My Turn – Commentary on Global Polyolefins and Elastomers – The Need for Business Training for Technical Professionals – Dr. Balaji B. Singh
Need for Business Training for Technical Professionals – The Global move to equalize prosperity results in a slight lull for advanced and super innovations for a while (justifiably so.. until balanced prosperity/living standards are reached Globally.
The role of technologists and innovators has to shift from being pure technologies to “Technocrats” and “Technopreneurs”. It is quite evident from the recent surge in interest for business training for technologists – just look at the number of MBA PhDs coming out of school from the Biotech field in California.
The technologists already in the workforce may have missed the boat to some extent, but is not too late. It is imperative for technologists and the organizations that employ them to train their staff in Business Management – at the minimum in the functions of (1) marketing, (2) planning, (3) finance, and (4) business law.
It has been proven over and over that it is easy to train technical people in business rather than the other way around – yet, it is disheartening to see how many scientists and researchers have no idea what happens outside the four walls of the lab and beyond the laboratory hood’s constant buzz.
My cartoons on technical versus marketing functions – have a message – if you get it!
Polyolefin producers announce first quarter 2006 earnings
Dow Chemical
The Dow Chemical Company reported a new sales record of $12.0 billion for the first quarter of 2006, 3 percent higher than the same period in 2005.
Net income for the quarter was $1,214 million, 10 percent lower than in 2005, while earnings per share were $1.24. Earnings for the first quarter of 2005 included a gain of 5 cents per share related to the sale of a 2.5 percent interest in the EQUATE joint venture.
Compared with the same period in 2005, price edged 2 percent higher, but this was not enough to counter a year-over-year increase of more than $800 million in feedstock and energy costs, resulting in margin erosion. Volume in the quarter increased by 1 percent, with strong growth in Latin America and steady demand in Europe and Asia Pacific dampened by a slowdown in demand across most businesses in the United States, where customers delayed purchases in anticipation of lower prices.
In the Performance Plastics segment, sales for the first quarter were $3.49 billion, an increase of 17 percent compared with the same period in 2005. Price was up 1%, while volume climbed 16%, largely driven by lump sum revenue in our Technology Licensing and Catalyst business. The Specialty Plastics and Elastomers business reported a year-over-year sales increase of more than one-third, with solid global demand growth benefiting from the successful integration of ENGAGE™, NORDEL™, and TYRIN™ elastomers, acquired by the Company in 2005 when Dow divested its interest in the DuPont Dow Elastomers joint venture. Dow Automotive sales also improved compared with the same quarter last year, despite the ongoing challenges facing the U.S. automotive industry. During the first quarter, the business continued to build its position with Japanese original equipment manufacturers and announced plans to open an automotive technology center in Japan to accelerate application developments with local companies. In Polyurethanes and Thermoset Systems, sales fell slightly as the business continued to re-focus sales from components to downstream systems applications. EBIT for Performance Plastics was $726 million, an increase of 55 percent compared with $467 million in the same quarter last year.
Sales in the Performance Chemicals segment were $1.89 billion for the first quarter of 2006, 2% lower than the quarterly record of $1.92 billion posted in the same period last year, with both price and volume down 1%. Dow’s Latex and Acrylic Monomers business reported lower sales than in the same quarter of 2005. Much of this decline occurred in acrylic monomers, where new industry capacity negatively impacted price and margin, prompting the business to cut back on volume. Conversely, the business reported solid demand for styrene-butadiene latex during the quarter, driven by strength in the European coated paper industry and supported by an increase in sales in Asia Pacific, following last year’s start-up by Dow of a second styrene-butadiene latex line in Zhangjiagang, China. In Designed Polymers, sales increased slightly compared with the same quarter a year ago, with demand for water-soluble polymers up markedly across a broad range of end-use applications, including building materials, pharmaceuticals, and personal care. EBIT in Performance Chemicals was $301 million for the quarter, a drop of 33 percent compared with $450 million in the same period last year.
