Major polyolefins producers Dow, ExxonMobil, Nova, and DuPont report earnings
Dow Chemical
Dow Chemical Company reported fourth-quarter sales of $8.3 billion, up 20% from fourth-quarter 2002 sales of $7.0 billion, with a 12% increase in price and an 8% increase in volume. Net income rose to $929 million, compared with a loss of $809 million a year ago. Dow reported earnings of $0.99 per share, including tax benefits of $0.49 per share, compared with a loss of $0.89 per share a year ago, which included items totaling a net charge of $0.71 per share.
The Plastics segment reported sales of $2.01 billion in the fourth quarter compared to $1.69 in the fourth quarter of 2002. In the Plastics segment, all the major polymers posted significantly improved results as prices recovered sufficiently to offset higher feedstock costs. Volume growth and structural cost reductions increased margins further. Demand for polyethylene in Europe & US improved, particularly late in the quarter. Excellent performance from the EQUATE joint venture also added to Polyethylene’s bottom line. The sales of Performance Plastics in the fourth quarter of 2003 were $2.05 billion compared to $1.7 billion a year ago.
ExxonMobil
ExxonMobil announced fourth-quarter sales of $6.65 billion compared to $4.09 billion in sales in the same period in 2002. Excluding merger effects, discontinued operations, and special items, earnings increased by $630 million from the fourth quarter of 2002.
ExxonMobil’s chemical division’s earnings increased to $476 million, the earnings were up $400 million from last year’s fourth quarter due to stronger margins, reduced operating expenses, favorable foreign exchange effects, and positive inventory impacts.
Nova Chemical
Nova Chemical Corporation reported a fourth-quarter loss of $15 million. For the entire year 2003, the net loss was $1 million, compared to a loss of $112 million in 2002.
The Olefins/Polyolefins business reported a net income of $23 million compared to a loss of $8 million in the third quarter. Margins expanded as polyethylene prices rose, average feedstock costs were lower, and sales volumes increased. The Olefins/Polyolefins business reported a net income of $14 million for the entire 2003 compared to a net loss of $5 million in 2002.
DuPont
DuPont’s operating income decreased to $420 million as a result of the increased raw material costs for most of its performance materials. The company says the sales increased by 14% to $6.48 billion. The company’s net income increased to $636 million. Almost all of the segments showed double-digit growth. CEO Chad Holliday, Chairman of DuPont suggested “2004 may provide the best Global economic improvement we’ve seen in several years”
Comments: The improved performance, especially in the polyolefins and elastomers market place is a welcome relief in the industry. The improvement essentially reflects the general U.S. economy and manufacturing sectors.
The feedstock price increases in the past three years have been the root cause of the depressed margins. The polyolefin elastomers companies have taken corrective actions to increase prices almost across the board and that action has helped organizations in mitigating some of the impacts.
The two major casualties – jobs and R&D funding remain unsolved. There was an industry-wide reduction in the basic and product R&D budgets and this is expected to continue. The impact of “Election Year” is something to be concerned about.
Gail India to construct polyethylene plant
Gail India Ltd announced its plans to construct a linear low-density polyethylene and high-density polyethylene swing plant of 120,000 MT/year. The company also plans to increase its ethylene production capacity at its Pata complex in Uttar Pradesh to 440,000 MT/year from 300,000 MT/year. The scheduled completion date for the polyethylene plant is 2007.
Gail India will also debottleneck its LLDPE/HDPE swing plant from 160,000 MT/year to 210,000 MT/year. The scheduled completion for debottlenecking is April 2004. The company will invest Rs. 760 million.
Comments: Gail is one of the leading polyolefin suppliers in India with capacities for ethylene, propylene, LLDPE, and HDPE. Gail’s petrochemical complex is in Uttar Pradesh. Gail had 300 KT ethylene, 20 KT propylene, 160 KT LLDPE, and 180 KT HDPE capacities. Gail has decided to add capacities for ethylene, LLDPE, and HDPE. Reliance Industries is the largest commodity plastics supplier in India.
Gail’s decision to increase capacity seems to be based on robust demand and growth in India. LLDPE is projected to grow at 15% annually for the next five years on a consumption base of approximately 500 KT. The largest demand for LLDPE in India is in film applications accounting for 80% of the market. Other markets include roto molding, extrusion coating, and injection molding.
HDPE is projected to grow at 8% annually for the next five years on a consumption base of approximately 800 KT. The major end-use markets for HDPE include blow molding, films, woven sacks, pipes, injection molding, and others.
Israel’s polyolefin producer Carmel Olefins to double polypropylene capacity
Israel’s Carmel Olefins announced its plans to invest $232-mil over the next two years to double its polypropylene production at Haifa from 200,000 MT/year to 400,000 MT/year.
