AMERICAS
Dow to complete closure of two VCM units this year
Dow Chemical will close two vinyl chloride monomer (VCM) production lines this year. Dow will shut down a production unit at its Freeport, TX VCM facility in the first quarter of 2011. A second VCM unit at the company’s Plaquemine, LA complex will cease operations in the third quarter. Dow announced the closure of the Plaquemine unit in 2009. The facility has a total nameplate capacity to produce about 726 KTA of VCM, while the Freeport plant has the capacity to produce about 1000 KTA of VCM.
Comments: This is in line with Dow’s emphasis on moving towards the higher valued, less cyclic specialty and performance businesses. Meanwhile, in the commodity arena, companies such as Formosa and Shintech will continue competing by lowering the costs of feedstock and operational expenditures. Larger capacity is typically a part of the equation.
ALFA completes purchase of three South Carolina plants from Eastman
Mexican industrial conglomerate ALFA, S.A.B. de C.V. has completed the purchase of 3 South Carolina petrochemical plants from Eastman Chemical Company for about USD 600 million. One of the plants produces PTA and the other two produce PET with an annual capacity of 1,270 KTA.
As per the agreement, ALFA’s DAK Americas, LLC unit also gets the intellectual property of Eastman’s integrated polyethylene terephthalate (PET) and purified terephthalic acid (PTA) business, as well as access to the existing customer base.
Comments: Announced on October 26, 2010, the deal is now completed. ALFA is a huge Mexican conglomerate with four business segments: petrochemical (where the PET business would fit), aluminum engine heads and blocks (a leading supplier), refrigerated foods, and telecommunications. ALFA considers this a good buy as the packaging business in beverages (such as PET) is resilient during economic cycles.
LBI’s LupotechT ®selected for Braskem Idesa LDPE plant in Mexico
The Braskem Idesa joint venture has selected LyondellBasell’s Lupotech T® process technology for a previously announced 300 KTA low-density polyethylene (LDPE) plant at the Coatzacoalcos Petrochemical Complex in Mexico. The plant is scheduled to start up in 2015.
Comments: Lupotech T®is a leading high-pressure tubular process licensed by LyondellBasell to make LDPE and standard EVA. Currently, there are a total of 60 licenses of Lupotech T®and Lupotech A®(autoclave) worldwide. This is the last of the three technology license selections (two HDPE and one LDPE) made by the Braskem Idesa JV. In November 2010, Braskem Idesa JV, selected two identical Innovene S technologies for HDPE (one for unimodal and another for bimodal resins), with a total capacity is 750 KTA. The Braskem Idesa JV is a major event in Latin America and has a significant long-term impact on the petrochemical industry of both countries. The deal involves three parties: Pemex, Braskem, and Idesa. Pemex will supply the natural gas from which ethane is obtained and then cracked to ethylene before converting to polyethylene. So far most of the polyethylene in Mexico is imported from USA and Canada. With the three world-scale plants starting up in 2015, the trade dynamics in the region are expected to change. In addition to the JV, Braskem has made an extensive long-term collaboration deal with Ineos in polyolefin licenses and technology developments.
Dow to start solar shingle production in 2011
Dow Chemical Company plans to start commercial production of its Powerhouse solar roof shingles in 2011 -before its new production plant in Midland, Mich. Dow’s photovoltaic thin-film copper indium gallium diselenide photovoltaic solar cells currently are manufactured on a flexible substrate by Global Solar Energy Inc. in Tucson. The flexible film solar cell is then integrated by Dow into a proprietary polymeric-based shingle using an injection molding process. Currently, Dow is making the shingles in limited quantities at its solar market development plant, in Midland, MI.
Comments: Dow started developing and building integrated solar arrays for residential purposes in 2007 and unveiled its product Powerhouse™ Solar Shingle in October 2009. The product has the capability to convert 13 percent of the sunlight absorbed into usable electricity in comparison to most thin-film panels which have a conversion rate of 11 percent. The key to its technology is the plastic coating, which makes the thin-film cells more durable and efficient than most of its competitors.
