AMERICAS
Kraton Performance Polymers to merge with SB copolymers unit of LCY Chemical Corp
Kraton Performance Polymers Inc. is merging with the styrenic block copolymers business of LCY Chemical Corp to create a new materials firm, which will have annual sales of over USD 2 billion. LCY is the third largest SBC producer with plants in China, Taiwan, and Baytown, near Houston.
Comments: Kraton Polymers with a 21% global capacity market share is the largest producer of styrene block copolymer (SBC) whereas LCY with a 14 % share was the 3rd largest, thus giving the merger a total market share of 35%. LCY Chemical bought the SBC plant in Baytown, Texas from Polimeri Europa in 2003 giving the company access to the North American market whereas Kraton’s presence has mainly been in North America and Europe with a low presence in Asia. With the JV, the company will have a significant presence globally in all regions including North America, Europe, Asia, and South America, thereby giving Kraton a better opportunity to transfer its technology and better serve its customer base globally.
Lion Copolymer is in a tentative agreement to sell the SBR plant
Lion Copolymer has a tentative agreement to sell its styrene-butadiene rubber plant in Baton Rouge Louisiana, to East West Copolymer & Rubber, which is a recently formed company by Lion Copolymers’ former CEO. Lion Copolymer had planned to idle its SBR facility due to unfavorable market conditions. The plant has a capacity of 130 KTA. On the other hand, Lion Copolymer would continue normal operations at its EPDM production facility in Geismar, LA.
Comments: The demand for Emulsion SBR has been declining due to market conditions in North America and inter-material competition from solution SBR, which is preferred due to the low rolling resistance which is a requirement for fuel-efficient tires, in addition to this, the oversupply of ESBR has influenced the company’s decision to stop production. In contrast, demand for EPDM has been increasing at a higher rate due to the growth of the automotive industry and the need for the material in under-the-hood applications due to its heat resistance properties, when crosslinked. EPDM in automotive is consumed in applications such as engine mounts, hoses, and others.
A more overriding reason involves the major Lion Copolymer investors including Vinmar’s Vijay Goradia who felt the Lion Copolymer project was successful and resulted in enough profits. It is time to move on to other areas.
EUROPE
Treofan to build BOPP film plant
Treofan Group is investing about USD 40.7 million in a new plant for the production of five-layer biaxially oriented polypropylene films at its Neunkirchen facility in Germany. The plant is expected to begin operations in mid-2015 and would produce premium packaging and label films with a wide range of thicknesses and densities.
Comments: Treofan has been looking to expand its BOPP film capacity both through new construction and acquisitions, to cement its status as a major global player in the robustly growing industry. Recently, Treofan has made an effort to expand past its stronghold in Western Europe to high-growth emerging markets in Asia and Latin America. Another major focus has been on increased R&D for films in electronic applications and energy efficiency. The new plant at the Neunkirchen facility is expected to have at least 20% lower energy consumption than existing local facilities. The plant will target primarily the packaging and labels industries.
Poland’s Synthos to construct solution SBR plant
Synthos is constructing its first solution SBR plant in Poland which is expected to be operational by 2015. The plant will have a capacity of 90 KTA. Also, Synthos has allied with Harwick Standard Distribution Corp to distribute Synthos’s SBR and butadiene in U.S. and Canada.
Comments: The demand for SSBR is growing in response to the number of regulations that have been set globally, requiring tires to be labeled for fuel efficiency. In Europe, this regulation went into effect in November 2011 prompting the tire industry to comply aggressively. SSBR when blended with silica and used in tire tread application can lower the rolling resistance leading to lower fuel consumption. Synthos, with the new plant, will be able to meet this demand and with the combination of neodymium-catalyzed butadiene rubber will be able to produce tires with higher fuel efficiency.
Croatian Dina Petrokemija gets a takeover offer
Croatian LDPE producer Dina Petrokemija has received an offer through Britain’s investment fund Devon, to resume and expand production. The 90 KTA has been indefinitely mothballed since late 2011 after creditors froze the companies’ bank accounts. About 34 million is required to launch production at present levels.
