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The speciality chemicals company Lanxess is making rapid progress with its three-phase realignment programme. With the implementation of the first phase, aimed at improving the competitiveness of the business and administrative structure, the Group plans to make total annual savings of €150M as of the end of 2016. It already expects savings of about €20M in the current year.
The first phase will result in a reduction of total headcount by about 1000 positions worldwide by the end of 2016 – roughly half of which will be in Germany. The affected jobs will be mainly in the administrative and service units, marketing and sales, as well as in research and development. The headcount reduction will result in exceptional charges of €150M being incurred through the end of 2016, including around €100M already in 2014.
"The realignment lays the foundation for Lanxess to return to sustainable growth in the mid-term. Downsizing the workforce is a necessary measure to improve our competitiveness,”said Matthias Zachert, Chairman of the Board of Management of Lanxess AG.
At the beginning of November, Lanxess initiated the second phase, which is aimed at increasing its operational competitiveness. This phase focuses on the optimisation of sales and supply chains and of production processes and facilities. The relevant measures will be implemented in 2015 and 2016.
The third phase of the programme, which is aimed at improving the competitiveness of the business portfolio, will focus on horizontal and vertical co-operations in the rubber business. This phase is also to be implemented in 2015 and 2016.
The company had a solid Q3 with sales on the level of the prior-year quarter, at €2.04bn, with marginally higher volumes compensating slightly lower prices.