Shin-Etsu’s PVC Plant in Kashima Starts Operating at Full Capacity
Shin-Etsu Chemical says that its polyvinyl chloride (PVC) plant at Kashima, Ibaraki Prefecture, Japan has started operating at full capacity since May 31. Operations at the PVC plant, where production was suspended since the earthquake and tsunami that struck Japan on March 11, were partially restarted on April 28 using the plant’s inventory of raw materials. Mitsubishi Chemical restarted production at the company’s 453,000-m.t./year No. 2 naphtha cracker at Kashima on May 20. Mitsubishi restarted the supply of ethylene on May 20 and accordingly, Kashima Vinyl Chloride Monomer Co., an affiliate of Shin-Etsu, restarted the production of vinyl chloride monomer (VCM). Kashima Vinyl Chloride Monomer Co., supplies VCM to the Shin-Etsu PVC unit. Shin-Etsu says that the company started operating its PVC plant at full capacity after confirming the safety and stability of production.
Shin-Etsu says its optical fiber preform plant at Kashima started partial operations on April 18, and the company aims to operate the plant at full capacity by the end of June.
The Shirakawa plant of the Shin-Etsu Handotai subsidiary partially restarted operations on April 20. Shin-Etsu Handotai manufactures and sells silicon wafers for semiconductors. Since restarting operations, the Shirakawa plant has been gradually increasing its operation in stages. Shin-Etsu says it is carrying out repair work and aims to operate the plant at full capacity by the end of June or in July.IHS iSuppli (El Segundo, CA) estimates that Shin-Etsu’s Shirakawa plant accounts for 20% of global supply of silicon wafers for semiconductors.
Shin-Etsu says that to counter the “problem of shortage of electricity expected during the summer this year in the areas served by the Tokyo Electric Power Company and the Tohoku Electric Power Company, we will make company-wide efforts to reduce the consumption of electric power by utilizing the technologies and expertise we possess. Shin-Etsu says it will also increase “the rate of utilization of our private power-generation facilities that are located at our Naoetsu Plant and Gunma Complex.”The Naoetsu plant is located at Joetsu in Niigata Prefecture, and the Gunma complex is located at Annaka in Gunma Prefecture.
Sumitomo Seika More than Doubles Superabsorbents Capacity in France
Sumitomo Seika says it will boost superabsorbents capacity at Arkema’s Carling, France manufacturing complex. Sumitomo Seika acquired the operation from Arkema in 2008, and Arkema continues to manufacture the product under a toll arrangement. Sumitomo Seika will add 27,000 m.t./year of superabsorbent capacity at the site, which is currently designed to produce 20,000 m.t./year. Completion of the project is scheduled for the spring of 2013.
BASF and Ineos Receive Regulatory Approval for Styrolution JV
BASF and INEOS have received approval from the EU Commission to form their Styrolutionjoint venture, which combines the companies’ global styrenics businesses. The approval is conditional on the companies selling a BASF acrylonitrile butadiene styrene plant (ABS) at Tarragona, Spain. The site accounted for less than 3% of Styrolution’s pro forma 2010 Ebitda, the companies say.The companies in May agreed to divest a plant to gain regulatory approval.BASF and Ineos signed a contract to form their previously announced Styrolution jv last week.
Styrolution will be made up of the combined global business in styrene monomers, polystyrene (PS), ABS, styrene-butadiene block copolymers, and other styrene-based copolymers, as well as copolymer blends into the new jv. The business with expandable polystyrene is not part of the transaction.
The jv will have sales of more than€5 billion, and have combined global capacity for 2.8 million m.t./year of styrene, 2.15 million m.t./year of PS, 1 million m.t./year of ABS and 350,000 m.t./year of copolymer specialties.
Lanxess to Invest €200 Million to Build Nd-PBR Plant in Singapore
Lanxess says that it will invest €200 million ($288 million) to build a 140,000-m.t/year neodymium polybutadiene rubber (Nd-PBR) plant at the Jurong Island Chemical Park in Singapore. Lanxess said last year that it is carrying out a feasibility study to build an Nd-PBR plant in Asia. Singapore was selected due to the availability of raw materials, Lanxess says. The facility, which will be the largest of its kind in the world, is expected to start up in the first half of 2015.
