Lanxess A.G. didn't wait long to bail on its synthetic rubber joint venture with Saudi Arabian Oil Co.
In August, the firm sold its 50 percent share of Arlanxeo to its joint venture partner, Saudi Aramco, for about $1.62 billion. Lanxess said it will use the proceeds to strengthen its financial basis and reduce its net debt.
The firm called the rubber business "volatile," and in recent years had been shifting its focus to other, more stable, markets—specifically chemicals and additives. The addition of Chemtura Corp. and Chemours Clean and Disinfect business have helped it achieve such a shift, but it also caused the firm's net-debt to balloon back to $3.05 billion through the first six months of 2018.
Despite divesting its synthetic rubber business, Lanxess still will serve the rubber industries in many other areas of its portfolio through primarily its additives, high performance plastics and urethanes units.
Road to NR sustainability
In 2017, General Motors Co. along with Bridgestone Corp., Michelin, Goodyear and Continental A.G. established a partnership to establish a sustainable natural rubber procurement policy.
One year later, the program is showing promise.
GM worked to map out natural rubber supply for greater trackability and transparency, and also worked to enlist as many stakeholders as possible in that effort.
The tire makers followed suit, supporting GM in the effort and followed with their own plans to achieve NR sustainability. The program met a major milestone during its first year at a meeting of the Tire Industry Project, where CEOs of 11 tire makers agreed to identify appropriate governance structures and potential platforms for sustainable natural rubber.
And most recently, Yokohama Rubber Co. Ltd. unveiled that it also is implementing a sustainable natural rubber procurement policy throughout its supply chain. The firm said that the content of Yokohama's new program is based on the Sustainable Natural Rubber Initiative launched by the International Rubber Study Group and the Tire Industry Project, led by the World Business Council for Sustainable Development.