Kazanorgsintez to triple PE capacity & add product capability using Univation’s capacity expansion technology
Univation Technologies and Kazanorgsintez have signed an agreement enabling Kazanorgsintez to triple the capacity of two of its three existing UNIPOL™PE reactors and add breakthrough PE products to its manufacturing capabilities. The agreement will increase the two existing UNIPOL PE lines to 220 MT/year each, bringing the total nameplate plant capacity to more than 510 thousand MT/year.
Under the terms of the license, Kazanorgsintez also has the rights to Univation’s newest bimodal HDPE film and PE-100 pipe technologies as well as a complete spectrum of polyethylene including high-density, linear low-density, and metallocene. Plant completion is expected in 2006.
Comments: Kazanorgsintez (KZOS), one of Russia’s largest petrochemical plants, and believed to be controlled by TAIF, a company associated with the Tatarstan government. The company has experienced healthy growth in the past couple of years. In 2003, sales profits grew by 14.9% and amounted approximately to 1.8 billion rubles; production has grown by 22% and amounted to 8.8 billion rubles. The polyethylene demand growth has been one of the main driving forces behind its production increment as it grew by 27.4% up to 450KT. Kazanorgsintez, which currently captures 38% of the Russian polyethylene market, intends to double the production volume. It is expected that 2004 will be a record year as production tops 394 KT of ethylene, 386 KT of polyethylene, and 38 KT of polyethylene pipes. As a strategic initiative to strengthen its position, the company intends to increase its production of innovative products such as bimodal polyethylenes. Although not confirmed, the company plans to take advantage of Univation’s bimodal HDPE and PE-100 technologies. Univation’s enhanced single-reactor technologies will be a key factor for Kazanorgsintez to leverage its existing technology base while upgrading its product lines.
Chemical Market Resources, Inc will soon feature a special edition of “New Generation Polyolefins” –on Univation Technologies.
Univation Technologies to license Unipol® PE process to PetroChina
Univation Technologies announced the signing of license agreements to supply its Unipol polyethylene (PE) process to plants being planned by PetroChina subsidiaries Daqing Petrochemical (DPC; Daqing, China) and Lanzhou Petrochemical (Lanzhou, China).
The companies will build PE units having the capacity to produce 200,000 MT/year. The facility at Lanzhou has been licensed to manufacture metallocene PE, the first such license in China, according to Univation.
Comments: The last Univation license awarded in China was in 2000 to Yangzi Petrochemical for a 200 KT swing plant in Nanjing. With the development of advanced Unipol products, Univation is in a better position to continue its dominance in the polyethylene licensing business. The two new plants will each have a nominal capacity of over 200 KT/year and are scheduled to go on stream in mid-2006. The Lanzhou facility is also licensed to manufacture metallocene PE, a first for China. According to Univation, metallocene is beginning to make inroads into the Chinese market growing at 20% or higher although it is starting from a relatively small base.
Sabic EuroPetrochemicals to construct polyolefin units
Sabic EuroPetrochemicals announced its plans to build three polyolefin units. Of the three units, two plants will be built downstream from a 650,000-MT/year ethylene unit at Geleen, the Netherlands.
The company is planning on constructing of LDPE unit based on SabTec technology with a capacity of 400,000 MT/year, and a 350,000 MT/year polypropylene unit based on BP technology.
Sabic is also considering the construction of a bimodal high-density PE plant with a capacity of about 250,000 MT/year at Gelsenkirchen, Germany. It will replace a 100,000 MT/year unit at the site. Board approval for the cracker and downstream units is expected by year-end, and engineering work is due to start in 2005. Completion is expected in 2008.
Comments: Sabic continues to increase its global presence in the polyolefins industry through acquisitions (i.e., DSM) and capacity expansions in the Middle East and Europe. The integration of the DSM assets into the Sabic businesses has created the expected synergies. The current expansion initiative spans across the polyolefins product lines including LDPE, PP, and bimodal HDPE. Sabic also continues to diversify its product portfolio by adding more value-added products and taking advantage of higher premiums from high-pressure products.
