ADI Chemical Market Resources Newsletter
September 20, 2010

AMERICAS

DuPont and Invista settle polymers lawsuits

DuPont and Koch Industries subsidiary, Invista have signed a settlement agreement resolving three existing lawsuits between the companies – concerning polymers technology, adiponitrile (ADN) technology, and disputes related to existing supply agreements.

DuPont filed a lawsuit against Invista in 2008 alleging that Invista infringed upon DuPont patents and misappropriated trade secrets and proprietary information as part of an effort by Invista to enter the nylon engineering polymers market. The suit stemmed from Koch’s 2004 acquisition of Invista from DuPont and came only months after Invista filed a suit regarding butadiene-based (ADN) production technology against DuPont and Rhodia.

Comments: One of the technical disputes centered on adiponitrile (ADN) production technology. ADN is chemically hexane nitrile or 1,4-dicyanobutane, which is the precursor to Nylon 6,6. It is typically made by hydrocyanation of 1,3-butadiene. The ADN can then be hydrogenated to 1,4-hexane diamine before reacting with adipic acid (six-carbon dibasic acid) to make Nylon 6,6.

American Acryl restarts the Acrylic Acid plant at Bayport

Americal Acryl has restarted its 120 KTA acrylic acid plant at Bayport, TX. The plant was offline since an explosion ripped through it on December 9, 2009. The complex also includes a 50 KTA butyl acrylate plant wholly owned by Arkema. The re-start follows the introduction of measures to prevent the accident from happening again.

Comments: Commercially, acrylic acid is often produced via the oxidation of propylene. For many years, it has been an essential building block in the production of some most commonly used industrial and consumer products. World demand for acrylic acid in 2009 was about 7.5 billion lbs (3,400 KT), with an annual growth rate of about 5%.

About two-thirds of the acrylic acid manufactured in the United States is used to produce acrylic esters – methyl acrylate, butyl acrylate, ethyl acrylate, and 2-ethylhexyl acrylate – which, when polymerized are components in paints, coatings, adhesives, plastics, and many other applications.

The remaining one-third of the acrylic acid is used to produce polyacrylic acid, or cross-linked polyacrylic acid compounds, which are successfully used in the manufacture of hygienic products, detergents, and wastewater treatment chemicals.

American Acryl is an equally owned joint venture between Nippon Shokubai’s U.S. subsidiary NA Industries and Arkema.

Braskem inaugurates green ethylene plant

Braskem has inaugurated operations of its green ethylene plant. The ethylene was specified approximately 12 hours later, signaling adequate conditions for conversion into green polyethylene. The plant is the largest industrial-scale operation in the world producing ethylene made from 100% renewable raw materials, i.e., sugarcane.

The project was conceived and installed in less than two years and draws on Braskem’s proprietary technology. The plant will be officially inaugurated on Sept. 24, 2010

Comments: This marks an important step in Braskem’s strategic pursuit of becoming the global leader in sustainable plastics. The green ethylene plant, which is located at the Triunfo Petrochemical Complex in the state of Rio Grande do Sul, has an annual production capacity of about 200 KTA, which will eventually be transformed into an equivalent volume of green PE. Recently, Braskem signed a deal with Proctor &Gamble to utilize its green HDPE in the packaging of P & G’s Pantene®, Covergirl ®, and Max Factor® brands. Toyota has also expressed interest in utilizing green PE in its production.

Currently, there are two popular routes to sustainability: Green Technology- (1) Focus on current raw materials/production methods with incremental improvements – to prove how environmentally friendly the materials are. a paper chase exercise – some major players follow to show how they are better than others. The Second Approach is: Give people what they want. now… true Green Materials.. even if they are very light green right now. The Winning approach. Braskem, SK Energy, PTT,.. the way to Go.

Brownsville, Texas, set to levy a US $1 charge for plastic bags

The border town of Brownsville, Texas, could soon become the second U.S. city to charge shoppers for single-use disposable plastic bags at checkout. If enacted, the proposed charge of US $1 per bag would go into effect on Jan. 5 at grocery and convenience stores in the town of 177,000.

The next public meeting on the Brownsville proposal is scheduled for Sept. 21, and if it moves forward, the US $1 charge on plastic bags could be adopted on Oct. 5, 2010.

Comments: If enacted, the new law is likely to lead to a virtual end to the use of disposable plastic bags at stores in Brownsville. This 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. Earlier this year, the Brownsville city commission had adopted a voluntary ban on plastic bags beginning Jan. 5, 2011. But the commission proposed amending the law last week to add the 1 USD charge.

