Basell to acquire Repsol YPF’s position in Argentine PP joint venture Petroken
Basell announced its plans to assume ownership of the 50% portion of Argentina’s Petroken Petroquimica Ensenada that is currently held by its partner in the joint venture, Repsol YPF.
Petroken operates a 180 KT per year polypropylene plant, a 20 KT per year compounding facility, and a propylene splitter in Ensenada. The acquisition will have no impact on Petroken’s operations, its leadership, or its staffing. The transaction is subject to approval by the Argentinean regulatory authorities.
Comments: Petroken was established in the early 1990s as a 50:50 joint venture between Repsol YPF and Basell.
Repsol provided access to feedstock, while Basell and its predecessors provided technology support (i.e., process platform and catalysts). Basell also provided access to the global polypropylene market. The first polypropylene facility started in 1992 with a capacity of 100 KT.
In 1999, Petroken expanded its polypropylene capacity to 180 KT. They also added a compounding facility to produce advanced polyolefins in the region, which today has a current capacity of 20 KT. Basell has agreed to pay $58 million for the 50% portion held by Repsol YPF.
LG Chemical to increase overseas sales and invest in India
LG Chemical announced that the company’s overseas sales goal for the year 2005 is estimated to be USD 4,486 million. This amount will cover over 50% of the company’s sales goal.
The main strategy for the China market is to strengthen capacity expansion and maintain market dominance. The company plans to secure a competitive edge for the PVC product by building a plant that would supply feedstock to the product. Moreover, the company has plans to expand the current ABS production from 300,000 MT/year to 700,000 MT/year by the end of 2008. The company also launched a holding company in Beijing, China early in 2005.
In North America, the construction of the acrylic solid surface factory will enable the Industrial Materials Division to sell more high-value-added products and further increase profitability. Furthermore, LG Chemical plans to actively export high-value products such as ABS, EP, and rechargeable batteries to the U.S. market.
As for India and Brazil, LG Chemical will seek new opportunities to market products such as rechargeable batteries. Within 2006, the Russian branch office has an ambition to reach USD 100 million in sales and with only a short two-year entry into the market, the company is considering building a factory to manufacture window frames and doors in Russia.
By 2008, the overseas sales portion is expected to take up 57% of the total sales and reach USD 7,400 million.
Comments: LG Corporation had recently undergone restructuring under which it spilt into three different companies including: (1) LG Chemical Investments, (2) LG Household & Healthcare, and (3) LG Chemical. The business units of LG Chemical are divided into 4 major segments including (1) petrochemicals, (2) industrial materials, (3) household products, and (4) material sciences. After the breakup, LG Chemical is set in a better position to enhance specialization and efficiency.
The company’s product portfolio has a balance of low-growth products in petrochemicals and high-growth business areas such as life sciences and electronic materials. The company’s sales include: Chemicals and Polymers account for about 55% of the company’s sales, industrial materials account for about 33%, and electronic materials account for the rest.
LG Chemical has already established itself as a leader in Korea and now the company is leveraging its leadership position into other Asian regions such as China and India. Moreover, the Asian economy is steadily improving, but the Korean economy has not shown signs of a turnaround.
Investment Firm to Revive Bataan Polyethylene Plant
Pan Pacific Capital Advisors Pte. Ltd. of Singapore and the Metro Alliance Holdings and Equities Corp. (MAHEC) announced their plans to recommission the Bataan polyethylene plant, the Department of Energy (DOE) announced.
According to DOE, the re-commissioning and eventual operation of the Bataan polyethylene plant is crucial to the government’s thrust to revitalize and strengthen the mid-stream petrochemical industry, which will eventually lead to the establishment of the much-delayed naphtha cracker plant.
The Bataan polyethylene plant has a rated capacity of 275,000 metric tons a year, with enough room for future expansion. It uses the BP Innovene® gas phase process, which entails processing polyethylene resin for distribution to plastic producers.
MAHEC acquired 100 percent ownership of the Bataan Polyethylene Corp. in 2004, Bataan Polyethylene Corp. was formerly owned and operated by a consortium of British Petroleum (BP) of the UK, Petroliam Nasional Bhd. of Malaysia, Sumitomo Corp. of Japan, and some local investors. It was decommissioned in 2003.
