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Performance Polymers

The Performance Polymers segment brings together all our polymer activities and comprises the Butyl Rubber, Performance Butadiene Rubbers, Keltan Elastomers, High Performance Elastomers and High Performance Materials business units. They all hold leadership positions in their respective markets.

Photo: Electromobility
Electromobility is another highly interesting technology in the area of green mobility – for LANXESS as well. Lightweight components made from our high-tech plastics can help offset the high battery weight – up to 250 kilograms – and thus extend the range of electric vehicles, which is one of the factors critical to their success.

Overview of the business units

The Butyl Rubber business unit produces high-quality butyl and halobutyl rubbers for the tire and rubber industries. A key advantage of these products is their high impermeability to gas and moisture. The Performance Butadiene Rubbers business unit produces synthetic rubbers that meet the most stringent requirements, including various polybutadiene rubber (PBR) grades, solution styrene-butadiene rubber (S-SBR) and emulsion styrene-butadiene rubber (E-SBR). Neodymium-based performance butadiene rubber (Nd-PBR) and S-SBR are used especially for manufacturing modern, fuel-efficient high-performance tires. However, the products of Performance Butadiene Rubbers are also an indispensable component of many everyday items such as shoes, yogurt pots and golf balls.

Effective January 1, 2013, we have reorganized the activities of our former Technical Rubber Products business unit. The newly created Keltan Elastomers business unit will focus exclusively on manufacturing synthetic ethylene-propylene-diene rubber (EPDM). This move reflects the increased significance of this business for LANXESS since our acquisition in 2011 of the EPDM activities of Dutch-based Royal DSM N.V. EPDM is used above all in the automotive industry for door seals and high-quality weather-stable dampers. It is also used as a modifier for plastics, in the manufacture of oil additives and in the wire and cable and construction industries. The remaining Technical Rubber Products portfolio, which includes a large number of high-performance rubbers and specialties for a wide range of applications, has been renamed the High Performance Elastomers business unit. The new structure offers both business units the opportunity to achieve further growth by focusing even more specifically on the particular needs of their markets.

The High Performance Materials business unit (formerly Semi-Crystalline Products) is successful with the high-tech plastics Durethan® and Pocan® and their key strategic feedstocks. These products are used primarily for lightweight construction solutions in automotive engineering and in the electronics industry.

Mobility megatrend is main growth driver

With economic growth and rising prosperity, particularly in emerging nations and developing countries, our world is becoming increasingly mobile. LMC Automotive, a market research company specializing in the automotive industry, forecasts that the number of cars in use worldwide will increase by more than 60 percent in the next 15 years. However, this growth goes hand in hand with increased emissions and higher consumption of resources. Making mobility environmentally friendly is therefore one of the greatest technical challenges of our time. Thanks to our pioneering technologies, our business units in the Performance Polymers segment enable us to significantly contribute toward mastering this challenge in two areas.

The future belongs to green tires

Legislators around the world have identified private transport, i.e. cars and trucks, as a key focus of their initiatives to increase energy efficiency and thereby significantly reduce harmful CO2 emissions. The European Union, for example, has stipulated that European car manufacturers must reduce average fleet emissions from their current level of 120 grams per kilometer to 95 grams by 2020. Since around one quarter of a car’s fuel consumption is accounted for by its tires’ rolling resistance, improving the energy efficiency of tires is the primary strategy for achieving this target.

As the market leader in high-performance rubbers, we make it possible to optimize the conflicting tire properties defined in the “magic triangle” of tire technology, combining low rolling resistance, good wet grip and durability. If all the vehicles in the world were fitted with these modern high-performance tires, annual fuel savings of some 20 billion liters could be achieved and CO2 emissions reduced by around 50 million tons each year. The success of electric mobility, too, will depend crucially on the extent to which tires with optimized rolling resistance can extend the still very limited range of electric vehicles.

Legislators have also recognized the huge potential of these tires and introduced corresponding regulations. Since November 1, 2012, all new vehicle tires sold in the European Union have to be labeled to show their fuel efficiency, wet grip and noise emissions. However, the European Union is not alone in its efforts. In December 2012, South Korea introduced mandatory tire labeling based on the E.U. model. Japanese tire manufacturers voluntarily introduced a comparable labeling system at the start of 2010. From November 2016, all tires imported to Brazil or manufactured there for the local market will have to be labeled in this way, too. Similar legislation is also being discussed in both the United States and China.

