AMERICAS
Mexichem buying AlphaGary for USD 300 million
Mexichem SAB de CV is paying USD 300 million to buy compounder AlphaGary Corp. from Rockwood Holdings Inc. AlphaGary is the largest division in Rockwood’s specialty compounds segment and it develops high-technology compounds for niche applications. It has multinational clients in such sectors as communications cables, disposable medical devices, crown and closure sealants, automobile components, building materials, and consumer products.
Comments: Mexichem, in recent years, has been aggressively acquiring several businesses to expand its reach and widen its product portfolio. Since launching a USD 1 billion program of acquisitions three years ago, it has spent an estimated USD 500 million in investments. In 2010, Mexichem acquired Ineos flour holding (producer of fluoro chemicals), Policyd SA de CV (PVC resins), and Plasticos Rex Sa de CV (plastic pipes and fitting). The recent acquisition of Alphagary will allow the company to expand into the North American market realm.
Shell sells more Criterion catalyst businesses
Axens North America has signed an agreement with Shell’s Criterion Catalysts & Technology unit and with Shell to buy Criterion’s catalytic reforming catalyst business. Axens will acquire Criterion’s Willow Island, WV manufacturing plant for reforming catalysts as well as intellectual property rights associated with the business. Financial remains to be disclosed.
Comments: Criterion is divesting some of its chemical catalyst business to mainly reinvest in more profitable ventures. Some of the catalysts divisionsthat have been sold include naphtha reforming to Axens, and the styrene catalyst division to BASF.
In the case of naphtha, overall, the value of naphtha as feedstock for petrochemicals and the emergence of major natural gas discoveries, offshore and in new land-based findings, has made naphtha steam reforming less important. Areas such as the United States which has good access to natural gas are dependent more on the natural gas routes for the production of major petrochemicals –ethylene, and propylene. However, areas devoid of inexpensive natural gas, such as Western Europe and Asia, but with a source of naphtha cuts from petroleum will continue to find naphtha steam reforming attractive.
Most organizations are either switching and/or on the way to switching to ethane crackers. The major catalyst system used for naphtha reforming is NiO, over different types of carriers. Typical carriers used are alumina, magnesium alumina, calcium aluminate, and calcium aluminate titanate.
The acquisition of Criterion’s catalytic reforming business will further strengthen Axensin in the area of catalytic reforming for gasoline and aromatics production. The Willow Island plant will provide Axens with additional growth potential worldwide. In terms of the styrene catalyst business, mainly two players –Sud-Chemie and CRI-Criterion supply the catalysts. Sud-Chemie has more than 70% of the market share by supplying the majority of licensees. Typically, a styrene catalyst is an iron oxide-based support on an inert carrier. With BASF’stakeover of CRI-Crierion, BASF would be able to create additional leverage on catalyst supply for the majority of its licensees.
Jacobs buys Aker Solutions –process, construction Business
Jacobs Engineering has reached an agreement with Aker Solutions to buy the majority of its process and construction (P&C) business. The acquisition includes most of Aker’s chemical operations and is one of the largest deals in the consolidating engineering and construction (E&C) industry. Completion is subject to regulatory approvals and closing conditions, and the deal is expected to be finalized in Q1 2011. The transaction value is estimated at approximately USD 913 million, depending on closing adjustments.
Comments: The major focus of the acquisition is the mining and minerals sector of the business. The acquisition also includes Aker’s chemicals business sector. Mainly, the acquisition includes Aker Process BV, Aker P&C Americas, Aker Solutions BV, Aker Solutions Australia Pty, etc. The majority of active projects that are near completion are not included in the agreement and will be part of the new Aker Company. The new contracting company will also include Aker Solution’s Houston center and Union construction based in US and Canada.
Jacobs intends to increase its presence in the Chemical sector by creating new relationships with clients and expanding geographically. Aker Solution, on the other hand, intends to focus more on the upstream oil and gas industry. Jacobs will benefit from the majority of Aker Solutionsrelationshipswith clients. Aker Solution has expertise in the petrochemicals, synthesis gas, methanol, and plastics businesses. Aker has a good relationship with Invistafor purified terephthalic acid(PTA). In addition, Aker possesses exclusive licensing rights of Arkema’s polyvinyl chloride(PVC)processes and has well-established relationships with licensors including Dow Chemical for Unipol®, OxyVinyls, Ineos, etc.