Brownsville would become the third-largest U.S. city, after San Francisco and Washington, to impose a tax or ban on plastic bags. Washington, D.C., introduced a 5-cent tax on plastic and paper bags at checkout beginning January 1 of this year.

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. In what could come as a victory for lobbyists of the local plastics industry, the plastic bag ban is expected to be modified sooner than anticipated – the city’s environment minister is now leaning more towards recycling to solve the capital’s excess garbage problems.

Overall, the probability of success of this being real is about 0.000000000000009%! Regulations that embrace the goal of revenue generation instead of implementation are doomed for failure. New opportunity for corner grocery stores —— Sell empty bags!!

Compounder RTP enters the South American market

RTP Co. has entered the South American market with a sales office and warehouse in Brazil. The location in Alphaville near São Paulo will provide sales support and distribution for Argentina, Brazil, and Uruguay.
RTP ranks as one of North America’s 30 largest compounders and concentrates makers. The firm employs more than 600 worldwide and has annual sales of more than USD 250 million.

Comments: RTP has eight manufacturing plants that are located strategically around the world servicing regional markets. The company currently operates five plants in North America, one in Europe, and two in Asia. South America has been experiencing increased economic growth and industrial development, driven primarily by Brazil’s high growth. This progress has generated the need for specialized compounds, which exhibit superior performance properties for various targeted applications. RTP’s experience in developing compounds for all the major markets will bestow upon it an advantage to serve the local industries and help create a foothold in the South American Market.

EUROPE

DSM to sell Sarlink Elastomers business

DSM has agreed to sell Sarlink, a thermoplastics elastomers business, and part of the firm’s Elastomers unit, to Teknor Apex. Approximately 90 employees will transfer to the new owner upon closing, which is slated for the fourth quarter of this year, subject to regulatory approval.

Sarlink has compounding operations in Leominster, MA, and Genk, Belgium. Although the business unit will operate as an integral part of Teknor Apex, it will continue to sell its thermoplastic vulcanizates (TPV) under the Sarlink name.

Comments: Teknor Apex is one of the leading compounders in North America with compounding capabilities for a wide range of products that includes PVC, Thermoplastic Elastomers, nylon, and PET. The acquisition of DSM’s Sarlink will be a good fit for its product portfolio as the company is well-established in the TPE market. The addition of the Sarlinks TPV line will enable Teknor to offer consumers a wider choice of products.

The other important competitive advantage would be the strengthening of Teknor Apex’s share in the automotive market. Teknor Apex is well established in this market working with OEM suppliers – Sarlink’s main business being automotive, will help increase the technical service the company will be able to provide. Sarlink’s TPV is mainly used in applications such as touch interiors, sealing systems, chassis, under-hood, and other applications.

Sarlink®, which was introduced in 1989 by DSM, was originally developed by Polysar/Nova in 1988 and was launched as a contemporary of Santoprene™ thermoplastic vulcanizers (TPV).

The commercialization of TPVs faced several challenges right from the onset in 1989. Some of the factors which hindered the acceptance of TPVs included (1) disadvantaged cost economics, (2) lack of applicability in large to medium-volume applications, and (3) increased emphasis on compounding, customization, and specialty formulations. etc.

If Sarlink was successful, it did take over 20 years, even after which it remains a small compound. Remember. Alcryn, Duracryn, Milastomer (compound version), etc, Etc..,
Sarlink will remain a compounder play in small customized applications.

Polyplex investing in PET film in Turkey

Polyplex (Thailand) Public Co. Ltd. is investing in a new thin PET film line, a PET chip manufacturing facility, and a metallizer in Turkey. Polyplex has estimated it will spend 2.5 billion baht (USD 80.5 million) on the expansion.
The company is also evaluating another PET film line in Thailand, saying it would seek board approval in a few months.

Comments: Polyethylene terephthalate (PET) is an engineering resin with strong physical mechanical properties and excellent transparency. It has three major applications: polyester fiber for textiles, PET bottles, and polyester films. In PET film application, the molten PET is biaxially oriented by drawing in two directions. It was followed by a process of “heat-set” to secure the stiffness, tensile strength, and clarity of the film. It is then subsequently followed by metallization (with aluminum vapor) to improve the barrier properties. Metalized PET has wide applications in food packaging.

