LANXESS start operating independently

1 July 2004

LANXESS, the future company where the Bayer Group will combine almost all areas of their chemicals business and parts of their polymers activities, began operating as an independent unit on July 1, 2004. For the moment, the new structure only applies internally. 'We've reached an important milestone for the realignment of the Group on schedule', said chairman of the Bayer Board of Management Werner Wenning. LANXESS will be able now to operate largely independently, he said. The company is scheduled to be listed on the stock exchange at the beginning of 2005. And the decision as to whether this will take place via an IPO or a spin-off will be taken over the coming weeks. Until the stock market flotation, LANXESS will operate under the umbrella of the Bayer AG holding company. Bayer will in future concentrate their resources on the innovative areas of health care, nutrition and high-quality materials and thus establish a sound basis for sustainable growth. 'I'm convinced that both companies will enjoy considerable success in the future', aid the Bayer ceo. With sales of around €6 billion and around 20,000 employees, of whom approximately 11,000 are in Germany, LANXESS will be one of the leading chemicals companies in Europe. And after the planned stock market flotation, they will operate as an independent company with their own business model, thereby enabling them to react faster and more flexibly on the market. Dr Axel C Heitmann, designated LANXESS ceo, is fully satisfied with the progress of the carve-out process so far. In just over half a year, the activities of Bayer Chemicals and Bayer MaterialScience transferred to LANXESS and parts of the service companies have been moulded together to form a new organisation. 'What we have to do now is use our strengths to their full advantage so as to achieve a competitive result and to ensure LANXESS a smooth transition to becoming an independent company outside the Bayer Group', he said. 'That's why it's still important to seize every single possibility for cutting costs and grasp every new market opportunity.' Despite a 2.1% decline in sales to €1.478 billion (2.2% up in local currencies), the consolidated business results for LANXESS in 1Q 2004 showed a 5.4% improvement in EBITDA to €136 million. Compared with 1Q 2003, the EBIT grew by €58 million to €75 million. In addition to Dr Heitmann, the future board of management of the company will include Dr Ulrich Koemm, Bruce Olson, Dr Martin Wienkenhöver and Matthias Zachert.

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