ChevronPhillips and ExxonMobil to cross-license PE Loop SlurryTechnology
Chevron Phillips Chemical Company LLC and ExxonMobil Chemical Company entered into an agreement to exchange proprietary technology using loop slurry technology, first developed by ConocoPhillips. The cross-licensing agreement establishes Chevron Phillips as the exclusive licensor to third parties of loop slurry process technology. ExxonMobil Chemical gains additional rights to use Chevron Phillip’s technology at its Baton Rouge facility and other defined areas. A technology exchange is included in the agreement.
Comments: The loop slurry process technology addressed in this agreement delivers high-reactor throughput while minimizing capital and operating costs. The production technology is applicable to various densities of polyethylene, which is used to manufacture pipes, beverage and food containers,household chemical bottles, drums, auto gas tanks and other products.
This agreement benefits both parties and confirms CPChem’s position as the licensor of loop slurry process technology for the production of polyethylene. CPChem production technology is widely licensed around the globe. The cross-licensed technology is adaptable to advanced catalysts including metallocenes and dual-site catalyst systems for single-reactor bimodal resins.
ExxonMobil introduces high melt strength thermoforming PP grade
ExxonMobil has introduced an advanced polypropylene resin grade – ExxonMobilPP5082KN – designed to provide the clarity and stiffness requiredfor the demanding thermoforming applications. This grade is a nucleated polypropylene produced using proprietary ExxonMobil Chemical formulation processes. In addition to its excellent clarity and high stiffness, its unique design offers excellent heat resistance; fast cycle times and good melt strength for easy processing.The grade is targeted mainly for thermoforming applications, which is one of the fastest-growing markets for polypropylene.
Comments: Three most strategic short-falls of polypropylene include: (1) melt strength, (2) clarity and (3) impact. Melt strength and clarity lapses have prevented PP from effectively competing against PS.
Almost all of the major polypropylene producers, compounders and machinery suppliers are working on this issue. This year’s FlexPO2003 to be held Sept 17-19th will primarily focus on PP developments. Please see the list of speakers and topics.
Basell to expand Catalloy capacity
Basell has announced its plans to increase capacity for its Catalloy engineering plastic by 200,000 MT/year to 600,000 MT/year over the next two years. The company will first add a combined 40,000 MT/year of capacity at its three Catalloy sites. It will expand its Moerdijk, the Netherlands plant by 20,000 MT/year to 205,000 MT/year, and its 100,000-MT/year plants at Ferrara, Italy and Bayport, TX by 10,000 MT/year each. The initial expansion is scheduled for completion in mid-2005. Then the company plans to convert a Spherilene-process polyethylene plant at Lake Charles, LA, to produce 160,000 MT/year of Catalloy.The total investment for the project is about $150 million.
Comments: Catalloys, introduced in 1988/89 by Himont was one of the first revolutionary concepts of Reactor TPOs. Himont introduced both the concepts of: (1) Commercial Reactor TPO and (2) Commercial product based on Reactor GranuleTechnology (RGT). The first product in the series RAO-61 was the benchmark for most of the new reactor TPO developments.
Himont, being a technology organization, did not consider licensing instead focused on developing markets and applications by themselves.
The first major emphasis of Catalloys was on flexible PVC replacement, based on erroneous forecasts by top polyolefin consultants of that time (late 80s). Himont realized the missed opportunities by mid 90s and refocused it on traditional TPO applications.
The two factors: (1) no licensing and (2) initial heavy focus on flexible PVC replacement have prevented Catalloy from becoming the widely accepted material in flexible polyolefins.
At present time Catalloy market is increasing at 10percent per annum, and the current owner Basell has no plans to license the product to other companies.
Basell delays U.S. Metacene startup
Basell announced it has delayed the restart of the polypropylene (PP) plant at Bayport, TX. The plan is to revamp the production based on Metacene (Basell’s version of metallocenes) Basell plans to restart the unit when demand improves sufficiently -most likely in second-quarter 2004. Basell makes Metacene PP at a 60,000 MT/year Novolen-process line at Wesseling, Germany and is converting a 200,000 MT/year Spheripol unit at Terni, Italy to make some Metacene PP.
Comments: Basell (previously Montell and Himont) historically had a major influence from Montedison and Natta, the inventor of polypropylene using Ziegler-Natta catalyst system.