Dow and PIC form two new joint ventures, MEGlobal and Equipolymers
The Dow Chemical Company and Petrochemical Industries Company (PIC) of Kuwait, a wholly owned subsidiary of Kuwait Petroleum Corporation, announced the formation of two new joint ventures, (1) MEGlobal and (2) Equipolymers.
MEGlobal will be a 50/50 global joint venture for the manufacture and marketing of merchant monoethylene glycol and diethylene glycol (EG) and Equipolymers, for the manufacture and marketing of polyethylene terephthalate resins (PET) and the manufacture of purified terephthalic acid (PTA).
Additionally, Dow and PIC propose to construct: Olefins II, a new ethylene and derivatives complex in Shuaiba, Kuwait, and a new ethylbenzene/styrene unit in Shuaiba, Kuwait.
To form MEGlobal, Dow will sell to PIC a 50 percent interest in its Canadian ethylene glycol assets. MEGlobal will purchase ethylene from Dow. MEGlobal will also market the excess EG produced in Dow’s plants in the United States and Europe, and might also market the EG produced by Dow and PIC affiliates.
To form Equipolymers, Dow will sell to PIC a 50 percent interest in its PET/PTA business which includes assets in Germany and Italy.
Comments: In the last few years the North American polyolefin industry has lost the competitive advantage of cheaper natural gas. Rising natural gas prices have forced North American suppliers to look for new/cheaper sources of raw materials. The Middle East has emerged as the source of cheaper raw materials and a number of players are expanding in that region to improve their margins and decrease costs.
In the past year, Dow has made a number of announcements regarding forming joint ventures in the Middle East. After a series of negotiations and talks, it seems that Dow has finally reached an agreement and decided to go forward with the new complex in Kuwait.
This new facility will allow Dow to compete effectively in the ethylene, EG, PET, and PTA markets. While the main focus will be on producing cheaper products through a better raw material sourcing strategy, it will also sell the excess material produced at Dow’s North American facilities.
Eastman to sell some of its CASPI Segment
Eastman Chemical Company and Apollo Management, L.P., a private investment firm, announced the signing of an agreement for Apollo to acquire certain businesses and product lines in Eastman’s coatings, adhesives, specialty polymers, and inks (CASPI) segment. The acquisition, with a purchase price of $215 million, is subject to regulatory approval and other customary closing conditions. The purchase price includes cash of $165 million at closing, plus a $50 million note payable to Eastman. The companies anticipate closing by the end of July 2004.
The Eastman businesses and product lines included in the divestiture are (1) acrylate ester monomers, (2) composites (unsaturated polyester resins), (3) inks and graphics arts raw materials, (4) liquid resins, (5) powder resins and (6) textile chemicals.
Eastman had announced plans in August 2003 to restructure, divest or consolidate these businesses and product lines. Manufacturing sites to be divested include Pleasant Prairie, WI; LaVergne, TN; Carpentersville, IL; Roebuck, SC; Lynwood, CA; Columbus and Forest Park, GA; and Ennis, Texas, in the United States. Sites outside the U.S. include Kallo, Belgium; Sant’ Albano and Cola’ di Lazise, Italy; Molndal, Sweden; Hamburg, Germany; Sokolov, Czech Republic; and Tianjin, Nanping, and Funing, People’s Republic of China.
Approximately 2,100 employees are currently associated with this portion of Eastman’s CASPI segment. Upon closing of the acquisition, these employees will become employees of the new owner.
Comments: Eastman has been undergoing a restructuring of its CASPI business segments for about a year now. In 2003, the company identified the underperforming businesses in its coatings, adhesives, specialty polymers, and inks (CASPI) segments and outlined steps to improve the profitability of the businesses. By the end of 2003, Eastman consolidated five sites in its CASPI segment and sold the colorants line assets. In 2003, the CASPI segment had total sales of about $1.6 billion which accounted for about 23% of the company’s total sales.
