ORANGE, Texas (April 15, 2011)—Synthetic rubber producer Lanxess A.G. has extended a specialty rubber supply agreement with South Korea's Hankook Tire Co. Ltd. by four years through year-end 2015.
The companies agreed to renew the contract ahead of its year-end 2011 expiration in order to respond better to increasing global demand. Lanxess has been providing Hankook with high-performance rubber—specifically solution SBR and neodymium polybutadiene (Nd-PBR)—for the last six years.
“This new agreement will further strengthen the already successful long-term partnership between Hankook and Lanxess,” said Jeong Ho Park, Hankook's vice president of global purchasing.
Hankook is in the midst of a $1.5 billion, multi-year expansion of its factories in South Korea, China and Hungary as well as building a plant in Indonesia.
The materials covered by the agreement are used increasingly to help reduce the rolling resistance of tires, Lanxess said.
Nd-PBR used in a tire compound helps reduce energy consumption more efficiently than many other tire rubbers, Lanxess said, while also reducing abrasion. SSBR also contributes to reduced rolling resistance and improved grip on wet roads.
Lanxess said demand for higher performing “green tires” is growing about 9 percent annually. Demand growth is being accelerated by European Union legislation that requires new tires sold in Europe to be labeled for fuel efficiency, wet grip and external rolling noise by November 2012.
Hankook and Lanxess announced the contract extension in a ceremony at Lanxess' Orange SR plant, where the German specialty chemicals company is spending $14.5 million through next fall to add 20,000 metric tons of annual capacity for high-performance rubbers.
Lanxess also said it has completed a debottlenecking at the plant that will increase production of Nd-PBR by 15,000 metric tons annually.