Lanxess to close down plants in Belgium and US to counter weak demand

Amidst soft demand that started in the second half of 2012 through 2013, specialty chemicals firm Lanxess has decided to lay down stategies that include temporarily shut down its butyl rubber plant in Belgium and its EPDM-production in Texas, US, in the coming weeks to gain momentum.

However, the firm expects demand to pick up during the year , and remains confident to achieve its mid-term earnings goals of EUR 1.4 billion and EUR 1.8 billion EBITDA pre exceptionals in 2014 and 2018 respectively.

During the fouth quarter of 2012, Lanxess has achieved substantially higher earnings compared to the same quarter in 2011, despite soft underlying demand.

Lanxess increased EBITDA pre-exceptionals by 37% year-on-year to EUR239 million from EUR174 million a year ago; with net income increasing net income increasing to EUR51 million from EUR5 million a year earlier.

The company said that their strict cost discipline and proven flexible asset management made them achieve these results.

In addition, the fourth quarter of 2011 included EUR35 million in charges for inventory devaluations. By this, Lanxess achieved an EBITDA pre exceptionals of EUR1,225 million in the business year 2012. This was an increase of 7% compared to 2011 and the company achieved its full-year guidance of 5-10 percent earnings growth. 2012 sales increased by 4% year-on-year to EUR9,094 million, net income increased by 2% to EUR514 million.


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