AMERICAS
Sasol to build a co-monomer plant at Lake Charles
Sasol will build the world’s first commercial ethylene tetramerization unit designed to produce more than 100 KTA of combined octene-1 and hexene-1 co-monomers at its Lake Charles, LA complex. The unit will use Sasol’s proprietary technology converting ethylene to octene-1 and hexene-1. Construction is scheduled to begin next year with full operation scheduled by mid-2013.
Comments: Sasol, with current production of more than 350 KTA, is amongst the world’s major producers of alpha olefin co-monomers. The Sasol technology at the Lake Charles facility would presumably be based on a Cr (+3) catalyst with a phosphoramide ligand in the presence of MAO. The tetramerization primarily produces octene-1 (up to 70%), along with hexene-1. Recently, Chevron Phillips also announced its plan to construct a 200 KTA hexene-1 plant in Cedar Bayou, Texas (presumably with the similar technology used at its JV with Qatar in Mesaieed, Qatar). It appears that the chemical industry is getting ready for the polyolefins boom anticipated over the next few years.
Dow Brazil invests USD 2 million in the technology center
Dow Brazil is investing up to USD 2 million in a technology center for engineering plastics, composites, and polyurethanes on the outskirts of São Paulo. This will be the company’s first such unit in the region, although Dow has been actively participating in South American markets for many years. When it opens in January, the center will be one of the most modern and well-equipped laboratories in Latin America. The lab will occupy about 13,000 square feet in Jundiaí.
Comments: Dow has been active in South America since 1956 and has operations in Argentina, Brazil, Chile, Columbia, Peru, and Venezuela. Dow’s South American businesses encompass agriculture, foods, building and construction, household, plastics, healthcare, etc. In 2009, Dow achieved sales of USD 2.2 billion in Brazil. These new polymer /plastics technical centers will undoubtedly enhance its business operations in the region.
PolyOne exits polyurethane JV with Bayer MaterialScience
Bayer MaterialScience has acquired the remaining 50% of BayOne Urethane Systems, its polyurethane specialties joint venture with PolyOne. The financial details of the deal are yet to be disclosed.
The deal will enable Bayer to continue its focus on the polyurethane specialties business in the NAFTA region. For PolyOne, the sale is in line with its portfolio restructuring to emphasize specialty platform assets that it owns and controls. PolyOne recorded USD 2.2 million in profits from the JV in the first nine months of 2010.
Comments: BayOne was formed by Bayer MaterialScience and PolyOne in 2003 to develop, produce, and market polyurethane systems, including ready-to-use isocyanates and polyol blends in the U.S. and Canadian regions.
PolyOne is continuing its strategy to focus on three platforms – specialty, performance, and distribution. This strategy is a good addition to the company’s existing approach of focusing on technology enhancements and expanding its global presence while increasing its exposure to attractive end-use markets. PolyOne recently acquired Polimater; a specialty color business in Brazil, For Bayer, this deal would enable it to focus on its polyurethane business unit and, therefore a win-win situation for both companies.
EUROPE
Ineos enters the styrenics business with BASF
BASF SE and Ineos Industries Holdings Ltd. have signed a letter of intent to combine their styrenics businesses into BASF’s Styrolution business unit. Ownership of Styrolution, based in Frankfurt, will be split 50:50 between the companies and BASF will receive a cash consideration once the transaction is completed. No other financial details have been disclosed.
Under the terms of the new deal, BASF and Ineos will combine business activities in styrene monomers, polystyrene, ABS, styrene-butadiene block copolymers, and other styrene-based copolymers as well as copolymer blends. BASF plants in Germany, Belgium, South Korea, India, and Mexico, and Ineos plants in Canada, the United States, Germany, France, and Sweden, will all become part of the new company. The former Ineos Nova joint venture will be included in Styrolution.
Comments: It has been difficult for the styrenics business in the past few years. Plagued by oversupply, higher costs in raw materials/production, and reduced demand, the merger of the two major producers to form Styrolution should mitigate these problems and improve the competitive edge of their businesses.
Dow completes propylene glycol capacity hike in Germany
Dow Chemical has increased mono propylene glycol capacity at Stade, Germany by 35 KTA or about 15%. The expansion was completed in August during planned maintenance and raised the plant’s propylene glycol nameplate capacity to about 270 KTA.
Comments: Dow is the world’s leading producer of propylene oxide (2,000 KTA) and propylene glycol (540 KTA capacity). Propylene glycol has low toxicity and has widely been used in food, pharmaceuticals, and cosmetics, amongst other applications. The capacity expansion in Germany should help meet the demand for the product in Europe as well as the rest of the world.