Eastman produces specialty acid copolymers which are not a part of the businesses for sale.
BP details Olefins & Derivatives spin-off
BP has provided more details of its previously announced plan to spin off its olefins and derivatives (O&D) business. The O&D operation will become an independent entity on January 1, 2005, and BP will float a partial stake later in 2005 most likely on the New York Stock Exchange. The company is retaining acetyls and purified terephthalic acid (PTA).
O&D has a number of operations in Asia, including the Shanghai Secco joint venture petrochemical complex with Sinopec that is under construction in Caojing, China.
Comments: The olefins and derivatives include: (1) polyolefins, (2) oxides, and (3) others. BP Chemicals has a strong synergy in the areas of polyolefins and alpha-olefins and is poised to be a major factor with the existing: (1) capacities, (2) technological superiority in polymer, catalyst, and reactors, (3) Global licensing presence and superiority.
The general public opinion is that BP is divesting its underperforming O&D assets and keeping the profitable aromatics divisions. We at Chemical Market Resources, Inc. don’t see it that way. The future of the plastics industry belongs to polyolefins – the superior products that have no aromatic content, no chlorides, are recyclable – and most importantly environmentally the best choice – even by the Greenpeace. The polyolefin industry is currently in transition due to: (1) Global developments and (2) Ethylene/Propylene supply issues – which we feel will settle within the next few years – thus benefiting the organizations that are patient and dedicated, of course, not for organizations that measure their success on a quarter to quarter basis purely on short term profits.
We are planning on dedicating an issue of New Generation Polyolefins Bimonthly Review to the new organization once it is finalized. We have covered in-depth, the contributing issues in the past including (1) Amoco’s polypropylene technology, licensing, and catalyst capabilities, (2) BP’s evolution of PE technologies, catalyst, and licensing developments, and (3) Ethyl-Albemarle-Amoco-BP linear alpha-olefins markets, technologies, and directions.
DuPont to expand its specialty polymers operations
DuPont Engineering Polymers announced its plans to expand its capacity for specialty products in China through an exclusive agreement with a licensed contract compounder in Shanghai.
DuPont’s product line of specialty products includes (1) Zytel HTN® high-performance polyamide, (2) Thermx PCT® thermoplastic polyester, (3) Rynite PET® thermoplastic polyester, (4) Crastin PBT® thermoplastic polyester, (5) Hytrel® thermoplastic polyester elastomers and (6) Zenite® LCP resin.
Comments: The rapidly growing Chinese markets have prompted DuPont to expand its specialty product offering in this region. DuPont’s specialty products will find applications in the fast-paced Chinese automotive industry.
The products listed for expansion include:
1) Zytel® impact modified nylons. The main end-use applications include automotive (fan blades, brake discs, oil pans, stone shields), electrical applications (connectors, housings, switches, relays), sporting goods (lacrosse sticks, helmets, snowmobiles, bike wheels), power tools, and safety equipment,
2) Thermx® is a blend of PBT and PET resins and is used primarily in automotive and electrical applications. Typical parts include circuit board connectors, automotive connectors (headers), lamp sockets, and relays. Thermx® offers excellent high-temperature properties, colorability, and chemical resistance.
3) Rynite® is a blend of PET and acrylic resins. This toughened reinforced PET compound is primarily used in automotive applications for exterior body panels and electrical (pump components & appliance housing) where it provides excellent stiffness, temperature performance, and a high-gloss finish.
4) DuPont Crastin® PBT thermoplastic polyester resins are based on polybutylene terephthalate. The various end-use applications include electronics, electrical, automotive, chemical apparatus, medical appliances, and sporting goods. They have excellent electrical insulation characteristics and high arc resistance.
