Lanxess AG still is not content with its business in Asia, reiterating it is ``not well-positioned'' in its fastest-growing market. Meantime, the spinoff from Bayer AG continues to restructure its operations in the Americas.
Randy Dearth, president and chief executive officer of the company's Pittsburgh-based Lanxess Corp. unit, said during NPE in Chicago that the styrenics business in the Americas is implementing the same restructuring model as in Europe last year, consolidating production and sales to one site.
Actions include downsizing the styrenic resins production site in Addyston, Ohio; moving Rhein Chemie offices from Trenton, N.J., to Ohio; and closing the styrenics facility at CamaÃ§ari, Brazil, this year.
Other restructuring steps include closing a textile processing site in Wellford, S.C., and closing operations at a former Bayer plant in New Martinsville, W.Va.
The firm said styrenics sales volume decreased in 2005. Total pounds sold globally went down, although sales retained positive growth because of rising prices.
Board member Ulrich Koemm said the United States still needs to catch up with resin pricing.
``The ABS pricing in North America is too low to compensate for price hikes in raw materials and energy cost,'' he said.
Koemm said the market position of ABS varies across regions. In the United States, it is used mainly in home appliances, automotive, cosmetic packaging and sporting goods, but in Asia it is used by injection molders in the information technology industry.
Lanxess is the largest ABS producer in Europe and India, Koemm said.
In the first quarter, Lanxess AG's global sales increased 6.2 percent to 1.8 billion euros ($2.3 billion) and profit grew 17.1 percent to 80 million euros ($100.6 million).
The Leverkusen, Germany-based firm forecasts EBITDA (earnings before interest, taxes, depreciation and amortization) pre-exceptionals, its key earnings indicator, to fall between 640 million euros ($804.8 million) and 680 million euros ($855.1 million) this year, up from 581 million euros ($730.6 million) in 2005.
In the first quarter of 2006, growth rates in Lanxess' different regional markets seemed to be negatively related to the absolute volume of sales, according to data released at a June 20 news conference.
Asian business jumped 21.2 percent in the first three months, keeping pace with the 2005 annual growth rate of 21 percent, and represented 16.5 percent of global sales for the period. Sales rose 10.7 percent in the Americas and 6.9 percent in Germany. The fourth region, Europe - except Germany - the Middle East and Africa combined, saw sales down 3.3 percent in the first quarter.
Koemm said the firm is looking for partners in Asia, with an interest in increasing its presence in underrepresented markets like China.
Lanxess expects the new sites going on-stream in China this year to boost sales further in the country, which were up 50 percent in 2005. In March, a plant for polymer-bound chemicals opened in Qingdao. In April, a compounding plant in Wuxi started with annual capacity of 44 million pounds of Pocan-brand polyester and Durethan-brand nylon. A joint venture for Vulkanox anti-aging additives will start at year's end in Tongling, Anhui.
Lanxess also opened technology centers in China for leather chemicals and rubber products.