LANXESS Greater China Achieved 6.5% Sales Growth in 2016

In the fiscal year of 2016, sales volume of LANXESS Greater China increased by 6.5% year on year, which accounts for a 13% of global sales. “It means that we have been widely recognized by our local clients in terms of all-round and high-quality product offering and service,” said Mr. Ming Cheng Chien, CEO of LANXESS Greater China at a press conference in Shanghai on March 23.
China is still the cornerstone of LANXESS’ long-term strategies. On January 31, 2005, LANXESS Chemical (China) Co., Ltd. officially began operations. Today, LANXESS has 10 subsidiaries including 3 joint ventures, as well as 8 R&D centers in China, with over 1 700 employees in Greater China. LANXESS works closely with its local partners to develop market-oriented solutions that meet local market needs.
Mr. Chien continued, “It is quite an important message to us all that in 2016,” Building a quality-strong country” has been officially included in the 13th Five-Year Plan of China. Quality has been put into the spotlight in the new economic norm. As a German company which has been localized well in China, LANXESS prompted ‘Quality Works’ slogan since 2016, to emphasize that quality is the top priority for LANXESS. With applying the highest quality standards for products, processes and technologies worldwide, LANXESS commits itself to fulfilling local clients’ demand for safety, environmental protection and high quality from  our products.”
In the first half of 2016, LANXESS inorganic pigment Ningbo plant was put into production. LANXESS has a breakthrough in iron oxide red technology - the Ningbo Process in that plant. It’s a benchmark for innovative and sustainable red iron oxide production. It is another perfect model of LANXESS practicing its localization strategies.
As a joint venture between LANXESS and Saudi Aramco which is the largest supplier of oil derivatives in the world, ARLANXEO was established on April 1, 2016, and strengthened its leading positionon synthetic rubber market all over the world.
By the end of last year, the ALANXEO Rubber Technology Center was completed in Changzhou, Jiangsu province. It is not only the most comprehensive rubber lab of LANXESS’s in China, but also in the entire Asian Pacific region. The lab is capable of testing and synthetizing all kinds of rubber products. This move also shows how important China and the Asian Pacific regions are  to LANXESS.
Mr. Chien believes that 2017 will be a year when the supply-side reform would be furthered and strengthened. LANXESS will continue to devote itself as an enterprise as well as a part of the society, to sharing efficient and innovative solutions and techniques in water treatment, green mobility and urbanization, reducing production consumptions and energy consumptions and helping China realize industrial upgrade in the chemical industry.

LANXESS - A very successful 2016 and a strong start to 2017

In 2016 fiscal year, LANXESS Group successfully advanced its transformation, underscoring this with strong performance data. EBITDA pre exceptionals increased by 12.4% to Euro 995 million, compared with Euroo 885 million a year earlier. The main drivers of this positive development were higher volumes in all segments, the associated increase in capacity utilization and cost savings resulting from the improved competitiveness of plants and processes. The EBITDA pre exceptionals was therefore at the upper end of the recent guidance range of Euro 960 million to Euro 1 billion. The Group’s EBITDA margin pre exceptionals improved from 11.2% to 12.9%. Net income also increased by a substantial 16.4% to Euro 192 million from Euro 165 million. Sales declined slightly, from Euro 7.9 billion in 2015 to Euro 7.7 billion, primarily due to the adjustment in selling prices to reflect lower raw material costs.
Also in 2016, the company made a number of important strategic decisions and realigned its portfolio. ARLANXEO, a joint venture with Saudi Aramco for the synthetic rubber business, started operating on April 1. At the end of August, LANXESS closed the acquisition of the Clean & Disinfect business of U.S. chemical company Chemours. In September, LANXESS announced the acquisition of U.S. specialty chemicals company Chemtura, a leading supplier of flame retardant and lubricant additives. Both acquisitions strengthen LANXESS’s position in high-margin specialty chemicals markets.

Outlook for 2017

The good development seen in 2016 has continued into 2017. LANXESS had a very good start to the new fiscal year and is expecting EBITDA pre exceptionals between Euro 300 million and Euro 320 million for the first quarter of 2017. This would represent an increase in earnings of around 20% compared with the prior-year quarter (Euro 262 million).
For the full year 2017, LANXESS expects a slight increase in EBITDA preexceptionals compared with 2016. Successful closing of the planned acquisition of Chemtura would generate an additional earnings contribution that LANXESS has not yet included in its current guidance for 2017.