Another advantage is its relatively lower price, which includes easier installation on the asphalt shingles and long-lasting performance besides its higher efficiency. A 4-square-foot shingle would cost USD40 after government subsidies and is expected to last 15 to 20 years, similar to the life expectancy of a standard asphalt roof. The product will be sold directly to major homebuilders such as Hovnanian, Pulte, and Lennar when commercialized in mid-2011.
It is the first residential solar roofing shingle to receive the Underwriters Laboratories(UL)safety certification and was also awarded the GLOBE Foundation award for Environmental Excellence in Emerging Technology.
White House energy adviser Carol Browner to resign
Carol Browner, a top adviser to President Obama on climate change and energy issues, is planning to resign from her post. Browner served as climate and energy czar in the Obama White House and was head of the EPA during the Clinton administration. She was considered a crucial voice in support of legislation establishing a cap and trade program for greenhouse gas (GHG) emissions. It is currently unclear whether the administration plans to appoint someone to fill her post or drop the position entirely.
Comments: Carol Browner was instrumental in adapting strict environmental restrictions.
EUROPE
BASF to increase R&D spending
BASF intends to increase R&D spending in 2011. According to the company, R&D spending increased to almost €1.5 billion(USD 2 billion)in 2010 from €1.4 billion(USD 1.9 billion) in 2009. BASF is participating in about 1,900 cooperative R&D projects worldwide. BASF exceeded its target set for 2010 of generating sales of €6 billion/year(USD 8 billion/year) from new and improved products and applications that have been on the market for less than five years. The company has raised the target to €6 billion-€8 billion/year (USD 8 billion –USD 11 billion) of sales generated through innovation by 2015. Investments will focus partly on products to improve mobility in a sustainable way, such as lightweight plastics, innovative fuel additives, and materials for high-performance and safe batteries for hybrid and electric vehicles.
Comments: As the number one chemical company in the world, BASF is also leading in its innovation-driven initiatives and always put a premium on research and development. For 2009, the R&D expenditure out of total revenue was 3.5%, compared to 3.3% for Dow and 0.87% for ExxonMobil Chemical Company.
Novostrat launches Europe’s largest PE foam plant
Packaging and insulation producer Novostrat Sp.z.o.o. has launched what is claimed to be Europe’s biggest polyethylene foam plant in Olszyna, Poland. The company, based in Pabianice, Poland, plans to export its entire output to countries in Western Europe, including France and Germany. The extruder located its largest production unit to date in a former furniture factory in an area close to Poland’s borders with Germany and the Czech Republic. Novostrat, already a supplier of PE foam packaging in Poland to global computer giant Dell, will produce PE foam material at the new facility for construction thermal and acoustic insulation and flooring underlay, as well as for packaging. The privately owned company bought the premises of the former Olszyna Furniture Factory, which went bankrupt two years ago with the loss of 350 jobs.
Comments: Novostrat has anticipated the potential growth for the foam market in the region, especially in Western Europe, where the consumer market is large and the economy continues to improve after the recession. The converting industry in recent years has started to establish production facilities in Central and Eastern Europe to take advantage of low-cost labor and lower production cost. Polyethylene foam is commonly used in the automotive market for applications such as dashboards, door panels, consoles, boot interiors, and handgrips. In sports, this foam is used as padding for the protection of the knee, shin, and elbow and used for head protection. Polyethylene foam due to its increased resilience and high shock-absorbing capability is also used for packaging fragile glasswork, TVs, audio sets, PCs, and printers.
BASF starts expanded the Ecoflex plant
BASF SE has started operations at its expanded Ecoflexresin plant in Ludwigshafen. The company will also ramp up the compounding capacity for Ecovio, a derivative of Ecoflex, a biodegradable polyester.
Comments: Ecoflexis a plastic that has the properties of conventional polyethylene, but is fully biodegradable under industrial composting conditions by DIN EN 13432. BASF now can produce 74 KTA of Ecoflex annually, up from its previous capacity of 14 KTA.
