Lanxess AG will combine its rubber and plastics products into a new performance polymers division, now that the company plans to sell its Lustran ABS business to Ineos Group.
Beginning Oct. 1, the new unit will comprise the firm's synthetic rubber interests and its remaining plastics business, notably in nylon. It will be one of three new segments for Lanxess, the others being advanced intermediates and performance chemicals.
In a Sept. 19 news conference in London, Lanxess Chief Executive Officer Axel Heitmann highlighted a 1 billion euro ($1.39 billion) investment plan, and the company's success in meeting targets ahead of schedule.
Sell-offs, cost-saving measures and a price-before-volume strategy have created a dramatic turnaround for Lanxess, which widely was thought to have included many of Bayer AG's unwanted businesses when Lanxess was spun off from Leverkusen, Germany-based Bayer in 2004.
``Back in 2004, 70 percent of our businesses were nonperforming,'' he said. ``Today, three-quarters of our businesses are reporting margins above 10 percent. And our proportion of low-margin businesses is insignificant. By the end of 2007, we expect to have 75 percent of our sales in [a] margin category of plus 10 percent.''
Following the failure of his ambitious plan to buy Dusseldorf, Germany-based Degussa GmbH, Heitmann was slow to discuss possible future acquisitions.
``At the moment, there are no potential large-scale acquisition opportunities that fit our strict value-creating criteria,'' he said, noting that only small and midsize candidates would be likely targets.
But Lanxess' ambitious plans include expansion of its Wuxi, China, nylon compounding plant.
Ineos is buying Lanxess' ABS business in two steps. First, Ineos will own a 51 percent stake in a new joint venture with Lanxess. In two years, Ineos plans to buy out Lanxess' share of the venture.