R&D For The Marketplace

STRATEGY

When Lanxess was spun off from Bayer in 2005, it had to press on alone with a portfolio of businesses its former parent cast off. Cut off from one of the largest chemistry research organizations in industry, it also had to go it alone in R&D.

In New York City late last month at an event highlighting Lanxess' rubber business, Ulrich Koemm, who oversees R&D on the firm's management board, outlined his R&D strategy. A key feature of this strategy, he said, is to focus on short-term projects that take a year or two to bear fruit, rather than on more speculative basic research.

About 70% of Lanxess' R&D projects are meant to improve existing products, he pointed out. "We are clearly setting our focus on improvement rather than on de novo development," Koemm said. "We have to come up quickly with market-ready solutions, and we cannot afford to spend enormous amounts of money before actually starting product development."

Most of the technologies that Koemm outlined at the meeting underscored the point. For instance, he described neodymium-catalyzed butadiene rubbers that have a narrower molecular weight distribution than other butadiene rubbers, leading to better fatigue resistance and reduced roll resistance.

Koemm discussed a new Lanxess technology that can boost the isoprene cross-linking content of butyl rubber from the conventional 2% up to about 8%. The technology supports the use of butyl rubber in tire treads, where it offers improved traction without sacrificing abrasion resistance.

Lanxess is also employing Grubbs' catalysts licensed from Materia to shorten polymer chains in hydrogenated nitrile rubber via metathesis. The resulting rubber, Koemm said, is easier to process.

Last year, Lanxess spent $126 million on R&D, about 1.4% of its sales. In contrast, Bayer's R&D spending was 5.5% of sales, and Dow Chemical and DuPont spent 2.3% and 5.3%, respectively.

Koemm admitted that Lanxess' R&D spending is low compared with that of many of its peers. But he also pointed out that there isn't much improvement that R&D can bring to bear in some Lanxess businesses, such as basic chemicals.

He also argues that money spent on basic research into, say, a new-to-the-world polymer, is often wasted. "The probability that Lanxess or one of our competitors is developing within the next year a new polymer that is superior to one of the existing polymers is not very big," he said.

Koemm said Lanxess' task instead is to address shorter-term questions posed by the marketplace. "You don't find answers to that when you are doing research on a very basic level. Then you need to invest five years, and you need another five years to design products. And no one is giving us 10 years to answer questions," he said.

But Koemm expects the company to take on additional longer-term projects when it wraps up its current restructuring program. "With more success and with better stability, we will still focus on these short-term projects, but we can add some projects that need a little bit longer period of time to be successfully developed," he said.