Lanxess’ new Nd-PBR plant will be located next to the company’s €400-million butyl rubber plant, which is currently under construction and will come on stream in the first quarter of 2013.“It is only one year since we broke ground for our butyl plant in Singapore. Now we are ready to move forward with the second largest investment project in our history,” says Axel C. Heitmann, CEO of Lanxess. “The dynamic Asia region is a key cornerstone of our mid-term growth strategy,” he says.
Lanxess and the Petrochemical Corporation of Singapore (PCS) have signed an agreement on the long-term supply, via pipeline, of butadiene from PCS to Lanxess and raffinate II from Lanxess to PCS. Butadiene is the raw material Lanxess needs to produce Nd-PBR and raffinate II will be a product stream from Lanxess’ butyl rubber plant in Singapore.
Lanxess is the leader in synthetic rubber for high-performance ‘green tires’ -the fastest growing sector in the tire industry, with an annual global growth rate of about 9%, Lanxess says. Growth is higher in Asia at 14%/year, Lanxess adds. The world’s leading tire manufacturers, who are supplied by Lanxess, are responding to this demand by expanding production in Asia, the company says.Demand is being driven by motorists calling for higher environmental and safety standards in performance tires. Demand is also being accelerated by European Union legislation. By 2012, all new tires sold in Europe have to be labeled for fuel efficiency, wet grip and external rolling noise. Japanese tire manufacturers voluntarily introduced tire labeling at the start of 2010 and the issue is also being discussed in Korea, Lanxess says.
“The far-sighted approach by the EU to introduce tire labeling, with the support of the German government, is a positive example of how environmental policies can benefit consumers and spur economic success,” Heitmann says.Nd-PBR is part of a tire’s compound and reduces energy consumption more efficiently than many other tire rubbers. It also reduces tire abrasion thus playing a role in making cars safer as well as more ecological and economical. Nd-PBR was invented by Lanxess in Germany.
A memorandum of understanding for the new Nd-PBR plant will be signed on June 2, 2011, between Lanxess and the Singapore Economic Development Board (EDB). Besides raw materials supply,Singapore also offers excellent infrastructure, skilled workforce, large sea port and close proximity to growth markets, Lanxess says.
Ashland to Buy International Specialty Products for $3.2 Billion
Ashland has agreed to acquire International Specialty Products (ISP; Wayne, NJ) for $3.2 billion in cash, boosting Ashland’s presence in higher-growth markets such as personal care and pharmaceutical ingredients. Ashland shares soared 12% on the news, closing at $68.34/share on May 31.
ISP posted sales of $1.6 billion and Ebitda of $360 million for the twelve-month period ended March 31, 2011. The combined company has pro forma sales of about $7.6 billion for the twelve months ended March 31, with about half generated outside North America.
The deal continues chairman and CEO James O’Brien’s strategy to position Ashland as a leading specialty chemical maker with top-quartile earnings and operating performance. The acquisition boosts Ashland’s share of revenue from specialty chemicals to 70%, up from 19% in 2005. The key acquisitions during that period have been Hercules and now ISP, and divestitures have included its chemical distribution business, construction aggregates, and its 38% stake in Marathon Ashland Petroleum.
O’Brien says that Ashland had targeted ISP because it was highly complimentary to its high-margin Aqualon cellulosics business, which it acquired with its 2008 purchase of Hercules. Ashland had previously made its interest known to ISP over the years “and when the Heyman family made clear that they were open to a sale we moved aggressively over the past few weeks,” O’Brien says. Privately held ISP is controlled by the family of former ISP chairman Samuel Heyman, who passed away in November 2009.
ISP’s specialty chemicals business is based on derivatives of butanediol (BDO), mainly polyvinylpyrrolidone (PVP) polymers and copolymers, which are used in markets such as personal care, food and beverage, and pharmaceutical excipients. ISP’s PVP and other BDO derivatives and Ashland’s cellulose esters are based on different chemistries, but both businesses are based on water-soluble polymers with significant market and customer overlap, O’Brien says. “ISP has a fantastic intellectual property portfolio, great patent structure and is very innovative company,” O’Brien says.
ISP posted overall Ebitda margins of 22.5%for the twelve months ended March 31, roughly 10 percentage points above Ashland’s Ebitda margin for the same period. Combined Ebitda is $1.1 billion, and the combined functional ingredients business is expected to account for half of Ebitda, Ashland says.
Ashland says it expects to realize annual cost savings of about $50 million by the second year following the transaction’s close through eliminating redundancies and capturing operational efficiencies. The deal is expected to close before the end of this year.
