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Lanxess adding compounding capacity in North Carolina

By: Frank Esposito

August 13, 2014

Materials maker Lanxess AG will spend $15 million to install a second compounding line at its plant in Gastonia, N.C.

The line will double capacity at the site, bringing its total to almost 90 million pounds, officials with Cologne, Germany-based Lanxess said in an Aug. 13 news release. The plant opened in September 2012 and makes compounds based on nylon and polybutylene terephthalate, primarily for the automotive market.

“The U.S. is the leading market for high-tech plastics, with the automotive industry at the forefront,” laxness executive Fleming Bjoernslev said in the release. “Automotive industry sales are at their highest level in almost 10 years, and by adding the second line in Gastonia, we are underlining our ongoing commitment to our customers.”

Bjoernslev serves as president and CEO of Lanxess Corp., Lanxess AG’s Pittsburgh-based North American business unit. Work on the new line is expected to begin in the second half of 2014, with production set for early 2016.

The Gastonia expansion announcement continues an unusual year for Lanxess during which the firm has opened a new nylon resin plant in Belgium and a new compounding plant in Brazil while also announcing a realignment that will eliminate 1,000 jobs worldwide and create $135 million in savings by 2015.

In May, CEO Matthias Zachert said that Lanxess “must become significantly more competitive and profitable again.” The firm’s sales for full-year 2013 fell 9 percent to $11.5 billion. That decline included a drop of about 13 percent in sales of performance polymers, including nylon.

Lanxess sales have continued to decline in the first half of 2014, falling 4 percent to less than $5.3 billion. The firm’s performance polymers segment saw first-half sales fall 9 percent to less than $2.8 billion.

Performance polymers was the largest of Lanxess’ three operating segments in the first half, generating almost 52 percent of total sales.