San Jose, CA, adopts plastic bag ban
San Jose, California, has become the latest and one of the largest U.S. cities to ban single-use plastic carryout bags in what could just be the beginning of a string of new plastic bag bans in California. The plastic bag ban, which will go into effect Jan. 1, 2012, was approved 10-1 by the San Jose City Council on Dec. 14. The new law also requires all retailers in the city of nearly 900,000 people to charge at least 10 cents at checkout for paper bags, which must have at least 40 percent recycled content.
It is expected for more plastic bag bans to be coming soon in other California cities. In the wake of the failure of the state to approve a ban on single-use plastic bags in the legislative session that ended in September, the California cities of Fremont, Sunnyvale, Santa Cruz, Santa Monica, and Long Beach, and Marin County and Santa Clara County are now considering legislation to ban plastic bags.
San Clemente bans PS takeout containers
The city of San Clemente has banned the use of expanded polystyrene containers by restaurants, supermarkets, delicatessens, and other retail food vendors, effective July 1. The ban, passed unanimously by the five-member city council, bans all PS trays, plates, bowls, lids, cartons, cups, hinged and lidded containers, and any other PS items designed for one-time use for prepared food, takeout food or leftovers from partially consumed meals. It does not apply to single-use disposable straws or utensils.
A similar ban in Hayward, Calif., also will go into effect on July 1. Three dozen California communities, namely 33 cities and three counties along with the cities of Portland, Seattle, and Issaquah, Washington, have bans on PS takeout containers. In addition, Los Angeles and four other counties in California have PS bans at citywide facilities and events.
Comments: The longstanding problem with used plastic bags is the collection and reprocessing. Since neither the bag manufacturers resin producers and/nor retailers take that responsibility, the government steps in to assess a fee/tax for disposal.
The latest bag ban in San Jose has once again sparked the ongoing debate on the benefits of taxation and a ban on plastic bags, as opposed to the development of more efficient recycling operations. Recently, the border town of Brownsville, Texas, slapped a USD 1 tax on single-use disposable plastic bags at checkout. San Francisco and Washington are other U.S cities that have also imposed a tax or ban on plastic bags. Mexico City has also been in the limelight owing to its recently introduced anti-plastic bag legislation but has had much difficulty in implementing the new laws.
For polystyrene, several government organizations have already implemented a ban on PS due to environmental concerns. The main reasons for the ban are that foam is not biodegradable and takes hundreds of years to break down naturally. In addition, animals have been known to eat the foam causing injuries by blocking their digestive tracts. Because polystyrene finds use in much disposable Back to Headlines applications, the material is a major contributor to litter.
Propylene price increases in North America
U.S. propylene prices are expected to increase in January due to tight supply and several cracker outages. North American propylene is expected to increase to the level of14.5 cts/lb for chemical-grade propylene (CGP) and 15 cts/lb for polymer-grade propylene (PGP), an increase of nearly 25% from December2010contract prices of 59 cts/lb and 60.5 cts/lb, respectively.
Comments: A strong fourth-quarter demand, on the back of unexpected outages at several production sites, has been one of the main factors contributing to this steep price increase.
Some of the major propylene suppliers that have had to unexpectedly and temporarily shut down production include Shell Chemical. The company declared force majeure due to a ruptured steam line in November 2010. Dow Chemical’s Taft complex in Louisiana suffered a power failure in early January, which resulted in the shutdown of its steam cracker and several downstream units. CP Chem declared force majeure on polymer-grade propylene in mid-December because of its inability to meet production contracts. Recently, there have been production outages at Ineos and Petrologistics, which has further aggravated the market situation. Ineos’ Chocolate Bayou, TX complex suffered a lightning strike in November 2010 taking the complex offline and affecting about 2% of the North American propylene supply.
