Lanxess invests €90m in plastic materials business

Lanxess invests €90m in plastic materials business
Lanxess yesterday announced a series of investments, totalling €90m.

This covers new polyamide compounding facilities in the US and India, as well as the expansion of upstream production facilities caprolactam (€35m) and glass fibres (€15m), both used in its semi-crystalline products (SCP) business unit, in Antwerp.

Since breaking away from Bayer in 2004, Lanxess has increased caprolactam (CPL) capacity to 220,000 tonnes per year from 50,000 tonnes per year. The company repaired its glass furnaces in 2010 – and will do again in 2013 – to increase annual capacity by 10% to 66,000 tonnes.

One third of the caprolactam and glass fibre products are sold to external customers and the other two-thirds are used by Lanxess itself in its PA and PBT SCP compounds.

SCP business unit head Dr Michael Zobl said this gives customers security of supply - important in a “world of volatility”.

Outside Europe, Lanxess is investing €10m each in new plants in North Carolina, the US, and Gujarat, India. Each of these new two plants will have 20,000 tonnes per year compounding capacity when they come on stream in 2012 and will draw upon polyamide 6 polymerised at the Hamm-Uentrop plant in Germany from caprolactam made by Lanxess in Antwerp.

The company is considering investing in a compounding site in an unspecified South American country but COO Dr Werner Breuers said that the company has yet to make a final decision.

In terms of existing plants, Lanxess is investing €10m each in plants in Hamm-Uentrop, Germany and Wuxi, China to increase capacity. In Wuxi, Lanxess has added a third line to increase compounding capacity to 60,000 tonnes per year, up from 20,000 tonnes per year in 2005.

Breuers said the market for high-tech plastics was worth €7bn in 2010 and that the market for high-tech plastics in cars is expected to grow 7% to 2020. Automotive applications is an important market area for Lanxess, accounting for around 50% of sales of SCP compounds (20% go to electrical and electronics applications).

One recent automotive innovation was frontends, made from a glass fibre reinforced PA6 and metal hybrid, which are 40% lighter than conventional all-steel frontends.

Hartwig Meier, head of SCP product and application development, said there are now 60 million hybrid frontends on more than 70 car models, including the new 2011 Mercedes Benz A- and B-Class cars.

The company has also developed an all-plastic frontend for the new Audi A8 car, comprising formed polyamide composite inserts made from continuous fibre reinforced "organic sheet".

Responding to an enquiry about whether the present euro crisis will have a negative effect on Lanxess business, Breuers said that Lanxess overall sales had increased by 40.8% to €7.1bn in 2010 and by 23% in Q2 2011, thanks to both "strong" pricing and volume growth. This "strong operational performance" is still ongoing and "there are still no reasons to revise expected growth downwards", Breuers stated.



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