DOMO Chemicals Files for Insolvency Amidst High Costs and Non-EU Imports
DOMO Chemicals and several subsidiaries have filed for insolvency, citing high energy prices, weak demand in Europe's chemicals sector, and increased non-EU imports as primary causes. Despite a 2024 restructuring attempt, talks for further short-term financing broke down. Preliminary insolvency administrator Prof. Dr. Lucas F. Flöther is continuing operations, ensuring employee wages for three months, and exploring options like securing investors or creditor settlements. This follows similar challenges faced by Klöckner Pentaplast.
DOMO Chemicals, a subsidiary of the Belgium-based DOMO Group, has filed for insolvency, a measure also taken by related entities like DOMO Caproleuna and DOMO Engineering Plastics. The company attributes this decision to a difficult market environment characterized by persistently high energy costs, diminished demand within Europe's chemicals sector, and a surge in polyamide resin imports from non-EU countries. Specializing in polymers, engineering plastics, and high-performance plastics, DOMO Chemicals faced significant operational headwinds despite its technological leadership.Following an unsuccessful restructuring process initiated in 2024, discussions for additional short-term financing ultimately failed. Prof. Dr. Lucas F. Flöther, the preliminary insolvency administrator, has confirmed that all day-to-day operations, including manufacturing and customer deliveries, will proceed without interruption. His immediate plans involve collaborating with creditors and company management to thoroughly assess the financial situation and explore viable restructuring avenues, such as attracting an investor or negotiating a settlement with creditors. Employee wages and salaries are guaranteed for the next three months via insolvency benefits. This development echoes the recent Chapter 11 bankruptcy filing by Klöckner Pentaplast in the United States, which experienced similar pressures from escalating raw material and energy costs and shrinking profit margins post-COVID-19 pandemic, underscoring systemic challenges within the industry.
