LEVERKUSEN (dpa-AFX) - Germany-based specialty chemicals company Lanxess AG (LNXSF.PK) said Thursday that it is adding a mixing and milling plant to the plant for inorganic pigments that is now under construction in Ningbo, China. The company noted that the expansion will strengthen its production network in China to meet the high level of demand for iron oxide pigments.
The new plants are located in the Ningbo Petrochemical Economic & Technological Development Zone or NPEDZ on China's East coast. Lanxess said the expansion will raise its investment at the Ningbo site to about 60 million euros from about 55 million euros. It will also create a total of about 200 new jobs with these two plants.
The company noted that potential customers for the iron oxide pigments are the coatings, plastics, construction and paper industries.
The new plant for iron oxide red pigments in Ningbo is being designed for an initial annual synthesis capacity of 25,000 metric tons, while the mixing and milling plant for pigments will have an annual capacity of 70,000 metric tons.
According to Lanxess, the plant will also process raw pigments from the company's other sites for the Asian market. The plants are scheduled to be completed in the fourth quarter of 2015 and expected to start production in the first quarter of 2016.
Meanwhile, Lanxess will close its existing mixing and milling operations in Taopu, Shanghai, with an annual capacity of 35,000 metric tons, by the end of 2016. Shanghai City Council will integrate the vacated plant grounds into a high-tech park in Shanghai's Putuo District.
Jörg Hellwig, head of the Inorganic Pigments business or IPG unit at Lanxess said, 'Our decision to significantly expand our plant in Ningbo is based on the fact that the global demand for iron oxide pigments is growing at an annual rate of around three percent. In addition to our Jinshan/Shanghai site in China, we will then have another very strong base for our global production network.'
Lanxess already operates a synthesis plant in Jinshan, Shanghai. The plant has an annual production capacity of 38,000 metric tons of high-quality iron oxide yellow and iron oxide black pigments.
Lanxess' IPG unit, with an annual capacity of more than 350,000 metric tons, is a manufacturer of inorganic iron oxide and chrome oxide pigments. The company's center of global production operations is Krefeld-Uerdingen in Germany. This business unit has some 1,250 employees and is part of the Performance Chemicals segment.
On Frankfurt's Xetra, Lanxess shares are trading at 47.74 euros, down 0.52 percent on a volume of 403,469 shares.
Copyright RTT News/dpa-AFX
© 2014 AFX News
