KUALA LUMPUR, Aug 24 (Bernama) — The joint- venture (JV) company between three countries to manufacture and market butadiene rubber (BR), Lotte Ube Synthetic Rubber Sdn Bhd (LUSR), plans to raise its annual production capacity by 22,000 tonnes to meet growing demand in the Asian region.
The company — a JV among Lotte Chemical Corporation of South Korea; Japan’s Ube Industries Ltd and Mitsubishi Corporation; and Lotte Chemical Titan (M) Sdn Bhd of Malaysia — is capable of producing 50,000 tonnes of BR annually.
“Demand for BR is expected to grow by some six to seven per cent yearly in the future, with the focus on the Asian market which is the biggest market for BR.
“In the tyre market, many BR manufacturers focus on the supply of BR to major tyre manufacturers as they are moving ahead with plans to increase their production capacity,” the Malaysian Investment Development Authority (MIDA) said in a statement today.
MIDA said the Ube Industries and Lotte Chemical will each have a 40 per cent stake in the venture while Mitsubishi and Lotte Chemical Titan will each hold 10 per cent of the shareholding.
“The implementation of this project demonstrates continued investors’ confidence that Malaysia provides a conducive business environment for long-term investments and it will add to Malaysia’s exports as 80 per cent of their products will be exported,” MIDA Chief Executive Officer Datuk Azman Mahmud said.
He said more than 90 per cent of the jobs created would be highly skilled and the project would provide potential business opportunities to support industries in Malaysia.
BR is mainly used for the production of automotive tyres, high impact polystyrene and shoe soles.
In 2011, Lotte Chemical Corporation and Ube Industries Ltd first commenced discussions on investing in a new BR plant in Malaysia.
The JV agreement was signed in April 2012 by the four shareholders, with LUSR established in Tanjung Langsat, Johor six months later.
