My Turn – Dr. Balaji B. Singh –The New Global Strategies – Go West for Survival and Focus on East for Value – Except the center is now The Middle East!
Comments: The Newest strategy for most Global organizations – shift the focus away from ASEAN countries a bit west.
Make the Middle East (including Saudi Arabia, UAE, and Qatar the Center for producing commodities based on plentiful feedstocks (cost is a different issue) to produce commodities and differentiated commodities to meet the growing demand in already booming countries like India, China, Europe .. yet be ready to capture the newly developing nations in the ROW.
Use the advanced nations for specialties and value addition. Just watch for a flood of announcements based on this strategy for the next six months.
GLS introduces a new family of TPEs based on Dow Chemical’s Olefin Block Copolymer Technology
GLS Corp., a supplier of high-performance, custom-formulated thermoplastic elastomers (TPEs), introduced a new family of TPEs based on INFUSE™olefin block copolymers (OBC) from Dow Chemical.
The new DYNALLOY® OBC injection-molding and blow-molding grades allow GLS to offer customers a broad array of standard and customized TPE alloys for a wide range of applications. With the DYNALLOY line, GLS has expanded the existing property and application range of OBC technology with exceptional softness, unique feels, and a wider range of flow characteristics in injection molding, and introduced a new blow-moldable grade range.
DYNALLOY OBCs offer a silky soft touch feel, excellent colorability, isotropic shrinkage, and flow characteristics enabling use in complex molds with long flow paths.
The five standard injection-molding grades of DYNALLOY OBC include opaque and translucent materials and provide hardness levels ranging from 60 Shore A down to a gel-like 5 Shore A. They offer excellent colorability as well as a non-tacky, soft touch feel that avoids dust pick-up. Other performance highlights include improved compression set and creep resistance. In addition, GLS utilized the unique rheology characteristics of OBC to formulate a uniquely soft feel and flexible blow-molding grade with a 50 Shore A hardness that can be customized for higher or lower softness to meet specific market needs. In addition to property enhancements, GLS’ new line of DYNALLOY OBCs can be formulated for optimized flow characteristics to fill complex molds with long flow paths, providing a unique isotropic shrinkage characteristic. Most grades are suitable for two-shot and insert over-molding with polypropylene. Target markets include consumer and office products, hardware, food packaging, and medical applications such as comfort grips for writing instruments, cosmetic items, prosthetics, and over-molding applications with fabric
Comments: This is a “win-win” deal for both parties – Dow Chemical Company and GLS Corporation (soon to be bought out by Poly One Corporation as announced recently!). While Dow is keen on finding markets for its newly introduced INFUSE™ Olefin Block Copolymers (OBC), GLS is always searching for new base materials to expand its proprietary TPEs that need to be competitive. Working together with GLS – a leader in innovative TPE technologies having the broad adoption of products across key market sectors, Dow will expand the application range of the INFUSE™ olefin block copolymers and enable more customers to benefit from the performance advantages of this new platform.
GLS’s extensive customization capabilities enable manufacturers of consumer, food packaging, medical applications, and other products to achieve new performance and aesthetic enhancements with OBC technology. In turn, GLS will have the benefit of having an industry leader – Dow supplying the new base material to formulate novel TPEs.
ExxonMobil increases presence in Asia Pacific for specialty elastomers
To support the specialty elastomers’ growing market, ExxonMobil has increased the number of sales, technical support, and marketing personnel in China and other countries in the Asia Pacific region. This growth in support will cover ExxonMobil’s full specialty elastomer portfolio of Santoprene TPVs, Vistamaxx specialty elastomers, Vistalon EPDM (conventional and metallocene catalyst), Exxelor™modifiers and Exact plastomers.
ExxonMobil Chemical has recently made several customer-focused investments for its specialty elastomers portfolio in the rapidly growing Asia Pacific region.
