German chemical firm Lanxess has raised its 2010 capex guidance to 450mn-470mn euros (up to US$610mn) from 400mn-430mn euros, with Brazil largely accounting for the boost in investment, company CFO Matthias Zachert said during a media day in Dusseldorf, Germany.

Zachert did not provide a breakdown of investments by region or country.

The executive added that Lanxess’ investments in Latin America will reach double digits in the millions for the first time.

Important recent investments in Brazil include a 7mn-euro cogeneration power plant in Porto Feliz, Sao Paulo state, which came online in March this year. The plant will use 144,000t/y of sugarcane bagasse to generate steam and 4.5MW of power, enough to fulfill all the energy requirements at the Porto Feliz iron oxide pigments site.

In addition, the company is boosting production capacity of its high performance neodymium-polybutadiene rubber (Nd-PBR) by 20,000t/y at its facility in Cabo de Santo Agostinho, in Pernambuco state. Together with expansions in Dormagen, Germany, by 15,000t/y, and Orange, in the US, by 15,000t/y, investments in Nd-PBR rubber will total 20mn euros.

In 2008, Lanxess bought Brazilian rubber producer Petroflex, the company’s largest acquisition to date, for 370mn euros, which was “a move that added enormous strength to the firm’s position in one of the world’s fastest growing rubber markets,” said Lanxess CEO Axel Heitmann.

By 2012, more than 38% of Lanxess’ total capital expenditures will have been directed to Asia and Latin America, which are included in emerging regions the company is focusing its growth on for the next five years, in comparison to less than 20% in 2005.

In sales terms, the BRIC countries – Brazil, Russia, India and China – together accounted for 23% of group sales in the second quarter of this year versus 21% and 18% in 2Q09 and 2Q08, respectively. In 2Q10, Latin America was the strongest performing region and accounted for 13.4% of global sales versus 8.2% year-on-year.

Heitmann pointed out that Lanxess’ strategy will mainly focus on growing organically, the company’s most profitable business in its fastest growing markets; however, he added that the firm is also seeking attractive opportunities for new acquisitions.

“We are now on the lookout for small to mid-sized businesses that can strengthen our leadership in our existing business,” Heitmann added.

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