Buying rubber

Leverkusen-based specialty chemicals group Lanxess is to acquire approximately 70 percent interest in Petroflex for around €198m. Rio de Janeiro-based Petroflex is among the world’s large-scale producers of synthetic rubber.

In 2006, Petroflex had some 1,300 employees and sales equivalent to about €500 million. The group’s 2007 output at its three sites in Brazil – Cabo  in Pernambuco State, Duque de Caxias in Rio de Janeiro State and Triunfo in the State of Rio Grande do Sul – will exceed 400,000 tons.

Its elastomer products range from solution rubber to emulsion rubber and comprise 70 brands. The products are used in the manufacture of tyres as well as for tubing and plastics. One third of its output is exported to more than 70 countries.

Petroflex was founded in 1962 as part of Petrobras, a Brazilian chemicals group. In the 1970s, Petroflex became independent and, in the following decade, it extended its international activities to Europe, Asia and North America.

The stake to be purchased by Lanxess includes the holdings of the current major shareholders Braskem and Unipar.

Lanxess currently employees more than 400 people in São Paulo, Porto Feliz and São Leopoldo, Brazil. Since the company became independent in January 2005, it has experienced double-digit growth rates in Brazil, posting sales of approximately €160m in 2006. In terms of sales, Brazil is now the second-largest market for the company in the Americas region after the US.

The market for rubber in Latin America is expected to grow rapidly in the coming years. The major global tyre manufacturers, for example are spending around €1bn to increase their production capacities in that part of the world. Consumption of synthetic rubber in the region is currently well below that in the industrialized countries and also below the global average.