The deal “broadens Ashland’s presence within attractive growth areas like skin, hair, and oral care, which are large and fast-growing segments of the $5-billion-plus personal care specialty ingredients market,” O’Brien says. “In addition, we expect to more than double the size of our highest-margin functional ingredients business,” he says. Ashland’s functional ingredients business reported operating income up 5%, to $112 million for the twelve months ended March 31, on sales up 4%, to $952 million.
The deal is expected to close prior to the end of the third quarter. Ashland will finance the deal through a combination of cash on hand, and $2.9billion in committe financing from Citi, The Bank of Nova Scotia, Bank of America/Merrill Lynch and U.S. Bank.Bank of America/Merrill Lynch acted as financial advisor, and Cravath, Swaine & Moore acted as legal counsel to Ashland. Moelis & Company acted as financial advisor, and Sullivan and Cromwell LLP acted as legal counsel to ISP.
Lanxess in Talks to Buy Taminco
Lanxess is in preliminary negotiations to acquire Taminco(Ghent, Belgium) from private equity firm CVC Capital Partners, reports say. The discussions cover a proposed deal valued at €1 billion-€1.2 billion, reports add. Lanxess has reportedly hired JP Morgan Chase to advise on the possible acquisition of Taminco.
Lanxess and Taminco declined to comment on the reports, but Taminco said earlier that its owners are exploring options for the company, including a divestment. CVC cancelled an initial public offering for Taminco last year and intends to reexamine those plans, sources say. CVC has hired Bank of America and Goldman Sachs to advise on options for Taminco, reports say. Other companies are interested in buying Taminco, and Lanxess is not the only company in talks with CVC, reports add. CVC has owned Taminco since 2007.
Taminco produces alkylamines, including methylamines, and derivatives. The company generates sales of about €715 million/year. Taminco says it is the only specialist amines maker with production integrated with derivatives, and that it has eight manufacturing sites worldwide. It has two divisions: functional chemicals and agrosciences. BASF is Taminco’s main competitor in Europe.
Lanxess produces rubber, rubber chemicals, pigments, and a range of other specialties. The company reported 2010 sales of €7.1 billion. Lanxess’s last major acquisition was the €310-million purchase of DSMElastomers, which closed early last month.
ENI and Novamont Sign Biopolymer JV Agreement
A previously reported €500-million project to build a biorefinery at Porto Torres, Italy is moving ahead. The facility will be capable of producing plastics as well as monomers, lubricants, fillers, intermediates, and additives for elastomers, all from renewable resources. It will be located within a petrochemical complex owned by ENI (Rome) subsidiaries Polimeri Europa and Syndial. A joint venture agreement for the plant was concluded recently by ENI and biopolymer producer Novamont (Novara, Italy).
The jv will convert some existing plant at Porto Torres and construct all-new facilities. Work is due to begin “very soon” and is scheduled to be completed at about the end of 2012. Proprietary Novamont technologies will be used for the design, construction, and operation of the biorefinery. Porto Torres is on the island of Sardinia.
ENI and Novamont, announcing the “Porto Torres Green Center” project in front of government ministers in Rome late last week, said that a major innovation would be the integration of the operation with the local agricultural industry. A key part of the project will be the cultivation of specific crops to “guarantee access to raw materials of agricultural origin, with the reuse of waste a priority. Attention will also be given to the sustainability of the facilities in terms of their size and energy requirements,“ the partners say.
The project will help ENI to meet its objective to become a leader in green chemistry, rendering its overall business more sustainable and competitive. “Chemistry using renewable raw materials has value in itself as a business that is complementary rather than an alternative to traditional chemistry,” ENI says. “Some of the applications, in their environmental performance and/or practical use, offer a clear advantage over what synthetic plastics can offer.”
Texas Passes ‘Fracking’ Disclosure Bill
Texas lawmakers have passed a bill that would require disclosure of chemicals used in the hydraulic fracturing. The process, known as “fracking,” has generated potential drinking water contamination concerns among some lawmakers and environmental groups. The House had passed the disclosure bill earlier this year, and the state Senate passed a version of the fracking bill last week. It was then forwarded to the House for a vote on amendments, which approved it over the weekend.
The bill would require companies “to reveal exactly what harmful chemicals are being pumped into the ground in the fracking process,” lawmakers say. The bill provides “certain protections against proprietary information where the exact composition of non-harmful chemicals used in the process are considered a trade secret,” lawmakers say. “Any carcinogens or other harmful chemicals must be disclosed.”
