Lanxess commits to local innovation in line with China's goals

German specialty chemicals company Lanxess says it is fostering further local innovation as it stays in line with China’s goals to foster high quality and sustainable development.

During his visit to China earlier this month, which was the first time since 2019, Lanxess Chief Financial Officer Oliver Stratmann said the company remains adamant about pursuing local innovation efforts.

“I am impressed by the vibrant development the country has taken and the technology advancement in recent years has also been very impressive,” he said.

The Lanxess Asia Pacific Application Development Center, which went into operation in June 2021, is the company’s latest effort to drive local innovation.

Several products that came out of the AADC are already in use for high-tech applications such as lubricants for renewable energy turbines and flame retardant for architectural safety.

Having seen the initial positive response from the development center, Lanxess is also evaluating which additional business units could use it for their development activities for local customers.

“We’re proud to have located the Asia Pacific Application Development Center in China, and we will certainly be thinking about rolling out this role model to other markets,” he added.

“We’re very encouraged and proud to see that our colleagues at the Asia Pacific Application Development Center are all energized by the R&D work to supply the local markets as a domestic player.

“This would certainly be a win-win situation to grow with customers’ demand for technologically advanced products,” Stratmann added.

The 3,600-square-meter facility hosts around 50 scientists, and has been serving as a customer hub for client visits and workshops, as well as a market sensor for the Asia Pacific region, further unleashing synergies for its existing innovation strength.

China’s chemical market makes up 40 to 50 percent of the global chemical demand so the localization efforts are seen as an essential part of maintaining a strong foothold in the country.

With 10 labs and production sites in China, the company aims to follow the development goals of the country for smart technologies as well as sustainable efforts.

“We believe we’re also moving toward the right direction of promoting sustainability and catering for customer demand in a sustainable way, which is the basis of our future development, and that also requires research and development in high tech,” Stratmann said.

In the second quarter of this year, Lanxess reported that free cash flow improved to 83 million euros (US$92 million) and it reduced net debt by 11 percent to 2.547 billion euros as of June 30.

For the full year, the company expects earnings growth of 10 to 20 percent thanks to the rebound of businesses in the first two quarters, as the upward momentum continues with improving demand.

Stratmann said the company already leveraging many smart technologies not only to improve efficiency of digital capabilities, but also to promote sustainable practices and raise awareness of emission-cutting initiatives.

For example, the company has developed a tool that can provide to customers for each of its products a third-party certified product carbon footprint certificate. “We believe it’s an important customer education process about cleaner products,” Stratmann said.

In order to advance technology and process innovations and reach a balance between material performance and the overall production cost, Lanxess remains committed to long-term investment in the field.