My Turn – Dr. Balaji B. Singh – Three Potential Disruptive Scenarios for the U.S Energy Picture Beyond Year 2010
Comments: Based on a strategic study of the Global Energy picture future direction, three major scenarios were identified as Low Probability – High Consequence Events that could disrupt the U.S Energy Picture. Organizations planning on energy-related developments need to be aware of these situations.
U.S consumes over 45% of the energy produced in the world and is a strategic buyer for Global energy resources – oil, natural gas, coal, nuclear, solar, and biofuels…,
Three major low probability – high consequence events for the past 2010 scenarios are:
Scenario 1: Western Accepted peace in the Middle East – Iran/Iraq/Venezuelan oil/gas resources freely available to West Consequence – Hydrocarbon Energy Bust?…. Remember the 80s after The Iran crisis?
Scenario 2: U.S. finally moves to Carbon footprint reduction (1973??? 1979??? 2000??? Finally?? Do alternate Energies make a dent?????? Consequence – A New Set of Problems…Impact of other costs (food, Consumer Goods, Agriculture) on energy costs
Scenario 3: U.S develops an economic transport/Logistics of Natural Gas to the U.S Gulf coast; the Middle East attains parity with the Rest of the World on natural gas;
West booms again for petrochemicals – with some delays due to the current lack of new construction Want to more detailed analysis of these disruptors. Call Us..,
FlexPO2007 on October 17-19th, 2007 and Polyolefins; Downstream Processing Workshop- October 16th Bangkok, Thailand
CMR is pleased to announce that we will be hosting a conference & polyolefins and downstream processing workshop in Bangkok, Thailand. The conference will be held from October 17-19 at Shangri La Hotel and the workshop will be held on 16th October. Please plan on attending.
Comments: Please find enclosed the brochure for FlexPO2007 & Workshop. For more information, please call us at 281-557-3320.
INEOS Polyolefins introduces ELTEX® PF metallocene product range
INEOS Polyolefins announced the commercialization of its ELTEX® PF metallocene product range, dedicated to film end uses. The ELTEX® PF metallocene product range will be added to the well-established existing LLDPE product mix. This continues the strategy announced earlier in the year of upgrading and expanding the assets, with an increased focus on high-value, differentiated polymers.
The ELTEX® PF metallocene product range will be produced at the Innovene 3 plant, located in Koln, Germany using the INEOS Innovene® G proprietary gas phase process, together with the newly developed metallocene catalyst technology. A significant investment will be made to increase the metallocene LLDPE capability of this plant while retaining the capability to produce the current C4-LLDPE products.
The initial product range will include the grades ELTEX® PF 6212, 6130, and 6220 for blown and cast film applications, where PF denotes “Performance Film”. This range of products exhibits a best-in-class mix of properties that enable film converters to make significant savings in their operations and opens the possibility for the development of new, differentiated film end products.
The products will be included as part of the ELTEX® PF family of leading products offered by INEOS Polyolefins. The ELTEX® brand is well known in the industry as standing for excellence not only in product performance but also for the cooperation between INEOS Polyolefins and end users to ensure that leading solutions are developed and offered to customers.
Comments: The demand for m-LLDPE in Europe in 2006 was over 1.1 billion pounds. m-LLDPE is the most common metallocene-based polymer consumed in Europe today with applications that include (1) film, (2) polymer modification, (3) wire & cable, (4) industrial, (5) medical, and others. Film application is the largest end-use application with over 90% of the total consumption and is mostly consumed in the packaging industry. The growth is mainly due to the advantages of m-LLDPE over conventional LLDPE resins that include: (1) hot tack, (2) better organoleptic properties, (3) toughness, (4) tensile strength, (5) OTR, (6) seal strength and (7) dart impact resistance.
The addition of the new grades by Ineos will further expand its product portfolio, increasing a wider range of end-use applications and taking advantage of the growth phase these metallocene products are currently in. For more information on metallocenes, please refer to our multiclient report on “Global Metallocenes”.
DuPont enters into a joint venture agreement with Sinopec for the manufacture of EVA resins
DuPont Packaging & Industrial Polymers (P&IP) have formed a joint venture (JV) with Sinopec, the largest petroleum products producer/distributor in China, to produce ethylene vinyl acetate resins (EVA). The joint venture, called Beijing Hua Mei Polymer Company Limited, will be located at an existing facility of Sinopec Beijing Yanshan Company in Beijing.
