Lanxess to set up world’s largest Nd-PBR plant in Singapore, eyes growing market for green tyres

Mumbai, September 11, 2012: German specialty chemicals company Lanxess has broken ground for its new neodymium-based performance butadiene rubber (Nd-PBR) plant in Singapore today. It is investing around 200 million euros (Rs 1,415 crore) in a 140,000 metric tonnes per annum facility on Jurong Island. The facility will be the largest of its kind globally and will serve the growing market for ‘green tires’, especially in Asia. About 100 jobs will be created. The plant is expected to start up in the first half of 2015.

Nd-PBR is used in the treads and sidewalls of green tires. It helps reduce the rolling resistance and increase the fuel efficiency of a tyre. Nd-PBR is highly resistant to abrasion and plays a significant role in making tires safer and, above all, more durable.

“We are delighted to be bringing another major rubber investment to Singapore, which underlines our commitment to ‘Green Mobility’,” said Lanxess chairman of the Board of Management, Axel C. Heitmann, at the groundbreaking event on Jurong Island. “It is our company’s focus on technology that makes it possible to reduce rolling resistance in tires and thus fuel consumption. This is good news for the consumer and the environment.”

The Petrochemical Corporation of Singapore will supply the majority of the key raw material butadiene needed to produce Nd-PBR, while Singapore’s TP Utilities will provide steam to the new plant.

Lanxess says it is the market leader for Nd-PBR used in green tyres, the fastest growing sector in the tyre industry, with an annual global growth rate of about 10 percent. Growth is even more pronounced in Asia at 13 percent per year. Demand is being driven by the megatrend mobility, above all in the regions of Asia and Latin America, as the middle class there becomes more affluent. In addition, demand will be accelerated by tyre labeling being introduced around the world.

November 2012 will see the launch of mandatory tyre labeling in the European Union (EU). Tyres will be graded from A to G according to their fuel efficiency and wet grip. Rolling noise is also measured. Therefore, the new legislation provides more transparency for consumers by highlighting the added value of green tyes. According to TU Munich, the market share of class A and B tyres in the EU is expected to reach 20-30 percent in 2017 and then jump to 70-80 percent in 2022.

Japan and South Korea were the first countries in the world to introduce a label system. After a voluntary tyre label was introduced in Japan in January 2010, South Korea launched its voluntary labeling in November 2011 and will introduce a mandatory label in December 2012. Other countries like Brazil, the USA and China are expected to follow in the coming years.

Lanxess has commissioned a study with Frost & Sullivan to examine how motorists in Singapore would benefit from green tyres. According to the study, their use on all vehicles in Singapore would result in a saving of 357,468 tonnes of CO2 as well as a saving of 146 million litres of fuel annually.

Synthetic rubber drives green tyres

Green tyres can reach their peak performance with formulations containing both Nd-PBR and solution styrene butadiene rubber (SSBR). Lanxess also produces SSBR, which is mainly used in the tread compound of green tyres, where it helps to reduce rolling resistance and improve grip on wet roads. “We are now moving from the age of tyre design to the age of tyre materials, which will make the difference in performance,” said Heitmann. “And here Lanxess is playing a leading role in developing the tyres of tomorrow.”?

Studies show that 20-30 percent of a vehicle’s fuel consumption and 24 percent of road vehicle’s CO2 emissions are related to tyres. Green tyres can reduce fuel consumption by 5-7 percent and have a shorter cost amortization period in comparison to other fuel-saving technologies in cars.