Research and development

Research and development makes an important contribution toward increasing our competitiveness and expanding our business through the development of innovative processes and products as well as the ongoing optimization of existing production processes.

Therefore, we continued to systematically drive forward our research and development activities in 2013. Existing products and processes were refined and optimized with a short- to medium-term time horizon. In addition, the Innovation & Technology Group Function focused above all on initiating medium- to long-term research projects to ensure success in the high-growth areas of the future and thus safeguard the Group’s sustainable performance.

In this connection, we entered into two new alliances with research institutes in China. One of these is investigating the polymerization behavior of typical rubber monomers with a view to expanding our product portfolio, while the other is aimed at developing thermoplastics for new application areas. Both of these initiatives support our ambition to be a pioneer in the field of green mobility.

Innovations in the Performance Polymers segment, which focuses on the mobility megatrend, include the development of two new grades of neodymium-based performance butadiene rubber. They have the high molecular weights that are essential for manufacturing tires with particularly low rolling resistance. Thanks to the new polymer chain modification technology we use, our customers can process these rubber grades more easily and effectively. We also succeeded in manufacturing bio-based polybutylene terephthalate (PBT), a component of our high-tech plastic Pocan®, at our world-scale facility in Hamm-Uentrop, Germany. Here, sugar – a renewable feedstock – was converted into the raw material butanediol using a strategic partner’s commercially proven process. This marks an important step forward in our efforts to offer bio-based versions of Pocan® in the future and further expand our position as the leading company in the field of specialty chemicals for green mobility.

The Saltigo business unit in the Advanced Intermediates segment started developing new applications for the insect repellent Saltidin®, which can be added to sunscreens or impregnated into textiles.

In the Performance Chemicals segment, we drove forward our research and development activities in the area of water treatment, for example. Here we succeeded in developing ion exchange resins with a small bead radius that enhance the efficiency of certain membrane-based electrolytic water treatment technologies, thereby extending the service life of both the resin and the membranes. This results in lower operating costs because less regenerating agent is needed and less wastewater is produced. We also introduced a new technology and service concept for beamhouse operations in the area of leather processing. The newly developed products for the beamhouse ensure significantly better process design, particularly from an ecological point of view, partly by reducing the amount of waste produced.

Cost trend and employees

Our total research and development expenses in 2013 decreased by 3.1% on the prior year to €186 million, or 2.2% of sales (2012: €192 million, or 2.1% of sales). The Butyl Rubber, High Performance Materials, High Performance Elastomers, Keltan Elastomers and Saltigo business units accounted for the largest share of these expenditures in 2013 at 59% (2012: 61%). Butyl Rubber, Saltigo, Material Protection Products, High Performance Elastomers and Liquid Purification Technologies were the business units most active in research in terms of their ratios of research and development expenses to sales.

The table below shows research and development expenditures in the past five years.

Research and Development Expenses
 
  2009 2010 2011 2012 2013
           
Research and development
expenses (€ million)
101 116 144 192 186
% of sales 2.0 1.6 1.6 2.1 2.2
 

At the end of 2013, we employed 931 people (2012: 843) in our research and development laboratories worldwide. We created the Group Senior Scientist awards in 2012 to honor top researchers and scientific experts for their achievements, generate motivation and prospects for careers in research and development, and place the focus even more firmly on innovation. The first awards have already been made for outstanding achievements in the area of sustainable science and technology with commensurate contributions to earnings.

Number of Employees in Research and Development
 
  2009 2010 2011 2012 2013
           
Year end 489 519 731 843 931
% of Group employees 3.4 3.5 4.5 4.9 5.4
 

Our largest research and development units are at the sites in Leverkusen, Krefeld-Uerdingen and Dormagen, Germany; Sittard-Geleen, Netherlands; London, Canada; and Qingdao and Wuxi, China. The development and testing of high-performance rubber products for energy-saving green tires and high-tech plastics for lightweight construction applications in the automotive industry are examples of the work we perform there. We also operate a development center for high-tech plastics in Hong Kong to strengthen our relations with automakers in the Asia-Pacific growth region.

Fields of activity and patent strategy

In 2013, we conducted around 260 research and development projects (2012: 235), around 150 of which (2012: 145) aimed to develop new products and applications or improve existing ones. Some 110 projects (2012: around 90) concerned process technology issues with a view to reducing costs, improving efficiency or increasing capacity. We plan to have roughly 20% of the research and development projects we started in 2013 in the market or technical implementation stages by the end of 2014 (2012: about 25%).