The Basic Plastics segment reported sales of $2.80 billion for the first quarter, flat with the same period in 2005. Both price and volume remained steady year-over-year. The quarter saw a marked downturn in North American polyethylene volume as high post-hurricane U.S. prices created a temporary export window for producers in Asia Pacific – and simultaneously reduced export opportunities for domestic U.S. companies. That window closed late in the first quarter. Steady volume in Europe and growth in Asia Pacific and Latin America offset the decline in North America, but margins were eroded as the rise in raw material costs outpaced price increases in each of these geographic areas. The Polystyrene business reported a drop in sales year-over-year as both volume and price fell from the high levels of the first quarter of 2005. While styrene costs moderated slightly compared with the same quarter last year, polystyrene prices fell further due to excess industry capacity, causing margin erosion. EBIT for the Basic Plastics segment was $476 million for the first quarter, 42 percent lower than the $824 million posted for the same period in 2005 which included a gain of $29 million related to the sale of an interest in the EQUATE joint venture.
First-quarter sales in the Basic Chemicals segment fell in 2006 compared with a year ago, down 7 percent to $1.37 billion. Despite solid sales growth in Europe, vinyl chloride monomer volumes also fell year-over-year, reflecting weaker global industry demand for polyvinyl chloride. The Ethylene Oxide / Ethylene Glycol business reported a significant decline in price and slightly lower volume as the industry’s supply/demand balance softened compared with a very strong first quarter of a year ago. Ethylene glycol margins came under pressure, as excess industry supply resulted in reduced prices, while at the same time, year-over-year feedstock costs increased significantly. The Basic Chemicals segment reported EBIT for the first quarter of $154 million, 64 percent lower than $427 million for the same period a year ago which included a gain of $41 million related to the sale of an interest in the EQUATE joint venture.
ExxonMobil
Upstream earnings were $6,383 million, up $1,329 million from the first quarter of 2005. Earnings from U.S. Upstream operations were $1,280 million, $73 million lower than the first quarter of 2005. The combination of a litigation item and higher tax expenses reduced results by over 4 cents per share. Non-U.S. Upstream earnings were $5,103 million, up $1,402 million from 2005. Higher realizations were partly offset by negative foreign exchange impacts.
Liquid production of 2,696 kbd (thousands of barrels per day) was 152 kbd higher. Higher production from projects in West Africa and increased volumes in Abu Dhabi were partly offset by mature field decline and the impact of entitlements and divestments. Excluding entitlement and divestment effects, liquids production increased by 10%.
First quarter natural gas production was 11,199 mcf (millions of cubic feet per day) compared with 10,785 mcf last year. Higher volumes from projects in Qatar and increased European demand were partly offset by the impact of the mature field decline.
Downstream earnings excluding special items, were $1,271 million, up $128 million from the first quarter of 2005, primarily due to higher marketing margins, improved refining operations, and positive foreign exchange effects. Petroleum product sales were 7,865 kbd, 364 kbd lower than last year’s first quarter, primarily due to lower refining throughput and divestments.
U.S. Downstream earnings were $679 million, up $34 million. Non-U.S. Downstream earnings of $592 million were $94 million higher than the first quarter of 2005. Chemical earnings excluding special items were $949 million, down $333 million from the record quarter a year ago primarily due to reduced margins. Prime product sales of 6,916 KT (thousands of metric tons) were down 22 KT from last year’s first quarter.
Lyondell
Lyondell reported quarterly net income of $290 million, or $1.12 per share. Ethylene and ethylene derivative product sales volumes increased by approximately 70 million pounds (3 percent) versus the fourth quarter of 2005. Quarterly average prices for ethylene and polyethylene decreased by 9 cents and 4 cents per pound, respectively, compared with the fourth quarter of 2005. The company’s cost-of-ethylene-production metric (COE) decreased by approximately 3 cents per pound versus the fourth quarter. Essentially all of this decrease is attributed to the lower price of natural-gas-based raw materials. Acetyls results improved by approximately $10 million, as margins increased due to lower raw material (natural gas and ethylene) costs.
1Q06 v. 1Q05 — Ethylene and ethylene derivative product sales volumes were relatively unchanged versus the first quarter of 2005. The quarterly average prices for ethylene and polyethylene increased by 6 cents and 8 cents per pound, respectively, while the average ethylene glycol price decreased by approximately 5 cents per pound compared with the first quarter of 2005. The company’s COE metric increased by approximately 8 cents per pound as the cost of production from both crude oil- and natural-gas-based raw materials increased. Elevated raw material costs in the first quarter of 2006 resulted in a $20 million decline in acetyls results.
