German chemicals company Lanxess to eliminate 1,000 jobs, reduce costs by €100 mn

German speciality chemicals company Lanxess will eliminate 1,000 jobs and reduce costs by €100 million due to weak demand for synthetic rubber from the auto industry.

Axel Heitmann, chairman, Lanxess

The Cologne-based company said that it is countering the challenging business environment with an ''Advance'' comprehensive efficiency programme.

Due to a temporary weakness in demand for synthetic rubber, increased competition and volatile raw materials prices, the company plans to restructure by reducing costs and headcount and divest non-core assets accounting for about €500 million in annual sales.

Lanxess will reduce costs by €100 million annually from 2015 onwards and reduce headcount by about 1,000 employees worldwide by the end of 2015.

It said that the positions will be phased out through a voluntary separation programme, which includes early retirement packages and severance pay.

Lanxess, which was spun off in 2004 from German drugs group Bayer, may sell non-core assets, which include its High Performance Materials business unit's Perlon-Monofil business line, Rubber Chemicals'accelerators and antioxidants business lines, and High Performance Elastomers' nitrile butadiene rubber business line.

The affected sites are based in Brunsbuettel and Dormagen in Germany, Kallo in Belgium, Bushy Park in the US, Jhagadia in India, La Wantzenau in France, and Nantong in China.

''Each of these businesses is well positioned in its market, but can develop better over time with a different partner,'' said Axel Heitmann, chairman of Lanxess.

Lanxess is a leading specialty chemicals company with annual sales of €9.1 billion, employs around 17,500 people in 31 countries, and has 52 production sites worldwide.