Lanxess warns on profitability of nitrile business as it opens China tech centre
By Liz White, ERJ staff
Leverkusen, Germany-Opening Lanxess AG's new Euro 5 million technical centre for its Technical Rubber Products (TRP) business in Shanghai, China, 19 July, TRP executives warned that profitability, particularly in the nitrile rubber business, is too low.
Margins in EPDM continue to be depressed and the NBR business in particular has been making losses that are no longer tolerable,â€ stressed Dr GÃ¼nther Weymans, global head of the Lanxess TRP business, at the opening ceremony for the group's new technical centre in Shanghai.
In the last 10 years, we have accumulated losses of Euro 200 million, while â€¦ investing almost Euro 150 million in our NBR production and research facilities, specifically in La Wantzenau,â€ Weymans emphasised. The plant at La Wantzenau, France, and Lanxess's other NBR operations employ 550 globally.
Wymans reiterated recent comments of Lanxess ceo, Dr Axel Heitmann: Lanxess is currently evaluating all options of internal cost reductions in the NBR-business,â€ specifically at La Wantzenau. The Lanxess executive added that the goal is to make La Wantzenau survive long-term and to return to acceptable margins in the NBR business.â€
Lanxess management will put their specific plans for the nitrile operation to the board at the end of August, he said.
Discussing Lanxess's Chinese business, Weymans said we see the establishment of a technical centre within the worlds fastest growing single market, China, was just one logical move in our quest to maintain and expand our leading position.â€
Lanxess's investment in the centre underscores our commitment to Asia-and to the industry as a whole," Weymans added.
"The Asia-Pacific region is the backbone of future growth for the technical rubber industry", commented JÃ¼rgen Gunther, head of global marketing for the TRP group. Lanxess's growth rates in Asia outpace overall market growth, he said.
Gunther also emphasised the need for balanced mix of investment in the future-such as the new Tech Center-on one hand coupled with further optimisation of efficiency for the NBR business "amidst a generally still unsatisfactory profitability" on the other.
The picture shows a seal for a steam line, made by R. Klinger Dichtungstechnik GmbH & Co. KG of Gumpoldskirchen, Austria, which relyies on a combination of NBR and HNBR rubber for the new Klingertop-sil-ML1 gaskets.