AMERICAS
DAK Americas buying Eastman’s PET business for USD 600 million
Eastman Chemical Co. has agreed to sell its integrated PTA and PET resin business to DAK Americas LLC, owned by Alpek, a division of Mexican conglomerate Alfa SAB de CV, for USD 600 million in cash. The transaction is expected to be completed in the fourth quarter.
The sale is subject to regulatory approvals and satisfaction of other customary closing conditions and is not expected to impact product lines in the company’s Specialty Plastics segment. The acquisition comprises three petrochemical plants with an annual capacity of 1,270 KTA, located in South Carolina, the first of which produces PTA while the other two produce PET.
The operation also includes the intellectual property rights to Eastman’s PTA and PET Integrex technology and access to the businesses’ list of commercial relations. Bank of America Merrill Lynch served as financial adviser to Eastman during the transactions.
Comments: We have monitored this development for months now. It looks like the successful sale of integrated PTA and PET businesses will enable Eastman to focus more on its core businesses. On the other hand, the PTA/PET may find an interesting fit with Alfa’s highly diversified businesses spanning petrochemicals, aluminum auto parts, frozen foods, and telecommunications.
ExxonMobil elastomer approved for food contact
ExxonMobil Chemical’s Vistamaxx propylene-based elastomer has been approved for food contact applications, such as flexible and rigid food packaging, by the Japan Hygienic Olefin and Styrene Plastics Association (JHOSPA).
The grades, Vistamaxx 3000, 3020FL, 3980 FL, 6102, 6102FL, 6202, and 6202FL, have been approved for food contact, including liquor and aqueous/acid food, providing the temperature does not exceed 100 C (212 F). The elastomers are based on ExxonMobil Chemical’s proprietary Exxpol® metallocene technology.
Comments: Vistamaxx is a propylene-based copolymer, which was introduced a few years ago. It is a metallocene olefinic elastomer that provides a unique combination of high elasticity, softness, toughness, flexibility, and clarity. The active market development effort results in more customer acceptance and more approvals by associations such as JHOSPA. A 300 KTA plant in Singapore will soon start producing Vistamaxx and Exact grades to serve the Asia-Pacific market which has a huge potential for specialty products like this.
EUROPE
Petainer buys Moller Maersk PET operations
Petainer Lidköping AB has acquired the Rostiprimpac PET containers businesses based in Norrkoping, Sweden, and Leinefelde, Germany, from A.P. Moller Maersk, subject to Norwegian regulatory approval.
Lidköping-based Petainer, owned by two private equity firms, has plants in Lidköping and Aš, Czech Republic.
Comments: Petainer, formerly a business unit of Rexam plc, has focused on plastics packaging as its core business. In November 2009, Rexam sold Petainer to Next Wave Ventures, WHEB Ventures, and senior management for £16 million (USD 20.8 million) as part of the restructuring of its plastics packaging division.
In early 2010 A.P. Moller Maersk sold its subsidiary Premier Technical Plastics Inc, to McCalmont industries, which produced injection, molded plastic parts, and products in Texas, Louisiana, and Arkansas. In total, the A.P. Moller Maersk Group has divested 39 plastic production companies over the past years in line to focus on shipping, energy, and retail businesses.
Moller Maersk’s Rostiprimpac plant produces numerous PET plastic blow-molded bottles for application markets within the water and soft drink industry.
Flexpol invests in polyolefin film production
Polish packaging film producer Flexpol is reported to be planning an investment of nearly €13 million (USD 16.9 million) in a project to manufacture novel polyolefin BOPE (biaxially oriented polyethylene) film products.
Flexpol is also said to be undertaking a major modernization and expansion of its plant in Plock. The scheme to introduce the BOPE manufacture is expected to create at least 30 new jobs and is scheduled to be launched late in 2011.
Both Flexpol projects involve the introduction of new technology which has been utilized in Poland for less than a year. This means the company will qualify for additional funding from the EU on top of financial incentive assistance in the Polish special economic zone.