Customers in mainland China can now buy the full portfolio of Santoprene™ thermoplastic vulcanizates (TPVs) from inventory stocked in China using local currency. Other ExxonMobil brands such as Vistamaxx™, Vistalon™, and Exact™ specialty elastomers are also available. As well as benefiting from the flexibility of a broader selection of grades as their needs change, customers will gain from more efficient service, faster delivery, and reduced inventory requirements.
Other investments in the region include a specialty polymers laboratory in Bangalore, India for fabrication development and testing, and the Polymers Automotive Applications Center in Kawasaki, Japan. Additionally, ExxonMobil has recently announced the construction of a second world-scale petrochemical complex in Singapore which includes a 300,000-tons-per-year specialty elastomers unit.
Comments: This is welcome news for customers in mainland China and other Asia Pacific region to purchase ExxonMobil Chemical’s broadest portfolios of specialty elastomer products – Vistalon™ EPDM (conventional and metallocene catalyst), Santoprene™ brand TPVs, Vistamaxx™ specialty elastomers, Exxelor™ modifiers, and Exact™plastomers that provide innovative elastomeric solutions combined with global support in material selection, design, processing, and supply chain management. Also, this is a pragmatic business move by EMC to operate with much greater efficiency via establishing direct access to a broad portfolio of products and fast electronic customs clearance. We understand that the products as sold in China are shipped from ExxonMobil’s world-scale plants in Baton Rouge, La.; Notre Dame de Gravenchon, France; Cologne, Germany; Newport, Wales and Pensacola, Fla., all of which are either ISO 9001:2000 or TS 16949 certified. The bottom line here is being close to customers is the key reason for this decision.
Basell and ConocoPhillips extend exclusive PP marketing relationship
Basell and ConocoPhillips have signed a new long-term contract for Basell to exclusively market the polypropylene produced at ConocoPhillips’ plant in Linden, New Jersey.
Basell has been the exclusive marketer of polypropylene produced at this facility since it first began operations in 2003.
According to Basell, for the past five years, this plant has been a reliable source of quality products. The long-term extension of this marketing agreement ensures that the company’s highly valued customers will continue to benefit from these resins for years to come.
Comments: ConocoPhillips has a 350 KT polypropylene capacity in Linden, NJ based on Unipol technology. ConocoPhillips mainly participate in the upstream industry and does not market any other polyolefin-based materials. The company has been selling its polypropylene via Basell for the last five years and it seems they have extended the contract. This relationship could be mutually beneficial as Basell has a lot more expertise and knowledge in selling polypropylene. This would allow ConocoPhillips to focus on the upstream market.
PolyOne to acquire TPE custom compounder GLS Corporation
PolyOne Corporation, a leading global provider of specialized polymer materials, services, and solutions, announced today that it has signed a definitive agreement to acquire GLS Corporation (“GLS”), the leading North American provider of specialty thermoplastic elastomer compounds (“TPE”) for consumer and medical applications. GLS has annual sales of approximately $130 million. However, PolyOne expects that the acquisition will be slightly accretive to earnings in the first year. Consummation of the transaction is subject to the satisfaction or waiver of customary closing conditions.
GLS, a privately-held company owned by the Dehmlow family, is headquartered in McHenry, Illinois. It has built a superb reputation as a strategic partner to many of the world’s best-known companies in developing and marketing highly customized soft TPEs. GLS products give toothbrush handles a softer touch, provide a better grip for electronic devices, create a stronger seal for food and beverage packaging, and enhance the flexibility of medical tubing systems. The company, which serves more than 1,200 customers worldwide, has achieved double-digit revenue growth in each of the last 10 years and is well positioned to capitalize on escalating demand for soft-touch products. With approximately 200 employees, GLS supports its customers with manufacturing facilities in Illinois and Suzhou, China. In 2006, GLS became the first specialty TPE compounder to begin production in China.
