Lanxess to set up another rubber plant in Singapore

LANXESS media briefing photo 1 June 2011DRIVEN by the growth of the “green tyre” sector, which is growing at 14% in Asia, German speciality chemical company Lanxess will locate another of its rubber plants in Singapore’s Jurong Island, where it is also building a facility for its butyl rubber. The company will invest EUR200 million into the new neodymium polybutadiene rubber (Nd-PBR) plant, expected to have a capacity of 140,000 tonnes/year.

Said to be the largest of its kind in the world, the facility will create 100 jobs when it starts up by 2015.

Said CEO Axel Heitmann recently, “It is only one year since we broke ground for our butyl plant in Singapore. Now we are ready to move forward with the second largest investment project in our history here.”

Besides growth in the Asian region, the company says a defining factor for locating the plant in Singapore was the availability of raw materials. Lanxess recently signed an MOU with the Petrochemical Corporation of Singapore (PCS) on the long-term supply, via pipeline, of butadiene and raffinate II. Butadiene is needed by Lanxess to produce Nd-PBR and raffinate II will be a product stream from Lanxess’s future butyl rubber plant.

The Nd-PBR plant will be located next to the company’s EUR400 million butyl rubber plant, which is currently under construction and will come on stream in the first quarter of 2013.

The company says construction of the butyl rubber plant is progressing according to schedule with engineering and soil preparation having been completed and the installation of infrastructure and steel now underway.

The plan to have both plants in Asia is in line with Lanxess’s agenda. It intends to cater to synthetic rubber for high-performance “green tyres”, which is the fastest growing sector in the tyre industry with an annual global growth rate of about 9%. Growth is even more pronounced in Asia at 14% a year. The world’s leading tyre manufacturers, who are supplied by Lanxess, are responding to this demand by expanding production in Asia.

Demand is being driven by the megatrend mobility as well as motorists calling for higher environmental and safety standards in performance tyres. In addition, demand is being accelerated by European Union legislation. As of 2012, all new tyres sold in Europe have to be labeled for fuel efficiency, wet grip and external rolling noise. Japanese tyre manufacturers voluntarily introduced tyre labeling at the start of 2010 and the topic is under discussion in South Korea.

Nd-PBR is part of a tyre’s compound and plays a part in reducing energy consumption and tyre abrasion, making cars safer as well as more ecological and economical, says Lanxess.

Nd-PBR was invented by Lanxess in Germany, the heart of the company’s research and development activities. The largest R&D centres are in Leverkusen, Krefeld-Uerdingen and Dormagen, Germany. Lanxess increased its R&D expenditures by 15% in 2010 and plans to increase it by another 15% to roughly EUR130 million in the current year. Some 80% of this amount will focus solely on Germany. Currently, over 400 employees are active for Lanxess in R&D in Germany.

Nd-PBR belongs to Lanxess’s Performance Butadiene Rubbers (PBR) business unit and is currently produced in Dormagen, Germany, Cabo, Brazil, Port Jérôme, France, and Texas, US. Apart from tyres, performance butadiene rubbers are used for the modification of plastics in the manufacture of High-Impact Polystyrene (HIPS) for injection moulding applications. Other areas of application include golf balls, running shoes and conveyor belts. PBR is part of the Performance Polymers segment, which achieved total sales of EUR3.8 billion in 2010.(PRA)