AMERICAS

LyondellBasell’s profit was boosted by strong polyolefin demand

LyondellBasell announced a third-quarter net income of USD 467 million, compared to a net loss of USD 651 million in the third quarter of 2009, driven by increased demand for polyolefins and higher selling prices for ethylene. Globally, LBI’s olefins and polyolefins results have been approximately equal to the strong results of the second quarter.

LyondellBasell America’s operating income in olefins and polyolefins more than tripled to USD 448 million, on increased average ethylene selling prices, strong polyethylene sales, and unchanged operational costs. Total polyolefins sales volumes increased about 4%, to 100 million lbs compared to the third quarter of 2009, on increased polypropylene sales.

Olefins and polyolefins– Europe, Asia, International business reported operating income up 95%, to USD 231 million, on higher olefins margins due to tight market conditions, and increased sales volumes due to the completion of maintenance turnarounds at the company’s Berre, France olefins and polyolefins plant during the second quarter.

Comments: For the second and third quarters in 2010, the olefin and polyolefins businesses globally are moving up in sales volumes and profitability. This reflects well on LyondellBasell as the timing coincided with their emergence out of Chapter 11 in April 2010. Now with a streamlined new organization, overall good technologies, and stronger market demands, the LBI olefins and polyolefins businesses are clearly on the upswing.

 Chevron Phillips Chemical announces plans for world-scale 1-hexene plant

Chevron Phillips Chemical Company LP (Chevron Phillips Chemical) has announced plans to build a 1-hexene plant capable of producing more than 200 KTA at its Cedar Bayou Chemical Complex in Baytown, Texas. The project received approval to begin engineering design work and to develop engineering, procurement, and construction deliverables. The plant would start up during the first quarter of 2014.

Upon construction, the new plant will be the third such plant to utilize Chevron Phillips Chemical’s proprietary selective 1-hexene technology, which produces comonomer grade 1-hexene from ethylene with exceptional product purity.

The proven technology is successfully used at Qatar Chemical Company Ltd.’s (Q-Chem) facility in Mesaieed, Qatar, and will also be utilized at the Saudi Polymers Company plant in Al Jubail, Saudi Arabia, scheduled for start-up in 2011. Both of these facilities are joint ventures of wholly-owned subsidiaries of Chevron Phillips Chemical Company LLC.

Comments: Assuming the 200 KT of hexene-1 will be used as a comonomer in LLDPE production, this would translate to approximately 2,000 KT or 4.4 billion lbs of additional LLDPE capacity. Recently, the LLDPE market has been tight with prices remaining high. This trend is expected to continue over the next few years. Interestingly, this would greatly alleviate the feedstock demand situation for all gas phase licensors and existing licensees. The gas phase process is the predominant manufacturing process for LLDPE; while Chevron Phillips’ loop technology is noted for HDPE, where significantly less hexene-1 is used as a comonomer. Chevron Phillips’s high volume signature product C6007 (MI 0.7 and density 0.963) for milk and water bottles is a homopolymer that does not require any comonomer.

Dow Chemical shifts strategy on plastics

Dow Chemical will likely retain its leading linear-low density polyethylene (LLDPE) franchise in any future deals involving its plastics business. A planned sale of a 50% stake in Dow’s basic plastics business collapsed in late 2008 when Kuwait’s Petrochemicals Industries Co. (PIC) pulled out of a planned joint venture.

Dow is no longer seeking to find a replacement partner for Kuwait in that venture. Dow Chemical will still seek joint ventures or divestitures for commodity portions of the plastics business, mainly high-density PE (HDPE) and polypropylene (PP), but will seek to keep and grow higher-value add polyolefins such as linear low-density (LLDPE), where it has the leading global market share. The company had the opportunity to complete a plastics deal in the first half of 2010 but pulled back after failing to achieve an attractive valuation. Dow’s plastics deal is not expected to be imminent but could occur in the next 12-24 months.

