LANXESS drives growth forward in India

06-17-2010: Specialty chemicals group LANXESS remains committed to its growth strategy in the BRIC states and plans to expand its new production site in India. The Group is now set to build compounding facilities with an initial capacity of 20,000 metric tons/year for the production of the engineering plastics Durethan and Pocan at Jhagadia in the Indian state of Gujarat.

Construction of the new compounding facilities will begin in Fall this year and they are due to go on stream with a workforce of 60 at the start of 2012. “With an investment of over EUR 10 million, we will be strengthening our position as a premium supplier of high-tech plastics in the Asia-Pacific region. As one of the fastest-growing markets for high-tech plastics, India offers the ideal environment for this,” said Hubert Fink, head of the Semi-Crystalline Products business unit at LANXESS.

Together with the compounding plant in Wuxi, China, the new facilities will supply the entire Asia-Pacific region with Durethan and Pocan. LANXESS recently announced that it would be expanding capacity for the production of these high-tech plastics in Wuxi. This expansion will be completed by mid-2011 and will raise capacity in Wuxi to 60,000 metric tons per year.

In terms of its potential, India is on course to become the third largest consumer market for engineering plastics after the U.S.A. and China. The Indian economy as a whole is predicted to grow by around eight percent in the medium term, while the automotive sector is forecast to increase by as much as ten percent this year and in 2011. The electrical and electronics industries on the subcontinent are expected to expand by around ten percent in the medium term. Large numbers of global automakers, their suppliers and numerous international producers of electrical and electronics goods are already active in India or are investing in new plants. Many of these companies are already key customers of the Semi-Crystalline Products business unit. “Our new facilities in Jhagadia will enable LANXESS to supply its customers with high-tech plastics directly and quickly using short distribution channels,” added Fink.

The Jhagadia site has particular geographical advantages for Semi-Crystalline Products. It is not far from Thane near Mumbai, India's main automotive industry center, and is already home to numerous plants operated by the business unit's customers. Excellent links to international ports ensure a reliable supply of feedstocks to the compounding plant and fast delivery to customers outside India. The state of Gujarat is also one of India’s leading chemical regions, which means very highly skilled technicians and engineers are available on the regional labor market.

To date, LANXESS has invested a total of around EUR 50 million in the 13-hectare Jhagadia site. A new facility for ion exchange resins is due to start production at the end of this year. LANXESS will then have a workforce of approximately 250 employees at this site at the end of 2010.

The first construction phase for the new Jhagadia production site was concluded at the beginning of March with the completion of a facility for the production of rubber chemicals. Production has now started as planned after relocation of the Thane operations in the state of Maharashtra.