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Dynasol opens rubber joint venture in China

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A look at Dynasol's SSBR/SBS joint venture in China.

PANJIN, China—Dynasol Elastomers S.A. is preparing to begin production at its Chinese joint venture with Shanxi Northern Xing'an Chemical Industry Co. Ltd.

Liaoning North Dynasol Synthetic Rubber Co. Ltd. will have the annual capacity for 100,000 metric tons of solution styrene-butadiene rubber and thermoplastic rubber.

When the Chinese facility comes online in 2015—either late first quarter or early second quarter—the firm will have localized production in all three major regions of the world. It produces more than 200,000 tons of SSBR, SBS and hydrogenated rubber (SEBS) per year combined at its existing facilities in Altamira, Mexico, and Santander, Spain.

The firm is in the process of populating the Panjin facility with equipment, which is projected to be complete by the end of January 2015. Dynasol General Director Ignacio Marco said the plant represents about a $200 million investment, split evenly between the joint venture partners.

“We knew we had to be in China. China is by far the largest market in the world, and on top of that, it's growing at the highest rate. We were convinced that we needed to install a production plant in China,” Marco said.

“We're in a very strong position because we can follow the customers giving our global capability and adapting to the local requirements of each of the regions.”

The firm plans to serve a variety of industries, such as asphalt modification for paving and roofing in construction, TPE compounds and adhesives for consumables and health care goods, plastic modification in automotive parts and domestic appliances, and vulcanized products for high performance tires and high end sportive footwear.

Initially, the plant will produce at about 50 percent capacity, then slowly increase until it reaches maximum capacity of 100,000 tons by mid-2016 or 2017. Employment will start between 155 and 170, but Marco said when full capacity is reached, the plant is projected to employ 200.

“This will depend on the market conditions,” Marco said. “When we designed this project, China was growing at rates close to 10 percent. Now it's closer to 7 percent. The market is still growing a lot, but it has slowed down compared to a few years ago. We are targeting segments of the markets that require technical assistance and application development. That's why we believe that we will be able to sell the full capacity, if not in 2016, then for sure in 2017.”

Representatives celebrate the groundbreaking of the rubber facility.

Dynasol will support its Chinese plant through its Central Research and Development Center in Madrid and its Innovation Center in Altamira. Marco said the firm is opening a technical service laboratory in Shanghai to assist customers with technical issues—application development, adjusting formulations and looking for solutions to specific requirements.

Its Shanghai location also will serve as a sales office for the region.

“Dynasol has given the latest technology to this plant,” Marco said. “We have taken the best of our technology in Mexico and the best of our technology in Spain and put all the best practices in this new plant. When we designed this plant from the beginning, we designed it for 100,000 tons.”

Headquartered in Madrid, Dynasol is a joint venture formed in 1999 between Group Kuo S.A.B. de C.V. of Mexico and Repsol Quimica S.A. of Spain. It produces Calprene and Solprene brands.