Ecovio is a derivative of Ecoflex that is also biodegradable and contains up to 75 percent of renewable raw materials. Typical applications are shopping bags, organic waste bags, mulch films for agricultural applications, and food packaging. One of the latest innovations is Ecovio FS Paper, which is used to provide a biodegradable waterproof coating on the interior surfaces of paper cups and cardboard containers.BASF has already been successful in its market with the biodegradable polyesterEcoflex and the related product –Ecovio. The larger production capacities will enhance their position significantly.
DSM sells Yparex business
DSM Engineering Plastics has reached an agreement for the sale of its Yparex adhesives business to Resin (Products & Technology), a Netherlands-based compounding company. The sale is expected to close in Q1 2011, subject to regulatory and other customary approvals and notifications. The Yparex business produces extrudable adhesive tie-layer resins as well as polyolefin compounds. These are used in numerous industrial applications such as sanitary and heating pipes, floor and wall heating (or cooling), copper and steel pipe coating, film applications, cables, and cladding panels.
Comments: DSMEngineering Plasticsheadquartered in Harleen, Netherlands, previously supplied maleic anhydride grafted LLDPE and LDPE under the trade name YPAREX® in Western Europe. Although the company’s petrochemicals and polymer division was acquired by Sabic, the Yparex® tie-layer resin division was owned by DSM. The company used to supply a significant majority of Belgium and Netherlands-based packaging converters for food packaging applications. However, due to the acquisition of its polyolefins business, DSM had to supply tie-layer resins separately (not as a packaging solution with polyolefins) –resulting in decreased competitive advantage. During the same period, the applications of tie-layer resin increased for industrial and compounding-related applications such as coupling agents, compatibilizers, tougheners, etc. Due to the increased demand in the industrial, automotive, and construction sectors, DSM mainly focused on increasing the market share in these markets. However, these markets typically have lower margins and the company required better business synergies in these markets.
RESINS (Products & Technology) B.V., based in Enschede, The Netherlands, is well-known in custom-compounding of thermoplastics. The company consistently participates in the industrial and construction sector through its thermoplastic compounds offering. The company blends polymer with other materials such as metals, polymers, stones, fibers, glass, calcium carbonate, etc. Yparex® can be used as coupling agents for all of these compounds. The move to sell its Yparex® business to RESIN BV is of strategic essence DSM lacked access to its polyolefins business after the SABIC acquisition of DSM petrochemicals. On the other hand, RESIN BV typically uses a tie layer as a coupling agent in a majority of its compounds.
Chemical Market Resources has been tracking tie-layer resins markets since 1990. We published a detailed market and strategic study on this subject in 1997 and 2004. Recently, there have been dynamic changes in this market with high volume consumption in emerging economies for packaging applications. In addition, the market has also witnessed high global growth for compounding-related applications such as wood plastic composite, coupling agents for PP, and nylon modification applications. To track all these changes, Chemical Market Resources, Inc has conducted a detailed study on the tie-layer market. Please contact us for more details.
MIDDLE EAST/ AFRICA
USD1.2 billion upgrades of a PE gas-chemical complex in Uzbekistan
Uzbekistan is expected to invest USD 1.2 billion in an upgrade of a polyethylene gas-chemical complex. The state-owned plant in Mubarak is expected to be upgraded to 400 KTA. The project will be financed jointly by three separate agencies. Singapore’s Indorama group is expected to receive USD 150 million from national gas company Uzbekneftegaz and USD 600 million from Indorama, while The Uzbekistan Fund for Reconstruction and Development will contribute USD 450 million. Upgrade of the plant built in 1971 is expected to be completed by 2015. This project constitutes part of the Uzbek government’s economic plan to stimulate investment in the country.
Comments: Uzbekistan’s PE demand has improved since the second quarter of 2009 and the trend is expected to continue for the next few years. Uzbekistan along with Kazakhstan has plans to leverage its strength in oil and gas resources to develop a world-class petrochemicals industry in Central Asia. The region needs foreign investment to go ahead with this establishment.
The Indorama Group has already established its presence in the region. The company with the National Bank of Uzbekistan established Indorama Quqon Textile, a joint venture textile plant in Quqon.