According to the company, the planned expansion will increase the company’s workforce by a thousand as well as increase the company’s annual revenues by about $180 million.
The upgrade is however contingent on necessary approval by Oil Refineries and the Israeli government’s state-owned Corporations Authority.
Comments: Carmel Olefins, jointly owned by Oil Refineries Ltd. and Israel Petrochemical Enterprises Ltd., is engaged in the production of ethylene, polyethylene, polypropylene, and specialty polymers. Carmel Olefins is the sole manufacturer of polyolefins in Israel. Their product portfolio consists of (1) IPETHENE® – low-density polyethylene, (2) CAPILENE® Polypropylene – homopolymers, impact, and random copolymers, (3) CARMELTECH™ – specialty polypropylenes, (4) CARMELSTAT™ – electrostatic dissipative compounds, and (5) CARMELFLEX™ – thermoplastic vulcanizates. Its sole manufacturer status coupled with its advantaged feedstock position, has enabled Carmel Olefins to experience above-average economic growth over the years. The planned expansion of the polypropylene assets is a result of the healthy growth of domestic consumption of polypropylene.
Reliance associate signs MoU with NOCIL to take over petrochemicals and plastics products divisions
Sunbright, a business associate of Reliance, signed a Memorandum of Understanding (MoU) with National Organic Chemicals Industries Limited (NOCIL) to take over its Petrochemicals and Plastics Products Divisions.
Under this proposal, the assets of NOCIL’s Petrochemical Division, certain liabilities of the Company, and the business and undertaking of the Plastic Products Division will be demerged from NOCIL and will be vested in Nocil Petrochemicals Limited (NPL), a wholly owned subsidiary of NOCIL. Sunbright will invest in the equity of NPL after the process of demerger is completed.
NOCIL’s petrochemicals complex has a total petrochemicals capacity of 300,000 MT/year, which include an ethylene cracker of 80,000 MT/year, value-added chemicals of 90,000 MT/year, and fiber intermediates of 20,000 MT/year. In addition, the complex has a polymer capacity of 80,000 MT/year. The Plastics products division at Akola, Maharashtra has a capacity of about 10,000 MT/year of processed polymer products.
NOCIL’s petrochemicals division, which is currently not in operation, will immensely gain from Reliance Group’s technical and manufacturing expertise. Already an ethylene pipeline links NOCIL’s Petrochemicals Division in Navi Mumbai to IPCL’s Nagothane plant.
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. The company 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 had decided to undergo major restructuring. The restructuring of Nocil divided it into three independent companies: Nocil Petrochemicals, Nocil Rubber Chemicals, and Nocil Plastics. Initially, there were talks of Shell picking up 49% of Nocil Petrochemicals and management of the company. However, it seems that the local producer Reliance Industries Limited eventually decided to take over its petrochemical unit.
This will strengthen the already strong portfolio of Reliance Industries. Reliance Industries was already the largest supplier of commodity plastics in India. With recent acquisitions of IPCL and NOCIL Reliance Industries has become the undisputed leader in the commodity plastics industry in India.
Indian government to sell remaining stake in IPCL
Indian government announced its intention to sell its remaining 33.95% stake in Indian Petrochemical Corp Ltd. The Government of India has expressed its intention to make an offer for the sale (of 33.95%) to the public.
The government has appointed SBI Caps, Kotak Mahindra, and JM Morgan Stanley as lead managers for selling its remaining stake in IPCL. A divestment ministry official clarified that the government plans to offer about 5% of the 33.95% stake to IPCL employees and the remaining 29% to the public. The offer is expected to be made before the end of the current fiscal year, which ends on Apr 1, 2004.
Comments: The Indian government has been divesting its stake from various companies to promote private industry and competition. The government had introduced divestment plans in various industries in India as part of its economic reforms program. The Indian government had already sold part of its stake in IPCL to the local company Reliance Industries Limited. Continuing its divestment plan the Indian government has announced plans to sell its remaining stake in the company.
IPCL is a leading integrated petrochemical player in India. IPCL was a government of India Corporation till it was divested and acquired by Reliance Industries. IPCL for a long time dominated the Indian petrochemical industry, when the industry was government controlled. IPCL was promoted by the government of India in 1969 &the company commenced its operations in 1973 with an aromatic complex and later commissioned a naphtha cracker with a capacity of 130,000 tons per annum of ethylene at the same location. It manufactures all the commodity plastics and several engineering plastics. IPCL also has a joint venture with GE, the Netherlands.
