At the media day, Heitmann presented the company’s strategy for countering the effects of the global economic turbulence. The three pillars of this strategy are to supplement organic growth by investing in existing business units; make selective acquisitions to progressively broaden and strengthen the group's portfolio; and research and develop innovative products.
The group is placing special focus on speeding the pace of its expansion in the BRIC countries. Along with the successful growth projects in Brazil, India and China, the group will launch its own company in Russia in the new year.
The first step will be to open a branch in Moscow to build a platform for
further involvement in the CIS countries. The Russian chemicals market is
growing in excess of 5% a year. ‘We plan to derive significant benefit from this expansion,’ said Heitmann. ‘We have identified substantial development potential for LANXESS and will systematically enlarge our market shares. We consider annual sales growth of up to 20% a realistic prospect.’
LANXESS anticipates a particularly positive medium-term trend in key customer markets such as the automotive industry (+9% annually), the electrical and electronics sector (+5%) and the construction industry (+8%). Currently in especially high demand in Russia are LANXESS's high-tech rubbers, rubber chemicals and ion exchange resins. The new company, based in Moscow, begins operating on January 1, 2009.
A further pillar of the growth strategy is to focus on innovations in terms of both new products and process technology. LANXESS currently has over 100 projects in its research pipeline that are expected to have a sales potential of around €700 million by 2011.
The operational success of the LANXESS Group is based on sound financing. During the media day, chief financial officer Matthias Zachert emphasised that LANXESS was not directly affected by the current crisis on the financial markets. ‘We have renegotiated our credit facilities over the past few years on favourable terms, most recently in fall 2007, thereby safeguarding the group's long-term liquidity through 2014,’ he said.