Comments: Flexpol is currently the only producer of BOPP films in Poland, located in Plock. It is part of a group of six companies, under the conglomerate of the Supravis Group. SUPRAVIS S.A. is amongst the leaders In the Central and Eastern Europe market of plastic packaging materials.
Flexpol was started in 1996 and within a short time started increasing its share in the plastic packaging market by producing a wide range of BOPP films under its BIFOL trade name. Their rapid growth in the packaging films market promoted the company to introduce modern manufacturing technology of 5 layered CPP films in January 2007.
Owing to the increasing local demand and cheap local labor, Flexpol has focused on increasing its investments in plant expansion and new technology. Due to the strategic location of the plant, Flexpol benefits from having access to a good mix of polyolefin suppliers and converters from East and West Europe respectively.
EU recommends retaining duties on Chinese PET
The European Commission will recommend keeping existing antidumping duties of €184 per metric ton (USD 239 per metric ton) for Chinese exports into the European Union of PET. A formal document proposing the move had been drafted and would be tabled by the commission
imminently, with the EU Council of Ministers being asked to approve the move by Nov. 17. This is the date that the duties – which have been in place since 2004 – are scheduled to expire. But following a detailed expiry review, the commission has decided to recommend their re-imposition.
They cover PET having a viscosity number of 78 ml/g or higher. The commission inquiry examined Chinese PET exports to Europe from July 2008 to June 2009 when considering whether to maintain protection.
The review was launched last August, following a request for maintaining the duties by the PET committee of the trade body PlasticsEurope. It claimed that the expiry of the measures would be likely to result in a recurrence of dumping and injury to the [EU PET manufacturing] industry.
Comments: The anti-dumping duty issue has a complex backdrop. It could be associated with a multitude of factors such as government subsidies in the exporting nation, the competitiveness of the importing country, deliberately suppressed value of the currency at the exporting nation, low cost of feedstock or raw material in the exporting nation, etc. As world trade activities accelerate, it looks like more collaboration and creativity are now needed than ever to prevent the outbreak of trade wars.
RTP opens second engineering compounding plant in Europe
Engineered thermoplastics compounder RTP has opened a new manufacturing plant in Ladenburg, Germany, the company’s second in Europe. Operating as RTP Deutschland, the operation will make products including very long fiber composites and conductive compounds.
RTP now has 11 manufacturing sites. Other locations include Beaune, France; Suzhou, China; Singapore; Monterrey, Mexico, and six plants in the United States. RTP bought the Beaune plant from French thermoplastics compounder Codiplast SNC in 1995, following which RTP has significantly expanded its global footprint.
Comments: RTP has found success developing applications based on their very long fiber composites. The fiber product which provides a high strength-to-weight ratio can be used in injection molding applications; in addition, the material exhibits high modulus and impact resistance. The material, because of its lightweight, high strength, and rigidity, is attractive for use in a number of markets – this fiber has found use in applications such as turbine blades, and in recent years, there has been a lot of interest in glass-reinforced very long fibers.
The glass fiber composites have a property performance blend to replace metal in some applications. This material would allow parts with lower weights to be manufactured, an advantage for automotive applications.
RTP has now opened its second plant in Europe to cater to the regional growth in its market for engineered materials.
Sibur confirms cracker plans; highlights expansion efforts
Sibur has outlined its medium-term investment plan at the K 2010 exhibition currently underway in Dusseldorf and also revisited the scope for its previously announced joint venture with Dow Chemical in Russia, and Sibur’s possible involvement in projects in Iran.
Sibur expects the competitiveness of its assets to improve after the planned construction of a 1,000 KT steam cracker at Tobolsk, Russia in 2015. The Tobolsk cracker is expected to use liquefied petroleum gas and some ethane. Sibur currently operates three crackers – two are designed to produce 220 KTA each and are at Tobolsk and Kstovo. The third, designed for 60 KTA is at Perm. The Kstovo cracker is being expanded to accommodate the 330 KTA RusVinyl polyvinyl chloride JV with SolVin at Kstovo, due onstream in 2013.