Comments: Bataan Polyethylene Corporation was formerly owned by Bataan Polyethylene Holdings Corporation (BPH, 50%), BP International Holdings, B.V. (BP Holdings, 30%), Sumitomo Corporation (Sumitomo, 10%) and Petroleum Nasional Malaysia (Petronas, 10%). BPH was a special-purpose company established for this project.
The plant is the PNOC petrochemical park in Mariveles, Bataan Province. The park also includes a polypropylene plant, a naphtha cracker, a vinyl chloride monomer plant, a polyvinyl chloride plant, and a styrene monomer plant. The planned project consisted of the construction and operation of a grassroots polyethylene plant with a capacity of 250 KT, to produce a wide range of linear low-density (LLDPE) and high-density (HDPE) products. When the project was planned the Philippines had no domestic polyethylene production capacity, and domestic demand was met by imports. Initially, the project was to rely on imported ethylene. The project was scheduled to be commissioned in the third quarter of 1999.
The petrochemical sector in the Philippines is still at a formative stage. Despite a reasonably strong level of demand, the industry has not expanded historically due to (i) non-availability of feedstock; (ii) limited availability of equity financing; and (iii) slow or stagnant economic growth. Since 1992, with the overall improvement in the country’s economic conditions resulting from macroeconomic stabilization and structural reform policy measures, private investment and exports have boomed. The Government then earmarked the petrochemical sector as a priority industry. The project was part of a larger initiative to create the country’s first integrated petrochemical complex consisting of second-generation polymer producers and eventually an olefins cracker.
After four years the new consortium has decided to revive the plant. This should decrease the reliance of the Philippines on imported polyethylene. If the project is successfully revived it might also allow the country to increase its exports.
The demand for HDPE in the Philippines is approximately 250 KT while that for LLDPE is approximately 100 KT. Both markets have a healthy growth rate of 7% to 8%.
Chennai Petroleum Corporation considers a polypropylene plant in India
Chennai Petroleum Corporation (CPCL) announced its plans to invest about Rs. 1,200 crores ($300 million) polypropylene project, which will have a capacity of 150,000 MT/year. The project would take about 4-5 years to be commissioned.
The company’s plans have come based on the expansion of its refinery capacity. In 2000, Chennai Petroleum started an exercise to add 3 million tons to its 6.5 million ton refinery in North Chennai. The LPG output of the 9.5 million tons refinery would be used in the polypropylene project.
Comments: The petrochemical industry in India is highly integrated. All the players have an integrated cracker and some are into refining as well. Reliance has its refinery and it also participates in the downstream industry. IOC is in refining and now has made announcements to participate in the downstream industry. The announcement by CPCL seems to be in line with the overall industry structure in India. As more and more players are integrated the need to buy feedstock from the merchant market decreases. CPCL is trying to circumvent this need to sell its feedstock in the merchant market via participation in the downstream industry. The smaller size of the plant may be linked to the amount of feedstock that CPCL has at its disposal.
Polypropylene is growing at 7% in India on a base volume of 1,200 KT. The Indian market will easily absorb the additional 150 KT of polypropylene without affecting the price of polypropylene. In the past, some of the end-users have been forced to import polypropylene due to a lack of supply in India. The smaller end-user will welcome the entry of a new player in a market dominated by Reliance.
Thailand’s PTT to control TPI and delays polyolefins plants construction
Thailand’s energy company PTT (Bangkok) announced its plans to purchase a 30% stake in the Thai Petrochemical Industry (TPI) and assume management control of that company, as part of a previously announced restructuring of TPI’s $2.7-billion debt. The deal will take the form of a private placement of 17 billion TPI shares, equivalent to 90% of the company’s equity, of which 11.16 billion shares will be new shares converted from debt and 5.89 billion shares are currently held by TPI’s creditors.
Also, the Thai Petrochemical Industry announced its plans to delay expansions to its high-density polyethylene and polypropylene plants until the middle of 2005.
According to the company, several new PP and PE plants are coming up in the Middle East and Europe that could lead to an over-capacity.
Comments: This deal is structured to provide a win-win situation for both companies. By purchasing a 30% stake in TPI, PTT will be able to diversify its portfolio with limited exposure. PTT on the other hand needed cash to decrease its debt and continue its operations. PTT also assumes management control of the company but it seems unlikely that it will influence the day-to-day operations of the company.
It seems that TPI is carefully considering its financial situation and the cash flow of the company. In a separate announcement, the company said that it was reconsidering its decision regarding the expansion of HDPE and PP plants. The delay of these expansions will provide the company with more operating cash flow.