The potential acquisition of GLS demonstrates PolyOne’s continued commitment to executing a specialization strategy focused on technical innovation, new product launches, speed to market, and long-term customer alliances rooted in problem-solving and value creation. GLS is known for difficult-to-develop specialty compounds and rapid turnaround on customer requests, with a research and development department that operates around the clock. The acquisition of GLS also will provide PolyOne access to new customers in specialized, high-growth markets such as health care and electronics. PolyOne has targeted these markets for expansion and believes there are additional cross-selling opportunities. Moreover, the two companies global footprints are highly complementary.
Comments: PolyOne Corporation became the world’s largest compounder and distributor of polymers when it was created by the merger of M. A. Hanna Co. and Geon Co. on September 1, 2000. The company currently produces thermoplastic compounds, specialty polyvinyl chloride and resins, specialty polymer formulations, engineered films, color and additive systems, elastomer compounds, and additives and is involved in thermoplastic resin distribution.
GLS corporations develop and markets soft TPE compounds and alloys. GLS has alliances with major producers which include (1) Kraton (SB Copolymer) polymers for their Dynaflex product (2) DSM (TPV product) with Versalloy (3) BASF (TPU) with Versallon and (4) GE plastic with soft fx product. GLS markets include compounding flexible thermoplastic elastomers for injection molding and extrusion of soft flexible applications, including soft-touch applications. GLS Corporation reports annual sales of approximately $130 million, has around 200 employees, and serves over 1,200 customers around the world.
PolyOne’s acquisition will allow it to have access to new customers in specialized, high-growth markets such as healthcare and electronics.
Siam Cement considers a $3.7 billion investment in a petrochemicals complex in Vietnam
Siam Cement, Thailand’s top industrial conglomerate, plans to invest $3.7 billion in a major petrochemical complex in southern Vietnam, state media reported on Monday.
The complex will be built in Long Son in the oil hub province of Ba Ria-Vung Tau, adjacent to the site of Vietnam’s third, and possibly its biggest oil refinery. If approved, the project would be completed by 2013.
The investment in the 240,000-barrel-per-day Long Son refinery has not been finalized. Although, the refinery has attracted strong interest from foreign firms because of its proximity to the main consumption centers including the Mekong Delta and industrial parks around Ho Chi Minh City.
State oil Petrovietnam is building the Dung Quat refinery, the country’s first, which will come online in early 2009 with a capacity of about 140,000 bpd. It is also planning another refinery, Nghi Son, in the country’s north with a capacity of about 170,000 bpd, as the government aims to be oil product self-sufficient by 2015.
Comments: Petrochemicals is one of the largest business units of Siam Cement Company. With the refinery capacity coming on stream, SCC will be able to achieve feedstock integration and benefit from being one of the first few companies to invest in the country.
The group has already made some investments in Vietnam in its paper business unit and will gain valuable experience from this investment. Additionally, its cement division is investing in Cambodia.
Qatar Petroleum signs MoU with CNPC to construct petrochemical complex in China
In a bid to secure customers for its gas output, Qatar- the world’s third-largest gas reserve holder, plans to sign a memorandum of understanding (MOU) with China National Petroleum Corporation (CNPC). This MOU is to be signed next year for the construction of a petrochemical plant in China. Talks are on with Royal Dutch Shell about joining the project. The company is considering a plant in China that would use 200,000 bpd of LPG products.
Qatar’s attempt to tap growing petrochemicals demand from Asia, manufacture of which can use propane and butane products from LPG as feedstock, has set the tables to make Qatar the world’s second-largest producer of liquid petroleum gas by 2012.
Comments: Qatar Petroleum is the national company responsible for all oil and gas industry processes in Qatar and abroad and CNPC is China’s largest oil and gas producer. The proposed petrochemical plant will use liquefied petroleum gas (LPG) as feedstock and have a daily LPG processing capacity of 200,000 barrels. The economics of this deal are unclear – the price for LPG has increased significantly in China due to shortage. China’s domestic annual ethylene demand in 2010 is forecasted to exceed production capacity, creating a supply shortage. The QPI-CNPC deal is in line with Chinese government policy, which currently favors joint ventures with foreign energy companies that have feedstock positions. In one recent example, Saudi Arabian state-owned Saudi Aramco secured a deal to build a mega refining facility in southeastern Fujian Province with Sinopec that will process sour Arabian crude beginning in 2008.