Meanwhile, Sibur’s 500 KTA polypropylene plant under construction at Tobolsk will lift Sibur’s total PP capacity to 750 KTA in 2013. Sibur’s existing PP plants are at Tomsk where it has 110 KTA and a newly acquired PP asset at the Moscow Refinery complex. Sibur is also expanding polystyrene (PS) capacity. The first 50 KTA line is due on-stream at Perm at the end of this year and a second identical line will follow. The company is also building a 50 KTA styrene butadiene styrene plant at Voronezh.
Comments: Sibur is Russia’s largest petrochemical company that operates across the petrochemical chain from gas processing to the production of monomers and plastics.
The company’s move to build plants to produce downstream products in anticipation of the growth in the Russian economy will help to alleviate any shortage this region may experience in the future. The production of these materials will also allow Sibur to export petrochemicals, especially to China, Russia’s main trading partner for polyolefins.
Sibur’s planned JV with Dow is a three-way alliance between Gazprom (Russia’s Oil and Gas giant), Sibur, and Dow. The Russian government recently joined the talks but it could take a while before plans are finalized; the project is not likely to be on-stream before 2016-17.
Sibur has also recently been involved in discussions with Iranian authorities about possible investments in Iran. The feedstock resources in Iran provide attractive feedstock options but could prove challenging to pursue such investments from a diplomatic standpoint at this time.
Teknor adding compounding capacity in the United Kingdom
Teknor Apex Co. is installing a new compounding line that will add almost 3.6 KT of annual thermoplastic elastomer capacity at its plant in Oldbury, England.
The new line will be used to supply styrenic TPEs, including (1) Monprene-brand compounds for a range of consumer and industrial applications (2) Tekbond-brand bondable TPEs for over-molding (3) Elexar-brand TPEs for wire and cable products.
The TPE line will be the second in Oldbury for Pawtucket-based Teknor and is expected to be fully operational during the first quarter of 2011. The firm also operates several lines there, compounding reinforced nylon and other engineering resins. An existing TPE pilot line in Oldbury will be used for research and development work and small-lot orders.
Comments: Teknor Apex established its UK TPE compounding plant in the first half of 2008 with a small-lot manufacturing line year at its Oldbury site. With the new compounding line, the company brings years of expertise it has acquired in styrenic compounds from its United States operations and markets. The company will be able to take advantage of the growth potential offered by the region, as Europe gradually hauls itself out of recession; markets such as wire & cable and construction are typically expected to improve during the phase of the economic recovery.
Teknor Apex, with its increased capacity, will allow it to become a preferred supplier of brand-name products to consumers in Europe. Teknor Apex initially began establishing and gradually strengthening its footprint in the European TPEs market by working with distributors in several EU countries.
MIDDLE EAST/AFRICA
Sabic to enter the polyurethanes business
Saudi Basic Industries Corp. is finalizing technology-licensing agreements that would enable the company to produce polyurethanes (PU). The project would represent Sabic’s entry into the PU business and would be implemented by the company’s performance chemicals business unit (SBU), the newest of Sabic’s SBUs and one that is key to Sabic’s plans to diversify into downstream products. The company is also looking at establishing PU systems houses.
Sabic has not yet decided whether to build plants producing both methylene di-para-phenylene isocyanate (MDI) and toluene diisocyanate (TDI) or construct a plant making just one of the products. Any plant will however be world scale. Several locations with proximity to raw materials, including the Sadaf joint venture with Shell Chemicals, Saudi Kayan, and Petrokemya–all at Jubail, Saudi Arabia–are under consideration.
