Brenntag Restructures Business


Brenntag Restructures Business
Brenntag sign on a building in Essen, Germany. © Tobias Arhelger

Germany-based chemicals and ingredients distributor Brenntag will place its finished lubricants business under its new Brenntag Essentials division as part of a portfolio shift, the company said Dec. 5.

The portfolio shift includes moving the company’s finished lubricants, water treatment and semi-specialties businesses from Brenntag Specialties to the Brenntag Essentials division. All pharmaceutical activities will be transferred from Brenntag Essentials to Brenntag Specialties.

“These shifts will sharpen the divisional profiles aligned with specific customer and supplier needs and increase the coherence within the division regarding the business model and the product portfolio,” the company said in a press release.

As a result of the shifts, Brenntag Essentials will account for 70% of the group’s current gross profits with a conversion ratio of 31 to 33%. Brenntag Specialties will account for 30% of the gross profits but with an increased conversion ratio of 38 to 40%. The changes in the portfolios will be reflected in Brenntag’s reporting structure from the first quarter 2024 results onwards.

In an investor presentation, the company said transferring the finished lubricants business to Brenntag Essentials will enable it to leverage Brenntag Essentials’ efficient last-mile delivery.

The company explained in its presentation that last-mile service operations feature a sales and service center in a local market to perform bulk breaking, packaging and last-mile delivery services. It also offers a comprehensive catalog of standard products and local services, along with value-added services, such as blending and mixing operations.

Brenntag said its regional networks also leverage delivery of products to last mile operations, including regional sourcing and supply chain services.

“We are growing Brenntag Essentials’ performance with our triple business strategy of local, regional, and global capabilities,” Ewout van Jarwaarde, CEO of Brenntag Essentials, said in a press release.

The company’s lubricants division distributes finished lubricants for use in passenger and commercial vehicles as well as industrial equipment. It also distributes lubricant additives and base oils. The business also offers lubricant related services, including oil condition monitoring, oil trials, surveys and training.

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