5) Hytrel® is a copolyester-based material. They give the flexibility of rubbers, the strength of plastics, and the processability of thermoplastics. They can be processed easily by conventional thermoplastic processes like injection molding, blow molding, calendaring, rotational molding, extrusion, and multicasting. Hytrel® provides excellent strength and stiffness characteristics along with outstanding toughness. Its chemical properties make it highly resistant to hydrocarbons and many other fluids.
6) Zenite® liquid crystal polymer finds applications in electrical and electronic parts in lighting, telecommunications, aerospace, automotive, fiber optics, and other advanced uses. Zenite® LCP offers dimensional stability and creep resistance, especially at very high temperatures.
BP & Petronas to sell Bataan Polyethylene to Metro Alliance Holdings
Metro Alliance Holdings and Equities (Manila) are in final negotiations to buy the stakes of BP and Petronas in Bataan Polyethylene. BP and Petronas each own 38% of BPE; Sumitomo Corp. has 6%; and the rest is held by local shareholders.
Bataan PE currently operates a 250,000 MT/year PE plant. Upon purchase, Metro Alliance plans to reopen the plant to produce PE from purchased ethylene feedstock.
Comments: Bataan Polyethylene Corp. (BPC) was formed in 1999 as a joint venture between BP, Sumitomo, Petronas, and several Philippines firms. BPC’s stakeholders included: (1) Bataan Polyethylene Holdings Corporation (consisting of Profinda, All Asia Capital and Trust Corporation, and Wellex/Plastic City) with a 45% stake, (2) BP with 30% stake, (3) Petronas with 20% stake, and (4) Sumitomo with 5% stake. Later, BP and Petronas increased their stake in Bataan Polyethylene to 38.6%.
Bataan Polyethylene stopped polyethylene production in 2002 due to oversupply in the region and BP & Petronas had put their stakes for sale.
Gas Authority of India Ltd. (GAIL) plans to heavily invest in petrochemicals
Gas Authority of India Ltd. (GAIL) has announced its plans to heavily invest in petrochemicals. Investments close to Rs 11,000 crore have been planned out by the company for building two new grass root petrochemical complexes in the country, expansion of its existing petrochemicals complex at PATA in Uttar Pradesh, and acquiring equity in overseas petchem projects.
GAIL is planning on acquiring a 10% stake in Haldia Petrochemicals before Haldia seeks an initial public offering. In addition, GAIL has signed an agreement with Haldia Petrochemicals Limited (HPL) for setting up a joint venture plant for manufacturing Styrene Butadiene Rubber (SBR). An investment of Rs 500 crore will be made to construct a 100,000 MT/year SBR plant at Haldia in West Bengal.
GAIL is evaluating an offer made by Egyptian Petrochemicals Holding Company (ECHEM) for equity participation in its petrochemical project in Egypt. GAIL has also planned an investment of another over Rs 700 crore ($155 million) for expanding the capacity of its existing petrochemicals complex at PATA in Uttar Pradesh from 300,000 MT/year to 440,000 MT/year.
GAIL’s PATA complex is undergoing expansion to increase capacity. In the first stage, LLDPE/HDPE swing plant has been de-bottlenecked to enhance capacity from 160,000 MT/year to 210,000 MT/year, taking the total polymer capacity to 310,000 MT/year.
In the second stage, the ethylene capacity is increased from 300,000 MT/year to 440,000 MT/year and the polymer capacity to 430,000 MT/year. The company is also debottlenecking existing LLDPE/HDPE capacity at PATA from 160,000 MT/year to 210,000 MT/year.
Comments: Indian economy has experienced significant growth in recent years and the chemical industry has also seen its share of growth. Owing to this high growth petrochemical complexes in India are investing to expand capacity via debottlenecking or expansions. GAIL is one of the leading petrochemical suppliers in India competing with the dominant Reliance Industries Ltd. GAIL has capacities for HDPE and LLDPE in Auraiva, Uttar Pradesh.
