Lanxess requests government assistance for the chemical industry following a drop in profits

Lanxess, a chemicals group, has announced plans to reduce expenses, which will include job cuts. They have also requested support from politicians in Germany to help the struggling industry after experiencing a decline of more than 50 percent in quarterly profits. Following the path of other chemical firms in Germany, Lanxess has to adjust its forecast due to the continued high energy prices and low demand. The company is facing challenges despite previously being able to pass on the increased costs to customers.

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As per the statement of CEO Matthias Zachert, the company requires sustainable framework conditions, particularly an electricity tariff that is competitive on an international level, for the industry to flourish.

Lanxess is one of the leading firms that manufacture high-quality speciality chemicals, including additives, lubricants, plastics, as well as flame retardants is aiming to save USD 110 million this year by implementing rigorous cost management practices and halting new hires across Europe.

Lanxess has disclosed that the company will be taking additional steps to review its energy-intensive operations and simplify administrative structures in order to save approximately 150 million euros annually starting in 2025.

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The hexane oxidation unit is expected to be stopped operating by 2026, as per the statement of the group based in Cologne. This unit is located in the Krefel-Uerdingen site in Germany and has a manpower of 61 staff. Additionally, they plan to either shut down or sell the chromium oxide production facility located at the same site, which has 52 employees.

According to Procurement Resource, a leading chemical firm Lanxess has experienced a reduction in profits by half. As a result, the company is planning to reduce its expenses which will also lead to job cuts. The company has also reached German politicians for support.