04 March 2013 17:05 [Source: ICIS news]
LONDON (ICIS)--Germany-based specialty chemicals group LANXESS has approved plans to spend €80m ($104m) converting a world-scale rubber chemicals plant in Brazil from commodity grades to high performance products, the company said on Monday.
Production at Triunfo, Rio Grande do Sul, Brazil, will switch to solution styrene butadiene rubber (S-SBR) from emulsion styrene butadiene rubber (E-SBR) with start-up set for the end of 2014. The capacity of the converted plant will remain at 110,000 tonnes/year.
The move follows LANXESS’s growth strategy of expanding into fast-growing “green tyre” technologies. Global growth for S-SBR and neodymium-based performance butadiene rubber (Nd-PBR) is estimated at roughly 10%/year up to 2017 as consumers shift to more fuel-efficient and environmentally-friendly tyres, according to the company.
A tougher regulatory environment is also driving the growth in green tyre technology. The European Union implemented mandatory tyre labelling regulations in November 2012. Similar moves are planned in Brazil in 2016, while Japan and South Korea introduced labelling in 2010 and 2011.
“We are following this megatrend of green tyres all over the world and Brazil is an important brick in this strategy. Our main strategy is move more of our plants towards this fast-growing green tyre type which you need to produce high-performance, fuel efficient tyres,” LANXESS board member, Werner Breuers, told ICIS.
According to LANXESS, studies show that 20-30% of a vehicle’s fuel consumption and 24% of its C02 emissions are related to tyres. “Green tyres” can cut fuel consumption by 5-7%.
“This means consumers can save real money in times of rocketing gasoline prices,” said Breuers.
Over the past two years, LANXESS has increased S-SBR and Nd-PBR capacities by 70,000 tonnes/year by debottlenecking plants in Dormagen, Germany; Orange, US and Cabo de Santo Agostinho, Brazil.
The company also broke ground on a world-scale 140,000 tonne/year Nd-PBR plant in Singapore last September with an investment of €200m. Startup is scheduled for the first half of 2015.
Breuers said that with its current new project plan the company is going through a period of high capital expenditure (capex) which should tail off in 2014/15 once they are complete. Capex for 2013 is planned to be roughly the same level as 2011 and 2012. In 2011, capex reached €679m and the figure is expected to be similar for 2012. Planned capex is subject to review depending on the macro-economic situation, he added.
LANXESS plans to reveal its 2012 financial results on 21 March.
($1 = €0.77)
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