Nova Chemical
NOVA Chemicals Corporation reported a net loss of $5 million ($0.06 per share) for the first quarter of 2006. The Olefins/Polyolefins and Styrenics Businesses generated a net income of $25 million ($0.31 per share) during the quarter.
This first-quarter net loss compares to a net loss of $68 million ($0.82 per share) for the fourth quarter of 2005, and a net income of $94 million ($1.06 per share diluted) for the first quarter of 2005.
Lower first-quarter average natural gas feedstock costs at the Joffre, Alberta complex were offset by lower ethylene and polyethylene prices. Higher crude oil costs at Corunna, combined with a reduction in the relative value of co-products, offset increased sales volumes. In addition, sales of polyethylene made from Corunna ethylene did not return to normal levels until mid-March.
Polyethylene – NOVA Chemicals’ total polyethylene sales volume for the first quarter was 737 million pounds, up 90 million pounds from the previous quarter. Joffre polyethylene sales were also stronger in the first quarter versus the fourth quarter. Sales from Eastern Canadian plants that use ethylene from Corunna were limited by the delayed cracker start-up and were about 40% below normal levels.
International volumes increased 47% quarter-over-quarter to 102 million pounds, or 14% of total polyethylene sales, which is in the normal range for the business. NOVA Chemicals finished the first quarter with 18 days of polyethylene inventory, down from 22 days at the end of the fourth quarter.
Performance Products – First quarter sales of polyethylene Performance Products manufactured using Advanced Sclairtech technology, were 122 million pounds, or 57% of the plant’s 215 million pounds quarterly capacity, up from 52% in the previous quarter. The first all-polyethylene rotomolded refuse dumpsters were commercialized in North America on the foundation of unique SURPASS resin performance characteristics.
DuPont
DuPont reported first-quarter earnings of $.88 per share. Excluding significant items, earnings for the quarter were $.93 per share, compared to $.96 per share last year. Local prices were 3% higher than in 2005, offsetting about 75 percent of the impact of higher energy and ingredient costs which increased $350 million above the first quarter of 2005. Worldwide sales volumes were up 2 percent on a comparable-business basis, largely driven by growth in Asia Pacific and Latin America. The company increased its outlook for 2006 reported earnings to $2.80 per share.
Consolidated net income for the first quarter was $817 million, or $.88 per share, including a previously announced Coatings & Color Technologies restructuring charge of $.10 per share, partly offset by a favorable tax audit settlement of $.05 per share. First quarter net income reflects higher local selling prices across all regions which were more than offset by the impact of higher raw material costs and the adverse effect of the stronger dollar.
Consolidated net sales for the first quarter were $7.4 billion, essentially equal to the first quarter of 2005, and up 2 percent on a comparable business basis.
Performance Materials – PTOI was $137 million versus $211 million in 2005, a decline of 35 percent, primarily resulting from significantly higher raw material costs, raw material supply disruptions, and an asset impairment charge of $27 million. First-quarter sales of $1.7 billion increased 6 percent on a comparable business basis, reflecting higher selling prices and volumes that more than overcame a negative currency impact. Revenue growth in engineering polymers and elastomers occurred in all major product lines and across all regions.
Safety & Protection – PTOI was $269 million versus $231 million in the prior year, largely as a result of sales growth in aramids, nonwovens, and solid surfaces. PTOI margins increased moderately as a result of effective manufacturing operations and fixed-cost leverage. First-quarter sales of $1.4 billion reflected double-digit growth before currency impacts.
Westlake Chemical and The Republic of Trinidad and Tobago announce joint development of ethane-based ethylene, PE, and other ethylene-derivatives project
Westlake Chemical Corporation and The Government of the Republic of Trinidad and Tobago (“Trinidad and Tobago”) announced that the parties have entered into a Memorandum of Understanding (MOU) for Westlake to develop ethane-based ethylene, polyethylene, and other derivatives project in that country. The project evaluation will be undertaken in conjunction with The National Gas Company of Trinidad and Tobago, Ltd. (NGC), and the National Energy Corporation of Trinidad and Tobago, Ltd. (NEC). Trinidad and Tobago has expressed an interest in becoming a minority equity partner in the project.
