Industry News

LANXESS opens new plant in China

Published on 2007-04-24. Author : SpecialChem

Leverkusen/Shanghai -- Chemicals group LANXESS opened a new plant in Shanghai as part of its Asia strategy launched in 2006. This is the Group's second production facility for inorganic pigments in China.

LANXESS opens new plant in China

The plant with an annual capacity of approximately 20,000 tons will be operated by the Inorganic Pigments business unit to supply raw materials for the production of inorganic pigments in Shanghai, which started in 1996. LANXESS had previously sourced these raw pigments from suppliers.

"The new facility is an important step in our drive to increase our profitability in Asia," said LANXESS Management Board member Dr. Ulrich Koemm at the inauguration. "With this backward integration, we can significantly improve our profitability in this segment."

Demand for the Inorganic Pigments business unit's products is rising considerably as a result of the ongoing construction boom in China. In the last five years, the business unit has registered average annual sales growth of 15 percent in China.

To quickly and efficiently ensure the economic supply of raw materials, LANXESS rented a new production facility. "With its significant time advantages and attractive financing conditions, the leasing model enabled us to gain yet another competitive advantage in China," said Koemm.

LANXESS iron oxides are used for the coloration of such things as roofing tiles, paving stones and precast concrete. These pigments have high tinting strength, are light-stable and environmentally friendly. The most prominent example for the use of LANXESS iron oxide pigments is the coloration of the new train station in Lhasa. Opened in 2006, the terminus of the Qinghai-Tibet Railway is decorated in concrete paints formulated with LANXESS pigments. With a production capacity of more than 300,000 tons per year, LANXESS is one of the leading producers of inorganic pigments.

The Inorganic Pigments business unit belongs to the Chemical Intermediates segment, which achieved total sales in 2006 of EUR 1.53 billion.

The Asia-Pacific region is of crucial significance for LANXESS. With sales increasing to EUR 1.23 billion, Asia accounted for nearly 18 percent of the Group's sales in 2006. The drivers of this growth are the Chinese and Indian markets, where double-digit increases in sales were recorded. As part of its "LANXESS goes Asia" initiative launched in April 2006, the Leverkusen-based chemicals group has already brought three new plants online in China. The company also plans to hire up to 1,000 new employees in Asia by 2009.

Forward-looking statements

This news release contains forward-looking statements based on current assumptions and forecasts made by LANXESS AG management. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development or performance of the company and the estimates given here. The company assumes no liability whatsoever to update these forward-looking statements or to conform them to future events or developments.


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