Lustran styrenic plastics business returns from the red

Lanxess chairman Dr Axel Heitmann said today that all businesses in the group will have to achieve a minimum of 5% EBITDA by 2009 and will be divested if there is no chance for them to meet the minimimum requirement within a reasonable time.

Although Heitmann says the company does not usually report detailed EBITDA returns for the individual businesses, he did reveal that the Lustran styrenic plastics business has recently emerged from the red and that for the synthetic rubbers business "by closing plants, restructuring other operations and redefining the business model to make it more flexible, we have helped our margins to reach a range of between 10 and 15%.”

He added that the anticipated growth in the field of high performance tyres, where the worldwide tyre market share will more than double by 2010, "must become a catalyst for our business".

While returns are still too low in engineering plastics with EBITDA at less than 10%, Heitmann says the outlook is good for polyamide compounds with 4% annual growth expected in Europe and the Americas and 7% in Asia through to 2010 – providing organic growth while costs are reduced further.