As currently envisioned, the project would use 37,500 barrels per day of ethane to produce 570,000 tons per year of ethylene, which would in turn be used to produce polyethylene and other derivative products. The project could be expanded in the future as more ethane becomes available. The capital cost is initially estimated to be approximately US$1.5 billion. The size, scope, and cost of the project are subject to further definition as the parties undertake a detailed feasibility study pursuant to the MOU. It is expected that the project would be financed through a project financing arrangement. The preliminary project schedule shows that construction would start in late 2007 and that the project would start operations in late 2010.
The National Gas Company of Trinidad and Tobago, Ltd (NGC) is a Trinidad and Tobago company charged with supplying natural gas and ethane to plants in Trinidad in support of the Republic of Trinidad and Tobago’s policies and programs to develop downstream energy sector projects. National Energy Corporation of Trinidad and Tobago, Ltd. (NEC) is a Trinidad and Tobago company that will assist project companies in acquiring facilities, equipment, materials, and logistics required in the ordinary course of constructing and operating developed projects.
Comments: The current trend in the polyolefins industry is to establish a position in regions having cost-advantaged feedstock via joint ventures or strategic alliances. The majority of the polyolefin suppliers have tried to form a position in the Middle East to accomplish this. Westlake seems to have formed a different strategy by looking into Trinidad. Natural gas prices in Trinidad average around $1.50 to $1.60. These prices are higher than the natural gas prices that remain in close proximity to the Americas market.
Westlake Chemicals will benefit from this MOU as the plants in the Middle East mainly cater to the Asian markets. Being in Trinidad allows them to compete effectively in the Americas market that does not have access to cost-advantaged feedstock. Trinidad also gains from this MOU by creating value for its natural resources via vertical integration.
Westlake Chemical Corporation owns and operates facilities for the manufacture of petrochemicals, plastics, and fabricated plastic products in North America, with sales on a global basis. After 30 years of presence in Asia, the Chao Group entered the U.S. market in 1986 with the acquisition of a polyethylene plant in Lake Charles, LA. This was the first facility to be operated by Westlake Chemical Corporation. In the following years, Westlake employed a combined strategy of acquisition, expansion of existing facilities, and new construction. The company currently participates in various olefins (ethylene, polyethylene), styrenics (styrene), and vinyl (polyvinyl chloride, vinyl chloride monomer, caustic, & fabricated products) markets. After many years of private ownership, the company went public in 2004.
Braskem and Pequiven to conduct feasibility for a petrochemical complex in Venezuela
Brazilian petrochemicals group Braskem and Venezuela’s state-owned petrochemicals company Pequiven announced their plans to complete in six months the feasibility studies for a US$1.5-2.5 billion ethylene and polyethylene production unit in Venezuela’s Jose complex.
The feasibility studies include an ethane gas cracker with the capacity to produce 1.5 million tons a year of ethylene and a unit to produce 1 million tons per year of polyethylene. According to Braskem, the main factors that motivated the decision to invest in the project were the cheap price of natural gas to be supplied by Venezuela’s state oil company PDVSA and the expected decline of the competitiveness of US petrochemical companies.
The project is expected to start production in 2010 or early 2011. In six months the two companies are expected to announce details of the project, including financing and the stakes each partner will take, Braskem said, adding that initially, the two companies will each have 50% of the project.
The project could also include second-generation petrochemical units and later a PVC production unit. This is the second large-scale project that Braskem and Pequiven are developing in Venezuela as the two companies are expected to announce in June the details of a US$300mn project to build a 400,000t/y polypropylene complex in Pequiven’s El Tablazo complex. El Tablazo is scheduled to start operations by end-2008.
Comments: The Jose complex in Venezuela was originally planned as a 50:50 joint venture between ExxonMobil and PDVSA. The joint venture was terminated recently. After the termination of the venture, Venezuela was in talks with Brazilian companies to replace ExxonMobil in the project. Earlier this year there were speculations that such a deal between Pequiven and Braskem was in the works. The impetus behind this deal was the exit of ExxonMobil from its deal with Pequiven. After the deal between ExxonMobil and Peqiuven fell apart, Pequiven was looking for another partner in Latin America. With this announcement, the rumors regarding Braskem and Pequiven working towards forming a deal have been substantiated.