As a key supplier to leading tire manufacturers, LANXESS will benefit from these initiatives, which will result in significant and, above all, sustainable growth potential. This is because they will translate into an increase in demand for green tires, which can only be produced with high-tech synthetic rubber and additives. We expect more than 2 billion tires to leave the production lines in 2017 – some 28 percent more than today. Over the same period, the proportion of green tires is likely to increase from around 35 percent at present to just under 50 percent. To satisfy this growing demand, we are making selective investments in the global expansion of our production capacities.

Key investments in the growth market of Asia
Four major investment projects are at various stages of implementation in Asia.

Hot commissioning of our new, high-tech butyl rubber plant in Singapore will begin on schedule in the first quarter of 2013. Costing around €400 million, it is our largest investment project to date. Regular production is scheduled to start in the third quarter of 2013 to meet the growing demand for butyl rubber in Asia. The plant has an annual capacity of up to 100,000 tons. It is also setting new standards in terms of environmental protection, with 10 percent of the investment going into technologies that will cut energy and water consumption and reduce emissions. State-of-the-art waste gas purification units have been installed and measures implemented to recover process water and heat of condensation.

In September 2012, we laid the foundation stone for a new production facility for Nd-PBR, also in Singapore. Costing around €200 million, this facility will be the largest of its kind in the world with an annual capacity of 140,000 tons. It will supply the growing market for green tires, especially in Asia, and is scheduled to come on stream in the first half of 2015. With this investment, we are creating around 100 new jobs. As was the case for the butyl rubber plant, the key arguments in favor of the Singapore site were the good supply of raw materials, the excellent infrastructure, the availability of highly skilled employees, the large port and the proximity to our growth markets in Asia.

Our project to build a new plant to manufacture EPDM rubber in Changzhou in Jiangsu province, which is scheduled to start operating in 2015, represents our largest investment in China to date at around €235 million. With an annual capacity of 160,000 tons, the plant will be the largest of its kind in the world. Up to 200 employees will use sustainable Keltan ACE technology to produce various premium EPDM grades tailored to the needs of our Asian customers. Compared to conventional technologies, ACE reduces the energy costs in the manufacture of EPDM and, at the same time, increases the range of applications for these rubber products.

In May 2012, we opened our new facility for the manufacture of NBR rubber in Nantong, northwest of Shanghai, in the key growth market of China. In a joint venture with the Taiwanese TSRC Corporation, we invested around €40 million in the facility, which started with an annual capacity of 30,000 tons. Some 100 new jobs have been created at the most modern production facility of its kind in Asia. China is the world’s largest and fastest-growing market for NBR, with an average annual growth rate of around 10 percent.

Selective capacity expansions in Europe and the United States

The ongoing development of our existing sites is a further important factor in expanding our leading position in synthetic high-performance rubbers.

Through 2015, we will be investing some €30 million to strengthen the production site in Port Jérôme, France, where our Performance Butadiene Rubbers business unit produces the high-performance rubbers Nd-PBR and S-SBR, and also lithium butadiene rubber (LiBR) for the plastics industry. This investment project is aimed at maintaining the plant assets and improving productivity and energy efficiency. We expect to reduce specific energy consumption by 20 to 25 percent, while increasing productivity by around 5 percent. Successful conclusion of the second expansion phase of Nd-PBR capacities at our site in Orange, United States, also resulted indirectly in increased capacities for S-SBR in Port Jérôme. With an investment volume of €10 million, this project was completed in the third quarter of 2012. The expansion in Orange enables us to strengthen our focus on the production of S-SBR in Port Jérôme, thereby increasing total output at the French site.

As part of the successful integration of the elastomers business acquired from Royal DSM N.V. in 2011, we are making the site at Geleen, Netherlands, that we acquired with the transaction into the headquarters of our new Keltan Elastomers business unit and an innovation center within the global LANXESS network. A new administration building accommodating up to 120 employees was completed at the start of 2013. During 2013, we also plan to invest €12 million in converting the largest of the three production lines – and therefore half the site’s capacities of 160,000 tons a year – to the aforementioned Keltan ACE technology.

In 2012, we made good progress with three major projects at the sites where our High Performance Elastomers business unit operates.

At our site in Dormagen, Germany, we are investing €17 million in the expansion of our production capacities for the polychloroprene solid rubber Baypren®. This project is scheduled for completion in the second half of 2013 and will increase production by 10 percent. The expansion work will also see the deployment of a new technology that will boost the energy efficiency of production by 20 percent.