IPCL has three petrochemical complexes at Baroda, Gandhar, and Nagothane. IPCL lost its dominant position to Reliance Industries in the post-liberalization era. After the government decided to divest its stake in IPCL, Reliance has become the leading player in the industry.
Kuraray develops SEPTON V series – a new hydrogenated styrene thermoplastic elastomer with reactive hard blocks
Kuraray Co., Ltd. announced the development of the SEPTON V Series, hydrogenated styrene thermoplastic elastomers that will provide compounds with improved heat resistance and oil resistance.
The company plans to commence production of the SEPTON V Series in the summer of 2004. Kuraray has also developed a new compounding technology that makes it possible to cross-link the hard blocks as well as the soft blocks during compounding and the new product will be marketed together with the technology.
Comments: Honam Petrochemical has 365 KT of HDPE capacity based on Mitsui technology in Yeochon. Honam Petrochemical accounts for almost 20% of the HDPE capacity in South Korea. Other major HDPE producers in South Korea include (1) Daelim, (2) Hyundai, (3) KPIC, (4) LG, (5) Samsung, and (6) SK Corporation. The total HDPE capacity in South Korea is approximately 1,950 KT.
The reduction in output caused due to the explosion in the Honam plant did not have a major impact on the supply of HDPE.
Indian Oil Corp. selects site for its PP plant
Indian Oil Corporation (IOC) announced that it has selected Panipat in Haryana, India, as the location for its proposed 350,000-400,000 MT/year polypropylene (PP) unit. The project will source propylene feedstock from IOC’s refineries.
The company was previously considering three sites for the project — Mathura in Uttar Pradesh, Baroda in Gujarat, and Chennai in Tamil Nadu.
The detailed feasibility study will start after IOC has conducted a review of scoping studies on revamping fluid catalytic cracking (FCC) units at IOC’s refineries in Panipat and Mathura to deep catalytic cracking (DCC) units, which can give higher propylene yields than FCC units.
As Mathura and Panipat are near each other, propylene from a DCC unit in Mathura could easily be transported to the PP project in Panipat.
Part of the propylene feedstock could also come from a refinery expansion at IOC’s subsidiary, Chennai Petroleum Corp. The expansion, when completed at the end of next month, will increase the refinery’s propylene capacity from 17,000 MT/year to 80,000-90,000 MT/year.
Comments: Thermoplastic Elastomers (TPEs) manufacturers have been trying to develop resins with higher heat and oil resistance for many years. One of the significant developments in this area of TPEs was dynamic vulcanization technology enabling products like Santoprene® and Geolast® to be positioned against high-performance elastomers like silicone and chlorinated products. One of the key elements of increasing the temperature and oil resistance performance has been the partial crosslinking of the matrix.
Kuraray is one of the major global producers of hydrogenated block styrene copolymers. Kuraray’s technology will allow hydrogenated styrene elastomers to not only offer good elasticity, low-temperature resistance, and excellent chemical resistance, but increased heat and oil resistance. According to Kuraray, compounds produced using the SEPTON V series have several benefits including (1) low compression sets at high temperatures, (2) superior long-term durability characteristics, and (3) better oil resistance. The company plans to target the new material in applications including (1) automotive weather-stripping, (2) automobile upholstery, (3) rack, and pinion boots (to cover rack and pinion steering units), (4) air-duct covers and hoses, (5) insulation of the electric wire, (6) window seals, (7) gaskets, (8) impermeable liners, waterproof materials, (9) protective sheets,
Atofina Sumitomo joint venture dissolved
Atofina and Sumitomo Chemical announced that they have dissolved the 50-50 joint venture Sumika-Atofina.
The joint venture sold terpolymers of acrylate, ethylene, and maleic anhydride in Japan. The products are produced at Atofina’s Carling, France. The business activities have been transferred to Atofina Japan.
Comments: Atofina produces and sells ethylene and acrylate terpolymers under the trade names Lotader® and Orevac®. The major applications of Lotader polymers include (1) adhesives and (2) compatibilizers or modifying agents for technical polymers. They are used for the modification of polyamides for impact resistance in the electronics and automobile industries. The Orevac terpolymers are used in packaging applications due to their clarity properties.
Tosoh to invest in 100,000 MT/year Guangzhou PVC project
Tosoh announced its plans to proceed with its polyvinyl chloride (PVC) resin operation in China as a solely Japanese investment and has begun the final drafting of a 100,000 MT/year capacity project located in Guangzhou, China.
Upon completion of environmental assessment, a final decision will be taken and a draft feasibility study will be submitted to get approval for the project.
If approved, a feasibility study will take several months and construction would start a few months later. Tosoh will be the first Japanese company to invest in a PVC facility in China. The plant will start up by the end of 2005 or early 2006.