Borealis introduces new XLPE cable compound
Borealis announced the addition of another grade to its Supercure™ high productivity energy cable compound product portfolio by offering a crosslinked polyethylene (XLPE) insulation solution for long-term performance cables.
The first of its kind, Supercure LC8205 combines water tree retardant properties with faster crosslinking, ensuring the longevity of the cable and quick production runs benefiting both cable makers and power distributors.
According to the company, it is introducing a new, advanced insulation solution that not only allows cable manufacturers to deliver cables with high performance over the long term but which also offers them the ability to achieve better capacity utilization thanks to faster and more cost-effective production runs.
Supercure LC8205 is based on a combination of Borealis water tree retardant copolymer technology for medium voltage cables and the patented Supercure high-productivity technology. Supercure productivity enhancement technology ensures that LC8205 maintains a high level of cable quality whilst at the same time increasing cable plant productivity. Crosslinking occurs faster in the curing tube, allowing a 30 per cent increase in line speed. Reduced production costs result from higher productivity.
The enhanced water tree retardant copolymer technology achieves outstanding results by reducing the growth of water trees thus extending cable lifetime. Supercure LC8205 is developed to meet industry standards for accelerated wet aging, including Cenelec HD 620 (2000).
Comments: Borealis and other manufacturers/converters of polyethylene resins have been using crosslinking techniques to enhance the performance of their products for many years.
Crosslinked polyethylene may be produced via (1) continuous vulcanization – peroxide, (2) moisture curing – silane, and (3) e-beam or gamma radiation.
Due to its cost performance attributes, moisture curing had made significant inroads into W&C applications. Moisture curing involves the use of a siloxane bridge to link polyethylene molecules together. The first step involves the grafting of the silane compound onto the polymer chain to form the vinyl silane copolymer. In general, silane crosslinking is initiated by treating a polyethylene grafted to a vinyl silane such as vinyltrimethoxysilane or vinyltriethoxysilane with water. Although standard crosslinked polyethylene grades are commonly used for low voltage applications, at higher voltages such grades may experience water treeing. To circumvent this problem, suppliers such as Borealis have introduced water tree retardant grades which provide increased performance without impacting processability.
ExxonMobil Chemical introduces new Santoprene TPV Grades for a more harmonized car appearance
ExxonMobil Chemical has developed two new Santoprene™ thermoplastic vulcanizate (TPV) grades for the automotive market. The grades address automotive original equipment manufacturer (OEM) demands a more harmonized appearance in exterior components. According to the company, automotive OEMs are constantly searching for ways to improve appearance and the latest trend is to harmonize the look of exterior components.
One new grade adheres to thermoplastic elastomer (TPE) systems and existing EPDM rubber profiles. The grade has been designed primarily for glass run channel corner molding applications that require a low coefficient of friction (COF). Exhibiting a level of bond strength and compression set to provide good sealing performance, the grade has good melt flow properties to produce a glossy, smooth finish which can help to harmonize the look of a car. The grade eliminates the need for a secondary coating often applied to corner molds, which can help to reduce system assembly costs. Available in hardness of either 70 Shore A or 80 Shore A, this grade can also be used for end caps and special fixation applications.
A second new grade allows the finish of a part to be matched to car components made from different thermoplastic or rubber materials. Through tooling, the appearance of the part can be adjusted to match a glossy, shiny, or matte look. Used for molded weather seals where the visual aspect is important, the grade also offers the following attributes: easy injection molding particularly for complex part geometries; good sealing performance; high flow characteristics for smooth surfaces; excellent elastic recovery; minimal part warping; and the ability to bond.
As well as harmonizing the appearance of car exterior components, these bonding and molding grades exhibit the usual benefits of a TPV: low specific gravity for lower part weight; good aging for longer part life; low compression set; and wide temperature range performance.
Comments: Congratulations to ExxonMobil –AES to reach out and understand the customer needs to tweak their product offerings to meet their customer needs.