The total capacity for HDPE in India is approximately1,020 KT. The major suppliers for HDPE in India include (1) GAIL, (2) Haldia Petrochemicals, (3) IPCL, and (4) Reliance. Haldia Petrochemicals is the largest supplier of HDPE with a total capacity of 410 KT followed by IPCL, GAIL, and Reliance Industries.
The total demand for HDPE in India in 2003 was 825 KT. The major end-use markets for HDPE include: (1) blow molding, (2) film, (3) woven sacks, (4) pipes, (5) injection molding, (6) monofilaments, and others. Blow molding is the largest end-use market accounting for 23% of the total demand. The film is the second largest market accounting for 20% of the total demand.
The projected growth rate for HDPE in India is 7.9% annually for the next five years. Pipes are the fastest growing market for HDPE with a projected growth rate of almost 12% followed by film applications which are projected to grow at more than 10% annual rate for the next five years.
The total capacity for LLDPE in India is approximately 1,005 KT. The major suppliers of LLDPE in India include (1) GAIL, (2) Haldia Petrochemicals, (3) IPCL, and (4) Reliance Industries. Reliance Industries is the largest supplier of LLDPE in India with a total capacity of 400 KT.
The total demand for LLDPE in India in 2003 was 535 KT. The major end-use markets for LLDPE in India include (1) films, (2) roto molding, (3) extrusion coating, (4) injection molding, and others. Films are by far the largest market for LLDPE in India, accounting for almost 80% of the demand. Rotomolding is the second largest end-use market accounting for 10% of the LLDPE demand in India. Other end-use markets are much lower and each of the markets accounts for less than 5% of the total demand.
The projected growth rate for LLDPE in India is 15% annually for the next five years. Films are both the largest and fastest growing market with a projected growth of 15.5% annually for the next five years. All other markets also have double-digit growth rates.
Reliance to restart NOCIL complex
Reliance Industries announced their plans to restart the petrochemical complex of National Organic Chemical Industries Ltd. (Nocil) at Thane.
Nocil’s assets at Thane include a 75,000 MT/year ethylene plant and downstream units include 60,000 MT/year high-density polyethylene (HDPE), and 25,000 MT/year ethylene glycol. Reliance plans to convert some of the site’s HDPE capacity to produce 30,000 MT/year of ethylene-vinyl acetate copolymers, and 10,000 MT/year of ultrahigh molecular weight PE.
Comments: Nocil was the first company to set up a naphtha-based cracker in India. In the license Raj era, Nocil was the only private company allowed to set up a petrochemical plant. It was promoted by the Arvind Mafatlal Group in 1961. In 1964, the Shell Group of companies tied up with Nocil to set up the first integrated plant for petrochemical products. In December 1992 Shell pulled out of the joint venture and since then Nocil has been struggling, especially with its planned expansions.
Nocil’s petrochemical complex is located at Thane. It is a small uneconomical plant when compared to today’s world-scale plants. Nocil has been unable to keep pace with Reliance and IPCL and the management has decided to undergo major restructuring. The restructuring of Nocil divided it into three independent companies: Nocil Petrochemicals, Nocil Rubber Chemicals, and Nocil Plastics.
Earlier this year Reliance Industries acquired the petrochemical complex of Nocil. Reliance has decided to restart the petrochemical complex of Nocil to feed the growing appetite for plastic in India.
DuPont expands Kevlar® and forms nylon filaments joint venture in China
DuPont announced production expansion plans for its high-performance Kevlar® para-aramid. DuPont plans to invest over $70 million in the project and is beginning the equipment procurement process. The expansion will increase global Kevlar® capacity by more than 10 percent. The project is scheduled to come online in phases between late 2005 and the first half of 2006. The specific expansion locations will be finalized as required to meet the projected start-up dates.
