Lanxess on track for Singapore investment

By Keith Boi, Plastics & Rubber Weekly

While uncertainties clouding the automotive and tyre manufacturing sectors have already led Lanxess to push back its butyl rubber project in Singapore by two years, the German specialty chemicals firm claims it remains firmly on track to start up the world-scale production facility by 2012.

Christian Lindenhayn, Lanxess head of global marketing for butyl rubber, said the first phase of engineering are currently being finalised at the Singapore plant, with the capacity of the manufacturing unit still projected to be 100 000 tpa.

He added that the butyl rubber facility to be built on Jurong Island is committed to installing highly developed technologies, including the latest waste reduction and energy efficiency initiatives.

Along with the Singapore plant delay, Lanxess had announced the decision earlier this year to cut back production at its butyl rubber facilities in Sarnia, Canada, and Zwijndrecht, Belgium, to counter slowing demand .

“The impact of the economic crisis on the automotive industry is obvious and this has clearly impacted our product demand as well,” explained Lindenhayn. “We decided to take immediate steps to reduce the output at these two sites. Market volatility is still very high. The current investments and existing capacities need to be managed.”

While macro trends in the tyre industry still dominate the global butyl rubber market, Lanxess is seeing interesting developments in niche applications where more specialised butyl rubber grades are in demand, such as for pharmaceutical closures and other medical-related applications.

Halobutyl rubbers used in the medical sector, for instance, are generally preferred because they ensure adequate protection of sterile pharmaceutical products against external contamination, according to Lanxess.

“Healthcare applications in general have been on the way up, particularly in the use of polymers,” said Lindenhayn. “There are significant growth dynamics in large countries like China. On top of that, there are now requirements by law to utilise certain rubber grades that provide specific performances for use in pharmaceutical stoppers. That is a driver on its own for this business, and it is the second largest business after tyres. Medical applications are certainly not on a downtrend.”

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Staff Report from Plastics & Rubber Weekly