The results of our research and development work are protected by patents, where this is possible and expedient. In the course of 2013, we submitted 89 priority applications worldwide. As of December 31, 2013, the full patent portfolio included approximately 1,140 patent families covering around 7,500 property rights.

Organizational focus

Our research programs are directly and systematically aligned with the major global megatrends: the greater need for mobility, sharply rising global food requirements, increasing urbanization and the growing demand for water. Business units with a substantial proportion of products in very mature markets, such as Advanced Industrial Intermediates, concentrate on constantly improving their production facilities and processes (process optimization). Other business units focus their research and development activities more on optimizing their products and product quality and on developing new products to meet market requirements and customers’ special needs.

Our basic research is conducted mainly via alliances with universities and research institutes. Generating knowledge in this way is substantially more cost-efficient than if we were to maintain our own resources for this purpose. In 2013, we had a total of 197 (2012: 203) major research and development alliances, 73 (2012: 78) of which were with universities, 72 (2012: 66) with suppliers or customers, and 52 (2012: 59) with research institutes.

Innovation & Technology Group Function

As a central unit, the Innovation & Technology Group Function complements our business units’ research work with new, longer-term, cross-business unit projects to ensure that potential synergies are exploited to the full and innovations can be applied in various LANXESS units.

We further expanded this group function in 2013 to allow better use of available synergies. When we divided our Technical Rubber Products business unit into the new Keltan Elastomers and High Performance Elastomers business units, the Technical Service Center in Dormagen and the Polymer Testing Center in Leverkusen (both Germany) – with additional sites in Qingdao, China, and Sittard-Geleen, Netherlands – were integrated into this group function. As a result, these facilities are now available to all business units.

The group function’s research concentrates on both process and product innovation, which are handled by separate units.

In the area of process innovation, we direct our efforts toward developing new processes and integrating new technologies into existing production processes with the aim of achieving cost and technology leadership. One focus is on reviewing current production processes using mathematical and experimental methods in order to pinpoint optimization potential. In this way, we have already identified and in some cases achieved considerable savings on raw materials and energy. We made further savings in operating costs by implementing our process control concepts in a number of facilities. These newly implemented concepts – including online analytics – enable us to run plants even closer to the optimum operating point, which, in addition to reducing costs, in some cases even increases their capacity. Against the backdrop of our strategic growth initiative, we are also stepping up our efforts to refine the technological aspects of our processes for growth projects. A key success factor is our process technology laboratory where we can optimize existing processes as well as develop new processes and investigate their transferability to industrial scale.

Product innovation is focused on the development of new products and new applications for existing products as well as on product modifications. The development of new products is more broadly based than in the business units, the main topics are generally applicable to multiple business units, and there is a medium- to long-term time horizon. Here, too, our research goals are derived from the global megatrends. Since launching our Xplore ideas platform on the company intranet, we regularly issue challenges that result in the development of ideas and solutions for future-oriented innovations worldwide. The great success of this platform has made a significant contribution to the promotion of our corporate innovation culture. We have already transformed a large number of ideas into concrete projects with the help of standardized processes. These projects are regularly evaluated with regard to their technological and financial attractiveness.

For instance, we have developed a new technology that makes it quicker and easier to produce a lightweight fiber-reinforced component using the reaction injection molding process. The low-viscosity monomer is directly injected into the (textile) fiber-filled mold, where it then polymerizes. Together with the Institute of Plastics Processing and a renowned Austrian manufacturer of injection molding equipment, we presented this technology at the K 2013 plastics fair in Düsseldorf, Germany.

We have further expanded our broad network of external partners through the establishment of new alliances with universities, institutes and leading companies in various fields such as biotechnology, nanotechnology, microtechnology and membrane technology.

We also collaborate with the Russian Academy of Sciences (RAS) – one of the world’s most distinguished scientific institutions – and have established a research network with leading Russian institutes and universities. After jointly hosting a prestigious scientific symposium as part of Germany Year in Russia in 2012, LANXESS and RAS held their annual joint workshop in 2013, as envisaged by their collaboration agreement. The aim is to meet regularly to exchange views on current scientific trends and developments, possibly leading to further cooperation projects.