Comments: In North America, Dow currently has two LLDPE solution lines (capable of making Elite® metallocene and Dowlex ® LLDPE grades), two LLDPE gas phase lines, and two gas phase swing plants. It is not clear if the swing plants are included in the category of LLDPE. The solution LLDPE (Elite® and Dowlex®) has achieved the status of “differentiated commodity” versus the rest of the commodity pack in the industry.

Braskem announces the construction of a green propane plant in Brazil

Braskem has announced plans for the construction of a green propane plant in Brazil. Operations are expected to commence in H2-2013 at an investment of USD 100 million.

The plant will have a minimum production capacity of 30 KTA. Braskem’s green Polypropylene will be made from sugar cane ethanol and have the same technical, processing, and performance properties as traditional polypropylene.

Comments: Braskem has been at the forefront of producing polyolefins using the bio-based route. The company is scheduled to open a 200 KTA HDPE plant utilizing sugarcane-based ethanol in 2011. Braskem has also been working on developing bio-based polypropylene with Novozymes, a Danish manufacturer of industrial enzymes. Braskem’s move to build a production plant for polypropylene based on sugarcane will provide the company with a complete bio-based polyolefin product portfolio.

SKC investing USD 100 million in a film plant

South Korea’s SKC Inc. plans to expand its film complex in Covington, GA investing USD 100 million to make a film for solar panels and other applications. The company announced the project on Nov. 5.

The new facility will be located on SKC’s existing Covington campus, which also houses SKC’s U.S. corporate headquarters, polyester film production facilities, and a chemical systems house that opened in May. The new 200,000-square-foot manufacturing facility will be completed in two phases.

SKC first opened its headquarters and manufacturing facility in Covington in May 1999, and it currently makes a variety of Skyrol-brand polyester films on three production lines.

Comments: The company’s trademark polyester film products called Skyrol® have turned out to be a commercial success since its launch in 1976. Their other products such as Skywell® and Skynex® have also been in high demand due to their mechanical and eco-friendly properties. As part of its continuous efforts to expand in the solar power industry, a plant for producing EVA encapsulant film for solar photovoltaic modules is being built at its existing Covington facility. The first line is expected to come on stream in September 2011 and the second phase is expected to start after 2013. After 2014, SKC would have a combined capacity of 60 KT of EVA sheets per annum worldwide. This would give them a 25% share of the global market by 2015. The push is due to the more than 30 percent expected annual growth in the solar cell industry. The company also started operating its Polyurethane systems plant in June to cater to home appliances and the automobile industry. The new plant is part of an aggressive expansion campaign by SKC called “Double SKC”.

EUROPE

Polyplastic starts new compounding line in Russia

Russian plastics pipe producer and compounder Polyplastic Group has opened a new compounding line at its Saratoy pipe plant in southern Russia. The latest installation provides the unit with a total of six composite material production lines and will allow it to turn out materials with up to 85% filling. The line also increases the plant’s compound volume to about 40 KTA.

Polyplastic group, which has a dozen plastic processing businesses in Russia, Belarus, Ukraine, and Kazakhstan, plans further expansion of its composite section. Polyplastic could reach an overall capacity of 70 to 80 KTA by 2013. The group has two compounding plants apart from Saratov, in Moscow and Togliatti, Russia.

Comments: Polyplastic Group is one of the largest pipe producers in Russia with twelve plastics processing plants and two R&D Centers. Polyplastic’s Saratov expansion has been prompted by a significant rise in regional demand for composite products, particularly from the automotive industry, construction, electronics, and household appliances.

Overall, the Russian pipe market has seen a steady increase in the demand for plastic pipes as the region improves its infrastructure to sustain growth. The current market for plastic pipe in Russia is close to 700 KT and growing at 10% leading to a need for new plastic pipe capacity.

