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Lanxess seeks profit via targeted R&D

GERMAN specialty chemicals maker Lanxess AG launched the expansion of its US$16 million rubber research center in east China yesterday as part of its strategy to grow profitably in Asia through targeted investments in research and development.

The company expects the facility in Qingdao, Shandong Province, to give it a competitive edge by developing new products and applications for the rubber market. The first phase was inaugurated in July.

"To be ahead of the competition especially in BRIC (China, Brazil, Russia and India) countries, we need to deliver tailor-made and innovative products to our Chinese customers," said Werner Breuers, a Lanxess board member.

Lanxess made a net loss of 14 million euros (US$19 million) in the first quarter of this year as demand slumped in the rubber and construction sectors.

It has delayed a rubber plant in Singapore because of weakening demand and to conserve cash.

Still, Breuers said Lanxess will boost its group R&D spending by 10 percent this year.

Lanxess has recently signed a cooperation agreement with Qingdao University of Science and Technology, near the research facility, in R&D and to train staff for the rubber industry.

The tire sector is the biggest consumer of rubber. Global tire makers may see a 6.8 percent drop in sales this year on weak auto demand, according to Singapore-based International Rubber Study Group.


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