Comments: In recent years, there has been increased growth of polyurethane in the Middle East driven by growth in markets such as footwear, furniture, automotive, and increased construction market. Polyurethane demand is growing at close to 5% prompting the need for new capacity to sustain growth in these industries. Sabic’s decision to set up a system house will allow it to facilitate growth and provide technical services to local consumers.
Systems houses play a major role in higher value-added flexible/rigid polyurethane foams. The systems houses essentially supply the premixed major components for foaming in specific applications including polyol, isocyanate, catalyst, and reaction systems to the end-use suppliers for foam-in-place applications. Polyurethane is used for building insulation while lightweight polyurethane components are used to reduce weight in automotive manufacturing. In other applications, PU is also used for manufacturing high-quality mattresses and furniture upholstery.
Sabic performance triggers possible loan restructuring
Saudi Basic Industries Corp. is considering restructuring the loans held by its Sabic Innovative Plastics unit due to changes in global borrowing.
Sabic reported third-quarter profits of USD 1.4 billion, a jump of 46 percent, which is attributed to the result of higher prices and increased demand as well as improvements in the performance of overseas affiliates.
Comments: In 2007, Sabic purchased GE Plastics for USD 11.6 billion to form the Innovative Plastics division. The 2008 year-end economic downturn adversely impacted the entire petrochemical industry, including Sabic. But recovery has accelerated in the recent quarters of 2010. The USD 1.4 billion quarterly profit is close to where Sabic was in 2006.
ASIA-PACIFIC
Asahi Kasei to build S-SBR plant in Singapore
Tires account for nearly 70-80% of the global market consumption of solution polymerized SSBR. Solution SBR also is extensively used to increase impact strength in polymer modification applications for High Impact Polystyrene, General Purpose Polystyrene, and Acrylonitrile Butadiene Styrene. Other markets of significant demand include adhesives and sealants, and footwear applications.
Asahi Kasei is one of the largest global producers of SSBR. Other major players include tire manufacturers like Goodyear, Firestone Polymers, Kumho Petrochemical as well as Lanxess, and JSR Corporation. Extensive capacity expansions are to be focused comparatively more in Asia than other regions like North America and Europe due to cost competitiveness and an increase in demand in these regions, especially in China.
ExxonMobil Chemical completes butyl rubber capacity expansion in Japan
Japan Butyl, in which ExxonMobil Chemical’s affiliate ExxonMobil Yugen Kaisha holds a 50% stake, has completed the previously announced expansion of its butyl rubber production capacity at Kawasaki, Japan. The expansion has increased the butyl rubber production capacity by 18 KTA, to bring the plant’s total capacity to 98 KTA. The expansion is aimed at meeting the growing demand for butyl rubber.
Japan Butyl is a joint venture of ExxonMobil Yugen Kaisha and JSR Kabushiki Kaisha, and it supplies butyl rubber primarily in Asia.
Comments: Butyl rubber is a random copolymer of isobutylene and isoprene. The principal characteristic quality of this type of rubber is low permeability to gases and moisture; therefore, applications requiring moisture/ gas retention such as tires, inner tubes, tank liners, pharmaceutical closures, sealants, and electronic components each constitute a good demand for butyl rubbers.Butyl rubbers are often modified with halogens like bromine and chlorine to give halo butyl rubbers. These halo butyl rubbers are blended with other synthetic rubbers like Styrene Butadiene Rubber to form the inner liners of the tires.
In North America, the tire market has experienced price increases along with decreased demand due to a slowly recovering automotive industry within the region. Asia, especially considering China and India, has been showing double-digit economic growth over the past years and the lower manufacturing costs along with abundant cheap labor have motivated producers to shift from the west to these regions for production. It has also caused domestic producers to significantly increase their capacities to cater to the increasing demand.
Major players in the butyl rubber market include ExxonMobil and Lanxess.
