Lanxess Will Build Lube Additives Plant In China

Lanxess plans to build a lubricant additives facility in Qingdao, China, at a cost that it says will be less than $10 million. The plant will initially employ about 50 people when it starts up in late 2008 at an existing installation of the firm's Rhein Chemie subsidiary.

"The new facility is a further step in our drive to increase profitable growth in Asia," says Lanxess Chairman Axel C. Heitmann. The firm commissioned three new plants in China in 2006, and sales in the country increased 21% in 2005, the most recent year for which financial data are available.

In Qingdao, Rhein Chemie and a joint-venture partner now employ about 160 people in the production of rubber additives. The addition of a lubricant additives facility there will allow Lanxess to participate in a 4.4 million metric-ton-per-year lubricants market, four times larger than the German market. Growing now at 8% per year, the market for industrial lubricants in China will double by 2012, Lanxess predicts. The new plant will focus on customized additive formulations.

"We want to share in the enormous growth taking place in Asia by making targeted investments," Heitmann says. Lanxess now employs 2,000 people in the region and expects to add an additional 1,000 in the next two years.