LANXESS plans new rubber facility project in Singapore
LANXESS, a synthetic rubber company, has brought forward
its plans to build a new butyl rubber facility in Singapore.
The company will hold a groundbreaking ceremony in May,
2010, and production is expected to start in the first
quarter of 2013. The 100,000 tons per annum plant on
Jurong Island will require an investment of up to $575
The plant will help serve the rising demand for tires
that is being driven by the trend towards greater mobility,
in particular among the growing middle-class in countries
such as China and India. In addition, the distinct properties
of butyl rubber make it an important product of choice
for the pharmaceutical industry, particularly in Asia.
In June 2009, LANXESS postponed the production start
of the plant until 2014 due to the effects of the global
economic crisis. This led to a period of de-stocking
and high volatility of customer ordering. However, demand
has stabilized in the last six months and the global
butyl rubber market is expected to grow again annually
by an average of more than three percent in the coming
years. LANXESS’ two existing butyl rubber production
facilities in Zwijndrecht, Belgium, and Sarnia, Canada,
are currently running at high capacity rates.
Global tire sales are expected to return to pre-crisis
levels in 2011 as the tire replacement market and new
vehicle production levels gradually recover. In order
to meet this growing demand, LANXESS’ customers are planning
capacity expansions in the BRIC markets.
LANXESS will lease about 200,000 square meters of land
from the JTC Corporation, an authorized agent of the
Singapore Ministry for Trade and Industry, to build the
plant. The neighboring petrochemical refinery belonging
to Shell will supply the feedstock for the key raw material
isobutene to LANXESS’ rubber plant as part of a long-term
agreement. In addition, the company will create about
200 highly-skilled jobs for the new facility and plans
to fill the majority of positions locally. At peak construction
times, around 1,500 workers will be employed at the construction
A complete evaluation of the existing process to manufacture
butyl was carried out for the new Singapore facility
and a radical redesign will be implemented. The process
is expected to be best in class. As a result, the butyl
plant will be more energy and resource efficient as well
as environmentally friendly.
Additionally during 2010, LANXESS will relocate the global
headquarters of its Butyl Rubber business unit to Singapore
from Fribourg, Switzerland, in order to better serve
the rising demand in Asia. The headquarters, including
all global management functions such as marketing, controlling
and supply chain, will have about 35 employees initially.
More than half of the company’s butyl rubber sales are
currently generated in the Asia region, with especially
China, India and South Korea showing strong growth rates.
“We will be focusing our attention especially on Asia
this year, which has already emerged strongly from the
economic crisis,” said LANXESS’ Heitmann.