €250 million and EBITDA margin rose from 11.8 to 12.8 per cent, while net income jumped 58.7 per cent to €87 million.
Further details of the Lanxess Q2 2015 financial results can be found here.