(EnergyAsia, September 14 2012, Friday) — Germany’s specialty chemicals company LANXESS began construction of its 200-million-euro neodymium-based performance butadiene rubber (Nd-PBR) plant on Singapore’s Jurong Island early this week.

When completed in the first half of 2015, the 140,000 metric tons/year plant will be the largest of its kind globally, producing raw materials for use in energy efficient and safety-enhance green tires.

Sited next to the company’s butyl rubber plant, the Nd-PBR unit will add about 100 quality jobs, boosting the total to nearly 500 in Singapore.

Used in the treads and sidewalls of green tires, Nd-PBR helps reduce rolling resistance and increase the fuel efficiency of a tire. The chemical is highly resistant to abrasion and plays a significant role in making tires safer and more durable.

The Petrochemical Corporation of Singapore (Private) Limited will supply the bulk of the butadiene raw material needed to produce Nd-PBR, while TP Utilities Pte. Ltd, a wholly owned unit of Tuas Power Ltd, will provide steam to the new plant.

Foster Wheeler Asia Pacific Pte Ltd has been selected to carry out the detailed engineering and construction of the plant.

LANXESS said it is the global market leader for the production of Nd-PBR. Global demand for the product is growing at about 10% a year, while in Asia, it is rising by 13% as a result of an increasingly affluent middle class which is buying cars and better tires.

According to LANXESS, the EU will launch the mandatory tire labeling in November.

“Tires will be graded from A to G according to their fuel efficiency and wet grip. Rolling noise is also measured. Therefore, the new legislation provides more transparency for consumers by highlighting the added value of green tires. According to TU Munich, the market share of class A and B tires in the EU is expected to reach 20% to 30% in 2017 and then jump to 70% to 80% in 2022,” it said.

Japan and South Korea were the first countries in the world to introduce a label system. After a voluntary tire label was introduced in Japan in January 2010, South Korea launched its voluntary labeling in November 2011 and will introduce a mandatory label in December 2012. Other countries like Brazil, the US and China are expected to follow shortly.

Speaking at the plant’s groundbreaking ceremony, Axel C. Heitmann, LANXESS’s chairman, said:

“We are delighted to be bringing another major rubber investment to Singapore, which underlines our commitment to ‘green mobility. It is our company’s focus on technology that makes it possible to reduce rolling resistance in tires and thus fuel consumption. This is good news for the consumer and the environment.”

Leo Yip, chairman of the Economic Development Board, said:

“We are delighted with LANXESS’ decision to locate its new Nd-PBR plant in Singapore. This is a significant investment for both LANXESS and Singapore as it will not only be the first Nd-PBR plant in Singapore, but also the largest of its kind in the world.

“To succeed in Asia, chemicals companies not only need excellent connectivity to key markets, but access to a skilled workforce and strong physical infrastructure. Global chemicals companies, like LANXESS, have found Singapore to be a strategic location from which to orchestrate their business growth strategies in Asia and beyond.”

Among those present at the plant’s groundbreaking ceremony were Angelika Viets, Germany’s Ambassador to Singapore, senior LANXESS executives including Rolf Stomberg, Holger Hueppeler, Werner Breuers, Joachim Grub and Jose Chytry, and Julian Ho of the Singapore EDB.