Lanxess continues its strong performance in 2017 with the best quarterly results ever (Q1 2018). After good results in the second quarter, the manufacturer of specialty chemicals is increasing its forecasts for 2018, and the Group currently expects its operating profit to grow by between 5% and 10%. We are talking about the current and future situation of the Group with Dr. Rainer van Roesseil, a member of the Lanxess Management Board.
2017 was a record year for Lanxess regarding the financial results. And it looks like the positive trend has been continued. What are the key components of the success?
Dr Rainier van Roessel: Indeed, our dynamic start to 2018 shows that our efforts to move the company forward are increasingly paying off. Over the last years we improved our operations and set-up a leaner company organization. But key is our portfolio optimization. The transfer of our synthetic rubber business into the joint venture Arlanxeo and the acquisition of Chemtura with its strong and growing additives business changed the face of Lanxess. Today, we are more profitable and more stable than in the past. But we won’t stop at this point. Instead, we will remain an active player in the consolidation of the chemical industry, based on clear criteria. We will only include business operations in the Lanxess portfolio that can achieve leading market positions and generate attractive margins sustainably.
Concerning the effects for now, how would you evaluate the acquisition of Chemtura? Has this really made the company stronger and more competitive as it was planned?
The acquisition of Chemtura was definitely a success. All the Chemtura businesses have found the place in Lanxess that offers them the best possible prospects for the future. They already contributed significantly to the Group’s results in 2017. And of the 100 million euros in synergies we plan to realize till 2020, 30 million were already realized in the past year and further 30 million euros are expected to follow in 2018. With the acquisition we diversified our customer industry structure and increased our footprint in the chemical growth markets in the U.S. and in China. We are a more balanced company now and more resilient against economic downturns in single markets industries.
In 2017 Lanxess not only bought Chemtura but also invested in its German plants…
And those investments in technology upgrades and capacity expansions are crucial to serve the increasing demand from customers in Poland, Europe and throughout the world. Just to name a few projects there: last year we upgraded our central organic pilot plant in Leverkusen increasing our capacities for customer synthesis. Moreover, we presented a 100 million euros investment package for capacity expansions for several chemical intermediates mainly at our German plants. And there are several organic growth investments around the world, for example a new compounding plant in China, where we will produce up to 25,000 metric tons of Durethan- and Pocan-branded high-tech plastics for the automotive sector and the electric and electronics industry.
We expect a volume growth, says member of the Lanxess Management Board