However, the decision to delay the expansions seems to be driven by external factors. There have been announcements regarding HDPE capacity expansions or grassroots plants by Basell, Aramco, IOC, and other companies. It makes sense for companies to stagger capacity expansions to control margins. On the polypropylene side, there are also concerns regarding the shortage of propylene. Looking at the market conditions it seems that it will be a tough decision for TPI to continue with the planned expansions.
IPCL to increase ethylene capacity in Gujarat, India
Indian Petrochemicals Corporation, part of the Reliance group announced its plans to expand its ethylene cracker capacity at Gandhar, Gujarat by 100,000 MT/year to 400,000 MT/year.
This expansion, when completed along with others, would take the company`s ethylene capacity to about 950,000 MT/year. IPCL has two other crackers at Vadodara and Nagothane in Maharashtra.
The expansion at Gandhar would be achieved by installing a fifth gas-cracking furnace, in addition to the four that already exist. This task began in January this year and would be completed by 2006.
Comments: The Indian petrochemical industry is very small by global standards with ethylene capacity accounting for only 2.2% of the global capacity.
However, the petrochemical industry in India is growing. The Reliance/IPCL combination is already in the Global 10 and is expected to impact the Global markets as a balance against the unbridled enthusiasm in China and the Middle East.
There have been significant increases in the capacity of polyethylene and other ethylene derivatives.
The growth of polyethylene has fueled the growth of ethylene. India has an equal share of naphtha and ethane-based plants. 55% of ethylene capacity in India is based on naphtha while the remaining is based on ethane. Due to higher natural gas costs, the newer capacities will likely be based on naphtha. The current expansion by IPCL (Reliance) will help the company address its ethylene needs for the fast-growing polyethylene market.
Shell to construct petrochemicals complex in Qatar in a joint venture with Qatar Petroleum
Qatar Petroleum (QP) and Shell Chemicals Limited (Shell) signed a Letter of Intent (LOI) for the development of a world-scale ethane-based cracker and derivatives complex in Ras Laffan Industrial City, Qatar.
The companies will carry out a feasibility study, which will determine the configuration of the complex as well as investment costs. Details of the possible shareholding by each partner will be announced at a later date. Completion of the study is expected early next year.
According to the company, if the project gets the go-ahead, completion is likely in 2011 or 2012. The ethane cracker will likely have a capacity of 1.2 million-1.3 million MT/year of ethylene. Downstream plants are expected to include polyethylene (PE) and ethylene glycol (EG) units.
Comments: The cracker project is one of three new ethylene complexes planned by QP. ExxonMobil Chemical is expected to partner with QP in a petchems complex at Ras Laffan based on a 1.3-million MT/year ethylene plant. Downstream units will produce PE and EG. Another petchem complex planned by QP and undisclosed overseas investors is a swing naphtha/ethane cracker planned close to an existing refinery at Mesaieed. This complex is likely to produce 700,000-800,000 MT/year of ethylene.
Shell is “tripling down” in their mega activities in the Qatar natural gas play. Tripling down means that Shell is playing almost all hands at once; LNG, GTL, and petrochemicals in one of the largest gas development programs ever seen. Qatar has current proven crude oil reserves of about 15B bbls and produces in the range of 725,000 BPD. Qatari oil is depleting with a possible production decline to 500,000 bpd by 2012 and the commensurate loss of revenues. As such, the development and cashing of the giant natural gas North Field is of great strategic significance to Qatar with the 4 key components of development being LNG, pipeline gas (for power generation, etc.), petrochemicals, and GTL all currently being pursued at once. The giant North Field was discovered in 1971 and certified in 2002 at more than 900 TCF making it the largest single gas field in the world. At present, it is largely under-produced and slated for support of more than a dozen significant projects in the 4 categories targeted. Shell and other major internationals are generally the key players with Qatar Petroleum (QP). With the recent announcement of an ethane cracker, Shell will add to its portfolio of already committed LNG and 140,000 BPD (two-train) GTL projects. Feed to these projects was announced in 2003 when Shell and QP announced a natural gas development program in the North Field of more than 1.6B cf/d production from a block within the field. More gas production will be needed to support all three initiatives but ample reserves are available.
Crompton Corporation and Great Lakes Chemical announce merger to form major new specialty chemicals company
Crompton Corporation and Great Lakes Chemical entered into a definitive merger agreement for an all-stock merger transaction, which will create the third-largest publicly traded U.S. specialty chemicals company.