Du Pont innovating soft, scratch-resistant ionomers
DuPont’s research and development efforts have helped the company add to its Surlyn® range of Ionomer products. The new ionomers combine a highly soft and flexible base Ionomer and reinforcing crystallizable ionomeric modifier to achieve extended performance capability. Based on the softening technology, significantly softer ionomers are developed.
The soft ionomers are further modified by finely dispersing a crystallizable ionomeric modifier into the soft ionomers to reinforce the ionic network for physical property enhancement. The new ionomers also achieve significantly higher flexibility. The reinforced flexible network structure also enhances the viscoelastic properties to improve scratch resistance. The new ionomers have acquired higher polarity to enhance blend compatibility, the fabrication process, and melt adhesion to various substrates. The combination of the polar comonomers and ionic functionality promotes receptivity to electromagnetic energy and its surface polarity.
Comments: Surlyn®ionomers, first commercialized by DuPont during the 1960s, are copolymers of ethylene and methacrylic acid /acrylic acid that have been partially neutralized into salts with metal cations such as zinc or sodium. Since their commercial launch, they have found extensive application in flexible packaging owing to an excellent blend of properties. Some of these include low-heat seal initiation temperature, high hot-tack strength overbroad temperature range, toughness, excellent thermoformability, ease of processing, high oil resistance, and optical clarity.
In terms of properties, DuPont’s new range of ionomers provides a soft feel, high flexibility, good scratch resistance, and versatile melt processability coupled with good compatibility with a wide range of materials. Conventional melt processes such as injection molding, mono film and co-ex film conversion processes per casting or blowing, extrusion coating, etc. can process the ionomers. The high polarity further enhances the bond strength of the melt with various substrates.
The new ionomers are expected to be well suited for use in protective and decorative applications for molded goods, coated fabrics, films, and sheets, amongst others. As a key differentiator, they can achieve enhanced softness and flexibility without the addition of softening modifiers or plasticizers. They also carry no intentionally added halogens. They can be recycled or incinerated to serve as an eco-friendly and lightweight alternative to flexible PVC. They could also be used as a lower-cost alternative to flexible TPUs.
PolyOne buys Brazilian thermoplastics firm
PolyOne has acquired Uniplen Industria de Polimeros (Uniplen), a Sao Paulo, Brazil-based producer of engineered materials and thermoplastics distributor. The acquisition has been valued at about USD 21 million. Uniplen posted USD 34 million in 2010 revenues. Additional payments may be made for Uniplen over the next three years, based on achieving certain performance metrics.
Comments: PolyOne’s globalization approach has pursued a strategy of exploring opportunities and increasing market presence in high-growth regions such as Brazil, Asia, and the Mideast. PolyOne’s latest Brazilian acquisition lends expertise in the specialty-engineered materials market, while also creating for itself an attractive position in the Brazilian thermoplastics distribution business. PolyOne’s deal with Uniplen closely follows on the heels of its October acquisition of specialty color producer Polimaster (Novo Hamburgo, Brazil). The Polimaster acquisition served to provide the company with a base foundation in attractive Brazilian end markets in consumer goods and healthcare. The twin acquisition of Uniplen and Polimaster will complement each other by strengthening PolyOne’s specialty product offering and overall customer service capabilities in Brazil.
EUROPE
Lanxess to buy DSM EPDM business
Lanxess AG has agreed in principle to buy DSM Elastomers for €310 million(USD 413 million)on a cash and debt-free basis. DSM NV has agreed to sell its DSM Elastomers business, which produces the synthetic rubber ethylene propylene diene monomer (EPDM) under the brand name Keltan.
The deal is subject to employee consultation and antitrust authorities. It is expected to close in the first few months of 2011 and will place Lanxess as the largest EPDM producer in the world with a total capacity of some 320 KTA. DSM operates an EPDM plant in Sittard-Geleen, the Netherlands, with an annual production capacity of 160KTA. DSM’s other EPDM plant is based in Triunfo, Brazil, with an annual capacity of 40 KTA. Lanxess said it plans to base the headquarters of the combined EPDM businesses in Sittard-Geleen.