The bill had support of environmentalists and industry, according to local press reports.
LyondellBasell to Sell Refinery in France
LyondellBasell intends to find a buyer for its chemical refinery at Berre, France. The refinery, which was acquired from Shell in 2008, “has not fulfilled economic projections made at the time of the acquisition,” LyondellBasell says.The Berre site also has a steam cracker and world-scale polypropylene and polyethylene plants that are owned and operated by a subsidiary of LyondellBasell. LyondellBasell says it does not plan to sell the olefins and polyolefins units at Berre.
The refinery has capcity for 105,000 bbl/day. “Divesting the refinery would help us to focus on our core petrochemical assets at Berre. We will move diligently and expeditiously to prepare an offering memorandum for interested bidders,” says Jean Gadbois, general manager of the Berre site.
Shell to Debottleneck Singapore Cracker,Hike EO Capacity
Shell Chemicals says it plans to debottleneck its Singapore ethylene plant and it has confirmed plans to raise capacity of its high-purity ethylene oxide (HPEO) plant in Singapore. Iain John Lo, v.p./new business development at Shell made the announcement at the recent APIC 2011 event at Fukuoka, Japan. The Bukom Island, Singapore cracker was taken offline earlier this year because of technical problems but has resumed operations recently, Lo says. The company did not say by how much it is likely to increase capacity of the ethylene plant but said that “typically, a debottlenecking could add 15%-20% capacity.”Shell’s Bukom chemical complex, completed in March 2010, is designed to produce 800,000 m.t./year of ethylene, 450,000 m.t./year of propylene, 230,000 m.t./year of benzene and 155,000 m.t./year of butadiene. Shell also operates a 750,000-m.t./year ethylene glycol (EG) plant on Jurong Island, which uses ethylene from Bukom, via a pipeline.
Meanwhile, Lo has confirmed earlier reports that it will raise capcity of its HPEO plant on Jurong Island. The company recently acquiredJapan-Singapore EOG Co.’s 30% stake in Ethylene Glycols Singapore (EGS), increasingShell’sstake in EGS to 100%.EGS has capacity for 60,000 m.t./year of EO and 120,000 m.t./year ofEG.It also makes oleo-alcohol ethoxylates.The facilities are located within the same hub as Shell’s world-scale EG plant, enabling their integration with the larger and newer EG plant.
The agreement to buy out its partners will enable Shell to strenghten its HPEO and ethoxylates value chains on Jurong Island. It is also aligned with Singapore’s ambition to develop the EO-based chemicals value chain and to attract more downstream players, such as detergent producers, to locate their manufacturing facilities within the HPEO-derivatives corridor the Singapore government is aiming to develop, Shell says.Earlier reports said the proposed expansion could increase EGS’s EOcapacity by 40,000 m.t./year, to 100,000 m.t./year.
Taiwan Cancels Major Petchems Project
The Taiwanese government has decided to postpone indefinitely the previously announced Kuokuang Petrochemical Technology Co.’smulti-billion dollar petrochemical project, CW has learned. Sources, speaking on the sidelines of the APIC 2011 conference at Fukuoka, Japan, have told CW that after strong protests from environmentalists, Taiwan’s president, Ma Ying-jeou, has instructed the company not to proceed with the project, which would have been built on reclaimed land at Changhua, 100 km north of Kaohsiung.
The project could be relocatedto another site, Ma said,without giving any specific locations. But members of the Kuokuang consortium,led by CPC Corp., say the project would be too costly, if companies had to adhere to the five requirements imposed b the Environmental Impact Assessment (EIA) committee, after five years of studies.They include providing water channels for endangered white dolphins;securing water supplies supplied; and reducing CO2 emissions. In addition,the original conditions of the area where the project would be located should not be disrupted and farmers in that area should not be affected.
Kuokuang was planning to build a refinery as well as a naphtha cracker and downstream units by end of 2015.
BASF to Build Large TDI Plant in Europe
BASF has announced plans to build an integrated toluene diisocyanate (TDI) complex in Europe by 2014. The single-trainplant will be designed to produce 300,000 m.t./year of TDI and be located at the company’s Antwerp or Ludwigshafen site. Engineering work is under way and the final site selection will be announced shortly, BASF says.