The new company will have combined pro forma 2004 revenues of more than $4.1 billion and a market capitalization of nearly $3.2 billion. It will hold leading positions in high-value specialty chemical niche businesses including plastics additives, petroleum additives, flame retardants, and pool chemicals. Additionally, the combined company will maintain strong positions in castable urethanes and crop protection chemicals.
The new company will be owned 51 percent by Crompton shareholders and 49 percent by Great Lakes shareholders on a fully diluted basis. Robert L. Wood, currently chairman, president, and CEO of Crompton, will serve in those capacities for the combined company, which will be headquartered in Middlebury, Conn. In addition to Robert L. Wood, the board of directors will have five directors from each side, for a total of 11 directors. The new company expects to maintain Crompton’s existing cash dividend level of $.05 per quarter.
The transaction is expected to be accretive to the combined company’s 2006 earnings per share and cash flow per share. In addition to significant cost synergies, the combined company expects to realize cash flow benefits related to the utilization of Crompton’s net operating losses. One-time pre-tax closing costs are expected to be approximately $35 million – $40 million. The combined company also expects to incur one-time pre-tax integration costs of approximately $90 million – $100 million.
The transaction, which is expected to close by mid-year, is subject to regulatory approvals, approval by shareholders of both companies, and other customary conditions. Morgan Stanley and Citigroup Global Markets Inc. acted as financial advisors to Crompton on this transaction and Merrill Lynch & Co. acted as financial advisors to Great Lakes. In 2004, Crompton had total revenue of approximately $2.55 billion and a net loss of $34.6 million. Great Lakes had total revenue of $1.6 billion and a net income of $62.9 million in the same period. On December 31, 2004, Crompton and Great Lakes had 4,800 and 3,700 employees, respectively.
Comments: Great Lakes Chemical is a diversified chemical company with leading market share positions in brominated flame retardants, and other chemicals derived from bromine. The company’s products can be divided into 2 broad segments including (1) industrial performance and (2) consumer. The company’s industrial performance divisions consist of products including (1) flame retardants, (2) polymer stabilizers, (3) bromine intermediates, (4) fluorine specialties, and (5) industrial water treatment. The consumer products include recreational water treatment and household products.
Crompton’s business units are divided into: (1) polymer additives (51%), (2) specialty products (42%), and (3) performance chemicals (7%).
This merger will strengthen Great Lakes’ industrial performance division due to Crompton’s strength in plastics and end-use markets. Crompton will benefit from GLCC’s position in the flame retardants market and broaden the new company’s product portfolio in plastic additives. The new company will have total sales of about $3.6 billion. Overall, this merger has good synergies and it is a win-win situation for both companies. The new company is best positioned to become one of the leading specialty chemicals companies in the world with a strong mix of businesses with leading positions and critical mass.
The three major drivers behind this merger are (1) the company’s goal of becoming the number one plastic additives supplier, (2) a balanced portfolio of niche businesses, and (3) leveraging Crompton’s strong leadership.
The combined Polymer Additives businesses will account for about 60% of total sales and 40-50% of the operating income of the new company. The new company will offer ten major plastic additives and a broad product offering should result in expanded global access to key customers, cross-selling and captive sourcing opportunities, cost savings, and improved opportunities for new product development.
After the merger, Crompton will have niche positions in several specialty chemicals areas such as (1) petroleum and lube additives, (2) consumer products, (3) urethane additives, and (4) crop protection.
Solvay’s vinyl affiliate, Vinythai in Thailand expands upstream capacity and secures feedstock supply
Following Vinythai’s decision to double its Vinyl Chloride Monomer (VCM) production, Solvay has announced today that the Board of its Thai vinyl affiliate has now decided to fully integrate upstream by also doubling the Chlorine and Ethylene Di-Chloride (EDC) production capacity at its plant in Map Ta Phut. The project, which is based on the latest bipolar membrane technology, is estimated to cost roughly Baht 2,300 million (MEUR 45). The total cost of this additional expansion together with the previously announced expansion of the VCM will be approximately Baht 4,600 million.
Construction will begin in mid-2005 with production expected to commence at the end of 2006. The expansion will double Vinythai’s current Chlorine capacity of 120,000 tpa to 240,000 tpa and current EDC capacity of 160,000 tons per year (TPA) to 320,000 tpa. This new EDC capacity will be the major feedstock for the 200,000 tpa VCM expansion project, mentioned above, which is expected to start production in September 2006.