Comments: DSM polymers have been gradually exiting from their EPDM business ventures over the last few years. The company closed down its 50KTAplant in Addis in 2004 and moved out of the North American market. DSM’s vision and strategy have been to move away from a chemical/petrochemical focus and instead concentrate its efforts on the life science and material sciences industry.
Lanxess has been aggressive in recent years in marketing its product portfolio and expanding its capacities. The company has had expansions in Marl, Germany, and Orange, Texas. The current demand for EPDM in the world is close to 1300 KT and growing at 4.0 %. The main market driver for EPDM is automotive and construction. The acquisition of DSM’s EPDM business will allow it to further expand its market share in the EPDM sector and increase its product portfolio.
Lanxess currently produces EPDM in Marl, Germany, and Orange, United States, with a combined annual capacity of 120 KTA.
Italy imposes ban on single-use polyethylene bags
Four years after it was originally proposed, Italy has now imposed a ban on single-use polyethylene-based retail carryout bags. The plastic bag ban, adopted Dec. 22, went into effect Jan. 1 for the country, which has an estimated population of 60 million. However, retail stores and supermarkets will be allowed to use up their stock of plastic bags but will have to hand them out for free, rather than charging for them –which has been their traditional practice. More than 100,000 citizens had petitioned the government for a ban. Stores in Italy now will only be able to offer biodegradable, cloth or paper bags to their customers.
Comments: Italy is among the first countries in the European Union to ban plastic bags. This latest development in Italy is part of an emerging trend that has witnessed several state governments seek to curb waste by taking measures to reduce the usage of plastic carrier bags. Governments in different countries have taken a variety of measures, from imposing a fee for each bag at the retail level, to an outright ban on plastic bags. Elsewhere in Europe, Bulgaria’s government recently introduced an eco-tax on all plastic bags to take a stand against the proliferation of retail packaging waste. The annual plastic bag use in Italy is estimated to be around 20 billion plastic bags. When this figure is stacked against the country’s population, consumption is estimated to be more than 330 per person.
Borealis investing in Finland polyethylene plant
Borealis AG is spending €17 million(USD 22.64 million)to upgrade its PE-2 polyethylene production capacity in Porvoo, Finland. The upgrade, approved by the Borealis board on Dec. 15, includes a new ethylene compressor and an upgrade to the monomer purification line. This is expected to increase the output from the Porvoo PE2 plant by 15 KTA, from the current capacity of 240 KTA.
The Porvoo PE2 plant is Borealis’s demonstration unit for upscaling new Borstar PE technologies and for the introduction of new PE products.
Comments: Borstar PE technology is a well-established ethylene polymerization technology. It is used primarily for internal manufacturing in Borealis and sister companies and is currently not available for licensing (there was one license sold to China more than a decade ago). Borstar technology is employed in various PE production facilities of Borealis, and all three phases of Borouge operations. In addition to the 6% production increase, the upgrade will enable Borstar PE to achieve more efficient operations in the development of new products/processes. Under the IPIC umbrella, there are three entities: Borealis, Borouge, and Nova. Borealis is also owned by other IPICs (64%) and OMVs (36%). But 20% of OMV is owned by IPIC. Therefore, Borealis is 71.2% owned by IPIC and 28.8% by OMV. Borouge is owned by Borealis and ADNOC (Abu Dhabi National Oil Company), while Nova has been a wholly owned subsidiary of IPIC since 2009.
Styron to build SSBR unit in Germany
Styron has announced plans to build an additional solution styrene butadiene rubber (SSBR) production line at Schkopau, Germany. The plant will have a capacity of 50KTA and help Styron to meet the growing demand for high-performance tires with low rolling resistance. The tires help vehicles to improve fuel efficiency and reduce CO2 emissions. The trend is driven partly by European environmental legislation, due to being formally introduced in 2012, covering mandatory performance labeling of tires, including maximum rolling resistance. Construction on the Schkopau SSBR unit will begin in May 2011 and production is due to start in the fourth quarter of 2012. The plant will be built alongside existing Styron SSBR production lines.