“This new investment supports BASF’s growth strategy, underlines our leading position as the largest TDI producer and reinforces our strong commitment to the TDI market,” says Martin Brudermüller, vice chairman of the board/plastics. TDI is a key component in the polyurethane industry. It is used in the automotive industry in seating cushions and in the furniture sector to produce flexible foams for mattresses and wood coatings. BASF also produces TDI at Geismar, LA; Schwarzheide, Germany; Yeosu, Korea; and Caojing, China.
Opal Switches High-Density Polyethylene Licensors and Contractors
ONGC Petro-Additions (Opal; Mumbai) has switched technology and engineering services providers for its previously announced dedicated high-density polyethylene (HDPE) plant at Dahej, India, Makarand Dixit, head of marketing at Opal tells CW. Speaking on the sidelines of APIC 2011, currently taking place in Fukuoka, Japan, he said that CP Chem, previously agreed to supply its technology for the 340,000 m.t./year plant but has pulled out of the deal. Opal will instead use Mitsui Chemical’s slurry HDPE technology. Samsung Engineering is the contractor.
Opal, a joint venture among ONGC, Gail, and the Gujarat State Petroleum Corp.,will complete its multi-billion dollar project in October 2013, Dixit says. The company will start seeding the market a year earlier with product supplied by its licensors. The complex, in addition to the dedicated HDPE plant, will include two 350,000 m.t./year each swing polyethylene facilities, based on Ineos Tecxhnologies’ process producing linear low-density polyethylene and HDPE, including metallocene-grade product. It will also include Ineos’s technology 340,000 m.t./year polypropylene plant. The upstream plant, meanwhile, designed for 1.1 million m.t./year ethylene and 400,000 m.t./year propylene is 55% complete, Dixit says. It is based on Linde’s technology.
Sumitomo to Build Polypropylene Compounds Unit in China
Sumitomo Chemical says it has decided to establish polypropylene (PP) compounds operations at Dalian, Liaoning province, China to further strengthen its PP business in the country. The new company tentatively dubbed Sumika Polymer Compounds Dalian, will bea 50-50 joint venture with Zhuhai Sumika Polymer (Zhuhai, Guangdong province, China), an affiliate of Sumitomo. Sumika Polymer Compounds Dalian will be formed in August 2011, and will have a production capacity of 10,000 m.t./year.
PP compounds are high-performance materials made by kneading PP with synthetic rubber and inorganic fillers to improve parameters such as impact resistance and rigidity in accordance with their use for applications such as automobile bumpers and interiors, Sumitomo says. Due to the increasing production of automobiles as well as increasing per-unit consumption of PP compounds, continued high market growth is expected, Sumitomo adds.
China’s strong economic growth has made it the world’s largest market for automobiles.Sumitomoand Toyo Ink SC Holdings established the PP compounds joint venture Zhuhai Sumika Polymer in 2005, to meet demand for PP compounds mainly from south China. Sumitomo holds 55% stake in Zhuhai Sumika Polymer and Toyo Ink holds 45%. Zhuhai Sumika Polymer currently has production capacity of 22,000 m.t./year.
Sumitomo says it has decided to build the PP compounds unit in Dalian, to meet further increasing demand, after having explored the potential for expansion of its PP compounds business in the particularly rapidly growing north China region. Dalian offers excellent advantages in logistics owing to its international trading port, and in addition, major automobile manufacturers have plans to establish operations there. It is also close to customers in the neighboring cities of Shenyang and Tianjin, Sumitomo says.
The new company will serve customers in the Japanese automobile industry as well as non-Japanese auto makers establishing operations in north China, Sumitomo says.
Braskem Opens Office in Singapore
Braskem says it has opened a new office in Singapore, the company’s first office in Asia. The new office will enable Braskem to provide more personal services to its clients in the region, located mainly in Singapore, China, India, Indonesia, Korea and Japan. The office will initially focus on basic petrochemicals. Asia will account for 60% of the petrochemical market by 2014 and naturally gain greater influence over the formation of international prices, Braskem says.
“Having a physical presence in Asia will allow us to get to know the players in the region better and to learn more about the dynamics of the local market, while also helping us identify opportunities for Braskem’s future growth,” says Rodrigo Carnaúba, head of international business in the Basic Petrochemicals segment at Braskem.
Braskem’s exports to Asia currently consist of olefins such as propylene, butadiene and butene. The company also expects to expand its sales of the bioadditiveETBE to the Japanese market. “The country is expected to triple its consumption of this product due to the new biofuel law approved in the second half of 2010,” Carnaúba says.