Borealis presents its first pilot projects to enhance the use of recycled polyolefins

Borealis has presented its first pilot projects to enhance the use of recycled polyolefins at K 2010. The projects highlighted a shopping cart and shopping basket made from a combination of recycled polypropylene (PP) with Borealis’ enhanced polypropylene (PP) grades for recycling, achieving the same superior material characteristics while significantly reducing the carbon footprint of the applications.

The development of the company’s first pro-recyclate grades PP4R 500 and PP4R 100 is another milestone in Borealis’ strategy to investigate different options to support the recycling of its advanced polyolefins solutions. The shopping carts are made of a combination of 67% high-impact PP4R 500 PP and 33% recycled PP material. The shopping baskets are made of 75% recycled PP and 25% PP4R 100. Both grades are enhanced grades developed by Borealis to meet the requirements for use in a combination with recycled material.

Comments: Environmental-friendly products are becoming more widespread with growing concerns about our planet’s health and limited resources. Being able to recycle material to make new and more sturdy material will be beneficial to consumers, the environment, and to Borealis, which is already a leading supplier of polyolefin raw materials. Several companies have adopted a similar strategy of allocating funds to develop environmentally friendly products.

MIDDLE EAST/AFRICA
Borealis reports solid results as the larger Abu Dhabi group grows

Borealis has reported solid improvement in third-quarter sales and earnings but believes the global economy is still volatile and expects results in the fourth quarter to be similar to those achieved over the last three months. The result has been promising for Borealis, considering that the company has been incurring costs with startups of the USD 5 billion Borouge 2 complex at Ruwais, Abu Dhabi, and the completion of Borealis’s low-density polyethylene plant at Stenungsund, Sweden, dedicated to the wire & cable market. Borouge is a joint venture between Borealis and the Abu Dhabi National Oil Co.

Capacity utilization rates across Borealis’s plants have improved from a year-ago period and are currently in the 90% range. Feedstock prices decreased slightly compared to the second quarter of 2010 while polyolefin market prices stabilized, resulting in a further improvement of the polyolefin business group results. Cracker margins were impacted by a turnaround at Borealis’s Porvoo, Finland cracker.

Comments: There are several factors, which have contributed to the improved financial performance of Borealis: the overall favorable market environment, the successful start-up of Borouge II, the synergism between Borealis, Borouge, and Nova operations, etc. In addition, Borealis and Borouge have also successfully conducted a very extensive and well-received campaign to promote the use of their PE-100 pipe products (made by their proprietary Borstar technology) as part of their global water solutions.

