Lanxess achieves independence
almost all areas of its chemicals business and parts of its
polymers activities, begins operating as an independent unit today.
The company also said its earnings improved in the first quarter, providing an encouraging sign that the restructuring effort has started to pay off, and lending weight to suggestions that the embattled European chemicals industry may see some form of recovery in 2004.
The independent structure - which for the time being only applies internally - leaves Bayer with the pharmaceuticals unit, which includes its nutrition activities, as well as its materials science and agrochemical operations, and is designed to improve competitiveness by simplifying what had been regarded in some quarters as an unwieldy corporate structure.
Lanxess is scheduled to be listed on the stock exchange at the beginning of 2005, and the decision as to whether this will take place via an initial public offering (IPO) or a spin-off will be taken over the coming weeks. Until the stock market flotation, it will continue to operate under the umbrella of the Bayer holding company.
With sales of around €6 billion and around 20,000 employees, of whom some 11,000 are in Germany, Lanxess ranks among the leading chemicals companies in Europe, a sector that has been hit hard of late by rising raw material and energy prices, softening demand and the high value of the euro.
Lanxess is also affected by the prevailing operating climate, and experienced a 2.1 per cent decline in sales to €1.478 billion in the first quarter of this year, although it reported a 5.4 per cent improvement in earnings before interest, taxes depreciation and amortisation (EBITDA) to €136 million. Compared with the same period in 2003, EBIT grew by €58 million to €75 million.
