“Ten years ago, the risk of LANXESS’s early automotive business was nearly 50%. Through the continuous restructuring over the years, and this time with Avon Capital, the risk of LANXESS’ automotive business will be reduced to less than 10%.” Qian Mingcheng, president of Lanxess Asia Pacific, a specialty chemicals company, made the above statement on the cooperation between Lanxess and Anhong Capital a few days ago.
LANXESS recently announced that the company is forming a joint venture with Advent Capital to produce high-performance engineering polymers. The parties also signed an agreement to acquire Royal DSM’s DSM Engineered Materials (DEM) business, which will be incorporated into the new joint venture; in addition, LANXESS will integrate its High Performance Materials (HPM) business The Ministry is merged into a joint venture. After the transfer into the joint venture, HPM’s business will no longer be fully consolidated into LANXESS, but will be included in the consolidated financial statements on an equity basis.
It is reported that Anhong Capital is one of the private equity investors with good performance in the field of chemical investment. HPM is one of the leading suppliers of high-performance polymers for the automotive industry. The aforementioned acquisition target DEM is one of the suppliers of high-performance specialty materials that can meet the key needs of the electrical and electronic and consumer goods markets.
Qian Mingcheng said that in this joint venture, LANXESS will hold up to 40% of the shares of the joint venture, and at the same time obtain at least 1.1 billion euros in cash in the first phase. Through this move, LANXESS can improve its product portfolio and further strengthen its advantages in the business, while reducing the risk of LANXESS’s automotive business. The new joint venture can also further improve business synergies and increase competitive advantage.
“LANXESS has actually done a lot of major transformation and upgrading in recent years, such as the automotive industry, and LANXESS is gradually moving away from the automotive industry. LANXESS believes that in the current business layout, the automotive industry is relatively volatile, and our strategy It is gradually shifting to a business with less volatility and more stable profits.” Qian Mingcheng said.
It should be noted that, in terms of new energy vehicles, LANXESS is still increasing its weight in the fields of batteries, electrolytes and other raw materials. According to reports, the cooperation between LANXESS and Tinci Materials is moving forward steadily; since the two parties announced the cooperation in 2021, Tinci Materials will be the OEM for the electrolyte of lithium battery materials through the factory of Lanxess Saito in Leverkusen, Germany. On this basis, the two parties will launch products this year.
Qian Mingcheng revealed that the pilot plant in El Dorado, in cooperation with Standard Lithium of the United States, has been in operation for 20 months. An economic feasibility study for the construction of a commercial plant will be conducted recently. As a result of the study, Standard Lithium will build the first lithium carbonate plant at its own expense. Last year, LANXESS established a circular economy business group to find more opportunities in the electronic automotive industry; recently, LANXESS and Jiangnan University have joined forces to find new R&D, product, and application cooperation in the field of new energy vehicles .Return to Sohu, see more
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