By integrating upstream its VCM production to Chlorine and EDC, the Company is strengthening its cost-effectiveness to ensure sustainable and growing profitability in a competitive market. The Company’s Board of Directors believes that this expansion will reinforce Vinythai’s position as a key player in the Asian vinyl industry and add significant value for the Company and its shareholders.
The expansion project is subject to approval from Vinythai’s bondholders and the environmental impact assessment authorities.
Another Unique Service From Chemical Market Resources, Inc. 560 Blossom Street, Ste C, Houston, TX 77598 USA; Tel: 281-557-3320 Email: POE-SNA@CMRHouTex.Com Copyright © 2003 Page 11/23of Issue 06 – Volume 3 The ethylene requirement for the expanded capacity is expected to be sourced from Thai Olefins Public Company Limited (TOC) which, in return will be provided the opportunity to invest in a 20% equity stake in Vinythai through an equity private placement offering. Solvay will keep its position as a reference shareholder of Vinythai after the integration of TOC as a shareholder.
Comments: This expansion is a strategic move placed in the Asia epicenter of the global vinyl market. With exports from developed markets like North America under current and future pressure from natural gas spike-driven costs, Asia will have to increasingly build its internal supply for regional demand in the future. Global demand for PVC by some recent estimates is forecast to average more than 4%/year through 2009, one of the strongest ethylene derivatives. More than 1/3rd of the future global demand for PVC will be Asia-centric. The region’s net ethylene chain self-sufficiency will remain short of 40% locally satisfied as demand growth continues to outstrip local supply building.
In fact, by some estimates, the region’s ethylene chain self-sufficiency will decline through 2009 if more projects like Solvay’s vinyl affiliate do not continue aggressive expansion over the next 5 years. With this expansion, Thailand will become Southeast Asia’s third-largest vinyl producer behind Taiwan and Singapore. Vinythai has experienced difficulties in the past several years but due to a restructuring and the alliance with Solvay, the future appears strong. This investment is a core business globally for Solvay also which follows other Western company core business investments in the region in the ethylene or vinyl chains.
Bayer MaterialScience introduces new aromatic polyester-based TPU resin
Bayer MaterialScience LLC expanded its Texin® family of aromatic polyester-based thermoplastic polyurethane (TPU) resins with Texin DP7-1197. The new resin was designed for applications that require durability under harsh conditions.
According to the company, Texin DP7-1197, with a Shore hardness of about 88A, is a general-purpose, injection molding-only grade that’s ideally suited for applications such as caster wheels, weather seals, and industrial and automotive components.
The resin’s key features include (1) low compression set even at elevated temperatures as high as 70° C, (2) excellent wear resistance and overall toughness, including high tensile and tear strength, and (3) very good processing through injection molding.
Comments: Thermoplastic polyurethane (TPU) was commercialized in the early 1960s and currently it is used in a wide variety of applications. Aromatic TPUs are based on aromatic isocyanates like MDI & TDI. Specialty aromatics include NDI (Bayer) and TODI (DuPont) and PPDI (Crompton). The commonly used polyol component is a polyether. Aromatics are cheaper and their applications are limited to interior applications due to the nature of aromatics to exhibit a color change (yellowing) on UV exposure.
TPU’s main advantage is that it has the high performance of polyurethane elastomers with efficient processing capabilities of thermoplastics in injection molding, extrusion molding, calendaring, and powder slush molding. Some of the main technical advantages of TPU include (1) abrasion resistance, (2) impact resistance,(3) weather resistance, (4) durability, (5) tear resistance, (6) chemical resistance, (7) adhesive strength, and others. Bayer is one of the major players in the TPU market, presently the North American market for TPU is at 118 million pounds growing at 3.5% annually. TPU’s major applications include (1) automotive (instrument panel skins, passenger side airbags doors), (2) film & sheet, (3) mechanical goods (diaphragms for water purification systems, industrial belts), (4) footwear (soling for athletic shoes safety boots, hiking boots, and ski boots), (5) laminations, (6) apparel and sporting goods (breathable apparels for hiking, camping, and medical applications), (7) recreational (tennis rackets, motorcycle & snowmobiles), and others. The introduction of its new grade will allow Bayer to increase its product portfolio and its use in a wider range of applications.