SABIC Innovative Plastics exits PBT JV with BASF
SABIC Innovative Plastics announced it has signed an agreement, subject to regulatory approvals, to divest itself of its share in a 12-year joint venture with BASF Aktiengesellschaft, which produces polybutylene terephthalate (PBT) resin in Schwarzheide, Germany. As part of this divestiture, SABIC Innovative Plastics will ensure continuity of supply for European customers through a contract to purchase PBT resin from BASF for a defined period. The transfer is expected by December 31st, 2007.
This re-alignment of resources allows SABIC Innovative Plastics to focus on different PBT technologies including resin based on terephthalic acid (TPA) feedstocks and iQ PBT resin, which uses an environmentally responsible process that reduces CO2 emissions and energy usage.
SABIC Innovative Plastics offers several new advanced PBT-based materials with specialized properties. These include:
Valox* Super High Flow resins – a family of glass-filled PBT materials aimed at helping automakers and tiers achieve thinner, larger parts with greater detail at lower injection pressures without sacrificing performance. These materials are available in both flame retardant (FR) and non-FR grades. Valox ENH resins – a PBT-based, environmentally progressive resin family that meets the requirements for halogen-free parts. These products deliver better ductility and strength than other environmentally focused, flame-retardant PBT materials, and better electrical properties than standard FR PBT resins. Valox ENH resins can help electrical/electronics (E/E) manufacturers and suppliers comply with regulations restricting the use and disposal of hazardous substances. Valox iQ* and Xenoy iQ* PBT resins – new environmentally responsible materials created via a unique process that reduces CO2 emissions and energy usage by 60 percent. In addition to automotive components, the materials are good candidates for applications in the consumer electronics and transportation industries.
The joint venture with BASF, which was formed in 1995 and began production in 1997, was designed to share the capacity of a 60,000-ton manufacturing facility, later expanded to 100,000 tons/yr. The facility produces PBT using DMT feedstocks. SABIC Innovative Plastics also produces PBT resins in Mt. Vernon, Indiana.
Comments: SABIC Innovative Plastics formally GE Plastics is now a global supplier of plastic resins that are used in automotive, healthcare, consumer electronics, transportation, performance packaging, building and construction, and others. The company manufactures and compounds resins such as polycarbonate, ABS, ASA, PPE, PC/ABS, and PBT.
This joint venture will allow SABIC to secure its supply of PBT for the next 12 years as the demand for PBT has been increasing and the demand is expected to continue for the next few years. This resin is mainly used in automotive construction as well as in the electrical & electronics industry. The global demand for PBT in 2006 was close to 685KT and grew at close to 6% per year. China has led rapid growth in recent years with its growth in the automotive and electrical markets.
After GE Plastics’ acquisition by SABIC, the company is aligning its businesses and refocusing its efforts in some areas.
Dow Polyurethanes acquires remaining Joint Venture shares of Pacific Plastics (Thailand) Ltd.
Dow Polyurethanes, a business group of The Dow Chemical Company, announced that Dow will acquire the remaining shares of Pacific Plastics (Thailand) Limited (PPTL). A joint venture between Dow, Siam Cement Group (SCG), and two other minority partners, PPTL represents ownership of the polyols and polyurethane systems facility located in Map Ta Phut, Thailand. Dow is acquiring the remaining 51 percent ownership in the joint venture directly for an undisclosed sum. Once the transaction is completed, the polyols and polyurethane systems facility will be wholly owned by Dow.