In light of the considerable increase in global demand for our synthetic high-performance rubber Therban®, we expanded production capacities at our sites in Leverkusen, Germany, and Orange, United States, by 40 percent each. This investment was in the low-single-digit million euro range.

We also significantly expanded EVM capactities at our site in Dormagen, Germany, to meet the steady rise in demand for special elastomers. €9 million was invested to increase production by 30 percent to 15,000 tons each year.

Concept tires underscore innovative strength
In 2012, we underscored our role as the innovation leader in the field of synthetic rubber by introducing a concept tire developed in-house on the basis of our synthetic rubber portfolio. This tire was one of the first to be awarded a double-A rating for fuel efficiency and wet grip in accordance with the new E.U. tire labeling regulation. Thanks to our expertise in assessing the impact of different grades of synthetic rubber on the running properties of tires, which we acquired during the development process, we will in future be able to offer materials that have been pre-evaluated in stringent tests. This represents real added value for our customers because it will enable them to shorten the time to market for new tires and strengthen their competitive position.

Photo: Tire
The E.U. tire labeling regulation aims to ensure greater transparency for consumers and support their tire-buying decisions with a system similar to the one already used for domestic appliances. Classes range from A (best performance) to G (worst performance). The rolling resistance of category A tires is around 40 percent lower than that of category G tires, which translates into a

A tire with an A rating for wet grip takes around 20 meters less than one with an F rating to come to a standstill from a speed of around 80 kilometers per hour. Because their fuel consumption is 5 to 7 percent lower, green tires are one of the fuel-saving technologies in cars that amortize soonest. Moreover, they currently offer car drivers the highest potential for reducing CO2 emissions per euro spent.

We are also demonstrating the benefits of green tires to the general public with a new fuel savings calculator that has been available free of charge as an app and on the Internet since September 2012. The software provides quick and simple answers to three important questions: 1. How much money can be saved by using high-quality fuel-efficient tires? 2. How long does it take to amortize their purchase? 3. How high is the reduction in a vehicle’s CO2 emissions? We developed the software in collaboration with the Technical University of Munich. It has been tested and certified by the TÜV Rheinland inspection agency.

For some years now, we have been fully committed to the development of sustainable technologies and processes for making synthetic rubber. In 2012, we once again made some significant progress in this respect.

At our site in Triunfo, Brazil, we started industrial-scale production of the world’s first bio-based EPDM rubber, which we market under the name Keltan® Eco. This material is made of ethylene derived from sugar cane. In terms of quality, it is on a par with conventionally produced ethylene.

We are currently testing an environmentally friendly and resource-saving production process for butyl rubber in two pilot plants at our site in Zwijndrecht, Belgium. The manufacture of butyl rubber is highly complex and involves process steps at temperatures ranging from minus 95 to plus 200 degrees Celsius. We expect the technology introduced for the first time on an industrial scale in Zwijndrecht to result in tangible resource savings.

Lightweight construction – a market with a promising future

The second important starting point for environmentally friendly mobility is the substitution of traditional materials, such as steel or aluminum, with innovative high-tech plastics and intelligent composites. In 2010, modern vehicles contained an average of around 14 kilograms of high-tech plastics. By 2017, this is likely to have increased to around 22 kilograms. There are good reasons for this. Plastics and fiber composites are easier to process than metal components. They also have outstanding mechanical properties and weigh up to 50 percent less than their metal counterparts.

By using our high-tech plastics, the automotive industry can therefore lower production costs, increase design freedom and improve vehicle safety in one single step. Other advantages include significant environmental benefits, because lighter cars consume less fuel, which also results in lower emissions. Our products can also play a key role in making electromobility a technology for the masses because every kilogram saved will increase the range of electric vehicles, which is still perceived by many consumers to be inadequate.

All our know-how relating to innovative and customized high-tech plastics is combined in the High Performance Materials business unit (formerly Semi-Crystalline Products). We offer far more than just the production and supply of materials. Our HiAnt® brand consolidates our engineering expertise to provide our customers and partners with the best possible support in developing innovative components. Our services range from material selection and complex simulation calculations to mold construction, part testing and assistance with the transition to series production.

