Global synthetic rubber demand is expected to be driven by green mobility and rapid urbanization, according to Ron Commander, global head of Lanxess' butyl rubber business unit, speaking at the World Rubber Summit 2012 held in Singapore from Wednesday to Thursday.
Green mobility includes lightweight construction concepts for vehicle body parts and high-performance rubber for the manufacture of smooth running, fuel-saving "Green Tires," he added.
"In the world today, there are a billion cars and trucks in use, with the figures expected to rise to 3 billion vehicles by 2035," Commander said, citing statistics from economic forecasting firm Global Insight.
Synthetic rubber requirements for green tires will become a necessity as the European Union's tire-labeling system goes into effect in November.
After this, manufacturers of tires for cars and trucks must specify the fuel consumption, wet grip and noise classification of the product by means of a sticker or a label. This information must also be included in the technical and promotional documentation accompanying new tires sold in the EU, Commander said.
He added that rapid urbanization of the world's population -- particularly in China, India and Brazil -- will translate into a massive, sustained building boom.
This will lead to increased demand for high-performance synthetic rubbers, which are essential to the construction of new apartments, public buildings, bridges and sports stadiums. High-performance synthetic rubbers are also used as the base material for damping elements in the foundations of skyscrapers, thus ensuring greater safety in the event of an earthquake.
The International Rubber Study Group, which organized the World Rubber Summit, said global overall rubber demand is expected to reach 26.8 million mt in 2012. Of the total figure, synthetic rubber demand will account for 15.5 million mt, up 3.6% year-on-year, with natural rubber at 11.3 million mt, up 3.4%.
A separate study by the Freedonia Group also forecasts that rubber consumption will rise by 4.3% annually through 2015 to hit more than 30 million mt.
Currently, Lanxess makes more than 800,000 mt/year of performance butadiene rubber, Commander said, adding that the company has taken steps to increase production.
In early May, the company raised the production capacity of its butyl rubber plant at Zwijndrecht, Belgium, by 10% to 150,000 mt/year. It also built two new pilot plants at the same location for the development of its butyl rubber technology.
On Wednesday, Lanxess started up a joint-venture nitrile butadiene rubber plant at Nantong, China. The 30,000 mt/year plant is a 50:50 venture between the company and Taiwan's TSRC Corp, and cost about $50 million.
In Singapore, the company is building Asia's largest butyl rubber plant at Jurong island. The 100,000 mt/year plant will go online in the first quarter of 2013.
At the same location, Lanxess will begin building a 140,000 mt/year neodymium polybutadiene rubber plant this September with completion expected in the first half of 2015.
"Singapore's excellent infrastructure, plentiful access to raw materials and highly skilled workforce are great assurance factors for these decisions. Of course, its proximity to our key customers in the fast-growing Asia-Pacific region is a double bonus," Commander said.
Other synthetic rubber producers have also targeted Singapore as a site for boosting their production capacities.
For instance, Japan's Zeon plans to start the first phase of production at its new styrene-butadiene rubber plant in Singapore in mid-July 2013.
The plant on Jurong Island is expected to begin production in two stages -- the first stage of 30,000-40,000 mt/year will start in mid-July 2013 and the second stage of another 30,000-40,000 mt/year will begin in the first half of 2016.