DuPont and Wuxi Xingda Nylon Co of Wuxi, China, have formed a joint venture for the production and distribution of filaments used in toothbrush, paintbrush, cosmetic, and industrial brush applications. The new enterprise is structured with three regional operating companies, each owned 70 percent by DuPont and 30 percent by Xingda. The operating companies are DuPont Xingda Filaments Co., Ltd. in Wuxi, China; DuPont Filaments- Europe BV in Landgraaf, The Netherlands; and DuPont Filaments-Americas, LLC in Wilmington, DE.
DuPont brands such as Tynex®, Tynex® A, Chinex®, and Orel® filaments are key components of the product offering. The venture will have manufacturing facilities in Parkersburg, W.Va., Landgraaf, The Netherlands, and Wuxi and Shenzhen, China.
Comments: The markets for high-performance fibers were developed by DuPont through their Kevlar® and Nomex® aramid fibers. DuPont’s dedication to innovation is exemplified by aramid fibers that remained superior products without markets for over two decades, before market acceptance. Kevlar’s superior strength and Nomex’s superior fire retardancy have created unique opportunities. UHMWPE (ultrahigh molecular weight polyethylene) developed by Allied Corporation under the trade name Spectra in the early 80s was able to compete with Kevlar in limited applications.
The early to late 80s saw a flurry of activity in alternative high-performance fibers – none with commercial success.
Honeywell to invest $20 million into Spectra® fiber
Honeywell announced its plans to invest $20 million to boost the production of Spectra® fiber to meet increased demand from the North American armor industry.
Honeywell expects to make several similar-sized investments in Honeywell Performance Products over the next few years to boost Spectra® fiber production. The current investment will take place at Spectra® fiber manufacturing facilities in the Richmond, Virginia, area.
Honeywell said the expansion should be completed by the second quarter of 2005. The additional production will be primarily devoted to meeting U.S. military demand.
Comments: Spectra® fibers, originally developed by Allied Corporation are based on UHMWPE. (See the comment on the previous news item) Spectra produced by Honeywell are high-strength polyethylene fibers. These fibers are usually produced by using solid-phase orientation or gel-spinning technology. The majority of high-strength polyethylene fibers on the market are produced by gel-spinning technology.
Honeywell is the only North American producer of high-strength polyethylene fibers. However, these fibers compete with other high-performance fibers such as aramid fibers, polybenzimidazole fibers, polybenzoxazole fibers, and others.
Dow Latex plans to increase styrene-butadiene latex in China
Dow Latex, the latex business of Dow Chemical Company, announced its plans to add a second styrene-butadiene latex train to its plant in Zhangjiagang, China. This expansion will double Dow’s capacity at the location to about 50,000 MT/year.
The newest of Dow’s 19 latex plants worldwide, the company’s latex plant with a capacity of 24,000 MT/year in Zhangjiagang was built in 2002. Dow will invest RMB 85 million to double its latex capacity in Zhangjiagang.
Comments: The announced capacity increase at Dow’s facility in China is part of its strategy to triple its emulsion polymers business by 2010. In 2001, Dow and Reichhold formed a new joint venture focusing on specialty latexes. The joint venture, Dow Reichhold Specialty Latex LLC, focuses primarily on butadiene-based latexes but also has access to a range of latex chemistries. In addition, Dow also acquired Reichhold’s carpet and latex businesses.
Dow Latex brought on stream the 22,000 dry metric ton SB latex plant in Zhangjiagang, China in 2002 which is Dow’s first in China and fifth in Asia. Dow has also expanded capacities incrementally at its other facilities in Sweden, Italy, Brazil, and North America.
EC approves Lyondell’s acquisition of Millennium Chemicals
European Commission granted permission for Lyondell Chemical to acquire joint venture partner Millennium Chemicals Inc. for $1 billion in stock.
As a result of the deal, Lyondell will acquire sole control of Equistar Chemicals Co, a U.S. petrochemicals company that is currently jointly controlled by Lyondell and Millennium. The combined company will be known as Lyondell Chemical Co. and be headquartered in Lyondell’s home base of Houston.
