German chemicals group Lanxess unveiled more cutbacks on Thursday, shedding about 140 jobs in rubber production and acknowledging its quest for a strategic partner would likely take until the second half of the year.
The company, the world’s No.1 maker of synthetic rubber, said as early as May last year it would seek a strategic partner for its hard-pressed rubber division, shortly after Chief Executive Matthias Zachert replaced Axel Heitmann at the helm.
Sources told Reuters last month Lanxess was in talks with Russia’s NKNK and state-owned Saudi Arabian Oil Co (Saudi Aramco) to sell a stake in its tyre rubber business.
“Lanxess is currently in talks with potential partners and will possibly report on these in the second half of 2015,” it said on Thursday, adding it expected stagnant core earnings or EBITDA in 2015, adjusted for special items, as it faces challenges from rubber competitors.
Its shares traded 0.8 % lower, having dipped as much as 2.4 % shortly after the open.
The company will stop production of EPDM rubber, used in tubes, sealants and transmission belts, at its Marl site in Germany, affecting 120 jobs. A further 20 posts in the production of high-performance tyre rubbers will go in the United States.
New output capacity in EPDM is coming to market driven by players such as Mitsui Chemicals and Sinopec.
Lanxess has itself contributed to the supply overhang, as it is bringing on stream the world’s largest EPDM plant at its Changzhou site in China, an investment initiated by Zachert’s predecessor.
Lanxess unveiled plans in November to cut about 1,000 jobs, or 6 % of its global workforce, in administration, services, marketing and sales, to counter overcapacity.
Lanxess is also cutting its investment budget to 450 million euros (US$479 million) this year, it said on Thursday, down from the total of between 500 million and 550 million earmarked previously. (US$1 = 0.9390 euros)