ICIS Top 40 Power Players: Introduction to the listing
We are pleased to present the ICIS Top 40 Power Players, a global ranking of the leading senior executives making the greatest positive impact on their companies and the chemical industry through investments, shifts in business models, mergers and acquisitions and innovation. Transformation in a fast-changing world is a key theme.
MATTHIAS ZACHERT TAKES THE TOP SPOT
Matthias Zachert, chairman of the board of management at German specialty chemical group LANXESS, has been awarded the top slot in the 2016 ICIS Top 40 Power Players.
When Zachert took over as leader of LANXESS on 1 April 2014 he inherited a company which was underperforming financially, having expanded capacities too ambitiously at a time of emerging global overcapacity and price pressure in rubber chemicals. Zachert quickly developed and executed a clear strategy to steer the company away from this core product area to expand in other, less cyclical, specialty chemicals businesses.
After announcing a 10% share increase and the elimination of 1,000 jobs, Zachert started the process of business realignment and refocusing on the Advanced Intermediates and Performance Chemicals segments which would pave the way for the separation of the rubbers business into a joint venture with Saudi Aramco in 2015.
In August 2015, LANXESS announced the carve-out of its Tyre & Specialty Rubbers and High Performance Elastomers business units, comprising 20 production facilities and 3,700 employees. Then in November Zachert revealed the 50/50 joint venture with Saudi Aramco that would lead to the formation of ARLANXEO.
For Zachert it was one more step towards cutting his company’s exposure to volatile and cyclical commodities.
“Now that we have solved the main structural problems, we can once again concentrate on growth,” said Zachert at the time. “LANXESS will be a more profitable and less cyclical specialty chemicals company – with a balanced portfolio of quality products and with growth potential.”
Then, on 1 April 2016, exactly two years after Zachert took over at LANXESS, ARLANXEO started operations.
Also in April, LANXESS revealed the first acquisition following its realignment – the purchase of the Clean and Disinfect business of US-based Chemours.
In September 2016 Zachert’s team announced the biggest acquisition in the company’s history – the purchase of US-based Chemtura, specialising in flame retardant and lubricant additives as well as urethanes and organometallics. The €2.4bn deal is expected to close in mid-2017.
In an interview with ICIS, Zachert said the driving force is to create a global giant in additives. “There was a compelling business rationale for both of us to come together – to create a truly global player in the additives space. We wanted to create something big and unique.”
The combined additives businesses of LANXESS and Chemtura, which comprise lubricant additives, flame retardants and plastic additives, will have €2bn in sales. They both have lubricant additives and flame retardants in their portfolio.
EBITDA margins for the entire additives business are around 20%, with annual sales growth in the 3-4% range. Geographic sales distribution will be around one-third each in Europe, North America and Asia, with a small portion in Latin America.
LANXESS has raised its earnings forecast twice in 2016, and in November said it expects to achieve EBITDA pre-exceptionals from €960m-€1bn compared to a previous assumption of €930m-€970m.
The €1.2bn in proceeds the German producer received from Saudi Aramco when they established their joint venture for styrene butadiene rubber (SBR) production helped LANXESS reduce its financial liabilities to €203m at the end of October 2016 versus €1.2bn at the end of 2015.
After hearing he had got the Power Players top slot, Zachert said: “2016 was both a very intense and very successful year for LANXESS. We made great progress at a fast pace in transforming our company.
“LANXESS is on its way to become a much more profitable and resilient company with a clear focus on specialty chemicals. These achievements should certainly be attributed to the entire LANXESS team around the world who have done tremendous work to bring our company back on track. It is therefore a great pleasure to receive this award in the name of the entire organization.”
Zachert was chief financial officer at LANXESS from 2004-2011 He then took over as CFO at Merck KGaA until his move back to LANXESS. He is a keen runner and took part in a half marathon in Leverkusen in June 2016. Zachert also enjoys spending time with his family, which includes four children.