The JV combines the manufacturing expertise of Sinopec and the latest EVA technology from P&IP. It will help meet the demand for both generic and unique EVA products in the region. The offerings will serve market segments including packaging, adhesives, printing, wire, and cable, footwear, and apparel.
According to DuPont, this is an important step for P&IP as we continue the globalization of our Ethylene Copolymers business. The partnership will help strengthen the position of DuPont in the world’s fastest-growing EVA market and support our customers as they grow and expand to specialty products for high-value applications.
The JV expects to start EVA production in Beijing in late 2008, with about 60 KT of annual capacity.
Comments: EVA prices have continuously increased in the last few months due to increasing demand and supply disruptions. The joint venture, called Beijing Hua Mei Polymer Company Limited, will be located at an existing facility of Sinopec Beijing Yanshan Company in Beijing. It is unclear if this is a new facility or if an existing LDPE plant will be converted to produce EVA products. Compressors for an EVA plant usually have to be pre-ordered and require 12 to 18 months for delivery.
It is also unclear if this facility is based on tubular or autoclave technology. Beijing Yanshan Company currently has an LDPE plant with a single-line capacity of 200 KT.
DuPont is one of the largest producers of EVA copolymers and this JV with strengthen its position in fast-growing Asia.
LANXESS to increase EVA capacity at its Dormagen facility
Specialty chemicals group LANXESS is to expand production of its ethylene-vinyl acetate copolymer (EVM). To meet the continually growing demand for this rubber specialty, EUR 10 million is to be invested to significantly expand the capacity of the plant at the Dormagen site. The current permit allows for a maximum volume of 15,000 metric tons per year, an amount that could be realistic by 2009.
The synthetic elastomer supplied under the product names Levapren and Levamelt is suitable for oil and heat-resistant applications in the automotive sector – in particular for seals and hoses. In addition, as a halogen-free polymer with excellent compatibility with flame retardants, it has ideal properties for the manufacture of cable sheathing and is also used for highly flame-retardant products deployed in construction or for the weather-resistant transparent film. Adhesives is another application field for Levamelt, where it is used especially in the manufacture of adhesive film since it combines good processability with high adhesion.
The Technical Rubber Products business unit is part of the Performance Rubber segment, which recorded sales of EUR 1,776 million in the fiscal 2006.
Comments: After spin-off and reorganization, Lanxess is identifying growth areas and positioning itself to better compete in the industry. The company recently divested its ABS business and made additional investments in the Chinese markets and plans to increase EVA capacity.
Some of the company’s strengths include (1) leadership position in most of its participating markets, (2) good business know-how, (3) massive product range, and (4) a lean structure of the company that allows greater flexibility for the management.
DSM to shift focus to Life Sciences and to sell its non-core businesses
IDSM announced its plans to focus on its specialty Life Sciences (Nutrition and Pharma) and Materials Sciences (Performance Materials) businesses. These businesses operate in sectors where DSM has market-leading positions and utilize unique technology platforms which combine DSM’s expertise in chemistry, process technology, (white/industrial) biotechnology, and materials science.
DSM announced its plan to divest those businesses which do not fit with the strategic thrust of the company. These businesses will be grouped in a new Base Chemicals & Materials cluster and include:
Melamine / Urea / Fertilizers / Energy (~EUR 700 million) (currently within Industrial Chemicals) Elastomers (~EUR 500 million) (currently within Performance Materials) Special Products (~EUR 100 million) (currently within Nutrition) Maleic anhydride including derivatives (~EUR 75 million) (currently within Pharma)
These divestments will result in a reduced presence at the Chemelot site, Geleen (NL). The new Base Chemicals & Materials cluster is expected to deliver 2007 sales of approximately EUR 1.5 billion, EBITDA of approximately EUR 200 million, and EBIT of about EUR 100 million.
DSM Fibre Intermediates activities (currently within Industrial Chemicals), which provide backward integration for DSM Engineering Plastics and have a strong leadership position, will be reported in a new cluster Polymer Intermediates.