Czech automotive supplier expands foam plant

Automotive component supplier IAG Group plans to expand production of polyurethane foam (PU foam) at its plant in the Czech Republic city of Nove Zakupy. The Czech company aims to more than triple the annual PU foam output at the facility from the current level of 18 KTA by 2012.

IAG, which is set to begin construction of a factory extension this year, expects that work will be complete in less than two years. In August, the project was the subject of an environmental impact assessment.

Comments: The IAG Group’s plan to expand PU foam will allow it to meet the expected regional growth in demand from 2012 onwards – as Europe gradually emerges from recession; the demand for raw materials will increase. The Central European countries have seen higher growth in the automotive market than the rest of the countries in Europe. The leading Central European automotive markets include (1) The Czech Republic (2) Hungary (3) Poland (4) Romania and (5) Slovakia. The current demand for polyurethane in Eastern Europe is approximately 700 KT and is currently growing at about 4%. In comparison, Western Europe is currently growing at around 2.0%. The main application for polyurethane in automotive markets includes an instrumental Panel, steering wheels, hand rest, etc.

Plastics-from-CO2 project gets funding

Bayer MaterialScience AG (BMS) and two partners have received funding from the German government to develop ways to make polyurethane from carbon dioxide feedstock.

The German Federal Ministry of Education and Research will invest more than 4.5 million euros (USD 5.9 million) during the next three years to fund the project, which would create polyether polycarbonate polyols from carbon-dioxide waste products.

BMS is being joined in the project by RWE Power International, a utility firm that ranks as Germany’s largest electricity producer, and RWTH Aachen University of Aachen, Germany. A pilot plant using the process will be built in Leverkusen.

The carbon dioxide used in the process will be sourced from RWE Power’s plant in Niederaussem, Germany, where the firm operates a carbon-dioxide scrubbing system at its coal innovation center.

Comments: Bayer’s move to develop polyether polycarbonate polyols (PPP) from carbon dioxide is a step in the right direction, as companies try to constantly explore new ways of recycling to promote sustainability and protect the environment. Several organizations in the last few years have been actively seeking to reduce their carbon imprint when producing a new product. The other advantage for Bayer is that PPP is a specialty product and is amongst the key components in many high-performance polyurethane formulations that are used in higher-end applications, where superior weather ability and resistance to chemical and environmental attack are required. These applications include elastomers, adhesives, and sealants.

Sibur forms PP JV with Moscow Oil Refinery

Sibur has acquired a 50% stake in polypropylene (PP) manufacturer NPP Neftekhimya from Moscow Oil Refinery (MOR). NPP Neftekhimya will be operated as a 50-50 joint venture between Sibur and MOR. The PP plant is located at MOR’s Moscow refinery site.

NPP Neftekhimya has the capacity for 100 KTA of PP. Sibur says that it and MOR will consider an expansion of the plant’s capacity to 150 KTA. Sibur is also building a wholly owned propane dehydrogenation and PP complex at Tobolsk, Russia for completion in the fourth quarter of 2012.

Sibur acquires Polyolefin Processor

Sibur has acquired the plastics company Novatek-Polymer from Novatek (Tarko-Sale, Russia). Novatek will transfer 32% of Novatek-Polymer to Sibur after the deal, and the rest will be transferred once the deal has been approved by Russia’s antimonopoly authority. Financial terms remain to be disclosed

Comments: With abundant resources in oil and gas, Russia is gradually moving up the value chain by developing more olefins and polyolefins. The development of petrochemical and chemical industries may mitigate its economic vulnerability when oil price fluctuates (such as in late 2008 during the economic downturn). Russia’s GDP is USD 1.23 trillion and the average annual GDP growth rate has registered a value of 3.28% from 1995 to 2010. It reached a high of 12% in 1999 and dipped to -10% in 2009.

Ineos completes film business sale

Ineos Group has officially completed the sale of its global films business for the sum of €100 million. Ineos’s global films business, which had 2009 sales of €240 million, will now become a part of the Bilcare Group, which is a leading international pharmaceutical packaging and research company. Bilcare AG will now fully integrate the business; the company employs around 1,300 people across manufacturing sites in Germany, Italy, India, and the US.

Comments: Ineos’s decision to sell its PVC film business is in line with the company’s revamped corporate vision to focus in entirety on its petrochemicals business.

