Specialty chemicals company LANXESS said last Tuesday it intends to cease production at its Ankerweg site in Amsterdam, Netherlands, where it produces lubricant base oils. LANXESS took over the production site and its roughly 100 employees when it acquired U.S. chemicals group Chemtura.
LANXESS produces Synton® PAO 40 and Synton® PAO 100 high viscosity, highly saturated, linear/branched polymers that can be used as the high viscosity synthetic oil or viscosity modifier of a high performance lubricant or synthetic lubricant formulation.
The company also produces phosphate ester base fluids that can be blended into Fire-Resistant Hydraulic Fluids and synthetic esters under the Hatco brand name used extensively in synthetic lubricant formulations to enhance high and low temperature performance, improve additive solubility,and increase lubricity. According to the company's website, they can be used alone for maximum high temperature performance or in combination with PAOs and mineral oils to improve solubility, stability and cleanliness.
LANXESS also produces active ingredients at the Ankerweg site under a contract manufacturing agreement for a customer in the agrochemicals industry. The contract manufacturing agreement for agricultural active ingredients, that represents a substantial part of the activities at the Ankerweg site, will end latest in November 2018.
“We carefully analyzed the site and came to the conclusion that we cannot run production there on a competitive basis,” says Anno Borkowsky, head of the Additives business unit at LANXESS. LANXESS can produce the volume of base oils it needs to cover its own demand for the production of high-performance lubricants as well as market demand at its Elmira site in Canada.
Borkowsky adds: “Our priority now is to work with employee representatives to find responsible solutions for the employees concerned by the intended shut down.” To this end, the company is already engaged in constructive negotiations with union representatives.
LANXESS acquired Chemtura and its 2,500 employees in April 2017. As part of the integration process, LANXESS launched a detailed analysis of the former Chemtura production sites so as to further optimize global positioning and the individual processes and technologies. From the acquisition of Chemtura the company expects in total about EUR 100 million in synergies by 2020. An estimated EUR 140 million in associated one-time costs will be incurred for this.
LANXESS posted sales of EUR 7.7 billion in 2016 and has about 19,200 employees in 25 countries. The company is currently represented at 75 production sites worldwide. The core business of LANXESS is the development, manufacturing and marketing of chemical intermediates, additives, specialty chemicals and plastics.