The acquisition of Dutch chemical company DSM’s elastomers division by German group Lanxess is expected to increase supply of ethylene propylene diene monomer (EPDM) rubber in Brazil and thus reduce the need for imports, Lanxess CEO for Brazil, Marcelo Lacerda, told BNamericas.

“This is very good for the country, as the chemical sector runs a high trade deficit,” the executive said.

Lanxess has agreed to buy DSM Elastomers for 310mn euros (US$411mn), on a cash and debt-free basis.

The acquisition includes a production facility in Triunfo, in Brazil’s Rio Grande do Sul state, with an output of 40,000t/y of EPDM, and a plant in Sittard-Geleen, in the Netherlands, with capacity of 160,000t/y.

Lanxess currently supplies the local market with imports of EPDM, Lacerda said, adding, “From now we will supply a great part of domestic consumption with local production. That is one of the advantages of having our own production facility close to our consumer markets.”

The transaction is still subject to approval from antitrust authorities and is expected to close in the first few months of 2011.

Lanxess currently produces EPDM in Marl, Germany, and Orange, in the US, with a combined capacity of 120,000t/y.

“The EPDM segment will grow in the single-digits annually over the next 10 years globally, and the main markets where growth will occur are Brazil and China,” said Lacerda. The acquisition is in line with Lanxess’ strategy of focusing its sales growth on the BRIC countries – Brazil, Russia, India and China, he added.

Lanxess plans to invest approximately 70mn reais (US$41.2mn) in its Brazilian rubber operations in 2011, company CEO Axel Heitmann said previously.

Next year’s capex includes expanding capacity of high performance neodymium-polybutadiene rubber (Nd-PBR) by 20,000t/y at Lanxess’ plant in Cabo de Santo Agostinho, Pernambuco state, as well as other investments in the company’s facilities throughout the country.

EPDM is part of Lanxess’ technical rubber products division, which belongs to the company’s performance polymers segment that recorded sales of 2.4bn euros in 2009.

The full interview with Lacerda will be published on Monday, for subscribers.

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