Global specialty chemical manufacturer Lanxess AG said on Friday it will undertake a series of cost-cutting plans, including a hiring freeze and plant shutdown, to address slumping sales.
The company’s sales fell 11.1% to 1.8 billion euros in the second quarter compared to the year-earlier period.
The company attributed the downturn to weak demand in China, price reductions, slow sales across industrial sectors and ongoing customer inventory reductions.
CEO Matthias Zachert attributed the lack of competitiveness in the industry to the failure of the German government to enact effective policies.
“When the economy picks up again, we want to get back on track quickly,” he said in a prepared statement “But that is not enough. Politicians need to finally wake up. In the current phase of economic weakness, the location Germany is not competitive internationally. We urgently need sustainable framework conditions – above all an internationally competitive electricity tariff for the industry, the reduction of excessive bureaucracy and faster approval procedures.”
The company is implementing a phased cost-cutting plan through 2025 called Forward. The company anticipates the plan that will result in long-term goal savings of 150 million euros annually. It includes a hiring freeze across Europe and ceasing hexane oxidation operations at the Krefeld-Uerdingen site. The company also plans to sell or possibly shut down its chromium oxide operations at the site.
The plan also includes a continued emphasis on the specialty chemicals market and sustainable product offerings.