Under the terms of the deal, Millennium shareholders will receive between 0.95 and 1.05 shares of Lyondell stock for each share of Millennium stock, depending on the average price of Lyondell’s shares before the transaction closes.
Comments: Lyondell announced its plans to acquire Millennium Chemicals in March 2004. The deal between the two US firms creates the No. 3 North American chemicals producer, ranking Lyondell behind Dow Chemical and DuPont.
For more information, please refer to “Global Polyolefins & Elastomers – Strategic News Analysis” – Volume 2, Issue 7.
PolyOne sells its European rubber granulate business
PolyOne Corporation announced the completion of the sale of its Melos® rubber granulates operations to the Melos management team, supported by investors from a group of European banks and funds.
The Melos® unit produces and sells primarily EPDM (Ethylene Propylene Diene Monomer) rubber granulates for the artificial surfacing market, which includes running tracks, sports fields, playgrounds, and safety flooring systems. The business, which PolyOne acquired in 1998, had 2003 sales of approximately $35 million.
PolyOne will retain operations on a portion of the Melle site for the manufacture of low-smoke and flame, zero halogen wire, and cable insulation compounds. PolyOne will recognize a non-cash charge of approximately $8 million in the second quarter of 2004 as a result of the transaction.
Comments: In 2003, PolyOne announced its plans to divest its Elastomers & Performance Additives business of which rubber products are a part. The company had also shut down two plants, one in DeForest, WI, and Wynne, AR, and eliminated about 230 jobs from the division.
The DeForest and Wynne plants manufactured a variety of products, including compounded elastomers and dispersed rubber chemicals. PolyOne had consolidated the production to other elastomer manufacturing facilities with excess capacity at Burton, Ohio; Dyersburg, Tennessee; and Kennedale, Texas. The company is following its strategic decision to sell its non-core operations.
Aragon Elastomers moves into new products & markets
Custom molder and urethane products maker Aragon Elastomers has branched out into areas including elastomer foam and thermoplastic urethane offerings.
The company’s product line only consists of products such as inline skate wheels, and skateboard wheels and now the company has moved into custom molding.
Comments: The demand for TPU in North America is expected to grow at about 3.6% per annum for the next five years. The major applications of TPUs include automotive, mechanical goods, medical, wire & cable, footwear, and others. Diversification into custom molding seems to be a good strategy for the company to expand its business.
For an in-depth analysis of TPU markets, view/order Chemical Market Resources, Inc’s latest multiclient study titled “Worldwide Flexible Polymers, 2003-2008”. Contact us at 281-333-3313, or email: poe-sna@cmrhoutex.com.
W.R. Grace emerges from bankruptcy
W.R. Grace has successfully emerged from bankruptcy. The company filed bankruptcy in 2001 due to the asbestos litigations filed against the company. Despite being in bankruptcy, W.R. Grace & Co. has managed to continue to grow its business through investment and acquisitions.
Grace has made seven acquisitions since filing for bankruptcy and invests about $100 million in capital expenditures and $50 million in R&D annually. The company’s 2003 sales were $1.98 billion.
Comments: At one time W.R. Grace was considered a conglomerate of over 50 different businesses from Asbestos to Taco Bells/Pizza Huts and everything in between. The problems associated with asbestos impacted all of the divisions.
The catalyst division is the closest to polyolefins and elastomers. WR Grace’s catalysts division is one of the major suppliers of polyolefin catalysts. Even though the polyolefin catalyst division’s business was not impacted by the overall bankruptcy, it gave them an excellent opportunity to increase the profitability, by avoiding outstanding invoices and creditors under the Chapter 13 protection.
New board to advise SPE on technological advances
A new Technology Advisory Board is appointed to help the Society of Plastics Engineers understand future trends in business and technology. The board will be led by Kurt Swogger, Dow Chemical Co.’s vice president of research and development for plastics. He will assemble a group of technology business leaders for the board. The board’s goal is to identify how business trends drive technology, and vice versa.
