HIGHLIGHTS Q2 2009
2009 ANNUAL STOCKHOLDERS’ MEETING – HIGH ATTENDANCE AND APPROVAL
On May 7, 2009, LANXESS held its Annual Stockholders’ Meeting at Cologne’s LANXESS arena for the first time. This year 60.94 percent of the voting capital was represented at the meeting, again an increase from the year before. The stockholders’ near-unanimous approval of all the motions on the agenda underscored their continued high confidence in the management and its strategy.
At the Annual Stockholders’ Meeting, LANXESS also presented its results for the first quarter of 2009. Group sales fell by 31.3 percent year on year, to €1,054 million (Q1 2008: €1,535 million). EBITDA pre exceptionals dropped by 70 percent to €66 million (Q1 2008: €220 million). Despite a decline in demand in all business units, the company reported positive earnings due in large part to the consistent implementation of the “Challenge09” package of measures.
CONSTRUCTION OF NEW BUTYL RUBBER PLANT IN SINGAPORE POSTPONED
In view of the ongoing global economic crisis and the associated decline in demand, the new butyl rubber facility to be built in Singapore is now planned to go on stream in 2014. LANXESS will take advantage of the postponement to ready an innovative butyl rubber production technology for industrial-scale use and will then apply it at the new plant, giving Singapore the world’s most modern production facility with a unique process technology. The plant, costing up to €400 million and having a capacity of some 100,000 tons, had previously been scheduled to start production in 2012. LANXESS will further expand its presence in Singapore independent of the project postponement. The company is currently negotiating with the Singapore Economic Development Board to transfer global management of the Butyl Rubber business unit to that country.
SECOND MAJOR SUPPLY CONTRACT SIGNED WITH HANKOOK TIRE
Under a recently signed agreement, LANXESS will supply Hankook Tire with butyl rubber from 2010 to 2014. In 2007 the companies already concluded their first agreement for the bulk supply of styrene butadiene rubber (SBR) and polybutadiene rubber. Hankook Tire is the world’s seventh-largest tire manufacturer and one of the fastest-growing suppliers of radial tires for cars and commercial vehicles.
“We have always stressed that we are on the lookout for small or medium-sized assets that will create value for LANXESS and are a strategic fit for our portfolio. These two transactions follow on from our successful acquisition of Petroflex S.A., one of South America’s leading producers of synthetic rubber.”
Dr. Axel C. Heitmann
ACQUISITIONS IN ASIA STRENGTHEN BASIC CHEMICALS BUSINESS UNIT
Two acquisitions by LANXESS in India and China mark further milestones in the company’s long-term growth strategy for Asia. LANXESS India Private Ltd. is to acquire the chemicals businesses and plants of stock-market-listed Indian company Gwalior Chemical Industries Ltd. for €82.4 million, including the assumption of debt. Closing of the transaction is expected at the end of the third quarter of 2009. Gwalior, headquartered in Mumbai, is one of India’s principal producers of benzyl products and among the world’s leading suppliers of sulfur chlorides. Gwalior posted sales of €45.7 million in the first nine months of its 2008/2009 fiscal year. In addition, LANXESS will strengthen its market position with the planned commissioning of the new site at Jhagadia, which in 2010 will become the company’s largest production site in India.
In China, LANXESS will acquire the businesses and production assets of Jiangsu Polyols Chemical Co. Ltd. Closing of this transaction is expected in the third quarter of 2009. Jiangsu mainly produces trimethylolpropane, a polyol used in the production of lubricants, paints and coatings. Jiangsu Polyols had sales of some €10 million in 2008.
NEW PARTNERSHIP WITH RUSSIAN RUBBER PRODUCER HALOPOLYMER
The Technical Rubber Products business unit has entered into a worldwide distribution partnership to expand its activities in fluororubbers, a market with a global volume exceeding 20,000 tons per year. In the medium term, LANXESS plans to market a significant proportion of its output under the name Levatherm F. Halopolymer will continue to serve the Russian market as in the past.
INNOVATION AS A FACTOR FOR SUCCESS
At the second LANXESS Innovation Day, some 200 experts from different parts of the company presented their current projects, underlining the growing importance of innovation for the company’s long-term success. The event concluded with the presentation of the “LANXESS Innovation Awards” to outstanding development teams by Andreas Pinkwart, Research Minister for the State of North Rhine-Westphalia. The LANXESS innovation campaign in 2009 not only comprises a 10 percent increase in the company’s R&D budget. In addition, LANXESS created the new Innovation group function at the beginning of the year to serve as an “innovation hub” for the development of improved production processes, new products and new applications.