Comments: Dina is an LDPE operation under DIOKA. In 1976 it licensed Dow’s LDPE tubular technology of 70 KTA capacity and was recently expanded to 90 KTA by adding LBI’s Lupotec T technology.
European Commission clears MOL-JSR JV
The European Commission has cleared the joint venture between Hungary’s MOL and Japan Synthetic Rubber Corporation to build a solution polymerization styrene-butadiene rubber plant in Hungary. The plant will have a capacity of 60 KTA, and commercial operation is expected to begin in 2017.
Comments: The planned JV will take advantage of the strategic location in Hungary which facilitates access to both Western and Eastern European tire markets. MOL and JSR will both bring their strengths to the venture, with MOL providing the infrastructure for the plant, and JSR providing the process technology. Further integration has already been planned at the site, with MOL planning to build a butadiene extraction plant to supply raw materials for the SBR plant.
Poland’s Azoty plans nylon-6 production
Grupa Azoty plans to begin producing nylon 6 at its facility in Tarnow, Poland. The new facility will be located on a 130,000-square-meter site. The facility will be operated by Grupa Azoty’s ZAT and will use feedstock supplied by the group’s ZAP plant.
Comments: Nylon demand is influenced by the growth of the automotive sector mainly due to its use in a number of applications such as air intake, carpets, and door handles. Glass-filled nylon 6 is increasingly being used for applications that require chemical resistance, impact strength, and performance at a higher temperature. These applications include engine transmission components such as engine covers, rocker and valve covers, and cooling system components such as fans and shrouds. The growth of the automotive sector in Poland and surrounding regions has been growing and production is targeted for domestic consumption and export to Western Europe close to 18% of Poland’s exports are based on this industry.
Borealis gets a loan from European Investment Bank
Borealis has been granted a long-term loan of 204 million dollars by the European Investment Bank for enhancing research and development in polyolefins. This loan would support the multi-annual innovation program at the company’s innovation headquarters in Austria, and innovation centers in Sweden and Finland. The project primarily focuses on product innovation in advanced polymers.
Comments: Borealis, developed significant developments via the Borstar program during the mid-2000s. Borstar’s program was well presented and in 2005 there was no company in the world, they did not approach potential joint ventures. However, they never succeeded in forming joint ventures with anyone. Taking over Abu Dhabi helped Borealis reach a stable position in the Global Polyolefins Industry. The recent move to improve the R&D activity will help Borealis further improve the polyolefin process. Most of the traditional polyolefin players – ExxonMobil, Dow Chemical, Mitsui, and LyondellBasell de-emphasized the traditional polyolefin research, and the work is being continued by Korean, Southeast Asian, and Chinese companies. It is nice to note Borealis will be much more active in the polyolefins research.
MIDDLE EAST & AFRICA
Egypt considering new petrochemical complex
Egypt’s government is considering the development of a petrochemical complex in Alexandria’s Merghem region. A committee has been set up to outline a plan for the establishment of a petrochemical complex. The plan also hopes to set up small and medium plastics converting firms around the complex.
Comments: In addition to the 225 KTA (2 lines) by Innovene G technology licensed years ago, the private firm Carbon Holdings also will start 1,350 KTA (3 lines each with 450 KTA) in Ain Sokhna, Egypt. It will use the Unipol process by Univation technology in 2014. With an abundant resin supply, it makes sense to start building converting industry in the vicinity for internal use or even exporting to nearby regions.
ASIA PACIFIC
ISRL produces on-spec E-SBR
Indian Synthetic Rubber (ISRL) has produced on-spec material at the new 120 KT E-SBR plant at Panipat. ISRL is a joint venture between Indian Oil, Taiwan’s TRRC Corporation, and Japan’s Marubeni Corporation. The technology for this plant is provided by TSRC.
Comments: SBR is the largest volume of synthetic rubber with over 70% used in automotive tires. India is poised to become one of the largest automotive producers in the world by 2015. Venturing into the elastomers business by Indian Oil is a strategic move to capitalize on the fast-growing automotive market in India. This is India’s first SBR plant and will supply synthetic rubber to markets that require products with high tear and crack resistance, and abrasion resistance such as tires, conveyor belts, hoses, shoe soles, and industrial goods.
