LANXESS Strengthens Presence in China by Acquiring Polyol Specialist  
  
By Lily Wang   

LANXESS AG is strengthening its market presence in the important Asia region by acquiring the business and production assets of Jiangsu Polyols Chemical Co., Ltd. (PCC) in Liyang, Jiangsu province, eastern China.   
    The deal is expected to close in the third quarter of 2009, pending for regulating authority's approval.   
    PCC engages in producing polyol family products containing proprietary calcium process technology, including 15 000 t/a trimethylolpropane (TMP), 2 000 t/a di-TMP, 2 500 t/a cyclic trimethylolpropane formal (CTF) and  10 000 t/a calcium formate, to serve China's lubricants, paints, coatings and printing as well feed additives markets. PCC achieved sales of about EUR 10 million in 2008 and currently employs some 170 staff.
    LANXESS' business unit Basic Chemicals is already a major supplier of TMP in China. And LANXESS will integrate PCC into LANXESS' global operations and complement its Germany polyols plant's existing products portfolio, which has no production of di-TMP, and enhance supply chain flexibility. LANXESS would increase investment for PCC to expand production and improve efficiency, it says.
    LANXESS expects the TMP demand to grow in China and in the Asia Pacific region in future thanks to broad applications of TMP although the global economy is still in recession. It estimates the TMP market volume in China to be ranging 22 000 tons to 25 000 tons offered by China's makers, the international firms and imports.
    "This acquisition is another step in strengthening our leading businesses here in China - and further proof of our successful China strategy. We are extending our employee and production base along our path of long-term, sustainable growth," remarked Martin Kraemer, CEO of LANXESS Greater China during a press conference in Shanghai on June 11th.
    PCC is LANXESS' second acquisition in China following the takeover in June 2008 of the largest and most modern plants for yellow iron oxide pigments in China from Shanghai Jinzhuo Chemicals Company Ltd. in Jinshan near Shanghai. (CCR2008 No. 19)
    The moves are followed by expectation of growing chemicals demand in China. Citing Global Insight's forecast, China's chemical industry would grow 11.4% in 2009 (in Euro, nominal), and by 10.6%, 2010; 12.5%, 2011 and 17.8%, 2012.
    LANXESS also announced that it has acquired the businesses and assets of stock-market-listed Indian company Gwalior Chemical Industries Ltd. for EUR 82.4 million, including debt. This is LANXESS' first acquisition in India and further strengthens the portfolio of the Basic Chemicals business unit. Gwalior is one of the largest Indian producers of benzyl products and one of the leading global producers of sulfur chlorides for the agrochemicals, pharmaceutical, dyestuff as well as flavor & fragrance industries.
   The LANXESS Basic Chemicals business unit, with some 1 000 employees worldwide, operates several production sites in Germany, China and the United States. The Basic Chemicals business unit belongs to the Advanced Intermediates segment, which achieved total sales in 2008 of EUR1.3 billion. The segment has proven to be one of LANXESS' more stable businesses in the economic crisis due to its exposure to the agrochemical industry.
   LANXESS, the global leader in specialty chemicals, today has eleven subsidiaries, three joint ventures and six R & D centers in China, with a double-digit sales growth since 2006. There are thirteen business units at LANXESS represent in Greater China at the following sites:

Shanghai: headquarter of LANXESS' business in China. The Technical Rubber Products business unit operates a Technical Center in Zhangjiang of Shanghai. The Inorganic Pigments Business Unit Jinshan site produce yellow iron oxide pigments with an annual capacity of 30 000 t/a, which ensures the raw material supply for LANXESS Shanghai Pigments, a mixing and milling pigment plant in Taopu, Shanghai.
   
Wuxi, Jiangsu province: The Leather business unit supplies leather chemicals for the entire Asia Pacific region from here. It is also the location of the largest and most modern R & D Center for leather chemicals of the region. The Semi-Crystalline Products business unit manufactures high-tech plastics. Since May 2007, the Business Unit also operates an R & D Center for high-tech plastics in Wuxi. In 2008 the Material Protection Products business unit has opened a microbiology test lab in Wuxi to strengthen its competitiveness in the biocides business in Asia.

Qingdao, Shandong province: The Rhein Chemie Business Unit produces polymer additives for the electrical, electronics and automotive industries. In addition, LANXESS has built a new plant for lubricant oil additives manufacturing in Qingdao. It started for production in the beginning of 2009. Opened in July 2008, a new Rubber Research Center (RRCQ) in Qingdao was established in close cooperation with Qingdao's University of Science and Technology (QUST). In May 2009, the expansion of High Performance Rubber R&D Center (RRCQ) was opened.  

Weifang, Shandong province: Together with a Chinese partner Weifang Yaxing Chemical Group, the Basic Chemicals business unit manufactures hydrazine hydrate.

Tongling, Anhui province: The Rubber Chemicals business unit has a joint venture with two Chinese partners for the manufacture of the antioxidant Vulkanox.
   
Liyang, Jiangsu province: The Basic Chemical business unit manufactures TMP, Di-TMP and calcium formate.

Hong Kong: A team of sales experts markets the entire product portfolio for the Asia Pacific region.