Three German subsidiaries of the Belgian chemical group DOMO Chemicals, operating in the field of polymers, engineering plastics and high-performance fibres, have filed for insolvency. The competent local court has appointed Prof. Dr. Lucas F. Flöther, a partner at the law firm Flöther & Wissing, as preliminary insolvency administrator. His task is to maintain ongoing operations and to prepare possible restructuring scenarios, including the potential entry of an investor or a settlement with creditors. The decision to file for insolvency results from prolonged weak demand in the European chemicals sector, high energy costs and a significant increase in imports of polyamide resins from outside the European Union, in particular from China, which have deteriorated the economic situation of the German entities of the group.
Continuation of operations and protection of wages
Prof. Lucas F. Flöther emphasises that despite the insolvency filings, the companies' business operations are being maintained.
"Day-to-day operations are continuing at all locations. Manufacturing and customer deliveries remain uninterrupted," the administrator stressed. Together with his team, he is already on site and is informing approximately 585 employees about the current situation. Wages and salaries are secured for the next three months through insolvency benefits. "This gives us some important financial breathing room," Flöther added.
Ensuring continuity of production and customer deliveries is crucial to preserving the enterprises' value and maintaining business relationships during the proceedings. From the employees' perspective, securing wages in the short term provides a basis for restructuring negotiations without immediate liquidity pressure.
Scope of the insolvency proceedings and possible restructuring paths
The insolvency proceedings apply exclusively to three German Domo companies: DOMO Chemicals GmbH in Leuna (around 35 employees), DOMO Caproleuna GmbH in Leuna (around 480 employees) and DOMO Engineering Plastics GmbH in Premnitz (around 70 employees). Other entities of the group, headquartered in Ghent, Belgium, are not covered by the filings.
In the coming weeks, the preliminary insolvency administrator will work closely with creditors and company management to obtain a full picture of the financial situation and to assess available restructuring options. These may include securing an investor or reaching an agreement with creditors. The final course of action is expected to become clearer over the coming months, as the operational and financial capabilities of the companies are analysed in more detail.
Flöther points to the strengths of the German entities of the group.
"The German companies of the DOMO Group are among the technology leaders in their field. In addition, they have a highly capable workforce and a strong, reputable customer base," he stated. "These are not bad starting conditions, even though the market environment for chemical companies is undoubtedly challenging."
DOMO Group profile and market environment
The DOMO Group, headquartered in Ghent, Belgium, manufactures and markets polymers, engineering plastics and high-performance fibres. These products are supplied to customers in the automotive, consumer and industrial goods, and electrical and electronics sectors worldwide. The German subsidiaries form an important part of the group's value chain in the area of polyamides and advanced engineering plastics.
According to the company, the DOMO Group's activities have been under pressure from persistently weak demand in the European chemicals sector. The situation is exacerbated by high energy costs and a significant increase in imports of polyamide resin from non-EU countries, in particular from China. The substantial inflow of cheaper raw materials from third-country markets increases price pressure and reduces the profitability of production at the group's European plants.
In response to these conditions, DOMO's management launched a restructuring process in 2024 to adapt operations to the changed market environment. However, talks on further short-term financing did not produce the expected results, which led to the decision by the three German companies to file for insolvency.
Implications for local sites
The plants in Leuna and Premnitz employ a total of around 585 people, and their operations are linked to regional supply chains and local industrial infrastructure. Maintaining the continuous operation of the plants is important both for the local labour market and for the stability of supplies to customers in the plastics industry and downstream sectors, including automotive and electrical and electronic industries.
The further course of the insolvency proceedings, in particular the possibility of securing an investor or agreeing a settlement with creditors, will have a direct impact on the future of DOMO's German companies and their position in the European polyamide and engineering plastics segment.