Comments: Dow Chemical had initially started up a Solution SBR plant in Schokpau (Germany) in April 2009, with a capacity of 60 KTA. Later in July 2009, the company decided to group the businesses of synthetic rubbers, styrenics, paper and carpet latex, polycarbonate and compound blends into another independent company to be called Styron LLC. Styron later became an independent company in June 2010.The two trains of SSBR production (i) the former Dow Chemical SSBR plant of 60 KT along with (ii) the 50 KT SSBR plant at the same site to come on stream in 2012, will set Styron as a significant competitor in the region. Solution SBR demand is increasing significantly in Asia in China.
Other major Solution SBR plant capacity additions include Asahi Kasei with a capacity of 100 KTA to be added in installments of 50 KT each by 2013 and 2015; in Jurong Island, Singapore, Sumitomo Chemical with a capacity of 40 KT to be brought on stream by 2013; and Indian Oil Corporation in Panipat, India, with a capacity of 120 KT to be brought on stream by 2011.
Styron’snew unit will supply customers overseas, as well as in Europe. Europe is ahead of the rest of the world in developing standards for rolling resistance and efficiency requirements, but other countries, including the U.S., are in the early stages of requiring more efficient tires.
DuPont expanding Czech PVB sheet plant
DuPont Co. has launched a USD 14 million plant in the Czech Republic producing its Butacite G PVB (polyvinyl butyral) interlayer film sheet for laminated glass.
The new plant in Holesov, which is set to become DuPont’s hub in Central Europe, opened late last year. The group sees the Czech Republic as a promising growth market for its new local production. The company, which manufactures similar products in the United States, Germany, and South Korea, considers the plant represents a milestone in DuPont’s continuing commitment to Central and Eastern Europe. It has been in the region for some 20 years.
Comments: This new venture by Du Pont is further representative of the company’s strengthening foothold in Central and Eastern European markets, while also signaling Du Pont’s continued contribution toward the development of regional east European economies. Du Pont especially considers the Czech Republic as a promising growth market for its new local production, given the burgeoning of the automotive and related industries in the region.
Du Pont’s PVB product offerings, namely Butacite® and Butacite® which are thermoplastic sheet materials, are tough, resilient safety interlayers –they are used in laminated architectural and automotive glass. Butacite® is virgin material while Butacite® Gis is manufactured from 100% post-industrial recycled PVB, and is used in safety glass for the automotive and construction industries. The technology has also been increasingly finding applications in the fast-growing photovoltaic sector. For environmental benefits, the patented technology used to produce Butacite®G at this facility substantially reduces the amount of scrap material that otherwise would need to be landfilled or incinerated. Du Pont’sglass laminating business focused on safety glass solutions provides a broad portfolio of highly engineered polymer resin and sheet products, including EVA, PVB, and ionomers.
BASF to grow USand EU superabsorbents
BASF plans to expand its existing superabsorbent polymer production capabilities at its Antwerp plant in Belgium and its Freeport site in the US. The company plans gradual debottlenecking and technical expansion measures to raise annual capacity by 70KTA to a total of 470 KTA by 2012, with each site contributing an additional 35 KT.
Comments: The rising demand for superabsorbent polymer (SAP) has been intertwined with the growth in demand for disposable diapers and hygiene products. SAP, due to its excellent water absorption properties, is widely used in these applications and accounts for more than 90% of the total consumption market. SAP demand continues to grow in Western Europe and the United States, with the aging population in these regions supporting this steady growth. The aim of BASF’s planned investments is thus to support market growth and drive innovation.
MIDDLE EAST/ AFRICA
Sipchem awards contract to GS Caltex
Sipchem and its partner Hanwha Chemical have awarded the engineering design, procurement, and construction contract for their previously announced ethylene vinyl acetate (EVA) and low-density polyethylene(LDPE) joint venture complex to GS Engineering & Construction. The 200 KTA plant will be built in Jubail, Saudi Arabia based on ExxonMobil Chemical technology by the second quarter of 2013. The estimated cost of the project is USD 800 million. Sabic will supply ethylene feedstock to the EVA-LDPE complex.