BASF pledges €9 billion (USD 12 billion) in investment; no forced job cuts at Ludwigshafen
BASF has reached an agreement with employee representatives at Ludwigshafen, Germany that pledges investments of €9 billion- €10 billion (USD 12.1 billion- USD 13.5 billion) and no forced jobs cuts at the site through 2015. The site, BASF’s largest, employs 33,000.
Approximately two-thirds of the investment will be for modernization and maintenance, and the balance for R&D. Ludwigshafen will remain the central platform for global research and development at BASF. The agreement runs through the end of 2015 and succeeds a five-year agreement that was set to expire at the end of this year. The deal also continues “flexible personnel deployment” as a key element wherein employees from plants with low capacity utilization are deployed to other plants where more work is available.
Comments: “flexible personnel deployment” is a nice concept to meet the challenges posed by unpredictable fluctuations in market demand without laying employees off. The pretext is that the company has an existing lean and versatile staff who can be deployed to different departments as needed. However, most companies still resort to workforce reduction as a quick measure to cut costs. Oftentimes to maintain productivity, they have to hire back some experienced former employees as contractors.
Teknor adding to UK compounding capacity
A new thermoplastic elastomer compounding line in Oldbury, England will add about 8 million pounds or 3.6 KT to the company’s annual capacity. The new line would enable Teknor Apex Co.’s 50,000-square-foot plant in the United Kingdom to focus on specialty products and quick turnarounds. The facility does a number of jobs in the 4,000- to the 7,000-pound range, working in natural colors as well as in blacks for a variety of consumer and industrial customers.
The line is expected to be fully operational during the first quarter of 2011. Teknor also operates several lines in Oldbury, compounding reinforced nylon and other engineering resins. An existing TPE pilot line there will be used for research and development work and small-lot orders.
Comments: The company is focusing on serving a niche, growing markets requiring strong expertise, while also catering to important sectors such as automotive, consumer products, industrial components, medical devices, and wire and cable. Over the last few years, Teknor Apex has specifically invested in growing its TPE business including (1) the Sarlink® acquisition from DSM, and (2) the introduction of TPE compounds in medical applications.
RTP launches second European production site
Engineered thermoplastics compounder RTP Co. has opened a new manufacturing plant in Ladenburg, Germany, the company’s second in Europe. RTP Deutschland GmbH’s 61,500-square-foot operation will make products including very-long-fiber composites and conductive compounds. RTP’s long-fiber products and other materials are used in automotive battery trays, front-end parts, and door panels. The first extrusion line at the Ladenburg plant was commissioned in late October, with the second line set to begin production in the first quarter of 2011.
RTP now has 11 manufacturing sites. Others include Beaune, France; Suzhou, China; Singapore; Monterrey, Mexico; and six plants in the U.S. Earlier in 2010. RTP entered the South American market with a sales office and warehouse in Alphaville, Brazil, near São Paulo.
Comments: RTP is leveraging the fast-growing trend of using very long-fiber composites in automotive applications. This material allows molders to produce structural or semi-structural parts when compounding the fiberglass in-line with injection molding or compression molding processes. The usage of these very-long-fiber composites to produce automotive parts aids in lowering the weight of the overall component, which improves fuel efficiency in a vehicle. Germany being the largest automotive production hub in Europe is strategically the right location for RTP to set up its new plant.
ASIA-PACIFIC
Bayer MaterialScience to double MDI and PC capacity in Shanghai
Bayer MaterialScience plans to invest about €1 billion (USD 1.3 billion) by 2016 to increase capacity at its manufacturing complex in Caojing, China near Shanghai. Capacities for methylene di-para-phenylene isocyanate (MDI) and polycarbonate (PC) will be more than doubled to 1,000 KTA and 500 KTA. Bayer MaterialScience will build a 200 KTA PC unit at Caojing and hike the capacity at the site’s existing PC plant to 300 KTA. The company will build a 500 KTA MDI unit at Caojing and increase capacity at the site’s existing MDI plant from 350 KTA, to 500 KTA. Bayer MaterialScience also intends to strengthen significantly its R&D capabilities at Caojing and relocate the headquarters of its PC business unit from Leverkusen to Shanghai. Bayer generated sales of €2.1 billion (USD 2.8 billion) in Greater China in 2009, of which €1.2 billion (USD 1.6 billion) was by MaterialScience.
The new projects are in addition to previously announced investments by Bayer MaterialScience at Caojing totaling €2.1 billion through 2012. The latest projects involve the construction of new plants and capacity expansions at existing ones.
