The largest investment project yet from Lanxess, its Eur 400 million 100,000 tonnes capacity butyl rubber plant to be built in Singapore, has been delayed due to the global economic crisis. Instead of starting up in 2011 as originally planned it has been put back to 2014.
While the anticipated fall in demand for butyl makes the additional capacity from the plant unnecessary – despite a recently-announced five year agreement to supply “large volumes” of butyl to South Korea’s Hankook Tire from 2010 to 2014 – it gives Lanxess time to rethink the production process.
Lanxess has developed what it terms a “technical breakthrough” in butyl production which it has so far tested only at pilot scale. Extending the schedule for the Singapore plant will enable Lanxess to prove the process for full scale production, and it plans to invest “a substantial sum” to do so over the next few years.
The new technology “uses far less resources and is considerably more energy-efficient and environmentally friendly,” said Lanxess chairman Axel Heitmann, and he anticipated that capital expenditure on the new plant will now be slightly lower than originally planned.
Lanxess is investing in Singapore in other ways as well. It is currently negotiating with the Singapore Economic Development Board with a view to managing the global business of the butyl rubber business unit from there in the future. The Group currently runs the Southeast Asian business of all its 13 business units from Singapore.