Rubber and chemicals supplier Lanxess A.G. plans to invest about $27.5 million during the next two years to expand its global capacity of neodymium polybutadiene by about 50,000 metric tons annually.

The company also is considering the future manufacture of emulsion styrene-butadiene rubber black masterbatch in Brazil, based on growing raw material demands of the retread industry in North and South America. Both projects involve facilities and products falling under Lanxess' Performance Butadiene Rubbers business unit.

The Nd-BR expansion will be spread over three company sites: Dormagen, Germany; Orange, Texas; and Cabo, Brazil. The additional capacity will go on stream between the first quarter of 2011 and the first quarter of 2012, Lanxess said.

The capacity boost is important because global demand for Nd-BR is expected to grow nearly 10 percent annually during the next few years, said Christoph Kalla, head of marketing for the Performance Butadiene Rubbers unit. Without the expansion, there would be a worldwide product shortage for this type of material by 2014, Lanxess said.

Nd-BR's increased use in tire manufacturing is being driven by trends toward greater mobility-particularly in Asia-as well as demand for higher environmental and safety standards in performance tires, the firm said.

In November, for example, the European Union approved a regulation requiring that by November 2012 new tires sold in Europe must be labeled for fuel efficiency, wet grip and external rolling noise. The aim is to cut carbon dioxide and noise emissions by promoting green tires that don't compromise on safety, Lanxess said.

Japanese tire makers voluntarily introduced tire labels this year, and the U.S. is evaluating similar labeling regulations as well.

Nd-BR in a tire's tread and sidewall helps improve rolling resistance, reduces energy consumption and tire abrasion and contributes to durability, Kalla said. He said Lanxess believes Nd-BR will gain market share as opposed to other materials such as cobalt-polybutadiene or nickel-poly-butadiene.

Lanxess Chairman Axel C. Heitmann said the company welcomes the tire labeling regulations, which are a "positive example of how environmental policies can benefit consumers and spur economic success." The initiative ultimately will lead to more innovations within the chemical and tire industries, he said.

The Nd-BR projects also will allow for a solution SBR capacity expansion at its Port Jerome, France, manufacturing facility, Kalla said. The Port Jerome site makes Nd-BR and SSBR, but the Nd-BR investment in Dormagen will shift production there and set up the French plant for additional SSBR capacity-used for treads in high-performance tires-as needed.

Leverkusen-based Lanxess also manufactures SSBR in Cabo and is planning to facilitate production of the elastomer in Orange sometime before the first quarter of 2012, Kalla said.

As for the company's potential ESBR-BMB manufacture in Brazil, it is examining adding capacity at sites in Duque de Caxias or Triunfo, both which already produce ESBR and ESBR latex, Kalla said.

Having existing ESBR capacity in Brazil is a big factor for having black masterbatch production there, he said. Brazil's large retreading industry and the availability of key raw materials are important reasons as well.

Black masterbatch is easier to process during compounding because the need to mix ESBR or another elastomer with the carbon black is eliminated. The process eliminates the dry mixing step and improves the dispersion of carbon black and the oil because the materials are blended with the rubber in the liquid phase, Kalla said.

Lanxess already makes Co-BR BMB in Orange and the company believes it could serve its retreading customers in the Americas with the complementary sources in Texas and Brazil, he said.

In addition to its established markets, the firm also sees good growth potential in China and India for its BMB products, Kalla said.

"In these countries the retread sector has not yet been able to keep pace with the enormous increase in demand for tires," he said. "An improved quality of the radial tires produced should enable the retread industry to catch up."