January 19, 2026 [Bloomberg]- Germany’s state of Saxony-Anhalt will temporarily finance Domo Chemicals GmbH’s insolvent plastics production site in Leuna to prevent a potentially damaging shutdown.

The plant, which makes plastics used in the automotive and construction sectors, will keep running at around 40% of capacity until the end of March, Christof Günther, managing director of chemical park operator InfraLeuna GmbH said Thursday, after helping to negotiate the financial lifeline with insolvency administrator Flöther & Wissing and the eastern German state.

Saxony-Anhalt will provide funding until the end of March, according to an email.

Ceasing production may damage the assets during low temperatures in winter and poses risks to the environment, according to Flother & Wissing. Domo Chemicals declined to comment.

“We have gained valuable time to examine whether and under what conditions a long-term stabilization might be feasible,” insolvency administrator Lucas Flother said, noting that prior to the state support being given, there was a risk deliveries of key supplies would be halted to the plant.

Several potential investors have held initial talks to buy the site, said Günther. InfraLeuna has been involved in the discussions as the chemicals park operator is providing services to the plant and has incurred losses from claims that Domo hasn’t met. The company declined to comment on the talks.

Germany’s chemicals sector is undergoing deep changes as high energy prices, competition from China and subdued demand combine to sap profits. Domo Chemicals’ three German subsidiaries filed for insolvency in December after talks for further financing broke down, following restructuring efforts that started in 2024.

Domo’s two subsidiaries at the Leuna chemicals park, which hosts more than 100 companies, employ just over 500 workers with Domo Caproleuna GmbH posting revenues of €550 million ($640 million) in 2023. Domo Chemicals Holding is owned by the De Clerck family.