Lanxess realigns Dormagen, Tarragona, cuts 960 jobs

03 June 2005 14:59  [Source: ICIS news]

LONDON (CNI)--Lanxess announced Friday that it will realign its styrenics and fine chemicals businesses at Dormagen, Germany and Tarragona, Spain through a Euro150m ($188m) restructuring plan involving the loss of at least 960 jobs and the closure of several fine chemicals plants.

 

The two and a half year restructuring programme is aimed at achieving annual savings of about Euro100m from 2008.

 

Some 200 jobs will be shed this year, and about 400 in each of the next two years, according to a company statement.

 

Around 300 jobs will be lost in the styrenics business and around 500 in fine chemicals. Some 160 positions in associated business units will also be affected. The number of job cuts will be reviewed every six months. Two-thirds of the around 400 jobs at Dormagen will be lost. 

 

Lanxess said that in comparing the two sites it had found that there would be potential for savings in the styrenics resin business at both Tarragona and Dormagen. The company will therefore retain and realign both sites, contrary to previous company reports that it was considering closure of either the acrylonitrile butadiene styrene (ABS) unit at Dormagen or the similar facility at Tarragona.

 

Dormagen, however, appears to have borne the brunt of the cutbacks. Production of specialties will be concentrated in Tarragona, while capacity will be reduced at Dormagen to focus on manufacturing high-quality products for Bayer MaterialScience. A Lanxess spokesman declined to give any further details.

 

The fine chemicals unit will be carved out to form a legally independent subsidiary, and several unprofitable plants will be closed. The spokesman would not say which plants would be shut, but did concede that this could mean Lanxess would withdraw from some markets.

 

Lanxess also said it would invest Euro50m in the fine chemicals business by 2007, with an option to invest another Euro50m by mid-2010. The company would not elaborate on these investments.  

 

Employment will be reduced through a combination of “natural wastage, retirements, part-time working arrangements for older employees and active outplacement assistance”.

 

Agreed cuts in personnel costs will apply from 1 July 2005 to the end of 2007. This will include a shortening of the work week for pay-scale employees to 35 hours in conjunction with a 6.7% pay cut. Bonus payments to all workers, including the board of management, will also be reduced.

By: Hilde Ovrebekk
+44 20 8652 3214

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