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2007-06-18 News Release

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Plastics and rubber units share sales totals

The Performance Rubber and Engineering Plastics segments of LANXESS contribute more than 50 per cent of total sales.

Innovation requires investments and LANXESS, one of the leading European chemicals suppliers, is backing innovation and is ramping up investment in research and development following a successful round of restructuring and consolidation. "At approximately EUR 100 million, our R&D budget for 2007 has increased by 15 percent over the previous year. With that investment, we are primarily targeting high-growth markets of the future as well as future technologies that promise a rapid return on investment," said Dr. Werner Breuers, member of the LANXESS Board of Management, at a press conference in Dusseldorf in the run-up to the K 2007 plastics and rubber trade fair. The company earns a major share of its sales with thermoplastic resins and rubber. By themselves, the Performance Rubber and Engineering Plastics segments contributed more than 50 percent to total sales in 2006. And this is without taking into account the business units Rhein Chemie and Rubber Chemicals.

LANXESS aims to make its investments in research as efficient as possible while maintaining a consistent market focus. To this end, the company emphasizes close cooperation with customers, suppliers and academic research. According to Dr. Breuers, the continuous improvement of production processes is of crucial importance particularly during times of high energy and raw material costs. That is one reason why nearly a quarter of current R&D projects at LANXESS focus on process research. But efficiency in research also means strict project and risk management. "We want to achieve maximum value creation in a short period of time with minimum investments. Accordingly, we expect four-fifths of our research projects to lead to market-ready products within two years," explained Breuers. "This of course means we have to focus on projects with manageable, medium-sized risks. We can do this primarily by concentrating our efforts on the incremental improvement of existing products and applications. Currently around three-quarters of our R&D projects fall into this category."

Core Business, Polymers and Polymer Additives - Plastics and rubber make up the lion's share of LANXESS sales. Click Here for High resolution image. photo: LANXESS AG

Lustran Polymers - Market approach successfully adapted
The Lustran Polymers business unit of LANXESS successfully adapted its business model, profiting from its unique position in the international market for ABS and SAN. It is ranked number 1 ABS producer in Europe and India, and number 2 in the NAFTA region. Throughout the world Lustran Polymers is focusing its ABS business on products colored to meet customers’ requirements and on specialties, adhering strictly to a price-before-volume strategy. We offer a wide range of products tailored to a variety of specific uses that comply with customers’ exact specifications. "In doing so we are distancing ourselves from many of our competitors whose portfolios cover only a basic range and who generally leave coloring to the processor," said Dr. Hans-Joachim Kogelnik, head of Lustran Polymers.

The business of Lustran Polymers has a strong regional orientation, with autonomous management teams empowered to act like local firms. Production capacity and product portfolios as well as research and development activities are all adapted to local conditions. "Already well over 90 percent of the plastics we produce in a region are also sold and used in that region," adds Kogelnik.

In light of the above-average growth of ABS and SAN in India and the whole Asia region, Lustran Polymers plans to increase capacity at its Indian production sites of Moxi, Katol and Nandesari from 20,000 to 80,000 metric tons in the coming year - with the option of expanding production volume to a total of 100,000 metric tons. In Map Ta Phut in Thailand, an extra 10,000 metric tons p.a. is currently being added to the site’s ABS compounding capacity.

One example of Lustran Polymers' expertise in innovation and development is Triax DP 3157. The online coatable polyamide + ABS blend for automotive body parts with class A surfaces was developed in a joint project with BMW. It is used in the fenders of the BMW 3-series coupé. "The material has met with a very positive response. Numerous projects are already running with well-known OEMs around the world," announced Kogelnik.

An additional focus of the presentations at K 2007 will be Lustran ST 4566 and Centrex ST 4766. With these new ABS and ASA plastics, matt soft-touch surfaces can be applied to ABS materials by coextrusion or lamination. "With these materials, we are targeting soft-touch components used in the interiors of trucks, buses and cars, as well as the outsides of boats, agricultural machinery and construction vehicles," explained Kogelnik.