DIC to merge its polystyrene business with PS Japan
Dainippon Ink and Chemicals (DIC) plans to merge its polystyrene business with PS Japan. DIC’s business has a capacity of about 100,000 MT/year and is being targeted for improvement under a company-wide restructuring. PS Japan is a joint venture among Asahi Kasei, Idemitsu Petrochemical, and Mitsubishi Chemical, and is Japan’s leading PS producer with a capacity of 530,000 MT/year.
Comments: DIC’s proposed merger into PS Japan probably can’t come too soon for Dainippon. If any market globally needs rationalization, it is polystyrene where regional operating rates below 80% are being reported when other polymers businesses such as polyethylene enjoy some of the strongest performance in years.
DIC’s and PS Japan’s move is a reminder of the recent European combination of Nova’s and BP’s polystyrene businesses. The combined entities in both cases (Japan and Europe) have over 1B lbs of PS, are market leaders, and in the case of the European combination according to analysts will save millions of dollars in expenses and redundant product line costs. Some estimates put savings in the $20-40/mt range which is significant, particularly in a business like polystyrene which for the most part is globally a dead loss in performance. With benzene’s price reversals in recent months and a run-up to almost $4.00/gallon, the pressure on polystyrene is unbearable, and more global strategic combinations or rationalizations will probably be the order of the day.
Borealis appoints Ultrapolymers as European roto molding distribution partner
Borealis appointed Ultrapolymers as a distribution partner in Europe for its full range of polyethylene and polypropylene roto molding resins effective March 14, 2005.
The appointment of Ultrapolymers consolidates the reputation of Borealis as a leading, innovative provider of plastics solutions with a long-term commitment to the rotomolding market in Europe. In addition, it marks the introduction of a strategy to further strengthen Borealis’ market position through a series of initiatives that will include a range of new product innovations.
Ultrapolymers will provide a full sales and technical support service for the Borealis ranges of roto-molding polymers, with local representatives able to provide a significantly faster route to market. It will also offer comprehensive color compounding and grinding services. Ultrapolymers will be promoting the full Borealis portfolio of roto-molding resins in both granular and powder forms.
Comments: Ultrapolymers was established in 2002 primarily to distribute Basell and BASF products in several European countries. Today it has offices in 14 European nations and distributes products for a handful of companies including, but not limited to, BASF, Basell, Nova (PS), Degussa (PMMA), and DuPont Dow Elastomers. Products range from commodity thermoplastics to engineering thermoplastics to compounded resins.
Ticona to quit COC and fuel cell business
Ticona is exiting its cyclo-olefin copolymer (COC) business, marketed under the brand Topas®, and its Pemeas fuel cell joint venture.
The disposals were revealed as part of Celanese’s planned floatation on the New York Stock Exchange. The COC business lost $35m (E27m) in 2003 and was on track to make similar losses in 2004. The fuel cell business lost $12m (E9m) in 2003.
Topas is manufactured at a 30,000 MT/year plant in Oberhausen, Germany.
Comments: Cycloolefin copolymers are a new class of materials that are polymerized from ethylene and norbornene. In 2003, Ticona’s Topa’s business lost about $35 million and the losses were similar in 2004. Ticona started Topa’s production in 2000 in Oberhausen, Germany having a manufacturing capacity of about 30KT with an investment of about EUR 60 million. Before the German plant, Topas was a toll produced in Japan.
COC is an over-engineered thermoplastic when compared to other thermoplastics such as polyphenylene oxide, polycarbonate, nylon, polyester, and polyacetal. Hence it becomes more expensive for the end users. COC when compared with other high-temperature engineering thermoplastics such as polyphenylene sulfide, polysulfone, polyetherimide, and fluoropolymers falls short of performance properties.
Ticona’s decision to quit COC is another blow for new engineering polymers. It also joins several new polymers launched over the last decade that have failed to achieve the expected sales such as Carilon® (polyketone-based thermoplastic by Shell), and Questra® (syndiotactic polystyrene-based thermoplastic by Dow).
Dow and GE develop nanocomposites technologies for car parts
GE Advanced Materials and Dow Automotive have both developed nanocomposite technologies for online painted vertical body panels. The companies have also looked at composite solutions for horizontal panels and structural cladding.
Both companies use unspecified nano-sized mineral fillers for online painting to meet automotive industry needs for online painted vertical body panels with stiff but ductile materials. These have lower coefficients of thermal expansion to enable narrow gap designs and low water absorption, thereby avoiding paint blistering during oven curing at 200°C.
