Lanxess Evaluating Feasibility of Asian Nd-PBR Plant

Germany’s Lanxess AG reports it is evaluating viability of building a new neodymium polybutadiene rubber facility in Asia. The company has already taken steps to increase its capacity for producing the substance, an essential ingredient in the manufacture of high performance tyres, at its plants in Germany, Brazil and the US. The decision to expand capacity at existing plants was made in order to meet demand in the “green tyre” market, which Lanxess notes has an annual global growth rate of about 9.0 per cent, making it the industry’s fastest growing segment. A study into the feasibility of a 100,000 to 150,000 tonne per annum Nd-PBR plant in Asia is currently underway, and Lanxess says a final decision on the project will be made within the next six months.

The tyre market is Lanxess’ largest customer industry and the speciality chemicals manufacturer notes the industry is expected to grow five per cent per annum up to 2015. Other projects the company is undertaking to meet this rising demand is the construction of a 400 million euro butyl rubber plant in Singapore that will predominantly serve the booming tyre market in Asia plus an expansion of the company’s butyl rubber plant in Belgium. Tyre industry customers form the backbone of Lanxess’ activities in the mobility sector, one of four “megatrends” the company is focusing on. Growth in these areas plus the company’s BRIC region strategy, where the percentage of group sales has more than doubled in the last five years, is expected to help each of Lanxess’ businesses generate an EBITDA compound annual growth rate of at least five per cent through to 2015.

Furthermore, on September 15 Lanxess announced its goal of increasing its leading earnings indicator by roughly 80 per cent in the coming five years. The company is targeting EBITDA pre-exceptionals of approximately 1.4 billion euros in 2015 and confirmed its forecast of roughly 800 million euros EBITDA pre-exceptionals in 2010. Lanxess says it plans to achieve its mid-term earnings target through a dual-track growth strategy of organic and external growth, with organic growth playing the more dominant role.

“We are poised to enter a new era of growth and have set an ambitious target, which we can achieve based on the strategic position of our business portfolio,” said Lanxess CEO Axel C. Heitmann. “Our track record reflects our operational strength. By the end of this year, we will have increased EBITDA pre-exceptionals by roughly 80 per cent since 2004, in spite of the global economic crisis.”