Leading global synthetic rubber producers like Arlanxeo, Reliance Industries, Sibur, Zeon etc are aggressively expanding their capacity to meet the growing demand for SR thanks to its increasing applications in the tyre, non-tyre, automotive, footwear and industrial sectors
Though overcapacity has been a major issue of the global synthetic rubber industry, leading synthetic rubber producers are on an expansion spree to meet the demand in future.
According to a report prepared by global market research agency MarketsAndMarkets, global synthetic rubber market is estimated to reach $37.82 billion by 2022. “Growing demand for synthetic rubber will be driven by its increasing applications in the tyre, non-tyre, automotive, footwear, and industrial sectors. The tyre industry will be the largest consumer of synthetic rubber,” the report says.
A notable recent development in the synthetic rubber industry is the divestment of LANXESS stake in Arlanxeo, the joint venture which was formed between petrochemical and gas giant Saudi Aramco and LANXESS in 2016. Citing its intention of becoming a leading player in mid-sized specialty chemicals markets, LANXESS has announced its decision to sell 50% of its stake in the joint venture to its partner, Saudi Armaco. The transition is expected to be completed by the end of 2018 or early 2019.
Before this development, Arlanxeo had announced major investments in its production facilities to enhance productivity. Arlanxeo, in the next three years, will invest ‘EUR mid double-digit million’ to modernize its production sites in Triunfo, Brazil, and La Wantzenau, France.
“The investment allows the company to implement advanced technologies for growing high-performance rubber grades in order to support the development of our customers in important regions over the long-term,” the company says.
The investment will upgrade its facility in Triunfo, Rio Grande do Sul, which will equip the plant to produce the more advanced PBR types, Nd-BR (neodymium butadiene rubber) and lithium butadiene rubber (Li-BR), for tyre and non-tyre applications by the second half of 2020.
“This investment highlights our commitment to Brazil and the long-term importance of the Brazilian market for our high-performance rubbers, especially in the tyre segment,” says Matthias Gotta, Head of Arlanxeo’s Tire & Specialty Rubbers business unit (BU TSR).
Arlanxeo is also investing in its plant in La Wantzenau, France, which is the world’s largest nitrile butadiene rubber (NBR) plant, to strengthen and secure its position as a leading global supplier of NBR rubbers for the long-term.
RSEPL’s aggressive expansion
India’s largest private sector company Reliance Industries Limited (RIL) is also getting aggressive on synthetic rubber business to meet the growing demand for synthetic rubber amid large dependency on imports. The company set up the new PBR and SBR plants in Hazira, Gujarat, in 2014. For Butyl rubber, the company has a joint venture with Sibur.
At present, work is in full swing at Jamnagar to commission the fifth largest Butyl rubber plant in the world with a capacity of 120 KTA. The joint venture will also set up South Asia’s first Butyl rubber halogenation unit at RIL’s integrated petrochemical site in Jamnagar, Gujarat. The unit will produce 60,000 MT of halogenated butyl rubber every year.
“The JV, Reliance Sibur Elastomers Pvt.Ltd. (RSEPL), is building a 120,000-metric tonnes/year butyl rubber plant, including 60,000 metric tonnes / year of halogenated butyl rubber, although the halobutyl rubber project is still in the engineering phase,” says Sibur in a release.
Commenting on the halogenated butyl rubber unit, Nikhil Meswani, Executive Director, RIL, says in a statement: “RSEPL’s halogenated butyl rubber plant is well-poised to capitalize on the significant surge in regional demand in tyre and pharmaceutical industries. India is expected to see a quantum jump in tyre production, with the Indian and international tyre majors gearing up to make capital investments of Rs 150 billion.”
The halogenated butyl rubber demand is expected to grow at a rapid pace of 8-10% CAGR over the next few years, driven by increasing customer preference for tubeless tyres in India and neighbouring countries, and significant investments in the manufacture of pharmaceutical closures and tank inner liners.”
Sibur for more JVs
Sibur, Russia’s largest producer of petrochemicals, is aggressively looking for joint ventures with more global companies for synthetic rubber business. Recently, Sibur signed a Memorandum of Understanding with Saudi Aramco to exploit possible cooperation in Russia and Saudi Arabia. According to reports citing the company officials, Sibur is in discussion with Saudi Aramco to build a synthetic rubber production complex in Saudi Arabia.
