Bayer spinning off nylon, styrenics, rubber business
Canadian PlasticsCanadian Plastics
The long-rumored restructuring of Bayer Corporation's polymers and chemicals business was formalized at a Pre-K sho...
The long-rumored restructuring of Bayer Corporation’s polymers and chemicals business was formalized at a Pre-K show press conference held last week in New York city. The restructuring, which officially goes into effect on July 1, will see the formation of two independent, 100-percent subsidiaries of Bayer AG, Bayer MaterialScience and Lanxess Inc. According to executives at the press conference, Bayer MaterialScience will remain a wholly-owned subsidiary of parent Bayer AG. However, in six to nine months, Lanxess will go public via an IPO, turning the company into a separate company with no financial linkage to the Bayer Corporation.
Bayer MaterialScience will hang onto the company’s most historic and profitable polymer lines, consisting of Makrolon polycarbonate, polyurethanes, coatings/adhesives and thermoplastic polyurethanes, as well as film, sheet and colorants business units. Lanxess will assume control of Bayer’s former polyamide, styrenics and rubber business, including the PA/ABS blend Triax, as well as chemicals and polymer additives business units.
Bayer MaterialsScience will have 40 production sites and over 18,000 employees worldwide. Based on relevant product lines, the company had approximately E7.5 billion in sales in 2003. Approximately 42% of its sales came from its polyurethanes business, while polycarbonate captured another 25% of total sales.
Lanxess will control product lines and business worth approximately E6 billion in 2003. Of this amount, about 60% or 3.5 billion euros were a result of sales in the company’s engineering plastics and rubber product lines.
Lanxess will operate two production facilities in Canada: its Montreal-based facility with about 50 employees producing chemicals for the paper and textiles industry, and its facility in Sarnia, ON producing butyl rubber. The 750-employee Sarnia site will also become headquarters of Lanxess Canada Inc.