Lanxess to end EPDM production at Marl in 2016

MARL, Germany—Lanxess A.G. will stop production of EPDM rubber at its facility in Marl by the first quarter of 2016, the firm said in a Sept. 9 news release.

After five months of negotiations with employee representatives, the company said it has agreed on a reconciliation and social plan with the 118 employees at the Marl site.

Lanxess said it decided to shut down EPDM production at Marl because of its relatively low capacity and it is the least competitive in its EPDM rubber production network. The Marl site produces synthetic EPDM for a wide rage of applications, with automotive and construction the two biggest end markets.

During the presentation of its 2014 financials, Lanxess said production from Marl will be transferred to its facilities in Changzhou, China; and Geleen, Netherlands, to limit the loss of sales.

The firm also produces EPDM in Orange, Texas, and in Triunfo, Brazil. Once the realignment is complete, Lanxess will operate one EPDM facility each in North America, South America, Europe and China.

“For the company and its employees, this decision is a deep cut,” Rainier van Roessel, board member and director of Lanxess, said in the release. “However, we have agreed on a responsible and very targeted implementation in complex and, at the same time, constructive discussions with the relevant employee representatives.”

The decision to shut down Marl is part of a larger restructuring effort within Lanxess' rubber business. It just revealed that it will transfer its rubber business to a legally independent business entity within the Lanxess Group for the purpose of facilitating a potential strategic alliance or partnership.

CEO Matthias Zachert said in the firm's second quarter financial report that the firm is “engaged in very constructive discussions and assumes that it will achieve concrete results in the course of the second half of the year.”

The plan is for the new entity to comprise its Tire and Specialty Rubbers and High Performance Elastomers business units. The two combine to operate 20 production facilities with about 3,700 employees.

Lanxess also is realigning its Nd-PBR production. It said during its 2014 financials presentation that it is relocating Nd-PBR production from its site in Port-Jerome, France, to its sites in Singapore and Dormagen, Germany, and it will reduce production at its Orange facility from four lines to three. The Port-Jerome facility will be used in the future to manufacture other butadiene rubber grades.

The company produces the material at Cabo de Santo Agostinho, Brazil. After the realignment, the firm will operate one Nd-PBR facility in each region. Lanxess said about 20 employees will be affected by its Nd-PBR realignment.

Combined with its EPDM restructuring, the firm said during its 2014 financials presentation that it anticipates exceptional charges of about $58.7 million associated with the reorganization of its EPDM and Nd-PBR production network along with annual savings of about $21.3 million from the end of 2016.

Lanxess is a specialty chemicals manufacturer that employs about 16,300 in 29 countries with 52 production sites worldwide. It reported 2014 sales of about $9.6 billion.