Himont maintained the position that Z-N systems had lot more options in product and process developments and did not embrace metallocenecatalyst as enthusiastically as rest of the polyolefin industry. The Reactor Granule Technology based on advanced Z-N systems was positioned to compete effectively against the newer metallocene based products (both in PP and PE).
Himont continued work on metallocenes, though at a lower level. With the formation of Basell (JV of BASF and Shell), the influence of Montedison has perceptually declined. BASF had pioneered the Metacene catalyst system.
Metacene based PP will be Basell’s foray into metallocene based PP in North America – assuming the profit margins will show marked improvement.
Operators Union strike hits Dowfacilities at Freeport, TX
Managers and nonunion workerstook over operationof the Dow Chemical Co. plant at Freeport, TX,second time in 30 years, as representatives of the workers walked off the job.The union, which represents about 1,000 Dow employees, went on strike since 11 p.m. Monday 19 May.
Late Monday, operators voted 463-409 to strike after union leaders and company officials failed to reach agreement on a contract offer that would have eliminated the long-standing system of seniority to determine job assignments at Dow’s largest chemical plant.
Dow officials had wanted to use other criteria as well as seniority to determine job movement. Union members were concerned that Dow’s proposal would givethe organization too much power which wouldresult in inexperienced employees passing up those who have put years into the plant.Both sides hadsaid the role of seniority in job was the key dispute.
On Wednesday 28th May the strike was resolved in a 510-to-286 vote. Operators at Dow’s largest chemical plant had agreed to a contract offer that would set up a joint labor-management committee to determine how workers are chosen for job assignments.
Comments: Seniority versus job knowledgeand/or job efficiencyand knowledge is an ongoing issue, especially highlighted by the recent technology developments, slower economy and cost pressures.
Most of the current union relations are based on the labor regulations of the early 20th century. The level of technology prevailing at that time made experience and trade art more important, hence the concept of seniority was very relevant. The Union’s views at that time were focused on job security and “take care of me when I am a senior because of my contributions for the last 10-15 years”.
With the current concept of Wall Street and investor accountability which demands that financial performance in less than 2–years is at odds with theseniority concept. Do you hire a young professional who is expert at SAP implementation and improve the organizational efficiency or keep the senior employee with 20 years experience, but is not computer literate?
Sumitomo mulls converting TPC’s LLDPE unit to PP Source
Japan’s Sumitomo Chemical Co is considering converting its 150,000 MT/year linear low density polyethylene plant at its Singaporean subsidiary, The Polyolefin Co, into a polypropylene unit to increase its profit margins.
Comments: There has been huge overcapacity in LLDPE markets leading to lower operating rates and hence diminishing margins. Polypropylene, on the other hand has seen robust growth and margins. Inthese tough times, Sumitomo seems to berationalizing its asset allocation strategy by converting its underperforming assets to profitable ones.
Chinese impose duties on SB Rubber
The Chinese government has imposed antidumping duties on imports of styrene butadiene rubber (SBR) from Japan, Korea, and Russia. The announcement follows an investigation by the Ministry of Commerce (Beijing) that began in March 2002.
Formosa to expand at Mailiao
Formosa Plastics announced its plan to expand capacity of several plants at its Mailiao, Taiwan complex. The company says it has a capital expenditure budget of $147 million for 2003. The company also plans to expand high-density polyethylene (PE) capacity by 50,000 MT/year, to 500,000 MT/year; low-density PE and ethylene-vinyl acetate copolymer by 40,000 MT/year, to a combined 240,000 MT/year; and linear low-density PE by 24,000 MT/year, to 264,000 MT/year, all for completion by end-2004.
Other expansion projects include expansion of ethylene capacity from 1.45 million MT/year to 1.7 million MT/year, caustic soda capacity by 350,000 MT/year to 1.05 million MT/year, and an increase in vinyl chloride monomer capacity by 200,000 MT/year, to 1.52 million MT/year.
Japanese polymer sector restructures
Japan’s two leading polyolefin manufacturers, Japan Polyolefins Co and Japan Polychem are planning to integrate their polyethylene businesses later this year. JPC will hold a 50% in the new company and JPO 42%. The remainder will be held by a subsidiary of Mitsubishi Corporation. The jv will be called Polyethylene Co and is estimated to have close 35% of the Japanese market share.
