Three German companies of the DOMO Chemicals group, belonging to the Belgian chemical group headquartered in Ghent, have filed for insolvency. The proceedings cover DOMO Chemicals GmbH, DOMO Caproleuna GmbH and DOMO Engineering Plastics GmbH. With the initiation of the procedures, the local court appointed Prof. Dr. Lucas F. Flöther, a partner at the law firm Flöther & Wissing, as preliminary insolvency administrator. The administrator has declared that business operations will continue and that available restructuring options will be analysed, including the possible entry of an investor or an agreement with creditors.
Continuation of operations and wage security
Prof. Flöther emphasises that current operations are being maintained at all locations covered by the proceedings. Production and deliveries to customers are to continue without disruption, which is intended to limit the impact of the legal and financial situation on supply chains of customers in the plastics industry and downstream sectors.
"Day-to-day operations are continuing at all locations. Manufacturing and customer deliveries remain uninterrupted" the preliminary administrator stated. As he reports, together with his team he is already present at the plants and is informing employees about the status of the proceedings and the next steps. Approximately 585 employees in the three companies have their wages secured for the next three months through insolvency benefits.
"This gives us some important financial breathing room" said Flöther, referring to the role of wage security in stabilising the companies' short-term financial situation. This period is to be used for a detailed analysis of the economic condition of the companies and for preparing restructuring scenarios.
Possible restructuring scenarios
In the coming weeks the preliminary insolvency administrator will work with creditors and company management to obtain a full picture of the financial situation and identify available options for further action. Both attracting a new investor and reaching a settlement with creditors within the framework of insolvency law are being considered.
Flöther stresses that the choice of the optimal path will only be possible after the completion of an in-depth review. In the coming months it is to become clear which solution offers the best prospects in terms of maintaining operations and satisfying creditors' claims.
"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" the preliminary administrator pointed out, referring to the market position and competence base of the companies. "These are not bad starting conditions, even though the market environment for chemical companies is undoubtedly challenging."
DOMO Chemicals business profile and market environment
The DOMO group, headquartered in Ghent, Belgium, is engaged in the production and marketing of polymers, engineering plastics and high-performance fibres. These materials are supplied to customers in the automotive industry, the consumer and industrial goods sectors, and the electrical and electronics segment on global markets. Within the group, an important role is played by polyamide materials and other engineering plastics intended for applications requiring defined mechanical and thermal properties.
According to information provided by the company, DOMO Group's operations are under pressure from persistently weak demand in the European chemicals sector. High energy costs and a significant increase in imports of polyamide resin from non-EU countries, particularly from China, have further worsened business conditions. These factors affect margins of producers of polymers and engineering plastics, intensifying cost competition on the European market.
In response to these conditions, DOMO's management initiated a restructuring process in 2024. It involved actions aimed at adapting operations to the changing market situation, including improving cost efficiency. As the company indicates, after negotiations on further short-term financing recently broke down, the three German entities were forced to file for insolvency.
Scope of the insolvency proceedings in Germany
The insolvency filings apply exclusively to three German companies belonging to the DOMO group. These are DOMO Chemicals GmbH based in Leuna, employing approximately 35 people, DOMO Caproleuna GmbH in Leuna with around 480 employees, and DOMO Engineering Plastics GmbH based in Premnitz, where approximately 70 people work. In total, these entities employ around 585 staff.
Information provided by the preliminary administrator and the company indicates that at the current stage of the proceedings the priority is to maintain continuity of operations, customer service and stabilisation of the employees' situation. In parallel, analyses and discussions with key stakeholders are being conducted on potential restructuring solutions that could enable the continuation of operations in a modified ownership or financing structure.
At later stages of the proceedings, the outcome of the financial review, the reaction of the market and the willingness of potential investors or creditors to participate in the development of a long-term solution for the German companies of the DOMO Chemicals group will be of key importance.
