Lanxess to Sell Chrome Chemicals to Brother
German specialty chemicals producer Lanxess is selling its chrome chemicals business to Chinese leather chemicals company Brother Enterprises for an undisclosed sum. The agreement finalized on Aug. 12 is subject to approval by the relevant antitrust authorities, and Lanxess expects to complete the sale by the end of this year.
Part of the Cologne-based company’s leather business unit, the chrome chemicals activities generate annual revenues of around €100 million from production at two sites in South Africa, Newcastle and Merebank. In Newcastle, Lanxess manufactures sodium dichromate, which is in part processed into chromic acid on-site. At Merebank, it produces chrome tanning salts from sodium dichromate for distribution to the leather industry.
Under the terms of the newly inked deal, the Newcastle plant with around 220 employees will be taken over by Brother, but Lanxess said it will continue manufacturing chrome tanning salts for the new owner on a contract basis, “presumably until 2024.”
While in recent years the company has “successfully reorganized” the chrome chemicals business it inherited in the 2005 split from Bayer, Lanxess CEO Matthias Zachert said it no longer fits in with its strategic focus on specialty chemicals.
In late 2017, to improve competitiveness, the German company – the only leather chemicals player active in both organic leather chemicals and chrome tanning salts – concentrated its production activities in South Africa. At the same time, it discontinued production at Zárate, Argentina, while continuing to operate sites in Burzaco and Merlo, Argentina, from where it supplies the global rubber industry.