Comments: The 200 KTA world-scale plant is considered to be the first of its kind in the region to produce ethylene vinyl acetate. Sipchem has licensed ExxonMobil`s tubular high pressure low density polyethylene process (HPPE) technology for this new production facility, to be built at its site in Al-Jubail Industrial City. This expansion is part of Sipchem’s Third Phase Projects.
The licensing agreement with ExxonMobil has been considered a win-win situation for both companies. ExxonMobil began licensing its high-pressure LDPE process technology in the mid-1990s. The major strength of this technology lies in its ability to control the reactor temperature profile and reactor gas distribution to custom-tailor the LDPE properties. In addition, this technology can be used for up to 400 KTA of capacity, in the event of a capacity expansion. This project is considered a major milestone for Sipchem as it reinforces the company’s commitment to adding value to the abundant natural resources of the Kingdom, thereby stimulating economic and social development.
The Kingdom’s Ministry of Petroleum and Minerals has allocated the required quantity of the ethane feedstock which will be cracked to ethylene by a SABIC affiliate -a tolling agreement for this purpose is in place. Vinyl Acetate Monomer, to be used as a secondary feedstock, will be supplied by the International Vinyl Company a Sipchem affiliate.
Qatar Petroleum and Shell study chemicals project
Qatar Petroleum and Royal Dutch Shell plc have agreed to jointly assess developing a major petrochemicals complex, including a mono-ethylene glycol (MEG) plant in Ras Laffan Industrial City, Qatar. The project would include a MEG plant of up to 1,500 KTA using Shell’s proprietary OMEGA (Only MEG Advantaged) technology. It also covers other olefin derivatives. to yield over 2,000 KTA of finished products. In Qatar, the partners are already building jointly Pearl Gas to Liquids (GTL) and Qatargas 4 LNG, two of the largest projects in the world in Ras Laffan Industrial City.
Comments: MEG is a hydrolyzed product of ethylene oxide, which originates from ethylene. So far, ethylene produced in Qatar has only been used for producing polyethylene (the polymer route). The production of MEG via the ethylene oxide intermediate route reflects a new direction –the chemical route. Ethylene oxide is one of the most versatile intermediates inetrochemical industry; due to its high reactivity m, any chemicals and polymers can be derived from it. Competing technologies of OMEGA include Dow’s Meteor and the Scientific Design Process (now owned by SABIC/Sud-Chemie).
ASIA-PACIFIC
TSRC to buy Dexco Polymers
TSRC Corp. will buy U.S.-based thermoplastic elastomers maker Dexco Polymers L.P. from ExxonMobil Chemical Co. and Dow Chemical Co., who are the owners of the venture.TSRC will pay USD 168 million for the company. Dexco Polymers produces SIS and SBS thermoplastic elastomers at its plant in Plaquemine, La. The deal still requires regulatory approval in the U.S. and Taiwan, which is expected to happen by the second quarter of 2011.TSRC formerly known as Taiwan Synthetic Rubber Corp. produces SBR and polybutadiene rubber. Its SBR is used in passenger tires, shoe soles, conveyor belts, tank and tractor tracks, and other products. The firm also makes Taipol TPE for adhesives, industrial compounds, and shoes.
Comments: TSRC started operation in 1973 under the name Taiwan Synthetic Rubber Corp. The company has been rapidly expanding and is currently one of the largest players in the Asian rubber industry. TSRC, in addition to styrenic TPE, produces Butadiene Rubber and Styrene Butadiene Rubber.
TSRC has gradually been expanding in the elastomers markets. Recently the company announced a JV with Lanxess to build a nitrile rubber plant in China.TSRC entered the Styrene block copolymers market when it relocated a 20KTASBC plant from Borger, Texas, USA from Phillips Petrochemical Company and rebuilt it at the TSRC site in Kaohsiung in the 1980s. The company has since then expanded and developed hydrogenated SB copolymers, and SEBS. Today the company produces all three major SBC grades, SBS, SIS, and SEBS.
TSRC will become the second largest producer of SB Copolymer in North America after acquiring Dexco polymer. TSRC’s acquisition will also help it to upgrade its technology, provide its customers with a wider array of products and diversify its customer base throughout the Americas, Asia, and Europe.