Tosoh plans to import vinyl chloride monomer (VCM) from the Nanyo site in Japan, and the entire volume produced will be supplied locally. The investment is expected to be in the order of Y3 to 4 billion ($27-36 million), and besides
Comments: The demand for PVC in China is increasing rapidly. The demand for PVC in China in 2002 was about 6 million tons, with about 45% of the demand sufficed through imports. There are many users in Guangzhou, but few PVC producers, and hence it was selected as the location for the plant.
Tosoh has been expanding its PVC operations through acquisitions and the construction of new plants. Recently, Tosoh subsidiary, Taiyo Vinyl acquired the PVC business of Kureha Chemical. The company has PVC plants in Chiba, Yokkaichi, and Osaka, Japan with a combined capacity of 570,000 MT/year. Tosoh also manufactures PVC in Indonesia through its joint venture Standard Toyo Polymer PT where it has 30% ownership (a joint venture between Jakarta-based Salim Group, Tosoh Corporation, and Mitsui & Co.).
Shell’s cracker at Moerdijk, Netherlands facing start-up problems
Shell is having start-up problems at its 900,000 MT/year cracker in Moerdijk, the Netherlands. Due to the problems, the company has reduced the unit’s operating rates to a minimum.
The unit was brought back on stream on Feb 1 after an unplanned outage since Jan 19, linked to compressor problems. However, during the latest start-up procedure, several problems were identified including a steam leak, forcing the company to reduce rates in an attempt to resolve them.
Comments: The ongoing problems at Moerdijk are impacting production at several downstream units. Polyolefins producer Basell has reduced operating rates at its 260,000 MT/year polypropylene unit at Pernis, the Netherlands. Shell’s own ethylene oxide and ethylene glycol operations have also halted.
Sinopec considers the construction of an ethylene cracker in Wuhan, China
China Petroleum & Chemical Corp. (Sinopec) announced that it is considering the construction of an 800,000 MT/year ethylene cracker in Wuhan, Hubei province, as part of its strategy to expand its petrochemical sector.
According to the company, it has reached an initial agreement with local Wuhan authorities to begin a feasibility study for the project. The feasibility will cost about 30 billion Yuan ($1=CNY8.28).
If constructed, it will be the first ethylene project in Hubei province, central China. Currently, most of the ethylene crackers are located in northern, eastern, and southern China. Completion is scheduled for 2008-2010.
Comments: China’s largest concentration of manufacturing activities stretches down the eastern coast of China, from Dalian in the north to Shanghai, to Guangdong, and then further south to Fujian province, across the straits of Taiwan. The general perception of the central and western parts of China is that of a less advanced society that hardly holds any appeal to an investor. The Chinese government is aware of the stark distinction in economic prosperity between the Eastern and Western regions and has been campaigning tirelessly to steer local and foreign investments to a largely untapped market. Thanks to widespread publicity, many investors have shown genuine interest in the development of West China. The four provinces in West China that are showing promising progress in the polyolefins industry are (1) Xinjiang, (2) Gansu, (3) Jiangxi, and (4) Pubian. All four provinces constitute about 88% of the polyolefins demand in West China. The agriculture films and pipes businesses in Xinjiang have been thriving in recent years and the production in this province alone accounts for 80% of the total output in West China. The PE converting trade in Xinjiang surpasses that of PP mainly because of the high demand and increasing production of LLDPE mulch and greenhouse films. Contrary to expectations, most of the PE film resins used are from foreign imported products (Korea and Eastern Europe for LLDPE and LDPE) instead of domestic polyolefin producers in East China. In Gansu province, the leading applications are irrigation pipes, hoses, and water supply pipes. HDPE has greatly benefited from this ever-increasing market. PP is used mainly to make braided bags for fertilizers and cement in both Xinjiang and Gansu. Jiangsi’s end-use structure is very similar to Gansu with LLDPE agriculture films dominating the market.
Mitsui Chemicals to switch focus from C2 to C3, specialty products
Mitsui Chemicals announced its plans to turn its ethylene-centered businesses into propylene-based ones. According to the company, the future for ethylene and its derivatives in Japan was bleak because of future start-ups of huge ethylene complexes in the Middle East. Besides focusing more on propylene output and propylene derivatives, Mitsui would also focus more on products in which it has “a competitive edge.