ASIA-PACIFIC

Successful startup of Dow and Siam Cement Group JV
Dow Chemical has started production of linear low-density polyethylene (LLDPE) on its new solution LLDPE II train (SPE II) at Map Ta Phut, Thailand. LLDPE from SPE II will be commercial this month.
SPE II is owned by Siam Polyethylene Co. Ltd, a joint venture between Dow Chemical Company (Dow) and Siam Cement Group (SCG), located at the existing Map Ta Phut manufacturing facility.
Comments: Dow has a well-established LLDPE market in North America and Europe. The resin is mainly used in the film market and octene-based products are said to have superior product performance in certain end-use application markets. Dow LLDPE is commonly used in applications such as stretch film, heavy-duty bags, food packaging, and others. The demand for LLDPE in Thailand is estimated to be 385 and is projected to grow at 5.9%. Siam Polyethylene Co.‘s new plant will allow it to meet the growing regional demand, and will also enable it to take advantage of the growing Asian market for exports.
In terms of the joint venture, the JV between Dow and SCG has had a long-standing history and has worked well. The existing four JV plants are styrene monomer, polystyrene, synthetic latex, and solution LLDPE. This will be the fifth JV (50/50) between Dow Chemical and SCG Chemicals and is also the second solution LLDPE plant built there. Dow’s octene-based solution LLDPE grades have been well established to be a high-end LLDPE, notably the Dowlex 2045 LLDPE. Facing stiff competition from gas phase LLDPE products, the focus is to develop value-added applications where performance is also valued rather than the price alone.
Teijin to enter the HP-PE market
Teijin Ltd. has announced a major move into the high-performance polyethylene (HP-PE) fiber market with a new production facility in Emmen, the Netherlands. The company is yet to disclose how much it is investing in the new plant, which will become commercially operational by the end of next year.
Teijin is targeting a global market share of 15-20 percent by 2015. Its competitors in this field will be DSM and Honeywell. Teijin has decided to move into mass production following work carried out by Teijin Aramid and Teijin Techno Products. The two divisions have been developing HP-PE products in their respective research facilities in Arnhem, the Netherlands, and Iwakuni, Japan.
Comments: The UHMWPE is a specialty polyethylene that requires rather different process conditions both in-reactor and post-reactor. A Ziegler-type poison-resistant catalyst capable of producing narrow MWD is generally preferred. Since the polymer is transported in powder form to converters, the particle sizes are preferred to be much larger than the slurry phase produced polyethylene due to static hazard concerns.
Commercial UHMWPE polymers are made in stirred tank reactors but loop slurry reactors are a viable alternative. Compression and ram-extrusion are common post-reactor processes. Most of the commercial UHMWPE have MW (determined by intrinsic viscosity method at elevated temperature) in the vicinity of 2 to 3 million but some special commercial grades are reported to have MW over 8 million.
One factor of Teijin’s leadership position derives from the synergism between UHMWPE and other existing high-performance specialty products such as aramid and carbon fiber.
Dow breaks ground for acrylic and styrene-acrylic polymers plant in Vietnam

Dow Advanced Materials, a division of The Dow Chemical Co., has broken ground on a new manufacturing facility in Dong Nai Province in southern Vietnam for the production of acrylic and styrene-acrylic polymers used in the paint, coatings, construction, packaging, home and personal care industries. The new plant, scheduled to go on stream in September 2011, will be shared by three Dow Advanced Materials businesses—Dow Coating Materials (DCM), Dow Building & Construction (DB&C), and Dow Adhesives & Functional Polymers (AFP).

Paint and coatings customers use DCM acrylic and styrene-acrylic-based specialty polymers as binders, rheology modifiers, and other additives for the development of a wide range of architectural and industrial products. DB&C customers use related specialty polymers to produce a wide range of products, such as specialty cement, concrete sealers, construction adhesives, caulks, and sealants. Dow AFP customers include Vietnam-based food and beverage packagers, textile companies, and home and personal care manufacturers.

Comments: In the past 20 years, to boost the economy, the Vietnamese government has tried to ease restrictions on the private sector and meanwhile tried hard to attract foreign investments. In 2009, Vietnam achieved a GDP growth of 5.32% (ranked as #3 in Asia after China and India). A member of the World Trade Organization (WTO) since 2007, Vietnam has attracted considerable foreign Direct Investments (FDI) and Foreign Indirect Investments (FII). Vietnam has a large young population and therefore can provide intensive labor for production. Eyeing the potential market growth in Vietnam, many other companies are predicted to follow suit like Dow. However, the Vietnamese economy faces a lack of infrastructure, pollution issues, and the need for higher-skilled and educated workers.

Fuller builds manufacturing facility in India

H.B. Fuller has broken ground on a manufacturing facility in Pune, India to support the expansion of the company’s business into India. The plant, which involves an investment of USD 12 million, is expected to become operational by August 2011. The company currently has a small but growing presence in the USD 300 million – USD 400 million Indian adhesives market.

Fuller, in the past few years, has invested in global expansion through acquisitions in Egypt, Germany, and Malaysia to strengthen its position as a global adhesives manufacturer. The company has also established a regional technology center in Shanghai, China to serve the Asia/Pacific market, and a manufacturing facility in Nanjing, China, focused on reactive technologies.