An issue that is more important and more pressing is that Monsanto – AES – now ExxonMobil’s SANTOPRENE still achieved only a small fraction of its declared capabilities of the original TPV concept from the mid-1980s. The real challenge will be to move beyond SANTOPRENE and GEOLAST which are 22 years old and remain highly specialized.
LG International to invest $200 million in PP joint venture with PetroVietnam
The Viet Nam Oil and Gas Corporation (Petro Vietnam) and Korean LG International announced their plans to build a polypropylene plant in Vietnam.
The companies plan to invest about $200 million in the plant with a planned capacity of about 150 KT per year of polypropylene. The plant will be located in Vietnam in the Dung Quat economic zone of central Quang Ngai province.
The factory, to be fed by the propylene source from the Dung Quat oil refinery, will turn out roughly 150,000 tons of polypropylene per year. The project is part of the Korean group’s investment scheme, which is strictly in line with Vietnam’s chemistry development strategy.
Comments: LG International, headquartered in Seoul, South Korea, specializes in the trading of metal, chemicals, petroleum, electrical, and machinery. LG International is divided into seven divisions including (1) petrochemicals, (2) metal & coal, (3) energy, (4) food, (5) plant, (6) machinery, and (7) IT. The company’s first involvement with petrochemicals was in 1984 when it entered into a joint venture with SABIC for the NPC plant. Since then, the company has invested in Oman Polypropylene and LG Dagu. The company’s profits are vulnerable to raw material prices and hence it has decided to invest in the manufacture of high-growth products.
This will be the first polyolefins project for PetroVietnam. The company has been considering building a refinery and petrochemical complex for a long time now.
Huntsman forms green chemistry strategic business unit
Huntsman Corporation announced that it has formed a new strategic business unit dedicated to the enhancement of the Company’s Green Chemistry initiatives.
Examples of Huntsman’s existing green, or sustainable, chemistry products include propylene carbonate-based solvents that reduce toxicity in applications from agriculture to industrial cleaning agents, carbonates that reduce volatile organic compounds in paints, wood preservatives that replace a known human carcinogen, waterborne paint primers, non-brominated flame retardants and catalysts that eliminate emissions from insulation foams.
Comments: Huntsman Chemical recently announced that they were splitting the company into two separate divisions or areas; (1) commodities and (2) specialties and performance chemicals. Performance Chemical Groups within Huntsman include Huntsman Advanced Materials, the new textile chemicals group recently acquired from Ciba, polyurethanes, and pigments to name a few. The Green Chemicals Group is not only timely but also enhances the strategic direction of the company, to transition out of commodities and into performance or enhanced materials.
The company has said that these two company sections will be stand-alone independent business units with possibly separate stock issues. Mr. Stanutz’s comment about Green Chemistry linked to energy conservation is right on. Since a major portion of standard petrochemical is hydrocarbon or energy content, it is advantageous to find ways to use renewable products as feedstocks. This sounds like the objective or at least a primary objective of the new Huntsman initiative into Green Chemistry.
We would expect Huntsman will populate this new business area with internally developed products and possibly with acquisition candidates as has been their mode of operation for much of the growth of the now sizable company. Green Chemistry is a good strategic move.
Kraton Polymers to expand its operations in Asia Pacific
Kraton Polymers LLC announced its plans to expand its presence in the Asia Pacific region. Kraton’s investment plans include a multi-functional customer service center and a proprietary Kraton® G manufacturing plant. In addition, several new leadership positions have been created to ensure Kraton has the expertise, experience, and resources in the region to meet the growing demands of its customers.
The new customer service center, to be located in China, is projected to be operational in the first quarter of 2007 and will include both distribution capabilities and technical product support for customers in the region.
The distribution center will include storage, packaging, and limited finishing capability for Kraton D, Kraton G, and IR products. The distribution center will improve product availability, reduce order lead times, optimize logistics, and improve overall service levels for customers in the Asia Pacific region.
The new technical center will serve customers in the Asia Pacific region, providing product testing, quality assurance, customer service, as well as targeted product development. Kraton will maintain its technical center in Tsukuba, Japan to provide technical service and support to the local Japanese market.
