Lanxess Urges Government Support as Chemical Industry Faces Profit Slump

Lanxess, a chemicals group based in Germany, has called for government assistance for the struggling chemical industry after experiencing a significant decline in profits. The company has outlined plans to reduce costs, including job cuts, and has urged German politicians to create sustainable framework conditions for the industry.

In the past weeks, Lanxess, along with other German chemical firms, has revised down its forecasts due to high energy prices and weak demand. Despite previously being able to pass on rising raw material and power costs to customers, the company is now facing challenges that require immediate action.

The quarterly profit of Lanxess fell by more than half, prompting the company to implement cost-cutting measures to support its remaining 51 sites in Germany. However, Lanxess has stated that it will need to reassess the viability of these sites if conditions continue to worsen.

In addition to cost-cutting, Lanxess intends to refine its business model to maximize the potential of recent acquisitions. However, the company believes that further assistance is required from the government. CEO Matthias Zachert has called for reduced bureaucracy and faster approval procedures to enhance Germany's competitiveness in the global market.

The company's second-quarter core earnings (EBITDA) pre-exceptionals declined by 57.7% to 107 million euros, aligning with the forecast made in June. Furthermore, Lanxess announced that its Chief Financial Officer, Michael Pontzen, will be leaving the company by the end of August.

Lanxess' call for government supportreflects the challenges faced by the chemical industry in Germany. The industry requires a favorable business environment to overcome rising costs and weak demand. By addressing bureaucracy and streamlining approval processes, the government can provide crucial assistance in making Germany more competitive.

As Lanxess implements its cost-cutting measures and refines its business model, the company remains hopeful that government intervention will create sustainable framework conditions for the chemical industry. The industry's success is not only vital for companies like Lanxess but also for the overall economic growth and stability of the country.

It is now up to German politicians to respond to Lanxess' call and take the necessary actions to support the chemical industry. By doing so, they can help foster a resilient and thriving sector that contributes to the country's economic prosperity.