Comments: As part of its Medium-Term Corporate Plan, Mitsui Chemicals’ President Nakanishi stated the company’s intent to change its product portfolio to strengthen profitability. As part of the changes, Mitsui intends to strengthen its Petrochemicals & Chemicals and expand its performance materials businesses. To accomplish the former, Mitsui plans to initiate a radical change in business structure centered on converting Osaka Works to a propylene center and focus on the following: (1) Polypropylene, (2) Purified Terephthalic Acid (PTA), (3) PET Resins, (4) Phenol, and (5) Bisphenol-A. To accomplish the latter, Mitsui will focus more resources on (1) Functional olefinic polymers, (2) Urethane-based chemicals, (3) Electronic materials, and (4) Healthcare materials.
Petrochemical organizations’ product plans and market involvement is driven by the basic 6 chains they chose to follow. Traditionally Mitsui Chemicals had a very small involvement in the propylene chain, with just polypropylene. (See exhibit enclosed) Expanding its propylene chain will provide Mitsui Chemicals with an expanded role. Currently, Mitsui has no role in the Styrene chain.
Chemical industry CEOs push President Bush for action on energy policy
A letter from 11 chemical industry CEOs was sent to President Bush and leaders of Congress urging them to address the unfolding crisis in the United States’ “go-to” energy source—natural gas. The letter asserts that “this situation threatens to curtail the current economic Another Unique Service From Chemical Market Resources, Inc. 1120 NASA Rd 1, Ste 340, Houston, TX 77058 USA; Tel: 281-333-3313 Email: POE-SNA@CMRHouTex.Com Copyright © 2003 Page 10/25of Issue 3 – Volume 2 recovery in its tracks.” It points out that rising gas prices have added $111 billion in costs to the economy since 2002, not only sending home heating bills through the roof but also destroying thousands of jobs in gas-intensive industries like chemicals and fertilizers.
The letter was signed by 11 CEOs including (1) William S. Stavropoulos (Dow Chemical), (2) Charles O. Holliday (DuPont), (3) Mark C. Rohr (Albemarle), (4) J. Brian Ferguson (Eastman), (5) Attila Molnar (Bayer), (6) William G. Walter (FMC), (7) Stephanie A. Burns (Dow Corning), (8) Dan F. Smith (Lyondell), (9) Jeffrey M. Lipton (Nova), (10) Raj Gupta (Rohm & Haas), and (11) John C. Hunter (Solutia).
Comments: Through most of the 1990s natural gas prices have remained low in North America and polyolefin producers using natural gas-based ethane as feedstock has gained significant competitive advantage over others using oil-based naphtha. However, the recent natural gas scenario has created a situation that could result in the reversal of feedstock advantage; producers using naphtha as feedstock could gain a competitive advantage over producers using ethane as feedstock. North America is probably the most exposed region as it does not have cheaper access to natural gas.
Higher natural gas prices are here to stay and the polyolefin industry will have to take action to ensure continued profitability. To counter the effects of increasing natural gas prices, the polyolefin industry will have to take measures that could transform the industry dynamic in both the short term and the long term.
Short-term actions include: (1) increase in prices, (2) shut down of inefficient capacities, and (3) shifting of capacities from ethane-based crackers to naphtha-based crackers and from feedstock disadvantaged regions to feedstock advantaged regions. Some of the long-term actions include (1) building capacities in feedstock-advantaged regions and (2) emphasis on alternate sources such as liquefied natural gas.
These changes could impact the entire industry across the value chain. As the resin producers start building capacities in different regions across the globe, converters and end users would follow suit. The industry will become more and more attractive to global players who can optimize their assets to gain advantages in the changing competitive landscape. There will be a lot more consolidation to compete effectively in the global markets.
For more information, please refer to our article on “Impact of natural gas on polyolefin industry” in our bimonthly publication – New Generation Polyolefins – Volume 9, Issue 1.
Solo cup purchases Sweetheart Cup Company forming the largest plastic cup company in the US
Solo Cup and Sweetheart Cup Company Inc. reached a “definitive agreement” for its purchase by Solo Cup. Sweetheart and Solo are major suppliers of disposable food service and beverage-related products. After the acquisition, the combined company will have total sales of about $2.2 billion.
Sweetheart has about 74 hundred workers nationwide – including about 16 hundred at its headquarters and production facilities off Reisterstown Road. Sweetheart also has a warehouse in Hampstead.
The Solo management team plans to review the performance of all 12 Solo plants and 22 Sweetheart plants during the next three months. The transaction is expected to close by March 2004.
Comments: Solo Cup and Sweetheart Cup Company are the two largest plastic cup manufacturers in the United States. The acquisition of Sweetheart by Solo will create the largest cup producer in the US. Both companies combined have approximately 34 plants in North America and total sales of about $2.1 billion in 2002.
In 2001, Solo Cup acquired Japanese firm Sanyo Pax Co. and hence expanded in Asia. The company is using the same strategy to increase its operations in North America as well.
