UpdateLANXESS eyes Q3 commercial ops at Singapore butyl rubber unit

04 June 2013 09:32  [Source: ICIS news]

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SINGAPORE (ICIS)--LANXESS expects to start commercial production at its new 100,000 tonne/year butyl rubber facility at Jurong Island in Singapore in the third quarter, the German specialty chemicals firm said on Tuesday.

The €400m ($526m) butyl rubber facility came into operation in the first quarter of this year, with production “being ramped up gradually”, the company said.

The company is planning to increase the plant's output to 30,000-40,000 tonnes/year in 2013 and around 70,000 tonnes/year in 2014 before running it at full capacity in 2015, said Ron Commander, the head of LANXESS' butyl rubber business unit, on the sidelines of the inauguration ceremony for the new facility.

LANXESS inaugurated the plant, which produces premium halobutyl rubber, as well as regular butyl rubber, on 4 June.

The global butyl rubber market is expected to grow at an annual average of 5%, driven by growth in the automotive industry, especially in Asia, according to LANXESS.

Butyl rubber is used in the production of tyres for the automotive industry.

The tyre industry now accounts for around 75% of sales at LANXESS' rubber business unit and more than 50% of sales generated in Asia, it said.

"Passenger cars in China and India alone are expected to more than triple in the next 15 years, mainly due to a growing middle-class," the company added.

LANXESS is also currently building a new production facility for neodymium-based performance butadiene rubber (Nd-PBR) at Jurong Island.

The Nd-PBR plant is scheduled to start production in the second half of 2015.

"The direct proximity of these two plants creates valuable synergies for the company, for example through joint infrastructure and logistics," the company said.

LANXESS is currently not looking at further expanding its butyl rubber capacity in the short term as it is concentrating on ramping up the production capacity of the new Singapore unit, according to Commander.

The company has two other wholly owned butyl rubber units - a 150,000 tonne/year plant at Sarnia in Canada as well as a 150,000 tonne/year unit at Zwijndrecht, Belgium.

($1 = €0.76)

By: Nurluqman Suratman

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