As a result of the above, DSM will create five reporting clusters, as follows: Nutrition (Life Sciences) Pharma (Life Sciences) Performance Materials (Materials Sciences) Polymer Intermediates (Materials Sciences) Base Chemicals & Materials
Comments: On 6th October 2005 DSM announced its new strategy program for the next five years. The strategy was to build on the foundation of the 2005 program and affect a successful shift of DSM’s portfolio to specialty life science and performance material products. This in turn would decrease cyclicality and provide more stable and higher earnings. The new strategy program has been named Vision 2010 with an emphasis on building on strengths and focusing on accelerating the profitable and innovative growth of DSM’s specialties portfolio. The key elements of this initiative include (1) market-driven growth & innovation, (2) increased presence in emerging economies, (3) operational excellence, and (4) value creation.
DSM Elastomers manufactures synthetic rubbers (EPDM) and thermoplastic elastomers (TPVs). DSM has a 20% market share in EPDM with a production capacity of 200 KT. DSM Elastomers has production plants in Geleen (Netherlands), Genk (Belgium), Leominster (USA), and Triunfo (Brazil). DSM Elastomers’ strategy has been to maintain its position in the EPDM market. The company believes it has a low-cost position at its plants in Geleen and Triunfo. Concerning TPVs, the business group is expanding its production in the field of consumer products.
Both strategic and financial buyers must have started evaluating DSM’s portfolio for acquisition or partnership opportunities. DSM initiated EPDM plant closures in the last few years to streamline its EPDM business and has helped in improving the operating rates and profitability of the entire industry. The elastomer’s business of DSM will be attractive to the current industry participants.
This business may also be attractive for SABIC which completed the acquisition of DSM Petrochemicals in 2002.
Dow sells its polyethylene foams business to Sealed Air
Dow Chemical announced that it has signed an agreement for Sealed Air Corporation to purchase certain assets of Dow’s ETHAFOAM™ performance foam business. The completion of the transaction is expected to take place in the fourth quarter of 2007, subject to certain regulatory approvals.
Sealed Air will acquire global rights to certain assets relating to the Dow ETHAFOAM™ polyethylene foam product lines, including a license to process technology, customer contracts, trademarks, and certain production and process equipment. The products include polyethylene-based foam products sold under the ETHAFOAM™, ENVISION™, SYNERGY™, and EQUIFOAM™ trademarks. In addition, Sealed Air will acquire the rights to the LAMDEX™trademark.
As a part of the transaction, Dow will supply products to Sealed Air for a period of up to 18 months following the close of the transaction from Dow’s manufacturing facilities in Hanging Rock, Ohio, and Drusenheim, France. Following that period Sealed Air will commence manufacturing the products at its facilities.
Dow’s ETHAFOAM™ performance polyethylene foam is used in a wide variety of applications, such as electronics, military sports, leisure, and transportation.
Comments: Polyethylene foam is a closed-cell expanded regular non-crosslinked material. Polyethylene foam products that are manufactured by Dow are used in applications such as electronic packaging, applications that require shock-absorption, vibration-dampening, insulation, sports & leisure equipment, flotation device, aircraft seating, and other applications. The demand for non-crosslinked Polyethylene foams in North America is close to 190 million pounds growing at 3.8%. This trend is expected to continue for the next five years. Sealed Air is an established global manufacturer of packaging material and the acquisition of Dow’s Ethafoam® will further expand its product portfolio and global reach.
Dow Polyurethanes acquires Danish firm Edulan to expand into Scandinavian and Nordic countries
Dow Chemical Company announced its plans to acquire Danish company Edulan A/S, an independent polyurethane (PU) systems house specializing in rigid foam and elastomer technologies. The deal, which is subject to regulatory approval, will expand Dow Polyurethane Systems, a business unit within Dow Polyurethanes, significantly enhancing its activities in northern Europe by strengthening its presence in Scandinavia and across the Nordic region.
In addition to Edulan’s business and production facility in Denmark, Dow will also acquire rights to all of its rigorously formulated and field-tested systems, which can be further developed into tailored solutions.
Edulan sells a broad array of polyurethane systems, mainly in the rigid foam market, as well as elastomers for specialties applications. By establishing a base in Denmark, Dow Polyurethane Systems will be well-positioned to meet customer demand for customized polyurethane systems in the Nordic countries, as well as capture emerging demand in the growing economies of Estonia, Latvia, and Lithuania.