Newell Rubbermaid subsidiary, Little Tikes to close a blow molding plant in Sebring, OH
Little Tikes, a subsidiary of Newell Rubbermaid Inc. announced its plans to shut down a blow molding plant in Sebring, OH.
Little Tikes has about 132 employees at the plant which will shut down by the end of March. According to the company, a “small number” of the Sebring jobs will be transferred to Little Tikes’ headquarters and manufacturing site in Hudson, OH. The company will consolidate its domestic manufacturing operations in the Hudson location. The 320,000-square-foot Sebring plant produced parts for picnic tables and basketball sets.
Comments: Newell Co. and Rubbermaid merged in 1999. After the merger, Newell Rubbermaid shut down Little Tike’s manufacturing location at Shippensburg, PA, and now at Sebring, OH.
Recently, Rubbermaid also announced its plans to shut down the Rubbermaid Home Products factory in Wooster, OH. Rubbermaid’s plastics manufacturing business includes several companies including (1) Rubbermaid Home Products, (2) Commercial Products, (3) Graco & Century Baby Products, (4) Little Tikes Toys, (5) Goody Combs & Brushes, and (6) Sharpie pens.
Pechiney adds four new blown film lines to Neenah, Wisconsin plant
Pechiney Plastic Packaging Inc. announced the installation of four extrusion lines at its Neenah plant to keep up with the growing demand in the marketplace for multi-layer high-barrier films.
According to the company, the new lines provide the technology that all the food, meat and dairy, and healthcare/specialty markets are demanding, such as higher quality, elevated barrier protection, and a wider variety of grade structures.
The blown film, in contrast, to cast film, is slowly cooled with air versus the quick quenching of cast film, creating a tougher film with better moisture and oxygen permeation properties.
Comments: The advantages of blown film overcast film are that it uses much less expensive machinery, adds more orientation, and can make much thinner gauges. The demand for high-barrier films has been increasing continuously. The key drivers to the increased demand for multi-layer films are new applications and improved performance. The film processors are going beyond five-layer structures. Dividing films into thinner layers allows the use of resins that don’t normally have the melt strength for blown film.
Pechiney Plastics Packaging is one of the largest film & sheet manufacturers in North America. The company has been recently taken over by Alcan Packaging.
World’s largest recreational boats builder Genmar launches polyethylene-made pontoon
Recreational boat builder Genmar Holdings Inc. introduced a tri-hull pontoon boat, constructed using the company’s patented Roplene® process.
Roplene is a patented dual-wall construction system made of roto-molding marine-grade polyethylene. This advanced technology was developed by the Genmar subsidiary Triumph Boats and allows Genmar to build higher quality, stronger boats with limited lifetime warranties at a lower cost for the boating consumer. Since 1999, Genmar has invested $35 million in the process.
Comments: Genmar, with 17 boat brands, 14 manufacturing centers, and 7,000 employees in the U.S. and Canada, is the world’s largest builder of recreational boats and the industry’s technological leader. The Roplene process that was developed by Genmar in 1994 and improvised in 2001, features specially formulated, marine grade polyethylene compound powder that is poured into high-temperature, stainless steal molds which are mounted in an oven and rotated vertically and horizontally, even during cooling. The manufacturing system produces few, if any, air emissions, and the boat hulls are recyclable. Used for the production of Logic boats since 1994, the Roplene process has recently experienced significant enhancements. Rotomolding is the preferred manufacturing process in marine applications given the part size. Polyethylene is widely used in rotational molding for several applications including recreational boats, kayaks, toys, and others. LLDPE is the material of choice for marine applications. HDPE and XLPE are the other materials.
General Motors to use nanocomposites in Chevrolet Impalas
General Motors Corp. is planning to utilize an estimated 500,000 pounds of a thermoplastic polyolefin with nanometer-sized filler on the exterior trim of its Chevrolet Impala. The composite will be used on about 200,000 Chevrolet Impalas. GM had initially used it for the first time in about 10,000 optional minivan step assists.
The nanocomposites study teamed GM researchers with those from Basell Polyolefins and Southern Clay Products Inc. to produce a thermoplastic using reinforcements on the microscopic level. The minute particles of the clay additive measure one-millionth of a millimeter thick, allowing for a lighter final component.
According to GM, the development team had to tweak the formula as it moved from the step assist to the side molding, in part to compensate for the color in nanocomposites compared with standard talc-filled material.
The TPO is 7 percent lighter than standard reinforced components — a slight saving on a narrow body molding, but one that will come into play more as nanocomposites make it onto bigger parts such as bumper fascia. Basell is compounding the resin, molded at Blackhawk Automotive Plastics, on production lines in Jackson, TN, that have been modified slightly for the filler.