Dow uses CBT (cyclic butylene terephthalate) from Cyclics for its polymer base, as an intrinsically low moisture absorption polymer. It has an exclusive deal to develop and market CBT in the automotive industry. GE has brought nanotechnology fillers to an HMD (high modulus and ductility) version of its Noryl PPE/PA blend for online painting, as well as to its Cycoloy PC/ABS and Xenoy PC/PBT blends for offline painting.
Comments: Nanocomposites have been attracting great interest for many years. However, the commercialization of nanocomposites has only started to build momentum recently. Automotive markets are one of the major drivers for nanocomposites. The first commercial application of nanocomposites in automotive markets is a step assist in the 2002 GM Safari and Chevrolet Astro made of PP/nanoclay-based nanocomposite.
In 2004, GM expanded the use of nanocomposite to the body side molding for the ’04 Chevrolet Impala and later to the cargo bed of Hummer H2 SUT. By 2004, General Motors started using about 660,000 pounds of nanocomposites per year. GE Advanced Materials has been using multi-wall nanotubes (MWNTs) as a conductive additive to their Noryl® GTX, a PPE/PA blend.
The conductivity imparts online paintability to the automotive parts made of Noryl GTX. It seems GEAM is expanding the technology to other engineering plastics lines as well.
Dow is another key supplier to the automotive industry. The new polybutylene terephthalate/nanoclay nanocomposite is synthesized through a new route. It is produced through ring opening polymerization of cyclic butylene terephthalate in the presence of nano clay. The compatibilization of butylenes terephthalate and nano clay will be a key technology to making high-performance products.
We shall see more and more commercial applications of nanocomposites in the automotive and other applications such as packaging. Large-scale manufacturing of nanocomposites at low cost is still a big challenge in many applications.
BASF starts new polytetrahydrofuran plant in China
BASF has started up its new polytetrahydrofuran PolyTHF®, plant at the integrated production site at the Shanghai Chemical Industrial Park (SCIP) in Caojing, Shanghai. By the middle of 2005, BASF will also gradually start up its neighboring THF (tetrahydrofuran) plant. With an annual capacity of 60,000 metric tons of Poly THF and 80,000 metric tons of THF, this is the largest PolyTHF production facility in the world. This is also the first investment project in China that has been wholly owned by BASF right from its inception.
A new proprietary technology for THF production is being used for the first time by BASF in Caojing. In this process, butane – obtained from widely available natural gas – is used as a raw material for manufacturing THF, which is then used to produce PolyTHF. The innovative process eliminates the intermediate step of 1,4-butanediol (BDO), which was previously necessary.
With the new plants, BASF will primarily supply Chinese textile fibers manufacturers. PolyTHF is an important component in the production of elastic spandex fibers for sportswear, swimsuits, underwear, and outerwear fabrics. In China, PolyTHF will be marketed under the brand name Bao Li Fu, which means “Enrich your fabric.”
In addition to its role in textiles, PolyTHF is also an important intermediate for thermoplastic polyurethanes (TPU), which are used for example in the manufacture of highly abrasion-resistant, yet flexible hoses, films, and cable sheathing. Other TPU applications include thermoplastic polyether esters and polyetherimides or cast elastomers required for the production of wheels for skateboards and inline skates. THF is a precursor of PolyTHF but is also used as a special solvent, for example, in the production of pharmaceuticals.
Comments: BASF is a major supplier of PolyTHF with production facilities in Ludwigshafen, Germany (on stream since 1983); Geismar, U.S.A. (1987); Yokkaichi, Japan (1992); Ulsan, Korea (1998) and now in Caojing, China. BASF’s advantage in this industry is that it is backward integrated ensuring a secure supply of all feedstocks for their PolyTHF production.
PolyTHF is manufactured by cationic ring-opening polymerization of tetrahydrofuran (THF). BASF manufactures PolyTHF with a wide range of molecular weights that includes PolyTHF 650, 1000, 1800, and 2000. PolyTHF is usually incorporated into segmented block copolymers, due to its elastomeric properties. This material with PolyTHF, shows increased tear strength, abrasion resistance, good low-temperature property, and better hydrolytic, and microbial resistance. These spandex fibers with PolyTHF are used to manufacture articles such as swim and sportswear and also form the basis of thermoplastic polyurethane elastomers used in vehicle side panels and cable insulation. The opening of this production facility will help BASF to take further advantage of opportunities for growth in the region.
