German specialty chemicals manufacturer Lanxess AG is working on capacity expansions for compounds production and is likely to announce its plans in the "very near future," according to Axel Tuchlenski, head of global product and applications development at the Lanxess high performance materials business unit.
According Tuchlenski, the company is currently expecting significant growth and is running with "very, very high capacity utilization rates."
Without going into further details, the Lanxess official said at the moment, "the capacity runs short in China and Europe, and this is where we work on expansion plans."
"Whenever there's need for new capacity, we will install new capacity. We can expand the existing sites with additional compounding units," Tuchlenski said.
In terms of markets driving the growth for Lanxess, Tuchlenski said the automotive industry is the biggest contributor.
"This is still the most important market for us, but also the E&E [electric & electronics] industry plays an important role in our business," Tuchlenski said.
Commenting on the key strategies of Lanxess, Tuchlenski said CEO Matthias Zachert has two top priorities — one being the successful integration of U.S. firm Chemtura, which Lanxess acquired in April, and digitalization.
The integration, explained Tuchlenski, started from the day the acquisition was completed. Integration teams were formed at different levels, including for R&D, logistics and production.
One major milestone was the reorganization of the company into "new Lanxess" with three segments, performance polymers, advanced intermediates and performance chemicals.
"The Chemtura integration also improved our stakes in the North American market, which is, from the strategic point of view, very, very important improvement for the Lanxess set-up," said the Lanxess manager.
According to Tuchlenski, Chemtura was the "perfect fit" for the existing business.
"We still follow the Lanxess strategy to enter midsize markets out of a leading position. This is a Lanxess strategy, and the Chemtura acquisition exactly matches it," he said.
And in addition to flame-retardants and lubricants, the Chemtura acquisition has offered a new business to Lanxess, and that is urethanes.
Lanxess has now developed a new business called Urethanes Systems following the acquisition, which is part of the company's engineering materials segment.
In terms of digitalization, Tuchlenski said Lanxess was running a "major project" to make itself digital.
"This holds for everybody within the company. It starts within the operations to make production facilities digital and follows with digital maintenance, predictive maintenance tools for the supply chain, all the way through to digital business models and digital marketplace," he added.