Comments: Polymer-based nanocomposites have been used in automotive applications for a decade now. Nanocomposites overcome the formation of bumpy part surfaces, typical of conventional fillers, due to their size. Steel, aluminum, and plastics for body panel applications can be replaced by these materials since they are stronger and lighter. Automotive OEMs and molders seek more interest in PP and TPO-based nanocomposites, which offer to engineer thermoplastic properties at 20% lower density and 50% lower cost per pound.
Nanocomposites exhibit enhanced barrier properties, flame retarding properties, tensile strength, modulus, and heat distortion temperature as compared to the pristine polymer. These improved properties can be achieved at very low filler levels compared to conventional fillers. The first polyolefin nanocomposites that were developed by GM were reinforced with 2.5% nano clays and replaced 15% talc-filled PP. Alliance of PolyOne and Nanocor, Southern Clay Products, Honeywell, and Clariant are some of the major suppliers of nanocomposites. The major end users in the automotive industry include GM and Ford Motor Co. Medical and electronic parts, construction materials, machine parts, and food packaging are some of the other potential applications. With ongoing research leading to evident applications, the future of nanocomposites is promising.
OMV subsidiary Polyfelt expands geoplastics
Polyfelt Ges.m.b.H. (Linz), a fully owned subsidiary of the OMV Group and leading manufacturer of plastics for road, railway, and tunnel construction, as well as civil and subterranean engineering applications, has announced its intention to strengthen its position as the leading provider of geotextiles in Europe, Southeast Asia, and Australia. Polyfelt will invest EUR 11 million in its site in Linz. In the first quarter of 2005, a unique 8,000-ton production plant, manufacturing high-performance geotextiles, will be commissioned at the Linz site.
According to the company, the opening of the new plant allows Polyfelt to strengthen its position as the world’s pre-eminent plastics manufacturer. The plant will enable Polyfelt to exploit the opportunities created by a growing demand around the globe for its products, as well as benefit from a lower cost base, the application of leading-edge technology, and increased productivity.
Comments: Polyfelt Ges.m.b.H is headquartered in Linz, Austria, and is a major manufacturer of spun-bonded and needle-punched nonwoven for geotextile applications. In the early 70s, Polyfelt pioneered and developed geotextile applications for water engineering, road, railway, and tunnel construction, as well as reinforced soil, drainages, landfills, and other applications. Europe accounts for almost 70% of Polyfelt’s sales while Asia-Pacific about 20% and the rest of the world the remaining 10%. Polyfelt’s manufacturing locations include (1) Linz, Austria, (2) Bezons, France, (3) Kuala Lumpur, Malaysia and (4) Albury, Australia. Geotextiles constitute about 15-20% of the overall global nonwoven markets. The geotextile applications include (1) soil stabilization, (2) asphalt overlay, (3) drainage liners, and others.
Eastman Kodak to eliminate 15,000 jobs
Eastman Kodak announced its plans to cut 15,000 jobs, representing about 20% of its workforce over the next three years. According to the company, the program will generate savings of $800 million-$1 billion/year by 2007. The cuts are part of a plan to dramatically lower costs in its traditional silver-halide-based film, paper, and processing operations.
Siemens develops novel glass-plastic hybrid
Siemens has produced compounds that overcome the disadvantages of conventional glass fiber-reinforced compounds. The new compounds, produced by adding a high percentage of low-temp-melting glass fiber to high-temp-melting thermoplastics, contain up to 80% of their weight in the glass.
According to the company, parts produced with the new compounds show less wear and less tendency to change with temperature. The new material has several advantages including (1) less friction and abrasion on the machine parts, (2) good flow properties, (3) structural strength, and others.
The new materials bond well to plastic and metal, and are suitable for surface mold device (SMD) processes. Applications include electronic parts, bearings, automotive and fuel system parts, and scratch-resistant housings. Many other applications are possible.
Comments: High-temperature plastics like polyphenylene sulfide (PPS), polyetheretherketone (PEEK), liquid crystal polymers (LCPs), polyetherimide (PEI), and polyethersulfone (PES) are used as matrix polymers. The glasses are phosphate or sulfophosphate glasses with a glass transition temperature between 250-300°C, showing good humidity and chemical resistance.
The glass particles have an initial size of about 2mm. During compounding, they are sheared down to give particles of around 5-10 micrometers in the final compound, which are homogeneously dispersed. Some of the particles are distinctly below 1 micrometer.
Kuraray signs joint development and marketing agreement of shopping bags containing handles made from biodegradable polylactic acid fiber
Kuraray Co., Ltd., major packaging manufacturer The Pack Corp., and handle-maker Matsuura Sangyo Co., Ltd. announced the joint development of PLASTARCH BioRope, a biodegradable polylactic acid fiber made from corn, for use as handles for shopping bags.
