Lanxess postpones plant construction

LANXESS    MANUFACTURING    RECESSION

Singapore - Lanxess said the deepening recession has hampered demand of butyl rubber, and will push the construction of its butyl rubber facility here to 2014.

The 100,000 tons per annum plant had been due on stream in 2012, and would have cost up to EUR400 (US$601 million) to build.

"We expect the new capacity to be needed in 2014 at the earliest," said Lanxess board of management chairman Axel C Heitmann.

The company plans to use the two-year delay to finish developing a new technology for butyl rubber production that will be used at the new facility. "That way Singapore will have the world's most modern plant with a unique process technology," he said.

The company said it will invest a "substantial sum" to the new technology, which is touted to be more energy efficient and require fewer resources. "From today's perspective, the capital expenditures for the new plant will be slightly lower than originally planned," the company said in a statement.

Lanxess however reinforced its commitment to expanding in Singapore. "This dynamic city is the hub of our activities in Southeast Asia and continues to play a key role in our highly successful strategy for the Asian region," Heitmann said. The company is currently in negotiations with the Singapore Economic Development Board (EDB) with a view to manage the global business for the butyl rubber business unit from here in the future.

The group currently runs the Southeast Asian business of all its 13 business units from Singapore.

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