ASIA-PACIFIC
IRPC to expand ABS production
IRPC, an integrated petrochemical arm of PTT Plc, will spend about USD 100 million to more than double its production capacity of acrylonitrile-butadiene-styrene (ABS) as part of its expanded USD 1.8-billion five-year “Phoenix” investment program through 2014. The ABS capacity increase is aimed at serving the growing demand from the automotive and electronics industries. Last year, IRPC launched green ABS, an environmentally friendly product that replaces synthetic rubber (butadiene) with natural rubber in ABS manufacturing. The product has since attracted a good response from IRPC’s customers. The new investment will increase the ABS capacity by 70KTA from 2012. Currently, IRPC produces around 40KTA to 50KTAat its petrochemical complex in Rayong.
Comments: China and the Asia Pacific will remain the largest consumer of ABS with over 75% of total global consumption due to the growth of the automotive and electronic markets. ABS can exhibit a wide range of properties due to its flexibility of composition and structure and can be used in a wide variety of applications. ABS is abridged between commodity plastics (e.g., polystyrene) and higher-performance engineering thermoplastics (e.g., polycarbonate). In ABS, the styrene base provides rigidity and ease of processability, and acrylonitrile offers chemical resistance and heat stability. IRPC’s new capacity will allow it to meet the growing demand for ABS in the region.
Dow to build MDI units in China and Saudi Arabia
Keyuan Petrochemicals signs R&D agreement to develop K-Resin Technology
Comments: Keyuan Petrochemicals, Inc., formed in 2007 has an annual petrochemical manufacturing capacity of 550 KT for a range of petrochemical products. Keyuan plans to establish a high-styrene SBS production facility will allow it to take advantage of the growing packaging and plastic industry in China. This plant will be the second plant in Asia to produce high-styrene SBS. In Korea, Phillips Investment Company (PIC), formed a joint venture with Korea’s Daelim Industrial Co. Ltd. to produce Phillips’ proprietary K-Resin (SBC) in a 90-million-pound capacity plant.
Chevron Phillips currently produces K-Resin SBC at the company’s 168 KTA Houston Chemical Complex in Pasadena, Texas. K-Resin SBC is a clear, tough material used in a variety of products, including medical components, toys, candy wraps, food packaging, cups, and clothes hangers.
PTT to merge petrochemical affiliates this year
Energy Company PTT expects to decide on a merger plan for several of its petrochemical-producing affiliates by the end of this quarter and to start implementing the merger in the third quarter. Details of which companies would be combined are yet to be disclosed. State-controlled PTT had been expected initially to merge Integrated Refinery and Petrochemical Complex Co. (IRPC) with PTT Aromatics and Refining, but legal difficulties at IRPC have caused speculation that PTT will instead combine PTT Aromatics and Refining with PTT Chemical.
Comments: The merger will bring PTT to among the top three-energy companies in Asia. The consolidation will also result in a more integrated company with upstream and downstream more closely knitted. The merger will allow it to cut costs and improve efficiency. The merger was originally slated to have taken place in late 2009, but the consolidation plan was affected when the Thai Central Administration Courts suspended the construction of 76 projects on environmental grounds. All the projects were located in Mab Ta Phut, Rayong province. The suspension was finally resolved in September 2010.
Rhodia boosts compounding capacity in Shanghai
With a 25 percent sales increase in 2010 and a double-digit sales growth forecast for 2011, Rhodia Engineering Plastics is on track to boost its compounding capacity in China. The company expects to complete a 40 percent expansion at its Shanghai facility by July 2011.
Expansion is needed to follow the growth of the market. Its recent acquisition in India has added capacity to its manufacturing portfolio and also announced a 10 percent expansion in South Korea in May. The Shanghai plant, which opened in 2006, was designed for twice its current capacity. After the current expansion, one more capacity increase is planned for 2013, to ultimately reach the designed capacity.
Comments: Rhodia’s expansion of its compounding capacity will allow it to continue to meet the growth in demand it has been experiencing. The main markets where compounded products are widely used in China include the automotive, appliance, electrical, and electronic markets.
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