Performance Rubber and Performance Chemicals - Problem solvers for the rubber industry LANXESS is one of the world’s largest producers of synthetic rubber. The company’s rubber business is divided between the Performance Rubber and Performance Chemicals segments. Rubber materials used nowadays in technically extreme applications must meet increasingly strict requirements. Suppliers in numerous markets are also facing growing cost pressure, which calls for particularly cost-effective rubber products. "At LANXESS, we have the right answer to all these challenges - what’s more, we are highly target-oriented in developing new markets for rubber raw materials and additives," stated Dr. Günther Weymans, head of the Technical Rubber Products business unit.

According to Weymans, LANXESS produces rubber and rubber chemicals in eight world-scale production facilities in Europe, North America, India, South Africa and now also in China. "Our facilities are ultra-modern and take excellent advantage of economies of scale," added Weymans. At the same time, the company attaches great importance to steadily expanding its strong position on the global market. Thus, the capacity of the butyl rubber plant in Sarnia, Canada will be boosted by more than 40 percent, while the plant capacity in Antwerp will be increased by about 10 percent. Production of the chloroprene rubber product Baypren is set to increase too. "We are currently applying for a permit to expand our production facility in Dormagen to increase capacity there to 100,000 metric tons a year," said Weymans.

Now more than ever, LANXESS is setting its sights on innovation for its rubber and rubber raw materials business. "Wherever we identify promising business segments, we make an express investment in research and application technology, and that means globally," remarked Weymans. As with its production facilities, the company has a worldwide presence in all key markets with its technical centers and laboratories for application technology. "We are constantly expanding our worldwide research network: another center is currently in the planning for Qingdao, China," explained Weymans.

Among other new product developments in the rubber division, Weymans mentioned Nanopren in particular. This emulsion styrene butadiene rubber is a gel with a particle size in the nano range. Tires made with a tread compound enhanced with Nanoprene particles display significantly improved grip in dry road conditions and improved abrasion resistance, without compromising on rolling resistance and wet grip.

One of the new products from the Performance Chemicals sector is Renacit 9203. This peptizer makes the mastication of natural rubber easier without carbon black. It was developed for manufacturers who put carbon black as filler material into their rubber mixture only after mastication, but who still want to increase its processability before that point.

Semi-Crystalline Products - Growth in the Asian market
With Durethan and Pocan, the Semi-Crystalline Products business unit at LANXESS ranks among the five largest suppliers of polyamides and polybutylene terephthalates worldwide. "We want to further expand our outstanding position in materials and system solutions," explained Dr. Hubert Fink, head of the business unit. The company expects particularly strong growth for engineering plastics in the Asian market, which currently stands at seven percent annually - and more than ten percent in China. In the current year, the Semi-Crystalline Products segment is already forecast to achieve over ten percent of its sales in the Asia-Pacific region. "We are confident that we can increase this share to more than 25 percent over the next four years," said Fink. We will be helped by the fact that we will shortly be putting a second compounding line on stream in Wuxi, China. This plant will double our capacity for producing Durethan and Pocan locally to about 40,000 metric tons per year."

One prerequisite for success in the market is strategic investments to strengthen innovative capability. We have set up new technical development centers in Dormagen and Wuxi in order to support customers the whole way, from the initial idea to the finished component. The new Research und Development Testing Center (RDTC) in Wuxi concentrates particularly on speeding up the development of new grades of Durethan and Pocan by carrying out comprehensive material tests. "This R&D center is not only a first step towards building up an effective research network in China and Asia. It also strengthens our global chain of development," explained Fink.

As one example of the innovative expertise of Semi-Crystalline Products, Fink presented new injection-molded structural inserts with Durethan as a carrier material which increase the stiffness of the body of the C4 Picasso model from Citroën, thereby significantly improving passenger safety in the event of a crash. The inserts also contribute to significant weight-saving. "Our development partner benefited particularly from the fact that we were able to supply strain-rate-dependent data for our materials obtained from high-strain tensile tests in conjunction with a high-speed camera." With the aid of sophisticated simulation programs, it was possible to evaluate the crash behavior of the inserts under realistic conditions from their characteristic values.

Read a recent press release about - LANXESS looks to achieve VDE material certification for all their flame-retardant materials that have a Yellow Card listing with the U.S. testing institute Underwriters Laboratories.

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