Comments: H.B. Fuller uses a wide variety of adhesive technologies to produce innovative industrial adhesives. Their extensive line of hot melt, water-based and solvent-based adhesives have applications in packaging, consumer products, specialty polymers, etc. Their novel metallocene hot melt technology has especially found a niche market over conventional EVA hot melts.

Fuller’s recent acquisitions and expansions are due to the growing demand for their products replacing conventional adhesives. The rapid growth of the packaging industry in Asia makes it a potentially lucrative market for adhesive producers to target.

PQ to expand silica production capacity in Indonesia

PQ Corp. plans to expand and more than double the current capacity of its silica manufacturing plant in Pasuruan, Indonesia. Preliminary design and engineering work is underway and the project is expected to be completed by the end of 2011.

The new capacity will meet the increasing demand in the Asia/Pacific region. The Pasuruan plant produces a range of silica products for various applications including toothpaste, paints, coatings, paper, and plastics.

Comments: PQ Corp is well known for its portfolio of a wide range of silica catalysts and supports ranging from granular to micro and macrosphere size. Their continuous efforts aimed at improving catalyst quality and innovating unique catalysts have made them the leading producer of silicates, zeolites, and other performance materials. The company also has the capability of producing custom-made catalysts and supports tailored for specific end-use applications.

Since the expansion of Silica-chrome catalysts in 2007 in their Rahway and Kansas facilities, they have been increasing production worldwide to meet the surging global demand. The rising demand for specific end-use polymers and the continuous expansion of petrochemical industries in Asia have driven the expanding demand for catalysts and supports.

A. Schulman preparing to open the first plant in India

Compounding leader A. Schulman Inc. will open its first Indian plant by the end of 2011.

The plant at first will operate a single Farrel continuous mixing line and will make additive masterbatches. Located in Vadodora in the state of Gujarat, the plant will make additive masterbatches, selling into biaxially oriented polypropylene film and other markets.

The plant will be Schulman’s fifth in the Asia Pacific region, joining locations in China, Indonesia, Malaysia, and Australia.

Comments: IA Schulman is a major player in the compounding industry. In recent years, the company has aggressively been marketing and expanding its global reach.

In addition to the opening of the new plant in India, the company recently acquired ICO polymers on April 30 to help further strengthen its presence in Asia, particularly in the South East. The company has become one of the world’s biggest compounders with markets in compounding, roto molding, and masterbatch industries.

Schulman just completed a fiscal year in which overall sales grew 24 percent to almost USD 1.6 billion. The company has also registered a USD 44 million profit after recording a loss of more than USD 2 million in fiscal 2009. In the Asia Pacific region, Schulman’s sales grew 87 percent to almost USD 85 million, while gross profit from the region shot up 83 percent to almost USD 12 million.

Acquisition of Titan Chemicals completed by South Korea’s Honam

Honam Petrochemical Corp. has completed the acquisition of Malaysia’s Titan Chemicals Corp. Bhd. The acquisition was announced by Honam on July 16. The deal involved buying a 73% stake in Titan from the Chao Group and a Malaysian state-run fund. Honam’s plans include the acquisition of Titan shares from the market to get its stakeholding to 100%. The total cost of the acquisition is expected to be Won 1.5 trillion (USD 1.28 billion).

Comments: This purchase will provide Honam with manufacturing sites and a market presence in Southeast Asia. There appears to be good synergy in either company’s product portfolio. After the acquisition, China will still be the biggest market for Honam. Since the second quarter of 2010, the petrochemical business in Southeast Asia has been looking up due to an improved regional economy, which has resulted in stronger demand. Titan, in the past, was rumored to be an acquisition target by Shell. Titan is Malaysia’s premier and largest integrated olefins and polyolefins producer. It can make 1,200 KTA of olefins, 1,500 KTA of polyolefins, 200 KT of aromatics, 100 KT of butadiene, and 38 KT of BOPP film through facilities and plants located in Malaysia and Indonesia.

 

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