Braskem is a leading exporter in Brazil. Braskem’s revenues from exports totaled $4.2 billion in 2010, an increase of 56% from 2009, driven by the higher petrochemical prices in the global market, especially for propylene, benzene and butadiene.
Braskem has been expanding its physical presence in the international market since 2002, when it opened its first office in Argentina. The company also opened offices in Chile, Colombia, the Netherlands, U.S., and Venezuela.Singapore was chosen as the location for the new office in Asia as it is the commercial operations center in Asia and the most important logistics center, Braskem says.
Momentive to expand Ohio plant
Performance Materials plans to grow at its Strongsville, Ohio, manufacturing plant, where it will begin a $5.8 million expansion June 10.
That’s the day the company says it will break ground on 6,000 square feet of space that will house new equipment, which will produce boron-nitride ceramics. The company reports it also will hire 10 people as part of the effort to increase capacity at the plant.
Momentive says it’s seeing increased demand for the specialty ceramics it makes at the plant; those ceramics are used to make semiconductors and specialty plastics.
In a May 13 conference call with investors and securities analysts, Momentive executives said they were seeing strong demand for the ceramic products from overseas, as well as for new uses related to the U.S. military. They also said the company was nearing capacity in terms of how much of the ceramic materials it can produce.
“For the past three years we have been investing in capacity in the business and also developing new products, especially related to the ceramics piece of the business.Throughout this year we continued to see strong orders,” company executive vice president Steve Delarge told investors.
Sabic and Mitsubishi create acrylic JV
RIYADH, SAUDI ARABIA (May 31, 1:45 p.m. ET) –Saudi Basic Industries Corp. and Mitsubishi Rayon Co. have formed a 50-50 joint venture to build and operate two plants in Jubail, Saudi Arabia, to produce methyl methacrylate (MMA) and polymethylmethacrylate.
The companies said the MMA plant would be the largest ever built, with a 250,000-metric-ton annual capacity. It will use Lucite International’s Alpha technology, which was first commercialized with its Singapore plant in 2008. Mitsubishi bought Lucite in 2009.
The PMMA plant will have capacity to make 40,000 metric tons per year.
Koos Van Haasteren, Sabic’s executive vice president for performance chemicals, said the JV will mark Sabic’s strategic entry into the acrylics business.
“We will be building on a breakthrough technology, with a strong partnership and integrated feedstock,” he said. “Moreover, the global market for MMA is growing at a rapid pace. New applications are driving this increase in demand and we are committed to meeting our customer growth requirements worldwide.”
Mitsubishi Rayon President Masanao Kambara said the partnership “will help us to meet long-term supply commitments to our MMA and PMMA customers. As the global leader we have a responsibility to ensure reliability of supply and this investment will enable us to deliver continuous improvement.”
The companies said the venture will help diversify Saudi Arabia’s industrial sector, creating new opportunities in the downstream industries such as construction, automotive, electronics, medical technologies and appliances.
StyroChem launches biodegradable EPS
StyroChem has launched a material that the firm says is the market’s first biodegradable expandable polystyrene.
Montreal-based StyroChem made EVRgreen-brand EPS commercially available May 30. The firm has completed two successful test runs of the product at its Montreal plant. EVRgreen also can be produced at StyroChem’s plant in Fort Worth, Texas.
“One of the stigmas facing EPS foam has been its lack of biodegradability, and the perception that it takes up a lot of space in landfills, although studies have shown that’s not true,” StyroChem President Glenn Wredenhagen said in a May 26 phone interview.
“With EVRgreen, we think we’ve addressed thatquestion,” he said. “This is something brand new and exciting for EPS.”
EVRgreen is expected to find a home in EPS products that aren’t construction-related. That includes food-service items like cups and bowls, as well as various types of shape packaging. One StyroChem custome
r already has assembled a marketing campaign that identifies its use of EVRgreen. And Wredenhagen said that a large number of customers also have asked for samples of the material.
EVRgreen “conceivably could go into half of the products made from EPS,” he added. End-product performance also has been unaffected by biodegradability, officials said.
The material uses StyroChem’s EcoPure-brand technology, which incorporates an additive company officials describe as “a catalyst to biodegradation.” The additive interacts with micro-organisms found in landfills to break down the EPS resin at the molecular level.
In testing that simulated a biologically active landfill, EVRgreen has biodegraded at an average of more than 14 percent in less than 140 days.
