Singapore to be manufacturing hub for Lanxess
Republic may become its Asian headquarters for butyl rubber
By RONNIE LIM
GERMANY’S Lanxess - which is building a mega 400 million euro (S$845 million) synthetic rubber plant on Jurong Island - is considering even more chemicals manufacturing projects here, its chairman Axel Heitmann has disclosed.
Dr Heitmann: Singapore plant will play a big role in Lanxess’ global manufacturing network
Singapore could also eventually evolve as its Asian headquarters for butyl rubber, he added, especially with the world-scale plant here playing a strategic role in supplying this raw material for ‘green’ tyres to the fast-growing regional market, especially in China.
‘Singapore will become an important new manufacturing hub’ for the group, Dr Heitmann told BT in a recent interview in Shanghai.
‘We are building the highly sophisticated plant from scratch with the latest technologies and inventions incorporated into the process. It is a big project and a lot of factors had to be put into the equation . . . we needed the right set of raw materials, right infrastructure and partners,’ he stressed.
Significantly, it will play an important role in Lanxess’ global manufacturing network.
The bulk, or 60 per cent, of the Singapore plant’s output is reserved for the Chinese market, Dr Heitmann said, just as Lanxess recently acquired Brazilian synthetic rubber maker Petroflex to supply the Latin American market. Likewise, its existing Canadian and Belgium plants cater to markets in the West.
‘This is a big step. And given that there are a number of advantages to using Singapore as a manufacturing hub for this kind of product range, I believe these advantages can be helpful for other projects to come in the future,’ he said of its plans for the Republic.
While Dr Heitmann said that it was too early to disclose details, further manufacturing investments here could - apart from advanced polymers - also come from advanced intermediates and speciality chemicals. ‘I can picture that we come with other opportunities out of these other two Lanxess divisions,’ he said.
‘I’m looking for opportunities all the time. But we will take our time as we have a long-term approach, so we are running a very careful selection process,’ he said. The enormous support Lanxess has received from the authorities and others here ‘contribute to making Singapore one of our preferred locations for chemicals production’, he stressed.
Lanxess officials in February indicated that one of the overriding reasons for its decision to invest here was the ready availability of higher olefin raw materials from upcoming petrochemical complexes here, like Shell’s. And this factor is likely to figure in Lanxess’ future expansions here.
When its Jurong Island plant starts up in 2011, Singapore will play an integral role in Lanxess’ latest China strategy - announced by Dr Heitmann in Shanghai last week - to increasingly cater to the country’s growing demand for green products.
The Singapore plant’s production of halobutyl and regular butyl rubber will, for instance, be used by international tyre makers like Michelin, Goodyear and Bridgestone to make so-called green tyres, as these reduce rolling resistance. Every fifth filling of the petrol tank is caused by rolling resistance, Dr Heitmann explained.
‘So if all 30 million Chinese cars today were equipped with tyres with reduced rolling resistance . . . it would be possible to reduce carbon dioxide emissions in China by roughly two million tonnes per year,’ he said.
Another green product will be engineering plastics, such as that made at its Wuxi plant in China, which go into hybrid plastic/metal automotive components produced by vehicle manufacturers like Audi. These help reduce the vehicle weight, thus saving fuel and lowering carbon dioxide emissions.
Last year, China was the group’s fastest-growing market, accounting for US$600 million or 6 per cent of its global sales, with synthetic rubber (which Singapore will help produce) growing by 140 per cent.
The company expects growth of the green or environmentally friendly business segment in China to be double the rate of the overall market growth there.
Source : Business Times - 28 April 2008
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