As part of its Asia Pacific expansion strategy, Kraton is evaluating the construction of a 30,000 tpa hydrogenated SBC manufacturing facility in the region. This new facility would employ Kraton’s latest state-of-the-art technology for producing its Kraton G products and would set a new global standard for manufacturing costs and product quality. Kraton has initiated engineering, is in preliminary discussions with potential partners, and will soon commence a site selection and approval process. Kraton believes a plant could be operational as early as 2009.
Comments: Kraton Polymers is the largest producer of styrenic block copolymers in the world, having over 60% of the hydrogenated SB Copolymer market share globally and close to 70% in North America and Europe. Kraton’s presence in Asia has not been significant as compared to North America and Europe.
China and the Asia Pacific region have shown strong growth in the SB Copolymer markets in recent years with the growing construction and automotive industry. The planned capacity for hydrogenated SBC in China to meet China’s growing economy will increase Kraton Polymers’ presence in the region. The current demand for SEBS in China is over 20 million and is forecasted to grow by over 10% annually.
Kraton G (hydrogenated styrenic Block Copolymer) is most commonly used for applications such as (1) polymer modification, (2) fibers, (3) viscosity index modification, (3) film (4) automotive (5) adhesive (6) wire & cable and (7) consumer products.
BASF to double production capacity for engineering polymer Ultrason®
BASF announced its plans to double production capacity for the engineering plastic Ultrason® (polysulfone and polyethersulfone) at its Ludwigshafen site. The expansion to 12,000 metric tons per year is expected to be completed by the end of 2007. In addition, the company will build a new logistics and packaging center for Ultrason®. The two projects will involve a capital expenditure in the mid-double digit million euro range. A total of 23 new jobs will be created.
The company said that its decision to expand capacity was in response to constantly growing global demand from its customers and it has developed many new applications for Ultrason® in all regions.
Plastics marketed under the Ultrason® brand are used, for example, in car headlamp units, engine cooling, and lubrication systems, in a wide range of electrical applications as well as in aerospace components. The plastics are particularly suitable for use at temperatures of up to 220 degrees Celsius. Ultrason® is produced exclusively in Ludwigshafen. Global marketing and application development are also managed by Ludwigshafen.
Comments: Ultrason is BASF’s tradename for their high-temperature engineering thermoplastics polysulfone (PSU, Ultrason S series) and polyethersulfone (PES, Ultrason E series). Both polymers are transparent, high-temperature, high-performance engineering thermoplastics. The high constant use temperature, 160 °C for PSU and 180 °C PES, combined with high mechanical strength, broad chemical resistance, and good hydrolysis resistance makes them good candidates in applications where the performance requirement exceeds the capabilities of polyamide, polycarbonate, polyoxymethylene, and polyalkylene terephthalate. With a price of more than $4/lb, they are mainly used in high-end applications in automotive, electrical, and aerospace. However, this does not prevent the demand from growing. BASF had been able to develop new applications for Ultrason. This newly announced expansion is a good demonstration.
Rhodia to construct a new polyamide unit in South Korea
Rhodia announced its plans to construct a polymerization unit at its integrated production platform in Onsan, South Korea. With an annual capacity of 48,000 tons, the unit will start polyamide production at the end of 2007. This investment of almost 40 million euros will strengthen the market position of Rhodia in Asia.
The new facility will produce nylon salt and polyamide 6,6 polymers. Strengthening its position in Asia is a priority objective in the strategy of Rhodia, which brought also a new engineering plastics facility on a stream near Shanghai, China.
Rhodia Polyamide is an upstream integrated company providing intermediates for polyamide and other applications, polyamide polymers, as well as a complete downstream range of added value products including engineering plastics polyamide 6.6 and 6 based, industrial polyamide yarns, technical and consumer polyamide fibers and textile yarns. With seventeen state-of-the-art production facilities along with R&D and technical centers, Rhodia Polyamide serves customers on every continent, with the capability to develop products and technologies locally.
Comments: Polyamides, commonly referred to as nylon is one of the important businesses for Rhodia, accounting for about 34% of the group’s total sales. Rhodia is one of the leading players in the polyamide industry, with a global number 2 position in nylon 6,6 and a number 3 in engineering plastics and nylon 6. The top two global producers of nylon resins (engineering plastics) are DuPont and BASF. The company has polyamide manufacturing plants in several locations including Brazil, France, Poland, and Asia. The company is very well integrated into the polyamide value chain which involves the manufacture of intermediates for nylon manufacture as well as textile yarns.