Sibur has also formed a JV with Sinopec for synthetic rubber business in Russia incorporating an existing 42,500-metric tonne/year NBR plant at Krasnoyarsk.
The Japanese synthetic rubber manufacturer Zeon Corp will boost the production capacity of the Kawasaki plant to expand its business of specialty cross-linked hydrogenated nitrile rubber. The company’s hydrogenated nitrile rubber is used in important safety and underhood parts for automobiles, and the latest expansion aims to meet the growing demand for this business, says the company.
Zeon has also established a new subsidiary in Thailand for the manufacture and sale of Acrylic Rubber. The Thailand operation adds to Zeon’s existing Acrylic Rubber manufacturing capabilities in Japan and USA. Apart from this, Zeon also established last year a joint venture with Sumitomo Chemical Co., Ltd, named ZS Elastomers Co., Ltd, to consolidate the two companies’ solution styrene-butadiene rubber (S-SBR) businesses.
Rising SR production
JSR Corp’s synthetic rubber plant (S-SBR), a joint venture with MOL Group, was opened in March this year. The plant has cutting edge technology and will manufacture annually 60,000 tonnes of synthetic rubber. The new unit will produce 60,000 tonnes of solution polymerization styrene-butadiene rubber (S-SBR).
The US multinational oil and gas corporation ExxonMobil opened its halobutyl rubber at its integrated manufacturing complex in Singapore this June to meet the growing demand for synthetic rubber and adhesives in Asia Pacific. The new 140,000-tonne/year butyl plant produces premium halobutyl rubber, used mainly in tyres to improve fuel economy.
ExxonMobil already has a joint venture with Sabic to produce synthetic rubber. The Kemya complex at full capacity produces 400,000 MT/year of synthetic rubber products, including 110,000 MT/year of butyl rubber; 110,000 MT/year of ethylene propylene diene monomer (EPDM); and about 100,000 MT/year each of polybutadiene rubber (PBR) and carbon black.
Kumho Petrochemical is expanding the NB latex production capacity of its rubber manufacturing plant in Ulsan, South Korea, from 400,000 tonnes to 550,000 tonnes per year, which is expected to be completed by the end of the first quarter of 2019. “The expansion, scheduled for completion in March 2019, will help solidify the company’s position as the “world’s number one NB latex maker,” says a company spokesman.
Leading Italian chemical producer Versalis, part of the chemical group Eni, has started a new facility for producing EPDM to cater the automotive industry in Ferrara, Italy, with an investment of 250 million euros. “The investment involved constructing a new production line on a land which was reclaimed and duly authorized for renewed industrial use, and the revamping of the existing elastomer plant. The investment will increase overall production capacity by about 50,000 tonnes/year,” says the company.
Apcotex Industries, a leading producer of synthetic latices and rubber in India, undertook efficiency improvement initiatives as part of the first phase of
capacity expansion costing Rs300 million. This will raise the NBR production capacity to around 21,000 million MT from 16,000 MT at present.
The management plans to invest another Rs1.50 billion to Rs 2 billion to further add NBR capacity by 15,000 MT and
latex capacity by 40,000 MT in the next two to three years, say reports quoting a company spokesman.
Tyre companies too are entering into synthetic rubber business. Michelin has entered into a joint venture with Chandra Asri to form PT Synthetic Rubber Indonesia (SRI), the first synthetic rubber unit to produce Polybutadiene Rubber and Solution Styrene Butadiene Rubber in Indonesia.
“The presence of SRI will strengthen the manufacturing sector by producing value- added products, combining Chandra Asri’s raw material products and Michelin’s technology that changes these raw materials into semi-finished products used in the key components to produce environment-friendly tyres,” says Chandra Asri in a statement.
This is Michelin’s third synthetic rubber plant after the ones in France and the United States. SRI targets a production capacity of 120,000 tonnes per year of Polybutadiene Rubber and Solution Styrene Butadiene Rubber. The plant is flexible and can vary the mix to meet specific business needs.
Says Michelin Group General Managing Partner Florent Menegaux: “Michelin needs more regular supply of synthetic rubber to ensure growth of its “green” tyres globally. For this reason, the presence of SRI is very important for Michelin. Thus, we are partnering with the largest Indonesian petrochemical company, Chandra Asri, as concrete evidence of our interest to invest in Indonesia.”