Comments: Dow Chemical is expanding its global capabilities to better compete in the market. The company is focusing on growth regions such as Eastern Europe and this acquisition proves the same.
The company is also adopting an “asset-light” strategy – locking into profitable opportunities via access to advantaged feedstocks and choosing to participate in the inevitable geographic shift in the basic chemical production base than about reduced capital intensity.
LANXESS to invest about EUR 1 billion by 2009 and reorganize its business units
LANXESS AG announced that the company will position itself as a specialty chemicals group following the divestment of its Lustran Polymers business unit. As part of a systematic market orientation, LANXESS will organize its 13 business units into three segments starting in October 2007 following the divestment of the commodity plastics activities. The new segments are named Performance Polymers, Advanced Intermediates, and Performance Chemicals.
The company plans to invest about EUR 1 billion over the next three years to further strengthen its businesses. According to the company, the focus of the investment program through 2009 will be on the ‘LANXESS goes Asia’ initiative,” the LANXESS CEO explained, with some 60 percent of planned capital expenditures going for capacity expansions. LANXESS’s capex budget for the current year is just over EUR 300 million.
Comments: This is a good business strategy by Lanxess – combining all polymer businesses in one segment to achieve its ambitious goal “to have 75% of sales in margin category of plus 10%.”
Total Petrochemicals to construct PLA pilot plant in a joint venture with Galactic
Total Petrochemicals and Galactic have announced the signature of an agreement for the creation, after obtaining the approval of the competent competition authorities, of a joint venture to develop a production technology for PolyLactic Acid (PLA) bioplastics of renewable vegetable origin.
The project entails the construction of a pilot plant capable of producing 1,500 tons per year of PLA using a clean, innovative, and competitive technology, to be developed by both partners. Based on the Galactic Escanaffles site, near Tournai (Belgium), the plant is scheduled to come on stream in 2009. The research and development phase, which will start at the same time as its construction, should last 4 to 5 years. Called Futerro, the new company will benefit from the support of the Total Petrochemicals Research Centre in Feluy. This ambitious research project is made possible by the financial support of the Walloon Region within the framework of the competitive hubs of the Walloon Marshall Plan.
Total Petrochemicals’ objective with this PLA development project is to fulfill a growing demand for plastics of renewable origin.
For Galactic, this new development will mean new outlets for lactic acid by turning it into feedstock for new green chemistry.
Lactic acid is obtained from the fermentation of sugar (beet or cane) or starch (corn, wheat, potato, or manioc). PLA is aliphatic polyester obtained by polymerizing this lactic acid. It is compostable, and today is used primarily in food packaging and textile.
Comments: Galactic is a multinational biotechnology company based out of Belgium. It is a subsidiary of Finasucre – one of the largest sugar producers in the world. Galactic has approximately 10 percent of the global market share in the production of lactic acid and its derivatives.
The lactic acid produced by Galactic is based on their proprietary fermentation technology which is used to produce the L (+) form of lactic acid exclusively. The L (+) form of lactic acid can be polymerized to a 100 percent biodegradable PLA, while the same cannot be said for L (-) lactic acid.
The current alliance between Galactic and Total is more of an R&D program to enhance and promote the utility of PLA beyond its limited use in food packaging and textiles. Several strategies have been applied to expand the property envelope of these materials, but the usual problem is the conflict among two or more properties. For example, an increase in crystallinity results in higher melting points while the biodegradability is severely compromised (which is one of the main reasons for using PLA, in the first place!). However, increased R&D and involvement of bigger players well integrated into their knowledge (from crop science to biotechnology to plastics to the requirements in end-use), would certainly lead to improved PLA grades. In the current alliance, Galactic will bring in the know-how related to biotechnology and is well integrated into the raw materials. The total would play a key role as they possess a firm understanding of the plastics industry and the technical requirements in end-use markets which can potentially be displaced by PLA.
