Lanxess Continues Expansion in China

Investing in the Shanghai and Wuxi sites

13-Jul-2005

From 2006, the chemicals group LANXESS will launch production of high-tech engineering plastics in China. The Semi Crystalline Products Business Unit (SCP) is investing EUR 20 million in new production facilities at the Wuxi site to produce high-tech plastics. The new plant will create up to 100 new jobs.

"This investment underscores our clear strategy of making profitable growth a priority. Demand in China for high-tech plastics is growing at a double-digit percentage rate each year. Thanks to the new plant, we'll be increasing sales of our high-performance polymers Durethan and Pocan by 50 percent in the next five years," explained Dr. Axel C. Heitmann, Chairman of the Board of Management of LANXESS AG, in Shanghai.

Annual production of 20,000 tons of Durethan and Pocan

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Approx. 20,000 tons of high-tech engineering plastics will be produced each year at the LANXESS Wuxi Chemicals Ltd. site, roughly 120 kilometers north-west of Shanghai, once the first section of the plant has been commissioned in 2006. If demand continues to grow unabated, capacity can be expanded in further construction stages as necessary.

Market growth for Pocan and Durethan in Asia currently stands at around eight percent, and in China at 13 percent. High-tech engineering plastics are used in the automotive industry, electrical engineering, electronics and the domestic sector.

EUR 5 million invested in new Technology Center in Shanghai

"China is becoming increasingly important for us as a technology location as well," said Dr. Heitmann, mentioning the investment of EUR 5 million in a new Technology Center in Shanghai for the Technical Rubber Products Business Unit. With this targeted investment and the transfer of the Technology Center from Singapore to Shanghai, LANXESS will be able to meet the needs of the market and its customers even more effectively, he said.

In Wuxi LANXESS also operates production facilities for manufacturing leather chemicals and the largest leather product research and development center in Asia.

Focus on China is of central strategic importance

In addition to these new operations, numerous other projects are currently running in China:

- LANXESS is strengthening its leading position on the Chinese tire market in a joint venture to produce rubber chemicals with Chinese partner TongFeng and established chemicals producer Xinda. The joint venture is scheduled to start production in the second half of 2006.

- A joint venture with Weifang Yaxing Chemical Company Ltd. is enabling LANXESS to become a leading company on the Chinese hydrazine hydrate market. As part of this venture, a complete production plant was dismantled in the USA and shipped to China. It is currently being constructed in Weifang in Shandong province. Production of hydrazine hydrate should begin by the end of 2005.

- Leather chemical production in Wuxi has been doubled. To this end, two new production plants were built in a record 15 months and went on stream in March 2005, allowing LANXESS to reinforce its leading position on the Chinese leather chemicals market.

- At the beginning of 2005, LANXESS and Sino Surfactant concluded an agreement on the toll manufacturing of textile processing chemicals. Under this cooperation agreement numerous chemicals will be produced in Shanghai for the worldwide textile industry.

In China LANXESS boasts production facilities in Shanghai, Qingdao, and Wuxi. It has sales offices in Shanghai and Hong Kong. LANXESS employs a total of 540 staff in China.

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