“We have decided to put off some investment projects given the decline in demand for chemical products we are seeing throughout the world.”
This high-tech plant was expected to create some 200 engineering and other high-value jobs. In addition, the Economic Development Board said at that time that the plant helps “to move our chemicals industry towards higher value-added downstream activities — beyond commodities into specialties’’.
Chemical plant delayed
Lanxess sees drop in demand for products, has to conserve cash
Esther Fung, Today Online 20 Dec 08;
IN WHAT is the first major industrial investment to be delayed in Singapore since the global financial crisis began, German chemicals group Lanxess has pushed back the construction of its Jurong Island plant to the third quarter of next year, from the originally planned January.
Lanxess said it had to conserve cash and revise its plans to cope with the economic downturn.
In February, the company said construction of the €400-million ($835-million) butyl rubber facility was expected to be completed by the end of 2010.
Lanxess now expects operations on the 20,000-sqm site to start in 2012.
The announcement yesterday will not affect the current 88 Lanxess employees in Singapore and Vietnam. Its operations in Singapore include a microbiology laboratory and its regional marketing headquarters.
“We have decided to put off some investment projects given the decline in demand for chemical products we are seeing throughout the world,” said Mr Axel Heitmann, chairman of the Board of Management of Lanxess, in a statement on Friday.
“This will ensure the necessary financial flexibility for the difficult fiscal year 2009.”
Lanxess chose to locate its third butyl rubber facility in Singapore to tap the growing demand in Asia for synthetic rubber used to make vehicle tires, said Mr Heitmann in February.
This high-tech plant was expected to create some 200 engineering and other high-value jobs. In addition, the Economic Development Board said at that time that the plant helps “to move our chemicals industry towards higher value-added downstream activities — beyond commodities into specialties’’.
Lanxess’ plans for capacity expansions in Germany and Belgium and a planned move of its headquarters in Germany will also be postponed.
Although sales in Asia-Pacific rose 31.4 per cent in the third quarter, Lanxess said in its statement it is seeing a worldwide decline in demand in the fourth quarter.
The firm also expects demand to be very weak in the first quarter of next year and is preparing for a difficult year ahead.
“If demand stays at its current low level, we will implement further measures globally,” addedMr Heitmann.
He did not elaborate on what these measures would be.
