Leverkusen, Germany, December 6-- Bayer is to spin off its chemicals and plastics activities in early 2005 under the name Lanxess. It will start with 67% of its activities in profit and an inherited debt of EUR 1.5 bn.
Its Ebitda margin is 7.6%, which is one up from the bottom of companies with a similar range of products. On this scale BASF is top at 17.6% and Rhodia is lowest with 6%.
The aim is for Lanxess to reach 10% by 2006. Almost 60% of the turnover now achieves a margin of more than 5% and 50% of that achieves more than 10%. Restructuring and an improvement in the economy are expected to help. Savings of EUR 25 M should take effect from 2005.
It is intended to close plants for synthetic fibre in Goch, Germany, and for butadiene rubber in Marl, Germany, and make improvements to processes. Although acrylonitrile butadiene styrene polymer (ABS) demand has increased in 2004, high feedstock costs are lowering earnings. It will invest EUR 40 M on increasing capacity for butyl rubber by 25% to 250,000 tonnes/y in Belgium and Canada.
