German specialty chemicals group Lanxess has said it is banking on growing demand for more environmentally friendly products and systems solutions in China, its most important market in Asia.

"Sales of our green premium products in China have risen significantly in the past 12 months. We expect this trend to continue and to have a positive impact on our business here," said Axel Heitmann, chairman of the Lanxess board.

Growth of the company's green business could double the rate of the overall market growth in China. "We will focus increasingly on green chemistry products in our portfolio," said Heitmann.

The company already has a wide range of environmentally friendly products and systems solutions. Its semi-crystalline products and technical rubber products business units are helping to reduce the weight of automobile components, enabling the construction of fuel-saving cars with lower CO2 emissions.

The company's newly developed special-purpose rubber based on nanotechnology can reduce abrasion in tires while reducing fine dust formation and increasing mileage.

Its special synthetic rubber grade that can reduce rolling resistance in tires is similarly beneficial to the environment. "If all 30 million Chinese cars were equipped with tires with reduced rolling resistance, it would be possible to reduce CO2 emissions in China by around 2 million tons per year," said Heitmann.

Last year sales of Lanxess in China stood at $635 million, accounting for 6 percent of global sales. The company now has five production sites in the country, making inorganic pigments in Jinshan near Shanghai, semi-crystalline products and leather in Wuxi, basic chemicals in Weifang in Shandong, rubber chemicals in Tongling in Anhui, and RheinChemie in Qingdao.

Heitmann said the company will pay equal importance to organic growth and mergers and acquisitions in China. It is looking for any investment opportunity that fits its growth strategy.

With China's chemical industry poised to see more consolidations in the coming years, Lanxess will take advantage of it to further develop its business in the country, he said.

(China Daily April 18, 2008)