In March 2012, a new Material Testing Center for HiAnt® solutions opened at our site in Dormagen, Germany. The state-of-the-art testing equipment installed there can be used to determine the material data for the most important load scenarios for thermoplastic materials, such as their fatigue, crash and creep properties. In December 2012, we also opened a development center for high-tech plastics in Hong Kong to strengthen our relations with automakers in the Asia-Pacific growth region. Driven by strong domestic demand and the growing purchasing power of an expanding middle class, China has now become the world’s largest market for the automotive industry.

Our takeover of Bond-Laminates GmbH in Brilon, Germany, in September 2012 is also helping to enhance our expertise and thus strengthen our position as a premium supplier of lightweight construction technologies for green mobility. The company has around 80 employees and specializes in developing and manufacturing customized continuous fiber-based composite sheets, which are marketed under the name TEPEX®. Our successful cooperation with Bond-Laminates in projects for the automotive industry dates back to 2006.

Our HiAnt® solutions make us the preferred partner to many well-known companies in the automotive industry, including Audi, BMW and Mercedes-Benz. Our high-tech plastics are already used in more than 100 vehicle models worldwide. As a result, we too are benefiting from the rising demand for cars, particularly in the BRICS countries. Overall, we expect global demand for high-tech plastics to grow annually by around 5 percent through 2017. In Asia, and especially in China, growth rates are likely to be slightly higher.

We will adapt our capacities to this market growth with a total investment volume of €125 million through 2014.

Expansion of the global plastics production network
The construction of a new world-scale plant for polyamide is an important part of our growth strategy and a significant commitment to our site in Antwerp, Belgium, as the central location for producing the key intermediates for our high-tech plastics. Costing around €75 million, the plant is designed for an annual capacity of around 90,000 tons and is scheduled to come on stream in the first quarter of 2014. Together with the nearby production facility for the key precursor caprolactam, we are thus creating a group of highly productive plants in Antwerp to supply our global network of compounding facilities with high-quality polyamide plastics. Our glass fiber production operations are also based in Antwerp and capacity is currently being expanded by 10 percent.

In addition, we continued expanding our global production network in the past fiscal year. We opened our first production facility for high-tech plastics in the United States in Gastonia, North Carolina, in September 2012. This site is located close to the “auto belt” in the southern United States. Many automakers – including a number of German companies – and automotive suppliers are located there. In the United States, the world’s largest market for high-tech plastics, demand is being driven in particular by stricter fuel consumption standards for cars and light commercial vehicles. The plant, which cost around €15 million, has an initial annual capacity of 20,000 tons and created 45 new jobs. We are investing a similar amount in constructing a facility of comparable size in Porto Feliz, Brazil, which is scheduled for completion in mid-2013. This will reinforce development of the site as our production center for cutting-edge technologies in Latin America.

In light of growing global demand for polybutylene terephthalate (PBT), we doubled capacity at the compounding facility in Hamm-Uentrop, Germany, owned jointly with U.S. chemicals group DuPont. This project represented an investment of around €10 million.

The E.U. tire labeling regulation aims to ensure greater transparency for consumers and support their tire-buying decisions with
a system similar to the one already used for domestic appliances. Classes range from A (best performance) to G (worst performance). The rolling resistance of category A tires is around 40 percent lower than that of category G tires, which translates into a fuel saving of around 10 percent.

Lightweight construction innovations in 2012

Photo: Hightech plastics part
The housing for a passenger airbag module that we have developed as part of a joint advanced engineering project with several partners demonstrates that high-tech plastics offer an alternative not only to metals in automotive applications, but also to plastic structures made in the conventional way by injection molding. The use of plastic composites cuts the weight of the housing by over 30 percent compared with a current series-produced version made of polyamide 6.
Photo: Hightech plastics part
Lightweight construction is also an interesting alternative under the hood. Made from polyamide 66, the new oil pan for turbo gasoline engines – including those in Audi’s A3, A4 and A6 families and in the VW Passat – weighs around one kilogram less than the equivalent steel component. Compared with an aluminum variant, it weighs 50 percent less. As this weight saving is in the area of the front axle, there is also an improvement in driving dynamics.
Photo: Hightech plastics part
Developed in cooperation with ZF Friedrichshafen AG, our brake pedal based on a plastic composite is around half the weight of conventional steel brake pedals but has the same mechanical load-bearing capacity. Weighing just 355 grams, this concept component is the world’s first car brake pedal made of polyamide reinforced with continuous glass fibers that is suitable for large-scale series production. Production is scheduled to start at the end of 2013.

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