20 August 2013

Lanxess to keep faith with its 200m euro investment here

GERMANY'S Lanxess intends to stay the course with its 200 million euro (S$335.3 million) Nd-PBR investment here despite the slump in global car markets, including in Europe and China, said chairman and chief executive Axel Heitmann.

The neodymium polybutadiene plant is its second synthetic rubber plant investment here, following its 400 million euro butyl rubber plant. Both projects produce key materials used in making more efficient "green" tyres which help save on fuel and reduce carbon dioxide emissions.

"For the time being, we stick to our plans on the Nd-PBR facility," Dr Heitmann said, adding that the Jurong Island plant is important as it provides the group with a strong market presence, especially due to its proximity to China.

"So we want to keep this going," he said, adding, "but you should never say never".

"But for the time being, we keep it going . . . this is not like flexibility, it is just because its strategic relevance is broader than the short-term savings."

He was responding to an analyst's question on whether Lanxess will be flexible and postpone the timing of big capital investments like the Singapore Nd-PBR plant given the market downturn.

Lanxess broke ground in September on its 140,000 tonne per annum plant here, its largest Nd- PBR facility worldwide. The plant is scheduled to start up in the first half of 2015.

The analyst's question arose as the specialty chemicals group had postponed construction of its 400 million euro butyl rubber plant here because of the 2008- 2009 global financial crisis. Despite giving the green light for that project in early 2008, Lanxess did not start construction until May 2010.

The group, which derives more than 40 per cent of its sales from the automotive sector, stressed that the environment remains negative for the tyre business, with no meaningful recovery in sight. But on the positive side, Dr Heitmann said the ramp-up of its 100,000 tonne per annum Singapore butyl plant, which is its most technologically-advanced butyl unit and largest-ever investment, "is on track".

 

BY RONNIE LIM

The Business Times, 13 Aug 13