StyroChem employs 90 and operates a total of about 180 million pounds of annual EPS capacity at its two plants. The firm has annual sales of more than $100 million and is owned by private equity firm Tennenbaum Capital Partners LLC of Santa Monica, Calif.
Tennenbaum also owns the former WinCup food-service packaging business, which it operates in tandem with StyroChem as New WinCup Holdings Inc. Wincup is a major customer of StyroChem, officials said.
Kraton’splans for Asia plant back on track
After plans for an Asia-based thermoplastic elastomers plant were derailed four years ago by the economic slowdown, Kraton Performance Polymers Inc. is finally drawing close to breaking ground on a production facility in the region.
At a news conference held at Chinaplas 2011 in Guangzhou, company officials promised the site for the new plant will be announced during the second half of the year and they expect to start operations in 2013.
“We are on a very fast track to choose a site,” said Lothar Freund, vice president of technology at Houston-based Kraton. After announcing the location of the site, Freund said, construction of the plant should only take 18 months.
In addition to the new plant, Kraton expects to double its workforce in China over the next 12 months.
“Eight years back we only had a handful of people here,” Freund said.
Kraton, which specializes in styrenic block copolymers (SBCs), has been through a lot since it first announced plans for the Asia plant four years ago. When it first made the announcement, Kraton was still owned by the private equity firm the Texas Pacific Group.
“We were looking into a spot in Asia right before the economic slowdown,” Freund said.
By mid 2009,following the onset of the recession, Kraton had lost 40 percent of its business volume. In an initial public offering made in late 2009, Texas Pacific Group sold shares for less than it paid to buy the chemical company in 2003.
By mid 2009,following the onset of the recession, Kraton had lost 40 percent of its business volume. In an initial public offering made in late 2009, Texas Pacific Group sold shares for less than it paid to buy the chemical company in 2003.
Since then, Kraton has been reestablishing itself, and it expects 19 percent growth from 2009 to 2014.
In Asia, the company is focusing on hydrogenated SBCs, which will eventually be produced in the Asia plant.
“HSBC has nice growth opportunities driven by penetrating new products and new market segments,” Freund said. HSBCs can be used as an alternative to PVC in automotive, electronic and medical applications.
HSBCs are on the high end of the SBC market, Freund said. “Our strategy is to focus on differentiation,” he said. “We planto open up new spaces on the high end of the portfolio.
“The design and technology in the plant will be specially designed for our newest products–products that are used in this region,” Freund said.
Bayer continues investment in China
The latest in a string of investments being made in China, Bayer MaterialScience AG recently announced an agreement to develop a polycarbonate color competence and design center, as well as a polyurethane systems house, in the western Chinese city of Chongqing.
Rainer Rettig, the head of Bayer’s polycarbonates Asia Pacific business unit, discussed plans for the center at a news conference held to coincide with Chinaplas 2011 held in Guangzhou.
“The industries traditionally in Shanghai and Guangzhou have built new capacity in Chongqing,” said Rettig. “We follow our customers, which then helps us spread to local manufacturers.”
While Bayer did not feature exhibit at Chinaplas, the company’s continuing investment in the market has beenhard to miss over the past six months.
In December, Bayer announced plans to double capacity in the polyurethane raw material MDI at its Shanghai facility by 2016. The company plans to invest 110 million euros ($155 million) in downstream facilities by 2012. In addition, Bayer is in the process of moving its global headquarters for polycarbonates to Shanghai.
“We want to increase group sales in Greater China to around 5 billion euros by 2015,” said Marijn Dekkers, chairman of Bayer AG, in a statement. “MaterialScience is expected to contribute at least half of this amount.”
While Rettig said Bayer “always had to be big in China,” the boom in China’s domestic market has encouraged the company to think even bigger. The Shanghai expansion will increase capacity to 500,000 tons per year, adding two new lines. The first step of the expansion will be to install the two lines, said Rettig, and then debottleneck them in phases until 2016, when they will run at full capacity.
“For the time being, China is still importing a lot of material,” Rettig said. “We still bring in a lot of material from Europe.” By bringing up capacity, Rettig hopes to bring their production closer to customers.
“We want to be self-sufficient in China,” he said.
The investment in both up and downstream facilities reflects a dual strategy for Bayer in China, Rettig said. The company wants to add value for its customers while at the same time offering commodity materials.
China consumes one third of the world’s polycarbonate, but per capita PC consumption is still low.
