LANXESS marks a decade with China focus
Print Edition
SPECIALTY chemicals company LANXESS recently raised its guidance again for the full year 2015 despite the subdued global economic growth and mixed performance in the emerging markets. The Cologne-based company now expects EBITDA pre exceptionals to come in between 860 million and 900 million euros (US$985 million), compared with 808 million euros in fiscal 2014.
The result was achieved a little more than one year after the company launched the realignment program aiming at improving business structure competitiveness, operations competitiveness and portfolio competitiveness. It is evident that the realignment program is taking effect and LANXESS has already established the basis for its new strategic focus.
As Matthias Zachert, Chairman of the Board of Management of LANXESS AG, indicated, “Now that we have solved the main structural problems, we can once again concentrate on growth. LANXESS will be a more profitable and less cyclical specialty chemicals company — with a balanced portfolio of quality products and with growth potential.” The company has defined its strategic cornerstones for future growth and will focus on mid-sized markets. In particular, LANXESS regards China as one major growth regions alongside with North America and Southeast Asia.
Actually, ever since LANXESS was established, the company has positively progressed forward through a series of investments and strategic moves. While LANXESS reached an important milestone this year celebrating its 10th anniversary, the company now operates 10 subsidiaries covering both the coastal area and inland cities of China. It also has set up eight research and development centers and eight production bases in the country.
The investment proved rewarding. LANXESS’ sales in China have grown from less than 500 million euros in 2005 to about 1 billion euros in 2014. During the same period, the employee number has also doubled to over 1,300.
“LANXESS and China have always been a perfect match. Our company has a clear role to play in this country’s current efforts to leverage key economic megatrends,” said Ming Cheng Chien, CEO of LANXESS China. “LANXESS is specialized in providing advanced technologies, quality products and innovative solutions for megatrends like green mobility, urbanization, water treatment and agriculture to help solve pressing challenges in China.”
The year 2015 not only sees the company’s 10 years anniversary, but also marks another testimony of the company’s commitment in China.
In August, LANXESS inaugurated its EPDM (ethylene propylene diene) rubber plant in Changzhou, which produces products tailored to the requirements of customers in China and elsewhere in Asia. The plant worth an investment of 235 million euros is the largest investment the company has made in China to date.
In November, LANXESS opened a production line for Rhenoshape high-performance tire curing bladders at its Qingdao production site to serve international tire manufacturers who produce their innovative tires in China and other Asian countries, such as Japan, Thailand and Malaysia. It is LANXESS’ first Rhenoshape production line in Asia and opens up significant growth potential for the company while customers place high value on their ability to source Rhenoshape bladders locally.
In November, the company also completed construction works at its inorganic pigments in Ningbo, producing highly saturated red iron oxide pigments for the global market using an innovative and highly sustainable new process.
“Thanks to the fast development of China’s economy, LANXESS has taken root in China and achieved good business results over the past 10 years,” said Chien. “Looking into the next decade, the momentum of Chinese market remains with the continued urbanization trend. Meanwhile, industry upgrade and green manufacturing will be in the spotlight in response to the country’s ‘Made in China 2025’ initiative. China’s demands for premium petrochemical products and sustainable process will continue to grow.”
“We look forward to continued close cooperation with our partners for mutual benefits and creating more value for Chinese petrochemical industry and growing together with Chinese economy,” added Chien.
LANXESS is a leading specialty chemicals company with sales of 8 billion euros in 2014 and about 16,300 employees in 29 countries. The company is currently represented at 52 production sites worldwide. The core business of LANXESS is the development, manufacturing and marketing of plastics, rubber, intermediates and specialty chemicals.
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