Lanxess at the Crossroads Capital Increase Shall Help to Turn the Tide for Lanxess
Speciality chemicals experts Lanxess have not turned the corner on low sales yet. Now an increase of share capital shall clear the way for a realignment – possible site closures can not be ruled out, the company states.
Leverkusen/Germany – After disappointing start in 2014 saw Lanxess sales falling by another 2.5 percent (to € 2 billion), the new management has announced its plans to stem the tide: A streamlining of administrative structures and decision making processes shall help to increase efficiency and improve customer and market orientation. Further, the company will evaluate the profitability of its sites, with the possibility to shut down several plants temporary or permanently.
“We must become significantly more competitive and profitable again,” said Matthias Zachert, Lanxess’ Chairman of the Board of Management. “The focus will therefore be on the business portfolio, our business units, the efficiency of our administration and our production sites.” Zachert took over the company in April 2014, after a strategy discussion saw long-time manager Axel Heitman leaving Lanxess earlier this year.
The management also discusses possible measures to deal with its problem child, the rubber business. Already in 2013, weak demand for rubber led to a site closure in South Africa and downsizing of Lanxess operations in Belgium.
Capital Increase Shall Help to Bring Realignment Measures Underway
To fill the war chest for the coming restructuring measures and generally strengthen the financial position, the Lanxess management has decided to issue roughly 8.3 million new shares. The placement price and the proceeds from the issue where not yet disclosed. As a total, capital shares shall be increased by around ten percent.