LANXESS confident of strong EBITDA margin in '08

26 June 2008 11:23  [Source: ICIS news]

SHANGHAI (ICIS news)--LANXESS is confident that all its business sectors will realise a margin of more than 5% in earnings before interest, tax, depreciation and amortisation (EBITDA) in 2008, company Greater China president Wang Yongli said on Thursday.

“The positive trend has continued into the first quarter of 2008, as the EBITDA margin rose to 14.3% [up 1.5% year on year],” Wang said in Mandarin at a press conference held in Shanghai.

“Therefore, we are confident that we are well ahead in terms of achieving our goal for 2008, which is to have all businesses realise an EBITDA margin of more than 5%."

Net income rose 13.2% to €103m ($160m) in the first quarter.

As part of its external growth strategy, LANXESS successfully completed the acquisition of Petroflex, one of the largest synthetic rubber producers in Brazil, in the first quarter of 2008 and the company will continue to strengthen rubber supply for China to meet rising domestic demand.

“We will continue to provide the products of good quality for the Chinese market after acquisition,” Wang added.

“We have no plan to build a rubber plant in China at present due to feedstock supply issues. So we chose Singapore to build a world-class synthetic rubber facility there,” he told ICIS news.

Lanxess selected Singapore's Jurong Island as the site of its largest investment - a €400m synthetic rubber production facility.

By 2011, the facility is expected to produce up to 100,000 tonnes/year of butyl rubber, primarily to meet the demand of the fast-growing tyre industry in China

“China showed strong double-digit sales growth in the range of 20-25% in the first quarter this year, and I believe sales in the second quarter will also see a good result,” he said.

LANXESS is one of the leading European chemicals producers, with 2007 sales of €6.61bn and approximately 14,600 employees in 18 countries.

Its core business comprises the development, manufacture and sale of specialty chemicals, plastics, rubber and intermediates.

($1 = €0.64)

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By: Judith Wang
+65 6780 4359

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