5 Jun 2013
ERJ staff report (BC)
Singapore – German speciality chemicals company Lanxess opened a €400m rubber plant in Singapore on 4 June, to meet rising demand in Asia led by China and India.
The plant, the company's single largest investment, will produce 100,000 tonnes of butyl rubber per annum when it reaches full capacity in 2015.
Butyl rubber is used in the inner liners of car tires, pharmaceutical packaging and chewing gum.
Global butyl rubber demand, at 1.2m tonnes last year, could rise 5 percent annually by 2017, the company said.
Demand is expected to rise 6 percent annually in Asia Pacific, led by increasing car ownership in China and India as well as improvement in China's healthcare system, according to the company.
"The megatrends are completely intact" despite a weak market in the short term, Werner Breuers, a Lanxess board member, told reporters.
When Lanxess first announced plans to build the plant on Jurong Island, Singapore's petrochemical hub, in February 2008, it said the facility would come on line in 2011.
But in December 2008 the firm said it would delay construction because of weakening demand and to conserve cash following the global financial turmoil.
Lanxess' butyl rubber unit generated more than half of its 500 million euro sales from Asia Pacific, of which half comes from China, the company said.
The company chose Singapore for the plant because of abundant raw material supply and its seaport.
Lanxess also has butyl rubber sites in Zwijndrecht, Belgium and Sarnia, Canada.
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