Japan Polyolefins Co, itself is a product of 1995 restructures involving Showa Denko and Nippon Petrochemicals, and Japan Polychem, formed a year later by Mitsubishi Chemical and Tonen Chemical.
Comments: The Japanese polyolefin industry is under tremendous pressure from the recent developments fromChina and Asia, whichessentially reduced their export opportunities.
The Japanese polyolefins industry has been an industry in transition for the past decade.
Starting with over a dozen companies and has gone through consolidation to only a handful. Over the past couple of years, the industry was trying to further consolidate in order to compete with the largest global players. However, some of the planned mergers have not gone through. The need to consolidate was prompted by increased capacity additions in China and other Asian regions, which used to and some still do rely on Japanese material.
Qenos, the major Australian PE producers hopes its ExxonMobil JV, Orica would survive financially
Orica hopes that the polyethylene joint venture Qenos, a 50-50 joint venture between Orica and ExxonMobil could still be a strong cash generator despite a $90.4 million write-off. The main reason for the losses was lower production due to power outages in December 2002.
Qenos controls 75% of Australian PE production with an annual output of 400 million pounds of HDPE, 200 million pounds of LDPE and about 220 million pounds for LLDPE.
DuPont Dow to preview new Engage® Grades at NPE
DuPont Dow Elastomers will preview six new grades of Engage® polyolefin elastomers at NPE (National Plastics Exp) to be held on June 23-26. These grades will be available in second half 2003 following startup of its new Plaquemine Louisiana manufacturing facility. According to the company, the new grades will provide improved soft-touch performance for flexible molded and extruded items, particularly in consumer goods applications. Other grades are specifically aimed at automotive TPO applications, offering increased versatility and excellent impact properties.
The new Engage® grades are primarily based on ethylene butene and include: (1) ENX 7467 (1 Melt Index, 0.863 Density), (2) ENX 7458 (2.5 Melt Index,0.863 Density), (3) ENX 7447 (5 Melt Index, 0.865 Density), (4) ENX 7270 (0.8 Melt Index, 0.880 Density), (5) ENX 7380 (0.3 Melt Index, 0.870 Density), and (6) ENR 8556 (2 Melt Index, 0.870 Density).
Polimeri declares force majeure on PE supply from French plant
Italy’s Polimeri has declared a force majeure on polyethylene supplies from its plant at Dunkirk, France, on May 16, due to a production stoppage following a workers strike action. The force majeure was declared as ongoing strike action lasted longer than expected.
Rubber extruder to expand into plastics
Rubber extruder Rice-Chadwick Rubber Co. plans to revive its idle manufacturing plant near Loudonville, OH to house a continuous salt bath cure line and also increase its extrusion capacity. The company plans to have plastic extrusion, molding and assembly operations in the near future.
Comments: The Rice-Chadwick Rubber, based in Killbuck, Ohiois a division of Alco Industries. The Company supplies rubber extrusions to many industries that include appliance, automotive, construction, agriculture, gasket and garage door manufacturers.
DuPont and AlphaGary form a joint venture
DuPont Co. and Alphagary Corp. are set to form a joint venture to develop a new fluoropolymer compounds for the data cable market. The jv allows DuPont, Wilmington to provide fluoropolymer technology while Alphagary of Leominster will offer its compounding expertise.
Comments: DuPont is one of the world’s largest producers of fluoropolymers and manufactures many other engineering resins. AlphaGary is one of North America’s largest PVC compounders and also produces compounds based on thermoplastic elastomers, nylon, polyurethane and other materials.
Sentinel expands into PP foam
Sentinel Products Corp. has started producing expanded polypropylene to its line of blown foam products. The move is due to continued interest by automakers to produce an all-olefin car interior system. The foam can be thermoformed or vacuum formed for use in headliners, instrument panels and door panels.
Comments: The Company’s strategy is to expand its polyolefin foams product line. In order to accomplish this, the company had launched two new manufacturing facilities in US, and UK in 1999.Sentinel Foams has been one of the cutting edge foam organizations in North America with credits including: (1) the first metallocene PE based foams, (2) joint venture with DuPont Dow that lasted few years and (3) popularizing of the metallocene technology.