Comments: Mr. Swogger is a great leader for this position and the SPE’s formation of the committee is a masterstroke to fill a void between R&D and planning. Mr. Swogger was the primary Dow recipient of the 2001 Presidential Technology Medal for Dow (and shared by ExxonMobil) for the development of metallocene catalysts. Such accolades make him perhaps the best person in the industry for this new chairperson honor.
Solo Cup to close four plants and lay off 400 workers
Solo Cup Co. announced its plans to close four manufacturing plants and lay off 400 people. The four manufacturing plants include: (1) Augusta, GA, (2) Kensington, CT, (3) Lakeland, FL, and (4) Highland Park, NJ.
Machinery will move to a plant near Augusta, while much of the equipment in Kensington will shift to Sweetheart’s former Maryland campus. According to layoff notices posted in the states of Connecticut and Georgia, the closures affect about 161 people in Kensington and 54 workers in Augusta. The company plans to redeploy 90% of its workers to different locations.
Comments: This is a multiple consolidation. The CT plant is one of the oldest in the system and it makes sense to combine it with the overheads at a larger sweetheart location. Kensington will go to Maryland and Lakeland and Highland Park will consolidate to outside Augusta.
The Kensington plant only had 150+ people which on a per shift basis is about 40/per – this was a small facility. The southern plants only have less than 12/shift employees. Jobs are jobs and all are important but the company is going to make multi-functional facilities with machining and molding at all locations AND redeploy 90% of all displaced workers.
Formosa Plastics eliminates jobs at Illipolis, IL site
Formosa Plastics has eliminated about 58 jobs at its PVC manufacturing facility in Illiopolis, IL. There was an explosion at the site in May which has halted the production. All the job cuts are hourly production or maintenance positions.
Comments: The manufacturing at Formosa’s Illiopolis plant is halted due to the explosion at the site in May 2004. Products manufactured at the site included specialty resins used in vinyl flooring, interior automotive parts, carpet backing, and traffic cones. While the specialty resins are made exclusively at the Illiopolis plant, some of the PVC paste resins can be made at the Delaware plant. Formosa has declared force Majeure on all specialty PVC resins produced at the Illiopolis plant.
Dow to move biopharma R&D site from Stony Brook, NY to San Diego, CA
Dowpharma announced its plans to move its biopharma process development activities from Stony Brook, NY into Dow Chemical group’s corporate R&D biotechnology site in San Diego. About 13 staff from the Stony Brook site will be laid off. Process development facilities at the San Diego site include 26 computer-controlled microbial fermentation reactors up to 1,500 liters.
Comments: The pharma business underwent major changes in the last few years due to developments in countries like India, China, and others. Unlike the traditional chemical industry, the Pharma industry requires much more human technology capital. Similar to software development, the development can be done cost-effectively in developing countries with a highly educated workforce. In general, the starting salary of a Ph.D. in biochemistry in the U.S. is around $72,000. The starting salary of a Ph.D. in biochemistry from a prestigious institution in India with Global recognition is $15,000.
Most of the major bio-pharma organizations are setting up developmental facilities in those countries to innovate drugs at a much lower cost – this trend is expected to continue.
Recipients of President’s Founder’s Medallions
Ramesh Thakkar and Manfred Jacob are the recipients of the President’s Founder’s Medallions at SPE-Antec in Chicago.
Thakkar is the 2004 recipient of the India Section, which he helped establish. A chemist, he has played an active role in India’s petrochemicals and plastics industries. Thakkar is chairman and managing director of Gujarat Petrosynthese Ltd. He also serves as chairman for Karnataka Petrosynthese Ltd.
Jacob won the award for his work to create the European Thermoforming Division, through organizing a successful string of biennial conferences throughout Europe. He founded Jacob Kunststofftechnik in 1973 and has played a role in several innovations such as thermoformed composite automotive bumpers.
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