International. Specialty chemical company Lanxess announced it is making rapid progress with its three-phase readjustment program. With the implementation of the first phase, aimed at improving the company's competitiveness and administrative structure, the Group plans to save 150 million euros annually by the end of 2016. In addition, savings of about 20 million euros are expected in the current year.
The company reported that the first phase of the restructuring will result in a reduction in the total number of employees by about 1,000 positions worldwide by the end of 2016 – about half of which will be in Germany. The jobs affected will be mainly in the administrative and service units, marketing and sales, as well as in research and development. The staff reduction will result in extraordinary expenses of €150 million incurred until the end of 2016 – including around €100 million already in 2014.
"Realignment lays the foundation for Lanxess to return to sustainable growth in the medium term. Reducing the workforce is a necessary measure to improve our competitiveness," said Matthias Zachert, Chairman of the Board of Management of Lanxess AG.
In early November 2014, Lanxess initiated the second phase of the readjustment program, which is aimed at increasing its operational competitiveness. This phase focuses on optimizing sales and supply chains and production processes and facilities. The relevant measures will be carried out in 2015 and 2016.
The third phase of the program, which is aimed at improving the competitiveness of the business portfolio, will focus on horizontal and vertical cooperations in the rubber business. This phase will also be implemented in 2015 and 2016. Sales in the third quarter of 2014 were at the level of the previous year's quarter, at €2.04 million, with slightly higher volume offsetting slightly lower prices.
Pre-extraordinary EBITDA increased by 12.3%, from €187 million in the previous year quarter to €210 million.
