Lanxess earmarks €1bn for Asia-focused expansion

19 September 2007 11:56  [Source: ICIS news]

LONDON (ICIS news)--Lanxess will invest €1bn ($1.4bn) over the next three years to strengthen its businesses, with a focus on expanding in Asia, the German specialty chemicals company said on Wednesday.

The company was also considering investing €400m in a new butyl rubber plant in Asia, said CEO Axel Heitmann, speaking at Lanxess’s investor and media day in London.

Should the project go ahead, Heitmann said it would go on stream in 2010 in either Thailand, Malaysia or Singapore. The decision would be made during the fourth quarter of 2007, he added.

Lanxess said 60% of planned capital expenditures would go on capacity expansions.

Heitmann said Lanxess would pursue acquisitions if they create value accretive to the company's earnings per share within three years at the latest.

“We don’t plan on following in the footsteps of some of our competitors, which made overpriced acquisitions years ago and have since paid dearly for their mistakes in the form of low margins and declining competitiveness,” Heitmann said.

Lanxess, which announced that it would reach its 2009 earnings targets a year early, is well prepared for acquisitions, but “we will never pursue an acquisition simply for the sake of size", he added. “We will act only when the time is right.”

($1 = €0.72)

By: Mark Watts
+44 20 8652 3214

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