Domo Group to hive off chemicals and polymer business for vertical expansion

09-Jul-05

The sale of the chemicals and polymers business of Domo Group, an integrated manufacturer of floor-coverings headquartered in Belgium, is acknowledged as a part of the group's strategy of vertical integration. As part of its strategy of vertical integration, Domo has developed a strong position both nylon and polypropylene, but more than 90% of its sales are to third party clients despite these businesses supplying the Domo fibres and yarns and floor coverings operations. The sale is likely to include the caprolactam complex in Leuna, modernised at a cost of about €350 million last decade with an annual output of about100,000 tons and the polyamide 6 plant at Premnitz that was acquired last year, both situated in Germany. Domo, with a turnover €858.7 million in 2004, is experiencing a tough market climate in floor coverings, with declining revenues triggered by continued economic weakness in Europe. Revenues of all carpet manufacturers are declining and profit margins are under continued pressure. Domo, however is to continue its independent expansion although the Domo Fibres and Yarns business.