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LANXESS 06/03/2007

LANXESS invests in new site in China

Leverkusen - As part of its Asia strategy, the LANXESS chemicals group is building a new plant for the manufacture of lubricant additives in Qingdao, China. The production facility, which belongs to LANXESS’s subsidiary Rhein Chemie, will go on stream at the latest in the fourth quarter of 2008 and will initially employ 50 people. It is estimated that the amount in euros to be invested will be a single-digit million value. "The new facility is a further step in our drive to increase profitable growth in Asia," said LANXESS Management Board Chairman Dr. Axel C. Heitmann. "We are rigorously expanding our presence here."

At the new facility Rhein Chemie will focus on the manufacture of customized additive formulations for lubricants with the product name Additin®. These not only improve performance and service life in industrial applications but also aid environmental protection as they can replace products currently used in China that impact on the environment.

With an annual volume of around 4.4 million metric tons, the market for lubricants in China is about four times as big as in Germany. Annual growth is estimated to be eight percent. The industrial lubricants segment, which is of particular interest to Rhein Chemie, is likely to double by 2012 with an even higher growth rate at the current time of one million tons per year.

In Qingdao Rhein Chemie has been producing rubber chemicals since 1999 within a joint venture. Capacity of polymer-bound chemicals (Rhenogran) was doubled last year with the commissioning of a second production unit. LANXESS currently employs more than 800 staff in China, of which 160 work for Rhein Chemie in Qingdao.

Asia-Pacific region of central importance

The Asia-Pacific region is of central importance to LANXESS. In 2005, the company recorded an increase in sales in the region of around 21 percent compared with 15.8 percent in 2004. The strong sales growth also continued in the first nine months of 2006.

This development was made possible through the start-up of new and additional production capacity. In China alone the chemicals company commissioned three new facilities in 2006. In future LANXESS will continue to focus on achieving profitable growth in the Asia-Pacific region. "We’re keeping a sharp lookout for opportunities," said Heitmann. "We want to share in the enormous growth taking place in Asia by making targeted investments."

To advance its expansion plans in Asia, LANXESS will take on up to 1,000 new employees in the region in the next two years. LANXESS currently employs more than 2,000 people in the region.

More information on the LANXESS Asia strategy can be found at: http://www.lanxess-goes-asia.com