Germany's Lanxess Brings Forward Singapore Project

18 Jan 2010 • by Natalie Aster

German chemicals giant Lanxess said Monday it has brought forward the building of a 575 million US dollar rubber plant in Singapore to meet demand for tyres as car sales in the region soar.

Company officials told a news conference that construction of the plant that will manufacture butyl rubber, a chemical used to make tyres, would begin in June this year instead of mid-2011.

Production is expected to start in the first quarter of 2013, earlier than its slated 2014 launch.

Lanxess, one of Germany's largest listed chemicals groups, had announced last year it would put back the start of production from the facility to 2014 because of the global economic crisis.

However, the pick-up in demand has prompted the change.

"The market has driven us to make this decision," Ron Commander, the head of Lanxess' butyl rubber business unit, told reporters.

"As of the third quarter of 2009, we saw much more stability in the market... and a lot of growth in Asia, predominantly in China."

Lanxess said global tyre sales are expected to return to pre-economic crisis levels in 2011.

The firm will also move the global headquarters for its butyl rubber business to Singapore from Fribourg, Switzerland, this year to meet rising demand for tyres in Asia powered by the region's burgeoning middle class.

Auto sales in the region have been growing for some time as the region's economies grow and last year China overtook the United States as the world's biggest car market.

The China Association of Automobile Manufacturers said more than 13.64 million units were sold last year in the country, an increase of 46.15 percent from the 9.4 million units sold in 2008, according to earlier reports.

In the US, sales fell 21.2 percent to 10.43 million vehicles in 2009, according to Autodata figures released this month.

"We will be focussing our attention especially on Asia this year," said Lanxess chairman Axel Heitmann.

The 100,000-tonne per annum plant in Singapore will be the hub of Lanxess' Asian operations. It will be located in Jurong island, a petrochemicals base that has attracted billions in foreign investments.

Lanxess' customers include tyre brands Bridgestone, Michelin, Hankook and Yokohama.

Source: AFP

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