The Dow-owned polyols and polyurethane systems facility at Map Ta Phut will enable Dow to accelerate the growth of its Polyols and PU Systems businesses’ capabilities at the site to better supply customers throughout Asia with the quality and service that help them succeed in their industries.
The acquisition is consistent with Dow’s commitment to continually assess the Company’s joint ventures to ensure they support the overall business strategy. Dow has a long-standing successful business relationship with SCG. The two companies signed their first joint venture agreement in 1987, and have since formed a total of five joint venture companies, producing polyols, synthetic latex, polystyrene, styrene monomer, and polyethylene at the Map Ta Phut site. Dow’s acquisition of PPTL supports the strategic goals of both joint venture partners and the companies will continue to collaborate on various projects such as the liquids cracker in Thailand announced in October of 2006, which is expected to commence operations in 2010.
Comments: This acquisition is in line with Dow’s strategy of investing in its downstream Performance businesses, Dow Polyurethanes has been expanding globally through acquisitions and geographic expansions.
Over the last few months, the company has made several acquisitions in its polyurethanes business. It was acquired from British Vita – Hyperlast Limited, a leading United Kingdom polyurethanes elastomers systems business, and Autothane Limited, a leading manufacturer of advanced automotive suspension components. It also acquired Danish company Edulan A/S, an independent polyurethane (PU) systems house specializing in rigid foam and elastomer technologies.
Hanwha acquires AZDEL, Inc. from SABIC Innovative Plastics, PPG Industries
Hanwha Living & Creative (L&C) Corporation announced that it has finalized the acquisition of AZDEL Inc., a 50/50 joint venture of SABIC Innovative Plastics (formerly GE Plastics) and PPG Industries. The acquisition of AZDEL will allow Hanwha to expand its offering of composite and advanced material solutions for the transportation and industrial segments. Terms were not disclosed.
AZDEL Inc. manufactures high-performance thermoplastic composites designed for both interior and exterior applications across many different industries. Major segments served include automotive, heavy truck, recreational vehicles, industrial, and other transportation applications.
Going forward, AZDEL has entered into a long-term strategic supply arrangement with SABIC Innovative Plastics and PPG Industries, whereas SABIC Innovative Plastics will supply thermoplastic resins to AZDEL and will continue to work with AZDEL through a joint development agreement to bring new innovative products to the industry. In the same way, PPG will continue to supply fiberglass reinforcement materials to AZDEL under a long-term supply agreement.
Comments: The decision to sell Azdel joint venture by SABIC Innovative Plastics is part of the company’s strategy to align the resources after the acquisition of GE Plastics.
Azdel was formed in 1986 as a joint venture by GE Plastics and PPG Industries. PPG contributed the technology and GE Plastics had the expertise in marketing polymers. The company was mainly involved in the manufacture and sale of glass mat-reinforced thermoplastic sheets (GMT). In the early 90s, GMT gained wider acceptance in the automotive industry mainly for bumper applications.
The automobile manufacturers were switching from steel bumpers to GMT-based bumpers. SABIC’s purchase of GE Plastics marked its entry mainly into engineering thermoplastics and now the company is aligning its resources to focus on the key areas.
Hanwha’s purchase of Azdel will increase its presence in Europe and improve its global footprint.
NVISTA joint venture to expand Spandex production capacity at New Plant in Foshan, China
INVISTA, the recognized leader in spandex production as well as a wide range of other apparel fibers, fabric treatments, and fabric technologies, today announced that its INVISTA Fibers (Foshan) Co. Ltd. joint venture plans to make an additional total investment of US$99.6 million in China in connection with a planned new production plant at its Foshan site, in anticipation of the growing demand in high-quality spandex fibers.
The joint venture spandex production plant at Xinan Foshan Plastics Group (FSPG) Industrial Park in Sanshui District of Foshan opened in November 2006. The plant is the largest foreign investment ever made in Guangdong’s fiber industry.
The joint venture plans to use its additional total investment to build a new 12.5-kiloton spandex plant next to the existing joint venture site in Foshan.
