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Purchases signal BRIC strategy

GERMANY'S Lanxess AG has agreed to buy a medium chemical maker in east China as part of its strategy to grow in BRIC countries - Brazil, Russia, India and China.

Lanxess is a leading producer of rubber for tires and also other specialty chemicals, and the deal to buy Jiangsu Polyols Chemical Co, which mainly produces trimethylolpropane, used in lubricants, paints and coatings, is expected to be closed in the third quarter. The companies didn't disclose the deal value.

Jiangsu Polyols generated sales of about 100 million yuan (US$15 million) last year and employs about 170.

"We look for profitable growth opportunities wherever they are," Martin Kraemer, CEO of Lanxess China, said yesterday.

Lanxess also said it has bought the business and assets of India's Gwalior Chemical Industries Ltd for 82.4 million euros (US$115.5 million).

Kraemer said the BRIC countries took up 16 percent of its group sales of 6.58 billion euros, and with the latest acquisitions, their proportion could grow a lot more.

The German firm is seeking acquisition at a time when asset prices are attractive. But it also must be cautious over its spending amid an economic downturn, Kraemer added.

He said demand has risen in China over the past months but the outlook for the whole year is still uncertain.

China sales grew 15 percent to 500 million euros in 2008, he said.


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