With its first acquisition in China, specialty chemicals company LANXESS AG is expanding the Asian business of its Inorganic Pigments business unit. In Jinshan near Shanghai LANXESS is to acquire two production units from its previous cooperation partner Jinzhuo Chemicals Company Ltd, one of which it had already leased since 2007. With this acquisition LANXESS will expand its global production capacity for inorganic pigments by five percent. The parties have agreed not to disclose the purchase price.

New facility ensures an independent raw material supply“This acquisition is a further significant step in our Asia strategy,” said Rainier van Roessel, member of the LANXESS Board of Management responsible for the Asia-Pacific region. “This strategy is based on an increased commitment to markets in which LANXESS is already well positioned. The take-over of pigment production in Jinshan strengthens the position of the Inorganic Pigments business unit on the global market,” he added. With this acquisition LANXESS also safeguards the raw material supply for its pigment mixing unit in Shanghai, thereby becoming completely independent of local suppliers.

Demand for the Inorganic Pigments business unit’s products is rising sharply as a result of the ongoing construction boom in China. In the next few years, growth rates of around five percent are expected, especially in Asia. The most important customers for pigments are the construction industry, followed by the paints and coatings sector and the plastics and paper industries.

Jinshan: The most modern iron oxide pigment facility in China

The site started producing iron oxide yellow pigments last year and has a total capacity of 30,000 metric tons per year. Half of this capacity was already utilized by LANXESS. The facility is one of China’s largest and uses state-of-the-art and environmentally compatible production methods.

LANXESS’s Inorganic Pigments business unit is one of the world’s leading iron oxide pigment manufacturers and produces approx. 300,000 tons per year of iron oxide and chrome oxide pigments at its facilities in the United States, Brazil, Australia, Asia and Europe. With sites in Krefeld in Germany, Porto Feliz in Brazil and Jinshan, LANXESS operates the largest facilities for the manufacture of iron oxide pigments in the world. The business unit currently employs around 350 people in China.

The Inorganic Pigments business unit belongs to the Performance Chemicals segment, which achieved total sales in 2007 of EUR 1.97 billion. LANXESS earned sales of around EUR 6.61 billion in 2007. LANXESS currently employs around 15,200 staff in 21 countries and has operations at 44 sites worldwide.

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