Degussa to Embark on Chinese Joint Venture

Degussa AG, Dusseldorf, and Rizhao Lanxing Chemical Industry Co, Ltd (Lanshan-Rizhao, Shandong Province) have agreed to establish a joint venture for the manufacture of sulphur-functional silanes for rubber applications. This agreement represents the successful conclusion of negotiations that followed a memorandum of understanding signed by the two companies in July.

Degussa will own a 50 per cent share in the new joint venture, and Lanxing 40 per cent. An unnamed financial investor will assume the remaining 10 per cent. Degussa is the worldwide leading manufacturer of silanes for rubber applications. Lanxing has operated as a well-established local manufacturer on the Chinese market since 1998. The new joint venture company will begin operating under the name Degussa Lanxing (Rizhao) Chemical Industrial Co, Ltd, following approval by the responsible bodies, and having obtained all licenses from the Chinese authorities. The company is scheduled to produce sulphur-functional silanes in liquid form and as a blend with carbon black.

Along with silica, sulphur-functional silanes are used to manufacture high-quality rubber compounds for use in tyres, technical rubber articles, and sports shoes. In tyres, the use of the silica/silane system – a pioneering development by Degussa – is said to allow a significant reduction in rolling resistance and therefore a reduction in fuel consumption.

“The demand for the kind of high-quality rubber silanes produced by Degussa’s Advanced Fillers & Pigments Business Unit is continually growing – not least because of the current fuel prices. Robert Wissner, head of the business unit, explains the company’s commitment to China: “By building a production plant in Asia we are supplementing our production facilities in Europe and the US, and further expanding our position as world market leader. Our joint venture facility in China will produce for our customers from the rubber and tire industries in Asia/Pacific who need our silanes to manufacture products that meet international standards.”

Together with an increasing production of tyres and other rubber products the demand for rubber silanes in China is growing strongly. China has already become the worldwide largest market for truck tyres and the third largest for all kinds of tyres. Powering this leap in demand is the increased involvement of global automobile manufacturers and big international tyre producers, as well as the massive expansion of China’s network of roads and highways.