Country attracts supplier of inputs for tire makers
Valor Econômico
The heavy investments in infrastructure in Brazil and the recovery of the sales of cars, especially trucks, are opening opportunities for the German Lanxess and the Chinese Jiangsu Sinorgchem, whose main shareholder is the American fund Carlyle. These companies produce inputs for the tire industries, which foresee resumption in the sales as of this year. In an interview to Valor, Stephen Choi, Chief Executive Officer of Sinorgchem, said the company is setting up a logistics center in Brazil. "That is our first step. We are going to analyze the market. In two years, we will be able to erect our first plant outside China here in Brazil".
Sinorgchem is one of the largest international producers of antioxidants for rubber. Such input is largely used by the major manufacturers of tires, since it prevents the oxidation of the product. In 2008, the Carlyle Fund, which has 40% shareholding in the company, invested US$ 87 million in the Chinese company, which started its process of expansion in the international market. The distribution and logistics center will be installed in the city of São Paulo and it may go into operation in the third quarter.
With earnings of nearly US$ 300 million in 2009, the company has grown 15% a year, informed the Executive. This year, in an investment of US$ 175 million, the company puts into operation its fourth plant of antioxidants for rubber in China. The company is aware of the opportunities in the market and it does not rule out making acquisitions. An initial public offering is also in the radar of the company, in the medium and long term, but Choi gives no further details on the strategies of the company.
Well positioned in the market of tires as well, the German Lanxess has recently announced it will increase by 50 thousand tons the overall productive capacity of polybutadiene with neodymium catalyst (Nd-PBR), technology developed by the company to cater to the tire market. Christoph Kalla, global marketing coordinator of the PBR division of the group, said yesterday the unit of Pernambuco alone will have an increase of 20 thousand tons to its productive capacity. The total investments of the company in this segment amount to € 20 million to three of the six plants of high performance rubber the company has in the world.