UK to review nanotechnologies safety regulations
The UK government plans to review safety regulations on nanotechnologies to see if the rules need tightening to safeguard people’s health and the environment.
But the move is being criticized by the Royal Society and the Royal Academy of Engineering, two of the country’s leading scientific organizations. They claim the government is not providing enough funds for research on potential risks to human health from nanotechnologies.
The UK Chemical Industries Association recently stated that the development of nanotechnology must proceed in a way that delivers its benefits but also enables risks to be evaluated and managed.
Comments: Like most revolutionary technologies, the initial enthusiasm for discoveries and developments tends to neglect the long-term impacts and spill-over costs. Case in point – asbestos, Tris, DP/DPO, Vioxx, etc.
Since nanotechnology is still in a nascent stage and involves particle sizes even smaller than brain cells, it is both prudent and logical to study the adverse impacts on human health at the very early stage of the game. The arguments should be viewed more as a careful progress of nanotechnology rather than as a hindrance.
Due to their tiny size, nanomaterials can easily transport to the human body through breathing or even through the skin. Not enough scientific research has been done on this front that could enable us to draw a definite conclusion, even though nanomaterials have been used in research for decades. This is one of the examples that science has developed so fast that it has been hard to keep up with safety measurements.
Westlake Chemical’s PVC profile group supplier to ‘The Gates of Central Park
North American Profiles Group (NAPG), a subsidiary of Westlake Chemical Corporation, was chosen as the manufacturer of the PVC profiles used for the vertical and horizontal posts used to construct the 7,503 gates for The Gates, the artwork recently displayed in New York’s Central Park.
The saffron-colored gates made of 5″ x 5″ square PVC lineals with free-flowing fabric panels were the work of artists Christo and Jeanne-Claude. The project used over 750,000 pounds of PVC profiles produced at NAPG’s Holmes, New York facilities. The inherent virtues of PVC components were of significant importance to the project. PVC offered the sturdiness and rigidity needed for the 16′ high gates at less cost and weight than traditional metal options and did not need to be painted as the colorant was added in the extrusion process.
On most days NAPG is producing PVC components for windows, decks, and fencing at its facilities in Holmes, New York; Evansville, IN and Calgary, AB. The company sells and markets over 100 million pounds of these components annually to residential and industrial customers in North America.
Comments: It is a lesser-known fact that Westlake’s top management are art connoisseurs, especially Mr. Albert Chao who in addition to being the CEO is an avid supporter of local opera performances. It is befitting to see Westlake have a public presence as a publicly traded organization.
Fujitsu and Toray develop PLA-based plastic housing for notebook PCs
Fujitsu Limited, Fujitsu Laboratories, Ltd., and Toray Industries, Inc. announced their joint development o the world’s first large-size notebook PC plastic housing made of PLA-based polymer. The new environmentally-friendly plastic is used in Fujitsu’s 2005 spring model FMV-BIBLO NB80K notebook PC.
The three companies plan to expand on various applications for this plastic, thereby further contributing to a reduction in the environmental burden as well as lower consumption of petroleum resources.
In June 2002, Fujitsu and Fujitsu Laboratories announced the development of the world’s first technology for plant-based plastics that could be used for small-size housing components in notebook PCs, using polylactic acid derived from corn and other plants. This technology was used in one of Fujitsu’s FMV-BIBLO notebook PC models.
Toray positions polylactic acid as an environmentally-friendly, advanced material and has been developing markets for fibers, textiles, plastics, and films under the brand name Ecodear, while conducting ongoing research in ways to obtain better performance from polylactic acid.
To broaden the applications for plant-based plastics, the three companies have been improving the materials’ heat resistance and flame retardance properties. The new material formerly was not suited for volume production and use in large-size housing, due to its use of polylactic acid which has low glass transition temperature, making it difficult to mold.
The companies have now developed a new type of plastic that uses polymer alloy technology blending polylactic acid and non-crystalline plastic with a high glass transition temperature as well as flame-retardant technology. These advances have resulted in a material with the heat resistance and flame retardance mandatory for large-size housing for IT devices, which features easy moldability, making it suitable for mass production.
Comments: PLA’s success in this application will significantly increase its demand. The use of PLA in notebook applications is justified due to the higher price of notebook PCs compared to desktops.
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