Dexco was a classic jv between the then Dow Chemical Company and ExxonMobil. There was no employee for Dexco –most of them were on loan from the parent companies. Dexco enjoyed independence and freedom with all the processed materials from Dow and molded material markets for Exxon. The major disadvantage –a company that does not belong to anyone is hard to sustain.
Dynasol forming SBS joint venture in China
The Dynasol JV is focused on the production of styrene block copolymers. Dynasol is a major Back to Headlines global supplier of SSBR, SBS, and SEBS –the company currently operates block copolymer plants in Europe and North America. The plants are located in Santander (Spain) and Altamira (Mexico) with both plants producing more than 200 KT of product annually. The SBS and SEBS capacities of the Santander facility are 90 KTA and 20 KTA respectively, while Dynasol’s Altamira production complex has an annual capacity of 40 KT of SBS.
Dynasol’s new SBS plant in China will benefit from China’s burgeoning rubber demand –the nation’s rubber demand is growing at a rate of about 7 % annually. The new plant will be part of an existing chemical complex owned by Xingan.
Mitsui may build a Singapore alpha-olefin unit
Mitsui Chemicals may build a new alpha-olefin co-polymer line on Singapore’s Jurong Island as demand increases. The plant will produce high-performance elastomers under the brand name Tafmer® and will start up in 2014 at the earliest. Mitsui Chemicals will decide the details, including the capacity of the new production line, in 2011 at the earliest
Comments: This is another addition to the list of alpha-olefin plant constructions and expansions announced by Chevron Phillips, SASOL, and SABIC. All these new capacities were based on the projection of the big boom of polyethylene and olefinic elastomers over the next five to seven years. Singapore’s Jurong Island provides the right infrastructure for production, while its location is suitable for supplying to most Asia-Pacific countries.
BASF and Sinopec to expand joint venture
BASF-YPC, BASF SE, and Sinopec have signed a memorandum of understanding to explore the expansion of their integrated petrochemical joint venture, BASF-YPC Co. Ltd. The expansion will be a world-scale hydrogen peroxide-propylene oxide (HPPO) facility.BASF said the main projects include an extension of the C3 and C4 value chains with the construction of a 160 KTA acrylic acid facility, a new butyl acrylate plant, as well as capacity increases at the 2-propyl-heptanol, styrene monomer, and non-ionic surfactants plants. A superabsorbent polymers (SAP) plant, to be built as the final part of the ongoing expansion project, will get feedstock from the acrylic acid facility. The projects will collectively total about USD 1 billion. The final scope of the investments will depend on the outcome of joint feasibility studies for each project.
Comments: Being the largest chemical company in the world with revenue exceeding USD 50 billion, BASF is eyeing the potential of Asian markets, particularly in China and India, and is actively investing more in these two countries mostly via a JV format. The projects of extension of C3 and C4 streams are important in the value chains since a number of high-valued products can be derived from these two streams.BASF has slated investment of approximately €2 billion (USD 2.7 billion) in the Asia Pacific region between 2009 and 2013.
DuPont expanding Shanghai R&D facility
DuPont Co. is doubling the size of its research and development facility in Chinato focusing on new materials for photovoltaic, bio-based, and automotive applications, as part of its strategy to accelerate growth in developing economies. Du Pont plans to add about 200 science and technology jobs at its facility in Zhangjiang Hi-Tech Parkin Shanghai over the next two years, doubling employment there. The company opened the Shanghai facility in 2005.DuPont opened research centers in Paulinia, Brazil, and Hyderabad, India, in 2010, along with two new solar energy centers in Switzerland and the United States, and agriculture research facilities in Ukraine, the United States, and the Philippines.
Comments: Shanghai is arguably China’s most attractive city for major foreign industrial companies to set up their R&D facilities. Several factors may account for the popularity. With a population of 20 million, Shanghai is the third largest directly-controlled city in China, after Chongqing and Beijing. It has a mild climate and excellent location with easy access to air travel, railways, and port. It has well-designed “industrial parks” for industrial R&D. Shanghai also has several reputable universities which can supply a high-quality workforce. Notable chemical companies recently set up their R&D in Shanghai including DuPont in 2005, Rohm and Hass (now Dow) in 2007, and ExxonMobil in 2010.
