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2012-09-11

LANXESS breaks ground for world’s largest Nd-PBR plant in Singapore

  • EUR 200 million investment
  • New 140,000 metric tons per year plant
  • LANXESS world’s leading supplier of Nd-PBR
  • Strong demand for “Green Tires” supported by tire labeling
  • Neighboring butyl rubber plant on track

LANXESS has broken ground for its new neodymium-based performance butadiene rubber (Nd-PBR) plant in Singapore today. The German specialty chemicals company is investing roughly EUR 200 million in a 140,000 metric tons per annum facility on Jurong Island. The facility will be the largest of its kind globally and will serve the growing market for “Green Tires”, especially in Asia. About 100 jobs will be created. The plant is expected to start up in the first half of 2015.

Nd-PBR is used in the treads and sidewalls of “Green Tires”. It helps reduce the rolling resistance and increase the fuel efficiency of a tire. Nd-PBR is highly resistant to abrasion and plays a significant role in making tires safer and, above all, more durable. 

“We are delighted to be bringing another major rubber investment to Singapore, which underlines our commitment to ‘Green Mobility’,” said LANXESS’ Chairman of the Board of Management, Axel C. Heitmann, at the groundbreaking event on Jurong Island. “It is our company’s focus on technology that makes it possible to reduce rolling resistance in tires and thus fuel consumption. This is good news for the consumer and the environment.”

The German Ambassador to Singapore, Angelika Viets, and the Chairman of the Singaporean Economic Development Board, Leo Yip, were also in attendance.

The Petrochemical Corporation of Singapore (Private) Limited will supply the majority of the key raw material butadiene needed to produce Nd-PBR, while Singapore’s TP Utilities Pte. Ltd. (a wholly-owned unit of Tuas Power Ltd.) will provide steam to the new plant. Foster Wheeler Asia Pacific Pte. Ltd. has been selected to carry out the detailed engineering and construction of the plant.

New plant to meet strong demand for “Green Tires”

LANXESS is the market leader for Nd-PBR used in “Green Tires” - the fastest growing sector in the tire industry, with an annual global growth rate of about 10 percent. Growth is even more pronounced in Asia at 13 percent per year.

Demand is being driven by the megatrend mobility, above all in the regions of Asia and Latin America, as the middle class there becomes more affluent. In addition, demand will be accelerated by tire labeling being introduced around the world.

November 2012 will see the launch of mandatory tire labeling in the European Union (EU). Tires will be graded from A to G according to their fuel efficiency and wet grip. Rolling noise is also measured. Therefore, the new legislation provides more transparency for consumers by highlighting the added value of “Green Tires”. According to TU Munich, the market share of class A and B tires in the EU is expected to reach 20-30 percent in 2017 and then jump to 70-80 percent in 2022.

Japan and South Korea were the first countries in the world to introduce a label system. After a voluntary tire label was introduced in Japan in January 2010, South Korea launched its voluntary labeling in November 2011 and will introduce a mandatory label in December 2012. Other countries like Brazil, the USA and China are expected to follow in the coming years.

LANXESS has commissioned a study with Frost & Sullivan consultants to examine how motorists in Singapore would benefit from “Green Tires”. According to the study, the use of “Green Tires” on all vehicles in Singapore would result in a saving of 357,468 tons of CO2 as well as a saving of 146 million liters of fuel annually.

Synthetic rubber drives “Green Tires”

“Green Tires” can reach their peak performance with formulations containing both Nd-PBR and solution styrene butadiene rubber (SSBR). LANXESS also produces SSBR, which is mainly used in the tread compound of “Green Tires”, where it helps to reduce rolling resistance and improve grip on wet roads.

“We are now moving from the age of tire design to the age of tire materials, which will make the difference in performance,” said Heitmann. “And here LANXESS is playing a leading role in developing the tires of tomorrow.”

Studies show that 20-30 percent of a vehicle’s fuel consumption and 24 percent of road vehicle’s CO2 emissions are related to tires. “Green Tires” can reduce fuel consumption by 5-7 percent and have a shorter cost amortization period in comparison to other fuel-saving technologies in cars.

Nd-PBR belongs to LANXESS’ Performance Butadiene Rubbers (PBR) business unit, headed by Joachim Grub. The highly innovative rubber is currently produced in Dormagen, Germany; Cabo, Brazil; Port Jérôme, France and Orange, Texas, USA. Apart from tires, performance butadiene rubbers are used for the modification of plastics in the manufacture of High-Impact Polystyrene (HIPS) for injection molding applications. Other applications include golf balls, running shoes and conveyor belts. PBR is part of LANXESS’ Performance Polymers segment, which achieved total sales of EUR 5.1 billion in 2011. 

BTR plant on track

LANXESS’ new Nd-PBR plant will be located on Jurong Island next to the company’s butyl rubber plant, which to date is the company’s single-largest investment at EUR 400 million. The plant is expected to start up in the first quarter of 2013, as scheduled.

Forward-Looking Statements

This news release contains forward-looking statements based on current assumptions and forecasts made by LANXESS AG management. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development or performance of the company and the estimates given here. The company assumes no liability whatsoever to update these forward-looking statements or to conform them to future events or developments.

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