Specialty chemicals group LANXESS has announced plans to build a butyl rubber production plant in Singapore with an annual capacity of up to 100,000 metric tons. It is due to be commissioned in 2011.

The plant will be constructed in the Tembusu Cluster of Jurong Island, a man-made island of around 3,000 hectares to the southwest of Singapore. The investment project is worth some €400 million, making it the largest ever in the history of LANXESS.

“LANXESS is already one of the market leaders in the butyl rubber business, which is of strategic importance to us,” said Ron Commander, head of the Butyl Rubber business unit at LANXESS. “This new production plant in Singapore is in response to the growing demand for this product. The booming economic region of Asia is playing a particularly important role in this. Our sales to customers in this region have risen by around 45 percent since 2004.”

Singapore was chosen following a detailed analysis of a wide range of location factors. “Probably the overriding argument in Singapore’s favor is the excellent availability of raw materials for butyl rubber production,” said Commander.

LANXESS has secured supplies of the key raw material through a long-term contract with Shell Eastern Petroleum (Pte) Ltd. before construction has even started. Beginning in 2010, Shell will supply Raffinate 1 — a product created through butadiene extraction — by pipeline from its butadiene extraction unit on neighboring Bukom Island, which is part of the Shell Eastern Petrochemicals Complex (SEPC). Pieter Eijsberg, general manager of SEPC, said: "We are delighted that LANXESS has chosen Shell as a significant partner in its expansion plans, and this agreement clearly underlines the industry's confidence in our C4 business."

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