In the recent past, the company has been pushing to sell its non-core business units. This strategic shift has arisen as a consequence of the company adopting new strategies to reduce debt and stabilize its finances. The company recently divested its Fluorochemicals division to Mexichem (Mexico City) for USD 350 million and also folded its ChlorVinyls subsidiary in the UK.

ASIA-PACIFIC

LyondellBasell technology selected for PP plant in China

Sibur establishes a trading company in China

Sibur has established a trading company in China. The new company, Citco Trading Co. located in Shanghai will sell petrochemical products with payments in Chinese currency. Sibur’s exports to China have until now been coordinated through the Shanghai branch of the company’s main trading subsidiary, Citco Austria with payments in US dollars.

Comments: Sibur’s global headquarter is located in Moscow, Russia. China is a major export market for Sibur and the formal establishment of the Chinese trading company is a move to expand its opportunities in Asia. The variety of products Sibur will be providing include liquefied petroleum gases (LPG), synthetic rubbers, plastics, fertilizers, and liquid chemical products. Plastics are the largest sector of consumption accounting for half of the sales of SIBUR in China – in particular, more than 175 KT of plastics were sold, more than 71 KT of caprolactam, more than 53 KT of liquid chemical products, and more than 47 KT of synthetic rubbers were sold in China in 2009.

Dow India Cancels USD 100 million R&D center project in Maharashtra

Dow India, a Dow Chemical subsidiary, has canceled plans to go ahead with a previously announced USD 100 million research & development center the company was constructing at Chakan, in the state of Maharashtra, India, following protests over pollution concerns. Work at the proposed R&D center was halted since September 2008, following orders from the Maharashtra government to stop construction. Local villagers protested the establishment of the Dow facility, over fears that it will pollute the nearby rivers.
Dow first announced its plans to set up the R&D center at Chakan in 2007 and the company signed an agreement with the Maharashtra government to establish the center, which was to become operational in 2008. The Maharashtra Industrial Development Corp. had allocated 100 acres of land to the center.

Comments: Dow Chemical has been facing resistance to establishing a firm founding in India since it acquired Union Carbide, which was involved in the Bhopal gas tragedy in 1984. This is proving to be a legacy that is hard to shake off.

Petronas Chemicals set for a USD 2 billion listing

The Petronas Chemicals Group will be among the region’s largest petrochemicals producers and could be valued at over USD 2 billion when it is listed on the Kuala Lumpur stock exchange later this year. The listing was mooted by Prime Minister Najib Razak earlier this year as a means to add heft to the local bourse, and the national oil company responded by proposing to list two of its divisions – petrochemicals and heavy engineering.

In a draft prospectus submitted to the stock exchange, the firm’s assets were valued at RM27 billion (USD 11.7 billion) at the end of March

Comments: This move will add to the Malaysian polyethylene segment, which is of relatively moderate size. In Malaysia, Petlin has a 260 KTA DSM LDPE plant in Kerteh. Malaysia Polyethylene has two Innovene plants 130 KTA each (one for LLDPE and another one for LLDPE/HDPE swing); in addition, there is one 200 KTA Titan plant utilizing Mitsui CX process for bimodal resins such as film and blow molding.

Albemarle invests in Korea

Albemarle has begun its largest capital investment in the Asia/Pacific region at Yeosu, Korea, to meet the regional growth in the metallocene polyolefin (mPO) market and high-brightness LEDs. Intermediate commercial operation will begin in mid-2011, and the commercial facility will become fully operational in 2012.

The site will produce finished catalysts, activators like methyl aluminoxane (MAO), and organoborons, as well as metallocene components. The site will also purify metal organics, creating a portfolio of high-purity metal organics (HPMO) for electronic applications. Trimethyl gallium (TMG) production will begin in early 2011, with other HPMOs phased into the project during 2011.

Comments: This key investment at the Yeosu site will enable Albemarle to meet its Asian customer’s current needs through local supply in both the mPO industry as well as the high-brightness LED industry. In the last decade, Asia has particularly emerged as a major market for metallocene polyolefins with several suppliers exploring possibilities to produce metallocene resins. Market leaders such as Dow and Exxon have both invested in new plants in the South East Asia region, namely in Thailand and Singapore.

The location of Albemarle’s new manufacturing site will boost its competitive advantage in Asia/Pacific and augments its position as one of the global leader for metallocene polyolefins catalysts. The Yeosu site will mirror Albemarle’s metallocene polyolefin catalyst and TMG capabilities located at its facility in Baton Rouge, Louisiana.

 

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