Lanxess Realignment Lanxess' Realignment Strategy: Mergers, Streamlining, Job Cuts
Crisis ridden chemicals firm Lanxess has defined a three phase realignment strategy, which includes a significant reduction of business units. Additionally, the company plans to cut positions, especially in its global administration.
Cologne/Germany – Beginning in early 2015, Lanxess will merge certain business units, reducing their number from 14 to 10. In addition, the company is streamlining its global administration by reducing the workforce on a cross-functional basis and consolidating specific areas of activity.
"We have been working at full steam over the past few months to create the foundation for our realignment. We, as a team, will significantly improve our competitiveness by systematically implementing our program. We have started talks with the employee representatives on the implementation process, and we expect to quickly reach constructive solutions," said Matthias Zachert, Chairman of the Board of Management of Lanxess.
14 In, 10 Out: Lanxess to Merge Business Units
Lanxess will combine the Butyl Rubber (BTR) and Performance Butadiene Rubbers (PBR) business units to form the Tire & Specialty Rubbers (TSR) business unit. This takes account of the overlapping customer and regional structures in the established markets, as well as complementary strengths in the emerging economies. The future head of this business unit is Jorge Nogueira.
In addition, the firm's High Performance Elastomers (HPE) and Keltan Elastomers (KEL) business units will be merged under the name High Performance Elastomers (HPE). This, too, is prompted mainly by overlaps in the customer structure. Jan Paul de Vries will head the new business unit.
Rubber Chemicals Future Not Yet Clear
The Rubber Chemicals (RUC) business unit's specialty chemicals product line, the Functional Chemicals (FCC) business unit and the Rhein Chemie (RCH) business unit will be combined to form the new Rhein Chemie Additives (ADD) business unit. Bundling the additives businesses will open up new markets and attract new customers, Lanxess hopes.
The future of the company's RUC business unit's antioxidants and accelerators business lines is yet undecided, as Lanxess is examining strategic options. Currently, both a divestiture as well as a merger into a future Advanced Industrial Intermediates business unit are being discussed.