Daimler Chemical Applies For Bankruptcy Protection In Germany!

Domo Chemicals Group announced on December 29 that it has filed for bankruptcy protection for its three German subsidiaries: Domo Chemicals GmbH, Domo Caproleuna GmbH, and Domo Engineering Plastics GmbH.

This decision will affect approximately 585 employees, including 515 at the Leuna production site in Germany and 70 at the German Premnit site of Daumer Engineering Plastics. A company spokesperson stated that employee wages will be secured through bankruptcy benefits until the end of March.

Daumer's bankruptcy filing highlights the structural predicament faced by medium-sized chemical companies in Europe: these companies lack the scale advantages of large integrated producers, yet face the same cost pressures and challenges from import competition.

According to a source familiar with the matter, a bankruptcy petition was filed on December 25. The local court ordered the preliminary proceedings to begin on December 26 and appointed Lucas Flöther as the temporary insolvency administrator.

Flöther will assess the company's financial situation and possible restructuring plans, including the possibility of finding potential investors or reaching settlements with creditors. However, the outcome of the related procedures may remain unclear for months to come.

"Daily operations at all facilities continue, with production and customer deliveries unaffected," Flöther stated. A company spokesperson further emphasized that Daimler intends to maintain operations and will stay in close communication with customers and suppliers to stabilize business operations.

Daomo produces a variety of products at the Leuna and Premnit bases, including intermediates such as isopropylbenzene, phenol, acetone, cyclohexanone, caprolactam, and ammonium sulfate, as well as nylon 6 resins and engineering plastics.

Flöther pointed out that although Daomei has "a team of highly capable employees and a strong and reputable customer base," the current operating environment for chemical companies is undoubtedly full of challenges.

Daumer attributed this bankruptcy filing to the continued weakness in demand in the European chemical industry and competitive pressure from imports of polyamide resins from non-EU countries, especially China.

The company initiated restructuring efforts in 2024, but recent negotiations for additional short-term financing broke down, forcing the German subsidiary to seek court protection.

European chemical producers are facing increasing pressure from Asian competitors, who have an advantage due to lower raw material and energy costs, while local demand in Europe continues to languish amid overall economic uncertainty. To cope with the challenging business environment, several restructuring announcements and capacity rationalization measures have emerged within the industry, such as Fibrant's announcement on October 21 to permanently close its caprolactam plant in the Netherlands.

The nylon market is particularly affected by the expansion of production capacity in China: although European products have quality advantages, the low-price strategy of imported products still impacts local producers. Sources say that the high energy consumption in chemical production in Europe continues to face challenges, with natural gas and electricity costs remaining higher than pre-2022 levels, squeezing profit margins in the specialty chemicals and commodities sectors.

Meanwhile, from March 2024 to December 2025, spot prices for phenol and acetone in Europe fell by approximately 49% and 61.5%, respectively, due to a continued oversupply in the market. Data from S&P Global Energy's CERA indicates that the production costs of phenol in Europe are about 41% higher than in Southeast Asia and about 45% higher than in the Middle East, primarily due to higher energy, raw material, and compliance costs, as well as the generally aging and less energy-efficient phenol facilities in Europe.