"While businesses faced challenges due to COVID-19-related reasons, our manufacturing business continued. We received good support from the local authorities, and our movement and supply of goods remained smooth. I would say that our Asian supply chains demonstrated greater resilience during this period."

Vinod Agnihotri

MANAGING DIRECTOR, LANXESS

July 26, 2023

Could you provide an update on what has been happening at LANXESS over the last year and the progress of your Flavors and Fragrances business unit launched two years ago?

Over the last year, LANXESS continued to sharpen its focus on specialty chemicals. This includes strengthening our Consumer Protection segment. Besides developing the Flavors and Fragrances business unit that we launched following the acquisition of Emerald Kalama, this also refers to the integration of the microbial control business we acquired from U.S. company IFF last July. This new business is now part of our Material Protection Products business unit and has made LANXESS one of the world’s largest suppliers of microbial control and biocidal products.

Has the COVID-19 pandemic and other challenges over the last year impacted your supply chain, particularly in Singapore?

Supply chain issues were a widespread challenge during the COVID-19 times. In Singapore, we have both trading and manufacturing businesses. Our trading business, which relies on two supply chain routes - from the Western world and from Asian setups - did encounter some issues, especially those dependent on Western continent supplies. However, our manufacturing business in Singapore and Southeast Asia proved more stable and resilient, largely due to the more robust Asian supply chains.

While many businesses in Singapore faced challenges and interruptions due to COVID-19-related reasons, our manufacturing business continued. We received good support from the local authorities, and our movement and supply of goods remained smooth. I would say that our Asian supply chains demonstrated greater resilience during this period.

Has the inflation and cost of energy and raw materials been a significant problem in 2023, and how has LANXESS addressed this?

Inflation and escalating energy costs have indeed impacted us, as they have the entire chemical industry. LANXESS, with a majority of our assets in Europe and Germany, felt these impacts. However, we have been resilient and quick to implement countermeasures. We managed to absorb some of the price hits, pass them on to our customers, and address these issues swiftly.

While the energy impacts were felt more in Europe, our businesses outside of Europe, specifically in America and Asia, were less impacted by these energy price surges. Overall, while there was an impact, we strive to react quickly and manage the situation.

What is your approach to sustainability and how do you plan on continuing your achievements in this area?

Sustainability, for us at LANXESS, is a heartfelt commitment driven by our board who have tied a part of their compensation to our sustainability targets. We are dedicated to reshaping the perspective towards chemicals, to encourage a sustainable approach to managing them. Our KPIs are consistently updated and communicated externally, which has been key to our success.

This is also reflected in our sustainability strategy. In 2019, we pledged to achieve climate neutrality in production (Scope 1) and energy sources (Scope 2) by 2040. Then, in 2022, we added the goal to achieve climate neutrality across our full value chain (Scope 3) by 2050. This includes green logistics – ensuring that our logistical operations are sustainable. Moreover, we are also devoted to water management. We have set a target to reduce water consumption by 15% at our sites globally that engage in water-intensive processes. In recognition of our efforts, we have made significant strides in numerous ratings. In the chemicals category of the Dow Jones Sustainability Index (DJSI), we again ranked first for Europe and second worldwide. Also, we have received an AA rating by MSCI ESG, and the Science Based Target Initiative (SBTi) certifies us as being in line with the Paris Agreement's climate neutrality goal of limiting warming to 1.5 °C above pre-industrial levels. Moreover, we were in the latest CDP assessment included in the “Climate A List” for the sixth time.

Could you shed some light on your strategy and plans for the coming year? 

As a global player, we appreciate free markets and flow of goods. Although current trends in the chemical world are heavily influenced by fluctuating macroeconomic and geopolitical situations, we aim to actively engage in all markets worldwide where we see opportunities and potential.

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