Germany-based specialty chemicals company Lanxess is strengthening its footprint in India by setting up new units in synthetic rubber and clean-water technology. It hopes to leverage the demand in Asia with these units. The company has made investments in a green-field facility for rubber chemicals and ion-exchange resins at Jhagadia in Gujarat.
Lanxess Chairman (board of management) Axel C Heitmann says: “India is developing as one of the fastest-growing markets in the world. We have accelerated our programmes to expand our presence here. Lanxess has a number of technology- and innovation-based products that offer greener and safer mobility. We are also heavily engaged in clean-water technology initiatives in the country.” Lanxess India is a leading supplier of specialty chemicals in India and the SAARC (South Asian Association for Regional Cooperation) countries.
With an annual capacity of 35,000 metric tonnes, Lanxess’ Gujarat plant will manufacture industrial water treatment products for power, food, semi-conductor and pharmaceutical industries. The setting up of new units marks the second phase of expansion for the pant in Jhagadia. A rubber chemicals production plant was the first project that got completed in March this year. Jhagadia is the second largest production site for Lanxess in India after Nagda in Madhya Pradesh.
Lanxess says it has developed a number of new products for more fuel-efficient tyres. These include ND-PBR, a new type of synthetic rubber which reduces the rolling resistance of tyres, and thus helps in fuel efficiency. Heitmann says: “We talk about a magic triangle: Grip, fuel-efficiency and durability. The complexity is that when you improve one property you tend to lose the other two. However, with this new product, all the three properties can be optimised at one go. It has already been launched globally, and tyre designers are working on implementing this in tyre designs.”
The market for synthetic rubber is expected to grow significantly due to increased mobility, and Lanxess says products like the ND-PBR will be much in demand. According to industry estimates, the Indian market is dominated by tyres for large vehicles (buses and trucks), which contribute nearly 60 per cent turnover of the tyre market. “More safer and fuel-efficient tyres are the next thing to follow. I anticipate more innovation-driven products will rule the Indian market. This technology is not yet widely used but it is taking shape,” says Heitmann. He says that in India, a lot of natural rubber is used and, as its production will keep reducing over the years, there will be an increasing demand for hi-tech synthetic rubber.
Lanxess says ND-PBR’s production requires a different manufacturing set-up and the company is currently expanding its global capacity for it. “We are thinking of a new plant in Asia in 2011. Though we are yet to finalise the location of this unit, it will have a capacity of 150,000 metric tonnes and will serve the Asian markets. We are focused on improving our existing facilities in Europe, North America and Asia,” says Heitmann.
Lanxess has set up an earnings target (before interest, taxes, depreciation and amortisation) of ¤1.4 billion for the next five years, which will be a massive increase from its existing profit margin of ¤900 million. “This will be fueled by developing countries like India and China,” says Heitmann.