The LANXESS Group
Business and strategy
The LANXESS Group is a globally operating chemicals enterprise with a portfolio ranging from polymers to basic, specialty and fine chemicals. In our core businesses, all of the conditions are in place for long-term success. These include a flexible asset network, a diversified customer base, a global presence with regional flexibility and an entrepreneurial management structure. We see ourselves as a premium company that is not only a reliable supplier of products in optimal quality. We also actively support our customers’ innovation processes and add measurable value. This enables us to strengthen customer loyalty and set ourselves apart from the competition. Our aim is to achieve sustainable growth, particularly through further expansion of our activities in the dynamic BRIC countries.
In response to the global economic crisis, we put together an extensive range of operating measures named Challenge09-12, the success of which is already reflected in our results for 2009. Flexible asset and cost management as well as human resources measures form the backbone of this program. Through our Group-wide flexible asset management policy, we have been able to avoid overproduction, cut spending on raw materials, energies, infrastructure services and logistics, and reduce the unnecessary build-up of inventories. Our employees have also helped to relieve cost pressure by taking a cut in working hours and a corresponding reduction in pay.
The objective of Challenge09-12 is to cut overall costs by €360 million worldwide between 2009 and 2012. Implementation is proceeding faster than expected. In 2009 we achieved around €30 million of the savings target set for 2010. Cost reductions in the year under review therefore totaled €170 million.
The segments in brief
LANXESS’s 13 business units are grouped in three segments: Performance Polymers, Advanced Intermediates and Performance Chemicals.
Synthetic rubber and plastics manufacturing activities are combined in the Performance Polymers segment. Here, LANXESS offers a broad portfolio of innovative products that holds a leading position internationally. The segment comprises the Butyl Rubber, Performance Butadiene Rubbers, Technical Rubber Products and Semi-Crystalline Products business units. The Performance Polymers segment’s production facilities are located in Dormagen, Krefeld-Uerdingen, Leverkusen, Hamm-Uentrop and Marl, Germany; Antwerp and Zwijndrecht, Belgium; La Wantzenau and Port Jérôme, France; Sarnia, Ontario, Canada; Orange, Texas, United States; Cabo, Duque de Caxias and Triunfo, Brazil; and Wuxi, China. Rubber products have applications in various areas, particularly the automotive and tire industry, construction materials, leisure equipment and machinery, but also in niche markets such as chewing gum. The plastics that LANXESS produces are used in particular in the automotive industry, electronics and electrical engineering, and medical equipment.
The business activities that LANXESS combines in its Advanced Intermediates segment make it one of the world’s leading suppliers of basic and fine chemicals. The business units in this segment are Basic Chemicals and Saltigo. The Advanced Intermediates segment’s production sites are located in Brunsbüttel, Dormagen, Krefeld-Uerdingen and Leverkusen, Germany; Liyang, China; Nagda, India; and Baytown, Texas, United States. Its products are used in such diverse sectors as agrochemicals, construction, dyes and pharmaceuticals.
The Performance Chemicals segment embraces the Group’s application-oriented specialty chemicals operations. The business units in this segment are Material Protection Products, Inorganic Pigments, Functional Chemicals, Leather, Rhein Chemie, Rubber Chemicals and Ion Exchange Resins. The segment’s production sites are in Bitterfeld, Brunsbüttel, Dormagen, Krefeld-Uerdingen, Leverkusen and Mannheim, Germany; Antwerp, Belgium; Branston, United Kingdom; Filago, Italy; Vilassar de Mar, Spain; Isithebe, Merebank, Newcastle and Rustenburg, South Africa; Burgettstown, Pennsylvania, Bushy Park, South Carolina and Chardon, Ohio in the United States; Porto Feliz, Brazil; Zárate, Argentina; Qingdao, Tongling, Shanghai and Wuxi, China; Madurai and Jhagadia, India; Toyohashi, Japan; and Sydney, Australia. The segment’s varied products are used in areas such as disinfectants, colorants, wood preservatives, the food and beverage industry, water treatment, construction and the leather industry.
Organization
LANXESS AG functions largely as a management holding company. Each business unit has global responsibility for its own operations. The business units are complemented by service-providing group functions with international responsibility.
LANXESS Deutschland GmbH and LANXESS International Holding GmbH are wholly owned subsidiaries of LANXESS AG, and in turn control the other subsidiaries and affiliates both in Germany and elsewhere.
The following are the principal companies wholly owned by LANXESS AG directly or indirectly:
- LANXESS Deutschland GmbH, Leverkusen, Germany: production and sales, all segments
- LANXESS Corporation, Pittsburgh, Pennsylvania, United States: production and sales, all segments
- LANXESS Elastomères S.A.S., Lillebonne, France: production and sales, Performance Polymers
- LANXESS Holding Hispania, S.L., Barcelona, Spain: holding company, all segments
- LANXESS Inc., Sarnia, Ontario, Canada: production and sales, Performance Polymers
- LANXESS International SA, Granges-Paccot, Switzerland: sales, all segments
- LANXESS N.V., Antwerp, Belgium: production and sales, Performance Polymers and Performance Chemicals
- LANXESS Rubber N.V., Zwijndrecht, Belgium: production and sales, Performance Polymers
- LANXESS Elastômeros do Brasil S.A., Rio de Janeiro, Brazil: production and sales, Performance Polymers
- Rhein Chemie Rheinau GmbH, Mannheim, Germany: production and sales, Performance Chemicals
- SALTIGO GmbH, Leverkusen, Germany: production and sales, Advanced Intermediates
In a transaction that took economic and legal effect on September 1, 2009, we acquired the chemical businesses and assets of listed Indian company Gwalior Chemical Industries Ltd. through our Indian subsidiary LANXESS India Private Ltd. Founded in 1978 and headquartered in Mumbai, the company is one of India’s leading producers of benzyl products and among the world’s main suppliers of sulfur chlorides.
Our acquisition of the businesses and production facilities of Jiangsu Polyols Chemical Co. Ltd. also became legally and commercially effective on September 1, 2009. This mid-sized Chinese company, established in 2006 and based in Liyang, west of Shanghai, mainly produces the polyol trimethylolpropane (TMP), which is used to manufacture coatings, paints and lubricants, for example.
As planned, in September 2009, we withdrew from the INEOS joint venture and thus from the low-margin ABS plastics business. We also divested our 55% majority shareholding in the hydrazine hydrate joint venture company LANXESS Yaxing Chemical (Weifang) Company Ltd. in the fourth quarter of 2009.