Evonik and Gujarat Alkalies link in HPPOproject in India
Evonik Industries and Gujarat Alkalies and Chemicals have signed a memorandum of understanding to develop a multimillion-dollar hydrogen peroxide-propylene oxide (HPPO) manufacturing project at Dahej, India. Under the terms of the agreement, which is yet to be approved by the executive and supervisory boards of Evonik, Evonik will build, own and operate the hydrogen peroxide facility while Gujarat Alkalies will be responsible for the propylene oxide (PO)unit. The HPPO technology was developed by Evonik and Uhde and has already been proven on a 100 KTA plant operated by SKC in Ulsan, Korea. Evonik plans to produce the hydrogen peroxide and supply it over the fence to the PO facility.
Comments: Evonik’s strategic objective is to gain access to new markets for hydrogen peroxide. The Evonik-Uhde establishment started their collaboration on HPPO technology in 2001. This is a process to make propylene oxide from reacting propylene and hydrogen peroxide. It has been touted as a superior technology versus those conventionally used in terms of economics, environmental friendliness(water is the only by-product), and selectivity (over 95%). A titanium silicate catalyst was used and the process was commercialized in 2008. Both hydrogen peroxide and propylene oxide are versatile chemicals and have a wide range of applications. The growth of these applications is highly dependent on the GDP growth rate. With a GDP growth of over 8% in this past decade, India and China are logically the prime markets for HPPO. Hydrogen peroxide has traditionally been used in the pulp and paper industry. Evonik is one of the global leading producers of hydrogen peroxide with plants in Europe, North and South America, South Africa, New Zealand, and Asia with a combined capacity of about 600KTA.
SK Energy spins off businesses; Petchem unit named SK Global Chemical
SK Energy (Seoul) has spun off its petrochemical, refining, and lubricants businesses, and the company’s petrochemical business has been named SK Global Chemical. SK Energy announced last May that it would pursue a restructuring of its businesses. SK Energy has been renamed SK Innovation, and the company’s oil refining business will be called SK Energy, and the company’s lubricants business will be called SK Lubricants.
Comments: South Korea’s leading oil refiner,SK Energy,is now known as SK Innovation Co. after completing the previously announced spin-off of its petroleum and petrochemical divisions. The theSeoul-based company announced in October of last year that its refining and petrochemical businesses would become separate, and new wholly owned subsidiaries would be formed on January 1, 2011.SK Innovation decided to spin off the two divisions in a bid to improve its competitiveness. The restructuring would help the company meet challenges caused by wavering market conditions, and the formation of separate entities would thus enable them to focus on strengthening their core businesses while implementing new strategies with greater autonomy.SK innovation, with current annual revenues of about won40 trillion(USD 35.6 billion), aims to have total sales of about won120 trillion (USD 107 billion) by 2020.
Indorama to invest USD 3.8 billion in PET resin
Indorama Ventures Ltd. plc (IVL) has set a five-year target to become the undisputed global leader in PET resin manufacturing. The company will invest USD 3.8 billion to expand its reach in PET, up by 90 percent from the company’s previously announced USD 2 billion investment. The investment through to 2014 would give the company the capacity to make 10,000 KT of resin annually, up from its earlier target of 3,200 KTA, which would have doubled its current capacity. Indorama shareholders approved the issuance of 481.59 million transferable subscription rights (TSR) units, priced at Baht36 (USD 1.20) per piece. Proceeds from the units would fund the expansion.
Comments: With aggressive expansions using acquisitions and organic growth, Indorama Ventures Ltd. plc (IVL) will undoubtedly become the dominating player in PET in all three major applications: fiber, bottles, and films. IVL has already invested USD 900 million in acquisitions and investments, especially in China and India. The company would be making a further USD 2.9 billion worth of investment over the next three years. IVL is currently in the process of completing the acquisitions of several PET business units from South Korea’s SK Chemicals-SK Eurochem in Poland, and PT SK Keris together with its subsidiary PTSK Fibre in Indonesia.
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