The different characteristics of Plastarch include (1) biomass material derived from botanical matter, (2) reduction in the use of petroleum resources; (3) biodegradable, and others.
The bags are being marketed by Pack Corp. starting Jan. 20, 2004, and the company targets to generate sales revenues of ¥100 million in 2004.
The PLASTARCH BioRope used in the new shopping bags is a biodegradable synthetic fiber made of polylactic acid, which is derived from the fermentation of lactic acid from corn and other plants. It takes fifteen kernels of corn to make the handles of one shopping bag. The development of this new PLASTARCH material for handles has resolved several issues and allows shopping bags to be made completely from recyclable materials. In addition, Kuraray’s original technology was used to make the new material more colorfast, allowing the sort of multicolor designs that were not possible with previous polylactic acid fibers. Therefore, the new product also contributes to the market’s design needs
Comments: Polylactic acid (PLA) was first made by Carothers in 1932 by direct condensation polymerization of lactic acid using solvents under a high vacuum. In 1994, Kanebo, Japan, introduced LACTRON® (poly L-Lactide) fiber and spun-laid nonwovens.
Initially, they targeted agricultural applications, and in 1998 the product was re-launched for apparel end uses. Fiberweb (now BBA), France, introduced a range of melt-blown and spun-laidPLA fabrics under the Deposa®. Several Japanese companies made announcements regarding PLA, most notably Kuraray and Mitsui Toatsu (under the LACEA®).
The biggest boost to PLA came due to the research and development efforts of Cargill in the last A decade. In 1997, Cargill Inc. and Dow formed Cargill Dow LLC to develop and bring to full commercialization the PLA technology and products. In April 2002, Cargill Dow launched the first global-scale 300 MM Lbs of NatureWorks PLA (formerly known as EcoPLA®) resin plant at Blair, NB.
Upon commercialization, the applications of PLA have been continuously increasing. In 2003, Cargill Dow also licensed the technology to produce PLA fibers to Toray Industries.
Activated Carbon – hurt by olefin & polyolefin shutdowns
The majority of the market for activated carbon is in water purification operations but a big segment is also used “in process” (gas or liquid phase) for final guard beds on syngas, ethylene, propylene, and internal recycle streams in many polyolefins processes.
USFilter/Westates Carbon is a major player in this industry. Mr. Jerry Ramdhani, Director of Sales for Westates says that market overall net growth for some US producers may be only half the profile estimate of 3% for two reasons. First, a large portion of the “utility” or generic lower end of the market is going to off-shore suppliers, particularly from Asia. Secondly, the bread & butter industrial applications have taken a big hit and are now in decline because of plant closures. There is good growth as the profile suggests in the upper end – environmentally connected applications but to garner these opportunities, the producer must be able to have special talents and provide much tech service. A not insignificant core of US capacity can’t do this so although the overview adds up to 3%, in reality, a US producer is likely to see somewhat less. Continental Carbon confirms (although in different segments) that they too see the looming impact of offshore supplies, particularly from China and India.
In the USGC alone, there are almost 2 dozen primary olefins & derivative plants down recently, the activated carbon picture could be a good mirror for the entire industry.
Kathleen Bader named CEO of Cargill-Dow
Ms. Kathleen Bader has been named the chairman and CEO of Cargill-Dow, a 50:50 venture of Cargill and Dow. Kathleen Bader recently served as the president of Dow’s styrenics and engineering plastics businesses.
Comments: Ms. Kathleen Bader has had phenomenal achievements in the past. Bader is a member of the U.S. Homeland Security Advisory Committee of President Bush. She is the chair of the Department of Homeland Security’s private sector senior advisory committee. She has been recognized as one of the top female executives in North America.
Shooting at BASF plant – just a false alarm!
The FBI and local police investigated an incident in which a security guard at BASF’s Freeport, TX ammonia plant was shot. The security guard claimed that he was shot by a Middle Eastern-looking man with a heavy accent when he was approached while taking pictures of the ammonia tanks. The alleged culprit shot him and took off in an SUV. The guard could not remember the color, make, or model of the SUV.
The incident sparked widespread speculation that the shooter could have been “on a terrorism reconnaissance mission”. The guard was arrested for making a false report. The guard was shot by his ex-wife during a domestic disturbance.
Comments: Incidents such as this become more common with the increased emphasis on security concerns. As usual, it is easy to blame the “boogeyman” – a Middle Eastern-looking guy without a heavy American accent.
Contact us at ADI Chemical Market Resources to learn how we can help.