Lanxess to invest S$350mn in world's largest 'green tire' plant

The German chemical maker plans to build a plant that will annually produce over 140,000 metric tons of synthetic rubber.

Lanxess is investing some S$350 million in Singapore to build the world's largest manufacturing plant for (neodymium polybutadiene) specialised rubber. This synthetic rubber material is used for the manufacture of high performance and eco-friendly tyres.

The move comes as the company rides on the booming tyre market in Asia. Only a year after breaking ground for its butyl rubber plant in Jurong Island, Lanxess is giving its large-scale investment a follow-through.

The German-listed company is building a facility that will annually produce 140,000 metric tons of a new type of synthetic rubber. This material is then used to make "green tyres" that can reduce fuel consumption and carbon dioxide emissions.

That production capacity is about a fifth of the 800,000 metric tonnes per annum produced by the company's six manufacturing plants globally.

It says Singapore would be a strategic location to serve the environment-friendly and fast-growing "green tyre" market in the region. Asia accounts for about 50 per cent of global demand for synthetic rubber.

Mr Ian Wood, managing director of Lanxess, said: "There's a voluntary scheme already in force in Japan in terms of tyre labelling. South Korea is due to bring in some mandatory regulations and we believe countries like China and India will probably move in this direction in the next two to three years as well."

The move is also consistent with the company's target of growing its earnings by about 80 per cent in 2015 or approximately €1.4 billion (S$2.5 billion).