INVISTA has announced or entered into agreements to add more spandex/elastane production in more geographic regions than that announced by any other producer. Since 2006, the company has added, announced, or entered into agreements to add more than 45 kilotons of additional spandex capacity.
In addition to expanding capacity, INVISTA continues to extend its lead in environmental stewardship, geographic scope, and innovation. The company is the only spandex producer with production in Asia, Europe, North America, and South America.
The company has been granted as many spandex/elastane-related patents in the U.S. as all competitors combined. In the past five years, it has filed for five times more US patents than the next competitor and nearly two times more than all other competitors combined.
INVISTA is firmly committed to the Asia market with the construction of an airbag fiber plant in Qingpu, Shanghai, a newly acquired nylon carpet fiber plant also in Qingpu, and a plan to build of a world-scale nylon 6,6 intermediates and polymer facility in Shanghai. The company has also just broken ground for a nitric acid plant at the Sakra site on Jurong Island in Singapore.
Comments: 2007 has seen a lot of investments in engineering thermoplastics – nylon and others. The demand for these materials is constantly increasing in China and other Asian countries and hence the investment. Moreover, China has imposed antidumping duties on Spandex® and hence producers must have a local presence to meet the growing demand.
In 2004, Koch Industries purchased Invista from DuPont through which it entered the Spandex business.
A. Schulman to consider different options – acquisition, sale, or merger
Directors at US compounder A. Schulman, under pressure from US investor Barington Group, have agreed to set up a committee of the board to consider “all strategic alternatives available to the company to maximize stockholder value, including without limitation, a strategic acquisition, merger or sale of the company.”
The members will include the new chief executive of the group to succeed Terry Haines, who is to retire by next March after 42 years with the Akron-based company. The committee will also include Barrington chairman and chief executive James Mitarotonda.
Under an agreement forged, Barrington Group, which holds 9% of the company’s stock, has agreed not to pursue the appointment of new directors and to abide by a number of standstill provisions until the next annual meeting.
Schulman said a highly qualified candidate to succeed Haines has already been identified and negotiations with the individual are underway.
Terry Haines was appointed president and chief executive in January 1991 and also became chairman last year. “The board is sincerely grateful to Terry for his many years of dedication, leadership, commitment, and strength of character,” said Will Holland, Schulman’s lead independent director.
Comments: A. Schulman, Inc. supplies high• performance plastic compounds and resins and maintains 15 manufacturing facilities in North America, Europe, and the Asia• Pacific region. The company operates in two geographic segments, North America and Europe (including Asia). Schulman’s manufacturing is classified into five segments: color and additive concentrates; engineered compounds; polyolefins; PVC; and tolling. The company’s concentrates business consists of the compounding of resins that provide plastic with specific color and/or physical properties, such as conductivity, flexibility, viscosity, and textures. A color concentrate is a clear or natural plastic resin into which a substantial amount of color pigment is incorporated or dispersed. Schulman manufactures its concentrates using its formulae and purchased natural resins.
Terry Haines, CEO and president of. Schulman announced his retirement and has been in this position since 1991. The company is now considering different options for its future mainly due to the pressure from its largest shareholder.
Advanced Polybag plans multilayer film plant
Advanced Polybag Inc. will enter multilayer blown film extrusion in a new facility it is building in Sugar Land. The firm plans to invest about $50 million in the project, which also could make it the first plant in Texas to receive silver certification under the Leadership in Energy and Environmental Design system devised by the U.S. Green Building Council.
The new facility initially will contain two nine-layer Windmoeller & Hoelscher blown film lines that will allow API to expand its range of flexible packaging. The 170,000-square-foot facility will employ 35-40 when it starts operating in the summer.
API was founded by Hank Nguyen, a Vietnamese refugee, in the mid-1970s. Members of the Nguyen family run each of API’s four current film and bag plants. API said its annual sales top $250 million. The company employs more than 900.
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