Most of the developments are attributed to their entrepreneur CEO Mr. Scott Smith
US PE producers drop the domestic prime pricing for the Month of May
US polyethylene producers have dropped May prices into the domestic prime market by at least 1 ct/lb, but more typically by 2 cents/lb. The price decrease was led by lower feedstock costs and slow demand. Prior to last week, many US PE producers were not publicly conceding that prices would drop in May, citing the need for margin maintenance.
Sumitomo Rubber to expand tire capacity
Sumitomo Rubber Industries Ltd is planning to invest 33 billion yen for two years starting in 2004 to expand tire production capacity in Japan and other parts of Asia.
Sumitomo intends to spend 23 billion yen domestically and the remaining 10 billion yen for Indonesia and other parts of Asia. The funds will be mainly used to expand existing plants. The new plan represents a 13 billion yen increase from earlier projections.The increase in investment is primarily aimed at boosting production of high-performance tires for sport utility vehicles by 30 per cent. Passenger car radial tire production will also be increased 15 per cent, and truck and bus tire output raised 10 per cent.
Profitability on commodity products is falling due to stiffer price competition, so the company aims to transfer production of those tires to Indonesia and have domestic plants specialize in making high-performance tires.
Goodyear & Sumitomo to broaden firms’ alliance
Goodyear asked Sumitomo Rubber Industries to broaden their global alliance, which was set up by the two companies in 1999 when Goodyear acquired 75-percent ownership of Sumitomo’s Dunlop tire operations in North America and Europe.
The companies plan to discuss the joint ownership of some of the Asian manufacturing and/or distribution facilities except in Japan and Thailand.
Dow to expand PE Waxes
Dow Chemical announced its plans to expand the global market for polyethylene (PE) waxes in the next few years. Dow is to begin production of PE wax early next year based on its Insite single site catalyst and solution process technology.
Comments: The market dynamics for PE wax will change with the entry of Dow as a new supplier in this market.
As mentioned in our Vol. 1 Issue 10 of PO&E, Dow has reached an agreement with Marcus Oil under which Marcus Oil will sell Dow’s PE waxes. Until recently Marcus Oil had 8-10% market share of the North American PE waxes market. Their ability to supply PE waxes based on Insite technology will enable them compete effectively with leading suppliers such as Honeywell and Eastman.
TSRC shelves plans to build China TPE polymer plant
Taiwan Synthetic Rubber Corp (TSRC) announced its plans to postpone indefinitely a study to build a thermoplastic elastomer (TPE) polymer plant in Nantong, Jiangsu province, China, due to the product glut on the mainland china.
TSRC had planned to complete the study by end of 2003. However, it decided to shelve it recently as it estimated that the oversupply in China could last for at least three years.
TSRC’s other facilities include an 8000 MT/year TPE compounding unit in Shanghai, China, and a 53 000 MT/year TPE polymer unit and a 100,000 MT/year SBR plant in Kaohsiung, Taiwan.
Natural rubber prices increase
The global prices for natural rubber (NR) increased in May after decreasing significantly in April. The prices for standard Indonesian rubber 20, the grade that is widely used by US tire manufacturers were about 43 cents per pound in May, which was higher compared to April.
DSM looks at jv with Beijing Yanhua Petrochemical
DSM has had talks with Beijing Yanhua Petrochemical of Yanshan, China on a possible synthetic rubber joint venture. The jv is most likely to be on ethylene propylene diene monomer (EPDM) rubber business.
Comments: The demand for synthetic rubber in China in 2002 was about 2,000 KT. China is a net importer of synthetic rubber with 2002 imports amounting to 916 KT. The demand for synthetic rubber in China is expected to grow at about 10-12% per annum for the next few years.
DSM Elastomers is the world’s largest EPDM supplier. It has manufacturing plants located globally at several locations including US, Netherlands, Japan, and Brazil. DSM total global EPDM capacity is about 205 thousand metric tons.
Thermoplastics for automobiles
DuPont introduced a number of new engineering polymers mainly for use in automotive applications. The company has developed several new grades of PBTs with improved hydrolysis-resistance that form part of the Crastin range, and find use in automobile engine compartments. According to DuPont, three new grades of thermoplastic polyester elastomers in its Hytrel range can replace conventionalcombinations consisting of many individual components, in automotive applications such as coextruded fabric-reinforced three-ply hydraulic hose lines.
