UpdateLanxess invests €400m in Singapore unit

26 February 2008 10:28  [Source: ICIS news]

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SINGAPORE (ICIS news)--Lanxess has selected Singapore's Jurong Island as the site of its largest investment - a €400m ($592m) plant - to cater to strong demand growth in Asia, the world’s second largest butyl rubber maker said on Tuesday.

The project will boost the company’s total capacity to 380,000 tonnes/year in early 2011.

“By setting up this new location in Singapore, Lanxess is responding to the significant growth in global demand for butyl rubber,” chairman Axel Heitmann said in a press conference.

Demand growth in the greater China region was expected at 6.3% annually while that of India was at 8.7% although from a smaller base, said Ron Commander, head of Lanxess’ butyl rubber unit which has more than €500m of sales a year.

He added that global demand was 900,000 tonnes/year and butyl rubber was in very short supply. Annual global demand growth was expected to stay at around 3% in the next 15 years, the company said.

Construction on the 100,000 tonne/year project in Singapore would begin in the first quarter of 2009 and it will be completed by the end of 2010.

More than 100 engineers and 1,500 workmen will be employed on the building sites and the project will initially create around 200 new jobs, Lanxess said.

The proposed plant will produce butyl and bromobutyl rubber, synthetic rubbers that are used in the production of tyres.

Shell Eastern Petroleum will supply raffinate 1 from a proposed butadiene extraction unit to Lanxess, which will take isobutene for its rubber production.

Lanxess was looking at increasing the isoprene content of its butyl rubber, allowing it to open up new applications such as tyre treads, Commander said.

Halobutyl rubber demand was also expected to increase with the rise in radial tyres output, especially in China and India, he added.

The company was expected to complete an expansion at its Sarnia, Canada, plant at the end of 2008, to boost its capacity to 150,000 tonnes/year, Commander said. It operates another 130,000 tonne/year unit in Zwijndrecht, Belgium.

These two plants could be expanded further to react quickly to market needs, Commander said.

($1= €0.67)

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By: Florence Tan
+65 6780 4359

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