Comments: Bayer is amongst the long list of companies that are looking to participate and strengthen their presence in the markets of growing economies – with China, being one of the most sought-after destinations. China has been exporting many consumer goods such as furniture, small appliances, and other applications where polyurethane and polycarbonate are used. The domestic demand in China is also growing at an accelerated rate owing to improvements in standards of living and urbanization.
Evonik adding PMMA Capacity in China
Indorama continues PET acquisitions; new deals in Poland and Indonesia
Sumitomo Chemical to construct S-SBR plant in Singapore
Sumitomo Chemical will construct a new plant in Singapore to manufacture solution styrene-butadiene rubber (S-SBR). The plant will have a production capacity of 40 KTA and will start commercial operation in the fourth quarter of 2013. Sumitomo Chemical has decided to construct the new plant in Singapore owing to its geographic advantage in supplying the growing Asian markets as well as a secured stable supply of the raw material butadiene, which is likely in tight supply. In addition, this location provides easy access to existing businesses of the Sumitomo Chemical Group in Singapore that can be leveraged effectively.
Comments: Currently, the Asian region (including Japan and China) accounts for nearly 56% of the total global demand for solution SBR. Major producers in this region include Currently, the Asian region (including Japan and China) accounts for nearly 56% of the total global demand for solution SBR. Major producers in this region include Kumho Petrochemical (South Korea), Asahi Kasei (Japan), and Sinopec.
Solution SBR is primarily used in tire tread applications, accounting for about 70-80% of the demand. Another major end-use segment, with significant markets in India, Taiwan, and China, is footwear applications – wherein SSBR is used in making shoe soles. Other applications of SSBR include adhesives and sealants, High Impact Polystyrene (HIPS), as well as Acrylonitrile Butadiene Styrene (ABS) impact modification.
BASF and Petronas to study the expansion of Malaysia JV
BASF SE and Petronas of Malaysia have signed a memorandum of understanding to undertake a study to produce specialty chemicals in Malaysia. This move would help to extend the two parties’ existing business collaboration in the country which includes a production facility making butanediol, used in the manufacture of polyurethane products. The partners are considering a potential joint investment sum of about USD 1.3 billion.
The final scope of the investments will be determined following the outcome of the study, which is targeted to be completed in 2011.
Comments: This partnership has been successful in the South East Asian region. BASF has been producing butanediol and its derivatives, amongst other products, in Malaysia for over a decade. The company also utilizes the C4 stream for use in gasoline and other chemical production.
The new expansion plan is evaluating the production of specialty chemicals that include C4-based specialty chemical products, non-ionic surfactants, methanesulfonic acid, etc. This will help further strengthen BASF’s position in the Asian region and Petronas will be able to pursue its plans of growing and diversifying its downstream petrochemical business.
A. Schulman to open India plant by 2011
A. Schulman Inc. will open its first Indian plant by the end of 2011. The plant, to be located in Vadodara in the state of Gujarat, will initially operate a single Farrel continuous mixing line and make additive masterbatches. The plant will sell the additive masterbatches into biaxially oriented polypropylene film and other markets – India’s flexible packaging sector has notably enjoyed strong growth in recent years as India’s massive consumer market has blossomed. Schulman expects its sales in the country to come from a mix of domestic businesses and multinational companies that are establishing themselves there.
Comments: A. Schulman is concentrating its efforts on developing markets in the fast-growing Asia-Pacific region, with the foray into India marking the company’s latest venture. The growth in polymer consumption in India has been robust, with enough demand to absorb this new capacity. The new plant in the India location will be the company’s fifth; A. Schulman already has existing operations in China, Indonesia, Malaysia, and Australia. The company acquired ICO, which had strong operations in Australia, earlier this year and now this plant in Vadodora, India should help further bolster the company’s footprint in Asia.
Borouge mulls new compounding plant in India
Borouge is currently evaluating the construction of a new compounding plant in India, which would help the Abu Dhabi-based petrochemicals joint venture to expand its operations in Asia. In April, the company opened a USD 70 million, 105 KTA polypropylene compounding plant in Shanghai and is planning a production facility in Guangdong province. The company is also seeking to stand out in Asia’s increasingly crowded petrochemicals market by working closely with both the direct buyers of its plastics and the manufacturers who use them.
Comments: This is a relatively small investment for the group but an important one. The new facility will serve as an outlet for the company’s production while also helping Borouge to participate in the growing Indian market, mainly in the automotive sector. The auto industry in India is undergoing phenomenal growth, which will require significantly more sophisticated plastics & compounded materials. Back to Headlines
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