Asia being one of the fastest-growing regions for polyamides is the obvious choice for additional capacity investment. Earlier this year, the company had restructured itself into three main divisions: (1) performance materials, (2) applications chemistry, and (3) organics & services. Polyamide and acetow segments are now part of performance materials.
ExxonMobil affiliate Tonen expands microporous films for battery separators
ExxonMobil’s affiliate in Japan, Tonen Chemical Corporation, announced the expansion of its microporous film production capacity by more than 50 percent at the Nasu Plant to satisfy strong demand and high growth in the lithium-ion battery separator market.
This investment is the third in a series of expansions supporting Tonen’s leading separator supply position with electronics companies and battery manufacturers. The Nasu production facilities were previously expanded in 2004 to meet strong demand in the markets for handheld battery-powered devices.
ExxonMobil’s affiliate, Tonen Chemical Corporation, commercialized and produces a thin, polyethylene-based, porous film that is used as a separator in rechargeable lithium-ion batteries used in small electronics such as cell phones, laptop computers, and digital cameras. The film is thin, yet strong, helping to increase the stability and reliability of lithium-ion batteries. Its homogeneous pore structure provides exceptional performance that maximizes battery safety. The film closes its pores if excessive heat is generated during the chemical reaction in the battery stemming the flow of lithium ions between the anode and cathode. This minimizes the potential for short circuits and battery rupture.
Comments: Battery Separator is a porous electronic insulator placed between positive and negative electrodes to prevent electrical short circuits while allowing ionic current to flow through the separator. The different materials used for the manufacture of battery separators include natural rubber, PVC, cellophane paper, polyethylene, nonwoven PP film, and others. These are mainly used in lithium-ion, nickel-cadmium, and other type of batteries. The major producers of battery separators include (1) Cellgard, (2) Amerace Microporous Products, (3) Entek International, (4) Tonen, (5) Ube, (6) Scimat, and others.
Alcoa Packaging & Graham Packaging announce a partnership agreement to provide enhanced container solutions
Alcoa Packaging, a business of Alcoa Packaging & Consumer and a leading manufacturer of printed flexible packaging and custom thermoforming announced the formation of a preferred partnership agreement with Graham Packaging, a manufacturer of customized blow molded plastic containers.
Through the preferred partnership agreement, both firms can provide total container solutions to their customers as the complementary capabilities of Alcoa Packaging’s award-winning printed shrink sleeve labels are combined with those of Graham Packaging’s blown containers for the branded food and beverage, household, specialty, and automotive markets. Now both firms, with co-promotional sales, marketing, and service teams, can move customers from concept to market with containers and flexible packaging solutions that will increase shelf visibility, brand awareness, and functionality.
Alcoa Packaging is one of the leaders in the printed shrink label industry, providing design services and up to 10 color rotogravure and flexographic printing on a variety of shrink sleeve substrates, superior on-site technical service, and management of inventory logistics for multiple account locations with limited turnaround time. Alcoa Packaging continues to be innovative with its shrink sleeve label offerings by continually reviewing new substrates and printing and ink technologies that provide optimum performance.
Comments: Through this agreement, the customers of both these companies will be able to take advantage of bundled packaging solutions.
Graham Packaging focuses on the sale of value-added plastic packaging products, mainly containers principally to large, multinational companies in the food and beverage, household, personal care/specialty, and automotive lubricants categories. The Company has manufacturing facilities in Argentina, Belgium, Brazil, Canada, Ecuador, Finland, France, Hungary, Mexico, the Netherlands, Poland, Spain, Turkey, the United Kingdom, the United States, and Venezuela.
Alcoa Packaging, based in Richmond, Virginia, manufactures a variety of packaging materials including extrusion and adhesive laminated pouch materials, overwraps and liner stock, blister lidding foil, thermoformed trays, cable wrap, plastic shrink sleeve body labels, shrink film, and laminated foil. These packaging materials serve the world’s leading consumer products manufacturers within the pharmaceutical, medical, food & beverage, and industrial markets.
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