Chinese group plans methanol plants in the US to supply olefins feedstock
Northwest Innovation Works plans to build two large-scale methanol plants in Oregon. The plants will each have a capacity of about 1,825 KTA and would cost USD 1 billion. Methanol from the plant will be transported to Dalian, China for conversion into olefins. The plants are expected to be fully operational by 2018. Northwest Innovation Works is a group backed by a joint venture between CECC and Xizhoug Island Petrochemical Park along with H&Q Asia Pacific, a private equity firm. CECC is a joint venture between BP and the Chinese Academy of sciences. However, BP will not be involved in the project.
Comments: Most of the olefins in China are from steam cracking of naphtha and by refining process as by-products. But the cost is high and alternate feedstock has been developed notably via the coal to methanol to olefin route. The coal route is more economical than naphtha cracking but faces the challenge of huge water consumption and environmental concern. Another way to make methanol is the steam methane method where the methane is reacting with steam to generate synthesis gas which is catalytically converted to methanol with efficiency. With the abundant supply of methane in N. A. from natural gas and shale gas, many overseas firms are investing in N. A. and this trend will continue. Of the four major methanol plants in the USA, two of them, (Liquid Carbonic in Geismar, LA, and Millennium in Deer Park, TX) use methane feedstock. The third one (Eastman Chemical in Kingsport, TN) uses a coal gasification route and the fourth one Range Fuels, Soperton, GA uses timber biomass as feedstock.
Taiwan to build a petrochemical plant in China
The government of Taiwan approved a proposal from USI Corporation and six other Taiwanese companies to build a petrochemical plant in Fujian’s Zhangzhou Gulei Economic Development Zone in China. The new company would produce seven products including ethylene, propylene, and 1,3-butadiene, with an investment of USD 263.62 million. The firms would supply the products to Taiwan as necessary. This joint venture is the first such approval since the restrictions on Taiwanese investment in naphtha cracking plants in the mainland were lifted.
Comments: This approval was also facilitated by the more favorable economic cooperation agreement between the two governments in the past 5 years. It should be a win-win situation. Taiwan is a small island of 14,000 square miles and there has been a strong sentiment toward building petrochemical plants there. Meanwhile, mainland China is more receptive to the build-up of petrochemicals. it is noted that in the past 15 years, a significant number of JV has been established between Chinese petrochemical companies and Western firms in building petrochemical plants or refining-petrochemical complexes.
Mitsubishi Plastics to build film unit in Indonesia
Mitsubishi Plastics plans to build a new plant to produce the polyolefin-based film at an investment of USD 14.4 million in Merak, Indonesia. This would be Mitsubishi Plastics’ first polyolefin film production facility in Indonesia and will be built at the site of MC PET film Indonesia. Commercial operations are expected to begin in the first half of 2015.
Comments: Mitsubishi’s KTF film, which has previously been produced and sold in Japan and Taiwan, is a moisture transmission film that transmits water vapor but blocks water droplets. The film is often used in hygienic items such as disposable diapers and sanitary napkins. Demand for the film is rapidly increasing in Indonesia, due to a rising standard of living and superior properties of disposable diapers made from moisture transmission film to those of previous alternatives. Construction of the facility is in line with Mitsubishi’s strategy to enlarge production capacity in Asia in countries other than Japan.
PTTGC starts new butadiene, butene-1 unit
Thailand’s PTTGC has commissioned the new butadiene and butane-1 plant in Map Ta Phut, Thailand, and will be ready for commercial operations this quarter. The plant can produce 75 KTA of butadiene and 25 KTA of butene-1.
Comments: PTTGC has been aggressive in marketing their LLDPE mainly due to the growth of the film market. The new butene-1 plant is expected to meet its future co-monomer for LLDPE. The demand for butadiene is expected to continue to increase with the automotive industry, as close to 75% of the butadiene is consumed in tires and with the regions that the automotive industry is currently expanding in, the new capacity will be able to sustain the growth of tire production in the country. The global butadiene supply is volatile and future supply is expected to be tight as United States crackers continue to use shale gas for feedstock.
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