LANXESS raise its Chinese production goal

   Date:2007/08/27     Source:

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GERMAN chemical maker LANXESS AG plans to achieve more of its China sales from domestically made products and may expand into the country's west, a senior board member said over the weekend.

"Our policy is to increase those products which we believe can participate" in the fast-growing market, said the company official, Rainier van Roessel. "We are considering more investments in Asia and maybe China."

He said some projects are under evaluation, though he did not elaborate.

LANXESS is also increasing investment in China because many multinational customers such as tire manufacturers are building factories here, Roessel said.

Roughly more than half of the company's China sales result from domestically made products, with the rest imported from Germany and other countries, Roessel said.

For example, LANXESS announced in May it will double the annual production capacity of its engineering plastics in China to more than 40,000 tons by the end of the year to meet strong demand. The Leverkusen-based company also chose Chinese cities - Nanjing in Jiangsu Province and Ningbo in Zhejiang Province - to build a mega-plant for ion exchange resins, used for water and waste water treatment. The list of candidate sites for the project, which will cost tens of millions of euros, also includes cities in Singapore and India.

Almost all LANXESS manufacturing facilities in China are now in coastal cities such as Shanghai, Qingdao and Weifang. Roessel said the locations help lower logistics costs by being close to customers.

But he said he cannot rule out setting up a presence in China's underdeveloped western regions in the future.

"To invest in the west could be attractive," Roessel told Shanghai Daily. "The infrastructure construction is improving significantly, and the skills of people are getting better and better in west."

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