“Markets tend to start with polypropylene then go to ABS,” said Rettig. As they get more sophisticated, markets will eventually land on polycarbonate. “Average polycarbonate consumption is still quite low in China,” said Rettig. “The customers that are coming to us have made the decision to use polycarbonate.”
In China, Rettig sees two particularly promising areas: lightweighting in the automotive sector and what he called China’s “illumination market.”
“We still have a lot of traditional lamps in China,” he said. “But, these lamps will eventually be replaced by LED or another generation of new lights.
“This is a step change and whenever an industry makes a step change, there are opportunities,” he said.
LEDs on their own do not disperse light well. The bulbs create a focused point of light. “To disperse the light, you need clever lenses,” Rettig explained.
In many cases, Bayer hopes to develop new applications for polycarbonates in collaboration with its customers. According to Michelle Jou, vice president of Bayer MaterialScience’s polycarbonate business unit in China and Hong Kong, the company has been hosting technical days on site at some customers’ plants.
“We are getting customers to come to us earlier,” Rettig said.
Dow successful in using recycled plastic to generate energy
Dow has successfully demonstrated the generation of energy from recycled plastic using scrap LLDPE generated in one of its extrusion laboratories. The pilottest measured how plastic that has been recycled to its full extent can be used as fuel instead of going to landfill.
The pilot test found that 96% of available energy was recovered after incinerating 578 pounds of used plastic in a kiln at one of Dow’s waste treatment facilities. The energy recovered was equivalent to 11.1 million BTUs of natural gas.
“The purpose of the test was to collect data showing that used plastic can provide a valuable source of energy and ultimately help reduce our need for natural gas or other fossil fuels,” said Jeff Wooster, plastics sustainability leader for Dow’s North American plastics business.
“The study results demonstrate that almost all of the available energy stored in used plastic can be captured and reused as opposed to being buried in a landfill.”
According to Dow, while most thermoplastics can be reprocessed, there currently are limited end-of-life options for certain types of used plastic packaging, such as some flexible films and containers made from a combination of materials.
Hindustan Petroleum Corp revives plans to of a US$10 bln refinery-cum-petrochemical project in Vizag
Hindustan Petroleum Corporation (HPCL) in talks with various entities in a bid to revive plans to set up a US$10 billion refinery-cum-petrochemical project in Vizag. This project had been put on hold by a HPCL-led consortium in 2007. The company is presently in talks with Oil India Limited (OIL) and GAIL (India) and is also open to taking in a foreign partner to implement the project. The company plans to invest Rs.45,000 crore, mostly in refinery capacity additions, in six years beginning 2011-12.
HPCL’s Vizag refinery capacity is being expanded while a new unit is being planned in Maharashtra. The company’s 9 mln tons Bhatinda refinery in Punjab will be mechanically completed in August/September and will be fully commissioned by year-end.
Huntsman inks license agreement with Yantai Wanhua for Propylene Oxide and MTBE
Huntsman Corporation has signed a license agreement with Chinese chemicals manufacturer Yantai Wanhua Polyurethanes Co. Ltd., for the production of Propylene Oxide (PO) and Methyl Tertiary Butyl Ether (MTBE) -a co-product of PO. The financial terms of the arrangement were not disclosed.
Yantai Wanhua, a leading Asian polyurethanes (PU) producer, plans to leverage the license to build a world scale PO/ MTBE plant at its facility in Yantai, Shandong province, with construction expected to commence later this year and beneficial production due in late 2013.
Huntsman’s PU division has world scale production facilities in the U.S., the Netherlands and China, including a 240/750 ktpa PO/ MTBE plant in Port Neches, Texas and is a global leader in PO technology. Commenting on the agreement, Peter R. Huntsman, President and Chief Executive Officer of Huntsman Corporation, said, “Huntsman is pleased with the negotiations and the relationship that has been built between our Company and Yantai Wanhua -one of China’s finest manufacturing companies. We anticipate this relationship will extend into other business opportunities that will be beneficial for both companies. We look forward to working with Yantai Wanhua in building this PO/ MTBE facility.” Mr. Ding Jiansheng, chairman of Yantai Wanhua Polyurethanes Co., Ltd., commented, “This co-operation with Huntsman is a win-win solution for both parties and for the polyurethane industry. Huntsman is one of the leading PO technology holders and definitely the right partner to work with to realize our vision: to be a first-class, green chemical producer. With China’s huge chemical market potential and Wanhua’s local expertise, the PO/MTBE license will foster a true success in our Wanhua Yantai portside integrated chemical complex.”
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