The chairman of the company's management board, Axel Heitmann, said in Singapore yesterday the company expected to spend about ¤400 million (Bt18.6 billion) on the plant.

It is also considering sites in Singapore and Kuantan, Malaysia.

Lanxess, which is headquartered in Germany and has operations in 18 countries, wants to expand its global position in the butyl-rubber market, Heitmann said, adding: "This will be the largest investment in the history of our company."

In the next few months, the company will hold talks with possible host locations to determine the feasibility of constructing the new plant. Should it decide upon a location, it hopes to bring the facility on stream in 2010.

The company is focused on satisfying the growing demand in Asia for butyl rubber, which is used mainly in tyre production.

The manufacture of tyres is increasingly shifting from the US and Western Europe to Asia, and the capacities of Asian manufacturers are increasing rapidly, Heitmann said.

Lanxess plans to increase butyl-rubber sales in Asia following expansion of its plants in Zwijndrecht, Belgium, and Sarnia, Canada.

Lanxess is one of Europe's leading chemicals suppliers, with total sales last year of ¤6.94 billion.

Of that, ¤1.77 billion came from the butyl-rubber business.