New Joint Venture to Manufacture Rubber Silanes in China

Degussa AG, Dusseldorf, and Rizhao Lanxing Chemical Industry Co., Ltd. (Lanshan-Rizhao, Shandong Province, People’s Republic of China) have signed an agreement to establish a joint venture for the manufacture of sulfur-functional silanes for rubber applications. This agreement represents a successful conclusion to the negotiations that followed a memorandum of understanding signed by the two companies in July 2005. Degussa will own a 50 percent share in the new joint venture, and Lanxing 40 percent. A financial investor will assume the remaining 10 percent. Degussa is the worldwide leading manufacturer of silanes for rubber applications. Lanxing has been a well-established local manufacturer on the Chinese market since 1998. The new joint venture company will begin operating under the name Degussa Lanxing (Rizhao) Chemical Industrial Co., Ltd., following approval by the responsible bodies, and having obtained all licenses from the Chinese authorities. The company is scheduled to produce sulfur-functional silanes in liquid form and as a blend with carbon black.

Along with silica, sulfur-functional silanes are used to manufacture high-quality rubber compounds for use in tires, technical rubber articles, and sports shoes. In tires, the use of the silica/silane system – a pioneering development by Degussa – allows a significant reduction in rolling resistance and therefore a reduction in fuel consumption. “The demand for the kind of high-quality rubber silanes produced by Degussa’s Advanced Fillers & Pigments Business Unit is continually growing – not least because of the current fuel prices. Robert Wissner, head of the business unit, explains the company’s commitment to China: “By building a production plant in Asia we are supplementing our production facilities in Europe and the United States, and further expanding our position as world market leader. Our joint venture facility in China will produce for our customers from the rubber and tire industries in Asia/Pacific who need our silanes to manufacture products that meet international standards.”

Together with an increasing production of tires and other rubber products the demand for rubber silanes in China is growing strongly. China has already become the worldwide largest market for truck tires and the third largest for all kinds of tires. Powering this leap in demand is the increased involvement of global automobile manufacturers and big international tire producers, as well as the massive expansion of China’s network of roads and highways.

Degussa, which has been producing specialty chemicals in China since 1988, now has 20 companies in the country, operating production facilities in Beijing, Guangzhou, Nanning, Qingdao, Shanghai and Hong Kong. Its broad spectrum of products – ranging from carbon blacks, amino acids, polyurethane foam additives, high-performance water treatment chemicals, construction chemicals, and initiators used in the production of plastics – is aligned to customers not only in China but in the whole of Asia. As parent corporation of the Degussa Group in China, Degussa (China) Co., Ltd., Beijing acts as a holding company for the Group’s activities in China, supporting Degussa’s business units through an efficient and expert platform of services.

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