Lanxess is pressing ahead systematically with its realignment. The specialty chemicals Group has defined a three-phase program “Let’s Lanxess again,” divided into the following three areas: Business & Administration structure competitiveness, Operations Competitiveness, Portfolio Competitiveness. The group-wide restructuring program initiated by the board of management on July 24, 2014, will initially focus on the first area – the Business & Administration structure competitiveness.
Preparations for the following phases have already begun. Effective January 1, 2015, Lanxess will merge certain business units, reducing their number from 14 to 10. In addition, the company is streamlining its global administration by reducing the workforce on a cross-functional basis and consolidating specific areas of activity. The respective employee representatives will be involved in the process.
This more efficient organizational structure is designed to enhance Lanxess’ market and customer focus and reduce costs. Lanxess is also aiming for savings on all cost types. “We have been working at full steam over the past few months to create the foundation for our realignment. We, as a team, will significantly improve our competitiveness by systematically implementing our program. We have started talks with the employee representatives on the implementation process, and we expect to quickly reach constructive solutions,” said Matthias Zachert, chairman of the board of management of Lanxess AG.
Lanxess will present further details on the restructuring at a Media and Capital Markets Day on November 6, 2014. Lanxess will combine the Butyl Rubber (BTR) and Performance Butadiene Rubbers (PBR) business units to form the Tire & Specialty Rubbers (TSR) business unit. This takes account of the overlapping customer and regional structures in the established markets, as well as complementary strengths in the emerging economies.
The future head of this business unit is Jorge Nogueira. In addition, Lanxess will recombine the High Performance Elastomers (HPE) and Keltan Elastomers (KEL) business units under the name High Performance Elastomers (HPE). This, too, is prompted mainly by overlaps in the customer structure. Jan Paul de Vries will head the new business unit. The Rubber Chemicals (RUC) business unit’s specialty chemicals product line, the Functional Chemicals (FCC) business unit and the Rhein Chemie (RCH) business unit will be combined to form the new Rhein Chemie Additives (ADD) business unit. Bundling the additives businesses will open up new markets and attract new customers for Lanxess.
The head of this new business unit will be Anno Borkowsky. As announced in September 2013, Lanxess is examining strategic options for the RUC business unit’s antioxidants and accelerators business lines. At the same time, the company is considering merging these product lines and placing them into the Advanced Industrial Intermediates business unit (AII).
A decision in favor of one of these options will be made by the end of the third quarter of 2014 at the latest. Lanxess will combine the group functions Aliseca (ASC), Industrial & Environmental Affairs (IEA) and Innovation & Technology (INN) into the new group function Production, Technology, Safety & Environment (PTSE). Par Singh will head the group function.
Some maintenance tasks will be delegated to the business units in the future, eliminating a number of interfaces and thus raising efficiency. The group function Internal Auditing (IA) and the Corporate Security unit will be integrated into the group function Law and Intellectual Property (LIP).
The new group function Legal & Compliance (LEX) will be headed by Jochen Schroer. Claus Zemke, current head of Corporate Communications at the machine tool manufacturer TRUMPF GmbH+Co KG in Ditzingen, will become head of Lanxess’ group function Corporate Communications (COM) no later than January 1, 2015. Further action initiated as part of the realignment. The second phase – Operations Competitiveness – will involve an “operational excellence initiative” to examine all production facilities with respect to market requirements and synergy potential. Par Singh will lead this initiative.
A “marketing and sales excellence initiative” – led by Torsten Derr – will evaluate the effectiveness and efficiency of Lanxess’ international distribution structures. Lanxess has already taken first steps in the third area – Portfolio Competitiveness. The company will provide information on a regular basis about the implementation of the realignment, in addition to the restructuring, as of 2015.