Asia Sales Make Up for US Decline, Says Lanxess

Global number two producer of butyl rubber for use in tyres, Lanxess AG, believes the decline in demand from US tyre manufacturers will more than be compensated for by sales in China and India. CFO Matthias Zachert informed Bloomberg that the company’s experience in the US, where rising fuel prices are prompting motorists to drive less and therefore require fewer tyres, is a ‘relatively moderate decline.’

“The growth rates you have in India and China are, in absolute terms, clearly outpacing whatever little percentage you are going to lose on miles being driven,” he said.

More than half of Lanxess sales are derived from synthetic rubber, with approximately half of current sales taking place in Europe, a quarter in the Americas and 18 per cent in the Asia Pacific region. Capacity to supply the growing Asia region will increase in 2011 when the company’s 400 million euro butyl rubber factory in Singapore opens, added Zachert. Furthermore, said Zachert, Lanxess’s rubber sales should benefit from the proposed European Commission on lower rolling resistance tyres, scheduled to effect in 2012.

“The mindset of the entire organisation is toward growth rather than restructuring,” Zachert said. “Here in the United States as well as in Europe and elsewhere, we are considering growth opportunities.” The company is contemplating further global acquisitions, he said, however he declined to comment on speculation that the company seeks to acquire Swiss chemical maker Clariant AG, adding that he has heard such rumours for years.