Lanxess AG plans a fourfold increase in ABS resin production in India by 2008, even as it examines whether it has enough presence in styrenic plastics to compete in China and the rest of Asia.
The Leverkusen, Germany-based firm will boost production at three plants in India, from the current 44 million pounds a year to 176 million pounds, to take advantage of a market it said is seeing double-digit growth. The company said it could boost that figure to 220 million pounds later.
The plants to be expanded are located in Moxi, Katol and Nandesari, India.
Chairman Axel Heitmann said the firm is ``very well-positioned'' in India, where it is one of the top five chemical firms and styrenics account for more than 50 percent of its business. But otherwise, it is not well-positioned in Asia, he said.
``In the rest of the fast-growing Asian market ... we have only a small market share,'' he said. ``Although we operate a modern production facility in Thailand, we do not have sufficient resources of our own to participate in the rapid growth that is occurring, particularly in the Chinese market.''
The company disclosed recently that it was evaluating the future of its styrenic units, and Heitmann said that ``in view of these regional differences and the changing market,'' the firm must consider all options.
The company supplies China and other Southeast Asian locations from its ABS plant in Map Ta Phut, Thailand, where it said sales increased 40 percent last year.
Heitmann's latest comments appeared to offer a more detailed window on Lanxess' thinking, particularly in Asia, even as he noted that the firm still is weighing its choices.
He said, for example, that the firm is expecting a restructuring to lead to improved performance in Europe and North America, where it has a large position in the market.
The Indian expansion comes as the company presses ahead with substantial investments in China and Asia in other segments of its business, including other types of plastics.
The company doubled investments in Asia last year and plans to continue with capital spending this year.
Lanxess opened its first production line for its polyamide and polybutylene terephthalate semi-crystalline products in Asia in late April, with a new, $25 million compounding facility in Wuxi, China, near Shanghai.
The markets for those Durethan and Pocan brands are growing 8 percent a year in Asia and 13 percent in China, in automobiles, electronic products and household goods.
The Wuxi plant, with an initial capacity of 44 million pounds a year, will let the company raise global sales of the two resins by 50 percent in the next five years, officials said.
The company also is opening facilities to make rubber chemicals and other products in China this year, and adding capacity to make rubber additives at Madurai, India, to tap into demand from Indian tire producers.
The company said it will add 1,000 jobs in Asia in the next three years, giving it 2,900 employees there, even as its head count globally has shrunk from about 20,000 to 17,000 as Lanxess has sold off units and restructured.