Toyota eyes Melbourne as site for bioplastic plant
Toyota Motor Corp. Australia Ltd. is in negotiations to locate a bioplastic manufacturing plant in Queensland, Australia. The plastic would be produced from polylactic acid, which it would create by fermenting sugarcane. The biodegradable, water-resistant PLA resin would be used to make car components.
Comments: PLA polymers based on polylactic acid are currently the most innovative bio-polymers developed jointly by Dow Chemical Company and Cargill. The past issues of our Bimonthly Review covered PLA related issues in great depth.
Japan’s Tokuyama starts PP plant
Japan’s Tokuyama Polypropylene(TPP) has started commercial production of its polypropylene plant in Tokuyama. The new plant has a capacity of 200,000 MT/year and is a 50:50 joint venture between Idemitsu Petrochemical and Tokuyama Co, and was established in 2001.
SABIC Marketing Ibérica and Stamylan Spain join forces
SABIC Marketing Ibérica S.A, the Iberian marketing arm of SABIC Global Ltd., located in Diagonal, Barcelona, will move to St. Just Desvern, Barcelona.Its sales team will join with their colleagues in the office of Stamylan España S.L., the Spanish marketing arm of SABIC EuroPetrochemicals B.V.
Comments: SABIC acquired DSM’s petrochemicals division including its polyolefin’sbusiness and related process technologies in 2002. Since then, SABIC is following its strategy of expansion into Europe. Its main objective is to become a leader in Europe. By combining the marketing operations in Spain, its customers will be presented with one face for SABICin Europe.
Exopack to purchase four Plassein facilities
Plassein International Corp. formed three years ago from six packaging group are about to split apart. The move was triggered by Plassein’s Chapter 11 bankruptcy filing on May 14. The companies are about to be sold to several bidders and the company dissolved.
Comments: Plassien group, formed by a group of ex-Enron employees was introducing a new concept of product/market/price sharing to optimize the operations on a long term basis. Plasien group presented the concept in paper presented at FlexPO 1998.
The major problems encountered include: (1) speculative nature of the concept, (2) lack of domain expertise, (3) the facility locations (distance) and (4) the slow economy.– Parallel to other Enron operations.
Trucker strike hits South Korea’s PE, PP exports to Europe
Some South Korean polyolefin exports to Europe, US and Middle East were delayed by a truck workers strike at Busan port.
The Busan port is used by polyethylene and polypropylene producers located in Ulsan to export cargoes to the West. The strike affected close to 20% of its exports. South Korea exports most of its products to China, via the Ulsan port. Truckers were seeking higher wages and lower fuel costs.
Owens Corning and Saint-Gobain to form joint venture for glass fiber reinforcements
Owens Corning and Saint-Gobain Vetrotex are planning to form a joint venture to manufacture high-quality glass fiber reinforcements to cater for the growing composites market. The 50:50 joint venture will produce reinforcements to be sold in equal shares through both companies ́ international sales networks. The production and delivery of these products is scheduled for late 2004.
Comments: Owens Corning recently sold its share of fiber reinforced PP product line of their Sta-Max to SABIC.
Braskem to invest US$7million n in polypropylene production
Braskem, a Brazilian petrochemicals is planning to invest US$7mn to increase polypropylene (PP) production at its plants in Trinufo, Rio Grande do Sul state, by 100,000 MT/year. Braskem has three polypropylene plants in Triunfo producing a total of 550,000 MT/year, and the expansion will boost capacity by around 20%.
The expansion will be achieved through improvements at the two plants using Spheripol technology at Trinufo, and is scheduled to be ready by 2004. The project is part of this year’s 300mn reais investment plan for this year, which is designed to ease a number of bottlenecks in the Braskem production system and boost overall production by 10-15% over the next three years. A current ethylene expansion project underway at Camacari in Bahia should be ready by October this year, boosting total production to 1.28MT/year.
Comments: Brazil is one of the largest economy of South America, and the growth in plastics is expected to be about 5-6% per annum for the next few years. In Brazil, the demand for PP is expected to grow at about 6-8% per annum. The demand for PP increasing faster compared to PE.
The major PP producers in Brazil have announced their plans to increase PP capacity. Polibrasil, the largest producer of polypropylene is constructing a 300 KT plant, and Rio Polimeros is bringing on 540KT plant by 2004. Braskem, not wanting to give up its market share in the PP market thus plans to invest in the expansion of its PP plant.
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