Lanxess expands specialty materials operations in Chinese market
Lanxess Group, a German specialty chemicals company, invested 20 million euros ($23.47 million) in building a new plant to produce high-performance plastics in Changzhou, Jiangsu province, as it expands its businesses in China.
The plant is expected to launch production in April 2019, with an annual production capacity of up to 25,000 metric tons of high-tech plastics for the automobile, electrical and electronics sectors, the company said at a news conference on Thursday.
Lanxess has operated a similar plant in Wuxi, East China’s Jiangsu province since 1995.
Matthias Zachert, chairman of Lanxess’ board of management, said China is one of the largest automobile markets and a global leader in electric vehicles. Lanxess wants to make use of these opportunities and expand its presence in China, he said.
A total of 85 million vehicles have been sold around the world so far this year. Among those, a quarter were sold in China, according to the company.
Annual vehicle sales in the country are expected to account for one third of the global total by 2025, it said.
Lanxess’ innovative materials can replace the heavy metal parts in vehicles to reduce their weight, fuel consumption and emissions.
Up to 50 percent of the weight can be saved in various components, such as engines, door structures, pedals, front ends and the cockpit.
Lanxess’ materials have also been applied in hybrid and electric vehicles. Some components are involved in highvolume production, including the carriers and cell holders for batteries and sensors, and enclosures for electric motors.
China has vast electrical and electronics industries. Lanxess’ year-on-year growth rate in these sectors is set to reach 9 percent in China this year, according to the company.
Michael Zobel, head of Lanxess’ high-performance materials business unit, said: “The establishment of the Changzhou plant will help to enlarge the global network of compounding plants, and promote the research and development of highly-refined plastics.”
The plant is the second production site Lanxess has built in Changzhou’s Binjiang Chemical Park. The first started operation in 2015, producing leather-related chemicals and synthetic rubber, and currently employing 350 staff members.
“Lanxess placed the new factory in Changzhou in response to the government’s call for chemical enterprises to enter industrial parks,” said Ming Cheng Chien, CEO of Lanxess Greater China.
“We will integrate the resources in Changzhou and achieve cross-divisional synergy to provide high-quality services and solutions for Lanxess’ old and new customers,” Chien said.
Lanxess’ plastic business operates in many cities around the world, including Germany’s Dormagen, Krefeld-Uerdingen and Hamm-Uentrop, Wuxi in China, Jhagadia in India and Gastonia, North Carolina in the United States.
About Lanxess
As a leading specialty chemicals company with sales of 7.7 billion euros in 2016 with about 19,200 employees in 25 countries, Lanxess is currently represented in 74 production sites worldwide.
The core business of Lanxess is the development, manufacturing and marketing of chemical intermediates, additives, specialty chemicals and plastics. It cooperated with Saudi Aramco to found a joint venture Arlanxeo, and thus becoming a major supplier of synthetic rubber.
In January 2005, Lanxess was initially listed on the Frankfurt Stock Exchange and its subsidiary Lanxess Chemical (China) Co Ltd officially began operations.
Today, it has 17 subsidiaries including three joint ventures, nine production sites, as well as nine research and development centers with about 1,900 employees in China.
The company said it will work closely with local partners to develop market-oriented solutions that meet local market needs.
Following an excellent third quarter of 2017, Lanxess is on course for its highest earnings in its history. Global sales increased by 25.1 percent or 483 million euros to 2.4 billion euros. A year earlier, they amounted to 1.9 billion euros. Earnings before interest, tax, depreciation and amortization, preexceptional items improved by 35 percent to 347 million euros, compared with 257 million euros in the third quarter of 2016.
“Lanxess is in full swing. Our clear strategic focus on high-margin specialty chemicals is increasingly paying off, and in operational terms we are performing very well in our new setup. It is particularly pleasing that all regions and all our specialty chemicals segments are seeing considerable earnings growth,” said Zachert.
Social Responsibility
Lanxess has held a university research competition for three years, related to managing and protecting water resources in China.
A total of 18 projects from 12 universities — such as Tsinghua University, Shanghai Jiaotong University and Tongji University — were selected to launch a threemonth research program into water resource protection and utilization this year.
Lanxess and China WTO Tribune — a monthly magazine focusing on the business events related to China and the World Trade Organization — released the first white paper concerning sustainable water management in China on Thursday.
The paper elaborates on water industry development with a collaborative and innovative approach.
Lanxess plans to build a sustainable clean water ecosystem with governments, industrial associations, professionals, research institutions and supply chain partners through cross-border collaboration and innovation in the future.
Our clear strategic focus on highmargin specialty chemicals is increasingly paying off.”
Matthias Zachert,