DuPont to increase Kevlar® para-aramid capacity in Richmond
DuPont announced production expansion plans for its high-performance Kevlar® para-aramid brand fiber. DuPont plans to invest over $500 million in a multi-phase production expansion starting with a Kevlar® polymer expansion in Richmond, Va., later this year. For DuPont, a world leader in para-aramid sales, this expansion would increase Kevlar® capacity by more than 25 percent when complete in 2010 and represents the largest Kevlar® expansion since the product was introduced in 1965. Details about additional expansion phases will be announced at a later date. DuPont is committed to investment in both Kevlar® and Nomex® brand aramid fibers, including several recent investments in both products. Between 2000 and 2006, DuPont completed four Kevlar® fiber expansion projects at its Richmond, Va., and Maydown, Northern Ireland, facilities. The latest expansions incorporated a proprietary New Fiber Technology (NFT) developed and patented by DuPont. This new technology enables innovative fiber and production capabilities for DuPont and is essential to help meet future market needs. In August 2006, DuPont announced it expected to invest more than $100 million in a three-phase capacity expansion that would raise Nomex® fiber and paper capability by approximately 10 percent. The first phase of the Nomex® expansion is scheduled to go online later this year.
As the first man-made fiber to deliver high strength combined with lightweight, Kevlar® is recognized as a category creator and leading brand in many high-performance and life-saving applications. This balance of properties makes Kevlar® the material of choice for a broad range of uses. Best known for its proven performance in ballistic and stab-resistant body armor, Kevlar® has helped to save the lives of thousands of law enforcement and military personnel around the world. The increasing need for protection against new and emerging threats continues to spur demand for Kevlar® in vehicle armoring, firefighter turnout gear, and blast and storm-resistant construction applications.
Demand for Kevlar® also increasing in the oil and gas and aerospace industries. The lightweight strength, dimensional stability, and chemical resistance of Kevlar® improve the reliability of umbilicals and risers used in offshore energy production platforms. These same properties also allow aerospace engineers and designers to build lighter aircraft with improved fuel efficiency.
Comments: Demand for para-aramid fibers have been increasing over the last few years mainly due to increased use in military applications.
The major producers of para-aramid fibers are Teijin and DuPont. Both these companies have recently invested in capacity expansions and are competing effectively in these products.
Commercialization of aramid fibers is an excellent example of the combination of all the steps involved in developing a successful product including (1) research, (2) scale-up, and (3) market development.
DuPont and Plantic Technologies to collaborate in polymers produced using Plantic® technology
DuPont and Plantic Technologies Limited, an Australian company specializing in starch-based biopolymers, today announced plans to collaborate in the development and sale of renewably sourced polymers made from Plantic® technology.
Plans include the collaborative development of new, renewably sourced resins and sheet materials based on high-amylose corn starch as the renewable feedstock for applications including cosmetics, personal care, and food packaging trays, caps, and containers. In addition to co-developing these new materials, DuPont will market and distribute Plantic’s starch-based resins and sheet products under the DuPont™ Biomax® family of products.
Under the agreement, DuPont will market Plantic’s starch-based sheet materials for trays and rigid packaging applications in North America, extending Plantic’s existing markets for these materials, which previously had been limited to Europe and Australia. DuPont also will brand and sell starch-based injection molding resins made with Plantic technology in all markets except Australia and New Zealand, using the DuPont™ Biomax® brand.
DuPont’s unique breadth of biology, chemistry, and materials science, ranging from better seeds to value-added end-use products, has enabled the creation of DuPont™ Renewably Sourced Materials, where each product contains a minimum of 20 percent renewable content by weight. These high-performance products are sourced to a significant extent from renewable, sustainable agricultural feedstocks, rather than petroleum.
Plantic’s novel polymer manufacturing technology is based on the use of high-amylose corn starch, a material derived from the annual harvesting of specialized (hybrid) corn. The unique chemical and film-forming properties of this type of corn starch allow for the development of a range of applications across conventional plastics markets. In addition to being renewably sourced, users can take advantage of excellent end-of-life properties such as biodegradability and compostability.
Plantic Technologies Limited has emerged as a world-leading bioplastics innovator. The Australia-based company has won numerous international awards for achievement in science and has built an international network of major corporate customers, distributors, and research and development partners.
Comments: DuPont has identified four trends as the basis for its investments and opportunities. These include (1) the need for increased food production, (2) the drive for renewable energy and materials alongside increased energy efficiency, (3) the demand for greater safety and security, and (4) the desire for increased connectivity. This agreement with Plantic Technologies is part of its investment in one of these trends.
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