(EnergyAsia, June 9 2011, Thursday) — Germany’s specialty chemicals company Lanxess said it will invest 200-million-euro in a new neodymium polybutadiene rubber (Nd-PBR) plant on Singapore’s Jurong Island.

The 140,000-metric-ton-per-year plant, the largest of its kind in the world, is expected to come onstream in the first half of 2015, creating about 100 jobs.

Lanxess said it has signed a memorandum of understanding (MOU) for the long-term purchase of butadiene from the Petrochemical Corporation of Singapore Private Limited (PCS) while it will supply raffinate II to PCS. Both chemicals will be supplied through pipeline.

Lanxess needs butadiene to produce Nd-PBR while raffinate II will be one of the products from its butyl rubber plant due to start up on Jurong Island in the first quarter of 2013. The new facility will be located next to the company’s 400-million-euro butyl rubber plant. (US$1=0.68 euro).

The Nd-PBR component in a tire reduces energy consumption and abrasion, thus contributing significantly to road safety. Lanxess said its research and development scientists invented the Nd-PBR technology in Germany.

Lanxess said it chose Singapore over competing sites around the world on account of the benefits offered by Jurong Island, the country’s excellent infrastructure, pool of highly-skilled workforce, large sea port and close proximity to growth markets.

The MOU was signed by Lanxess CEO Axel C. Heitmann and Leo Yip, chairman of the Singapore Economic Development Board (EDB) in connection with the first official visit of German Chancellor Angela Merkel to Singapore.

Mr Heitmann said: “It is only one year since we broke ground for our butyl plant in Singapore. Now we are ready to move forward with the second largest investment project in our history here. The dynamic Asia region is a key cornerstone of our mid-term growth strategy.”

PCS managing director, Akira Yonemura, said: “We are delighted to have reached this MoU with Lanxess to supply the key feedstock for its state-of-the-art synthetic rubber plant and to purchase raffinate II from them.”

Mr Yip said: “We are delighted with Lanxess’s intention to build its new Nd-PBR plant in Singapore. Lanxess’s expansion plan is a testament to Singapore’s value as a strategic location for high value manufacturing activities.”

Manohar Khiatani, CEO of JTC, said: “This new Lanxess facility will be the company’s second investment on Jurong Island, and will be a key downstream plant that will further strengthen the value proposition that Jurong Island offers to the chemical industry.”

Lanxess said construction of the butyl rubber plant is progressing according to schedule, with engineering and soil preparation work completed and the installation of infrastructure and steel underway.

The company said it has completed one million man-hours of work without loss-time incident involving 750 employees.

Lanxess said it is the global leader in making synthetic rubber for high-performance ‘green tires’, the fastest growing sector in the tire industry, expanding by about nine percent a year. In Asia, the sector is growing by 14% a year.

The world’s leading tire manufacturers, who are supplied by Lanxess, are responding to this demand by expanding production in Asia.

Lanxess said the sector is being driven by increased motorisation, growing demand for higher environmental and safety standards in performance tires, and tightening European Union legislation.

As of 2012, all new tires sold in Europe have to be labelled for fuel efficiency, wet grip and external rolling noise. Japanese tire manufacturers voluntarily introduced tire labelling at the start of 2010 while South Korea is considering the same.

Mr Heitmann said: “The far-sighted approach by the EU to introduce tire labelling, with the support of the German government, is a positive example of how environmental policies can benefit consumers and spur economic success. The initiative will ultimately lead to more innovation within the German chemical and tire industries, while at the same time creating jobs.”