Taiwan builds ethanol-to-ethylene complex as part of bio-pet supply chain
Greencol Taiwan Corp. (GTC), an equally owned joint venture between China Man-Made Fiber Corp. and the trading group Toyota Tsusho Corp, will build a 100 KTA ethylene plant at Kaoshiung, Taiwan, which will use bio-ethanol as feedstock. The bio-ethanol, produced from sugar cane, will be imported by Toyota Tsusho from Brazil. GTC has awarded a contract to Chemtex International to engineer the plant using the Petron Scientech technology. Chemtex is the exclusive engineering contractor using Petron technology.
GTC has received all the environmental approvals to go ahead with the project, which is expected onstream in 2012. The ethylene plant will feed existing ethylene oxide and ethylene glycol plants at the site, which have been transferred from Man Made China Corp. to the GTC joint venture.
Toyota Tsusho will establish the first global bio-polyethylene terephthalate (bio-PET) supply chain, including procurement of bio-ethanol, production of bio-mono ethylene glycol (bio-MEG), tolling business of PET, and marketing of bio-PET. Toyota Tsusho, as part of that program, signed a joint venture agreement with China Man Made Fiber Corp., to establish GTC to produce bio-MEG from the end of 2011. Toyota will market the bio-MEG from GTC to PET manufacturers and off-take the bio-PET from them on a tolling basis to sell to end users in Japan, Europe, and the United States. Toyota Tsusho will sell textiles for vehicle interiors and resin for beverage bottles as the final application of bio-PET, and especially the product for textiles for vehicle interiors developed together with Toyota Motor Corp.
Comments: Bio-ethylene from bio-ethanol is the most critical step in making a long series of bio-based chemicals and polymers. So far, it is clear the most viable way to make bio-ethanol is from sugarcane – it has proved to be far more efficient than from corn or biomass (cellulosic material). Currently, Brazil is the major producer of sugarcane; it turns 55% of sugarcane output into ethanol and 45% into sugar.
Tessenderlo building compounding plant in China
Tessenderlo Group plans to build a compounding plant in China to serve automotive customers. The Tessenderlo-based compounder’s CTS Cousin-Tessier unit announced that it will build a plant for both thermoplastic elastomers and PVC slush compounds in Changshu, near Shanghai. Production at CTS Automotive Compounds (Changshu) Ltd. is scheduled to start in the fall of 2011.
The plant will have three compounding lines, and it will produce CTS Tefabloc TPE compounds for airbag covers, sealing applications, cables, and interior parts. It also will make Marvyflo PVC such as molding compounds for dashboards and door panels. The plant will eventually employ 70.
Comments: China is currently the largest auto market in the world surpassing the United States; meanwhile China is also the leading automaker in the world followed by Japan. With over 14 million automobiles manufactured in China yearly, the demand for TPV, PVC, etc. specialty compounds is bound to be strong. The trend will continue in line with China’s robust GDP growth projected at 8% for the next decade.
CTS Cousin-Tessier currently has plants operational in France and Poland.
Styron deal adds Poly Carbonate position in Asia
Styron has reclaimed a position in Asia by assuming ownership of Dow Chemical Co.’s 50 percent stake in the Sumitomo Dow Ltd. polycarbonate joint venture.
Styron confirmed the deal on Oct. 27 at K 2010 in Dusseldorf. Earlier this month, Dow had sold half of the LG Dow Polycarbonate Ltd. JV to partner LG Chem Ltd., potentially leaving Styron without a business presence in Asia.
Comments: Styron was Dow’s former styrenic materials unit. It became a private company earlier this year when it was sold to private equity firm Bain Capital for USD 1.6 billion. With Styron assuming Dow Chemical’s 50 percent stake in Sumitomo Dow Ltd. polycarbonate joint venture, the company will gain a foothold in Asia and be able to take advantage of the growing future market. The polycarbonate business in Asia shows promise driven by growing automotive markets such as headlamp and tailgate lenses along with applications in the electronic sector, lighting, appliance, and others.
Asia’s demand for polycarbonate is close to 1800 KT with China leading the consumption and growth.
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