SINGAPORE : Japan's Sumitomo Chemical is building a synthetic rubber plant in Singapore to supply to tyre-makers globally.
The project rides on increasing demand for less-polluting initiatives in the auto industry.
The US$140 million factory will be Sumitomo's first synthetic rubber plant outside Japan.
Singapore is one of the largest manufacturing sites for synthetic rubber globally.
The product, which will be made at the plant in Jurong, is known as Solution-Styrene Butadience Rubber (Solution-SBR).
Masakazu Tokura, president of Sumitomo Chemical Company, said: "The plant is scheduled to be completed in 2013 with an annual production of 40,000 metric tonnes of specialty rubber. This project is an important step for our petro-chemical business because the new facility will be Sumitomo's first synthetic rubber plant build outside Japan."
Sumitomo said the new plant will service tyre manufacturers in Asia, Europe and the US.
Rising crude oil prices and climate change concerns have increased the demand for Solution-SBR tyres.
Companies like Asahi Kasei, Lanxess and Zeon have also made a series of other synthetic rubber investments in Singapore.
Singapore Trade and Industry Minister Lim Hng Kiang said: "Presently, the company's activities in Singapore encompass not only manufacturing, but also headquarter functions and talent development. With cumulative investments of over
S$3 billion, Sumitomo Chemical is the largest Japanese investor on Jurong Island."
Manufacturers claim motor vehicles consume less fuel when natural and synthetic rubber are combined.
While it isn't a direct substitute for natural rubber, manufacturers have the added incentive to looking to synthetics, with the price of natural rubber soaring in Tokyo by more than 20 per cent this year, driven largely by a brightening outlook for the car sales.
- CNA/ms
(ldtn)