Lanxess “ready” for growth in rubber demand
At its most recent “Rubber Day”, held today in Germany, specialty chemicals company Lanxess reported it expects – and is well equipped for – a labelling-related boost in demand for high performance rubber. Speaking at the event, company Board of Management chairman Axel C. Heitmann said “in order to meet the new legislation and the expected customer demand, our high-tech materials are essential. As the world’s largest partner for the tyre industry, we have adapted to the trend on time. We have made the right strategic investment decisions and have strengthened our capacities.”
Quoting internal market studies, Lanxess says it anticipates a rise in the global tyre market from its current level of 1.6 billion tyres per annum to 2 billion tyres by 2015. Furthermore, initiatives such as the European tyre label and similar international legislation are expected to boost the market share occupied by “green” tyres containing high performance synthetic rubber from its present 35 per cent to around half of the overall tyre market.
To meet this expected growth in demand, Lanxess has expanded its product portfolio for the rubber industry. The company is confident its recently-added products should enable tyre manufacturers to achieve the properties required by November 2012. Production capacity and research expenditure are also on the rise: Lanxess has increased production capacity for high performance rubber at its Dormangen plant in Germany by 15,000 tonnes, Port Jérôme in France by 10,000 tonnes and Cabo in Brazil by 20,000 tonnes. A new polybutadiene rubber (Nd-PBR) facility in Singapore is also in the pipeline; this 140,000 tonne plant – the second-largest project of its kind since Lanxess was founded – is expected to enter operation in the first half of 2015. In terms of research and development, a 15 per cent budget increase in 2010 has been followed up this year by a further 15 per cent, which means around 130 million euros will be spent on research and development during 2011. Around 80 per cent of this figure is being directed into sites in the company’s home country, Germany.
“Tens of thousands of tonnes” of bio-rubber
During his Rubber Day Germany address, Heitmann also furnished an update on the company’s joint work with US biotechnology Gevo, who has developed a process for utilising biomass from forage corn as a raw material (isobutanol, which is then converted to isobutene using a high-tech dehydration process) in the production of REACH compliant butyl rubber. “The process doesn’t only function in the laboratory,” Heitmann stated. “It works on an industrial scale too. We could be in a position to manufacture tens of thousands of tonnes of bio-rubber in less than five years’ time.” Gevo’s facilities in Luverne, Minnesota and Redfield, South Dakota are being retrofitted to produce isobutanol; the Luverne retrofit will produce 50,000 per annum and is expected to start-up in mid 2012, while the 115,000 tonne Redfield plant should come on-line early in 2013. Lanxess is now in the “final stages” of negotiating a ten-year exclusive supply agreement and says that in the “near future” bio-based raw materials will account for half of all synthetic rubber production at its Sarnia facility in Canada.
Heitmann also took the opportunity to confirm the company’s full-year earnings forecast: “As announced, we will increase our EBITDA pre exceptionals by roughly 20 per cent. The third quarter is going very well and will be better than the third quarter of last year.”