Total Petrochemicals to invest in polyolefin– increase in PP capacity
Total Petrochemicals announced its plans to increase its polypropylene (PP) capacity significantly. Total will build a PP line at its La Porte, TX site or at another, undisclosed location, with a minimum capacity of 300 KT by 2008 or 2009. The company is planning to use Spherizone or Spheripol PP technology licensed by Basell. Total added 100KT PP capacity plant at La Porte at the end of 2004, raising the total there to 1,060KT and making La Porte the world’s largest PP site.
Total had also debottlenecked its PP Plant at Feluy, Belgium by 10%, to 800KT. The expansions at La Porte and Feluy, as well as some capacity at Gonfreville and Lavéra, France, have given a total of 2,300KT of PP capacity worldwide. That makes it the fourth-largest player in capacity terms, trailing Basell, Sinopec, and Innovene. Total’s PP capacity will rise to 2,500KT by the end of 2007 after Samsung Total Petrochemicals completes its plant, which will raise the capacity at Daesan to 500KT. Total is expected to add a further 300KT of PP capacity in Europe by 2008-09
Comments: Polypropylene demand is projected to outpace capacity till 2007. Total‘s expansions in both the United States and Europe seem to bring a balance between supply and demand. However, if supply outpaces demand then polypropylene margins may not recover. Polypropylene margins are already under pressure due to the unavailability of propylene. Propylene prices have increased significantly due to shortages but polypropylene producers have not been able to increase prices at the same rate. According to some estimates if propylene production is not increased using metathesis and other technologies then there could be a shortage of propylene by 2011. Therefore these capacity increases could negatively impact polypropylene margins.
Basell introduces new Hostalen®HDPE grade for blown film applications
Basell has developed a new HDPE grade, Hostalen GX4041 for blown film applications. The new grade offers a combination of stiffness and impact strength for applications such as lamination film, release film (bitumen film), paper-like film, label film, bags, and heavy-duty bag packaging. Basell’s Hostalen Advanced Cascade Process (ACP) was used to produce the new product.
Industrial trials have shown that Basell’s Hostalen GX4041 can offer approximately 30-40% improved dart drop performance capabilities versus the current market benchmark, Hostalen GM9255F2. In addition, Hostalen GX4041 can be used to produce the film with a very broad conversion window, good lay-flat properties, and excellent roll configuration.
Comments: Unlike LDPE, linear polyethylenes like LLDPE and HDPE have the disadvantage of poor melt tension and flow characteristics. These characteristics contribute to the poor processability of the resins. Typical problems encountered during processing are lower extrusion outputs, higher back pressures, increase utilization consumption, and lower line speeds. Due to the lack of long-chain branching, HDPE producers developed bimodal resin technology to overcome some of the above limitations. Bimodal technology allows for better control of molecular weight distribution, resulting in resin that is not only easier to process but also exhibits better mechanical performance. Hostalen was one of the first bimodal technologies on the market. Although known better for pipe-grade resin, Basell has been improving the process and catalyst technologies to make leading film-grade resins. The recently developed resin provides the needed combination of stiffness and impact balance for many blown film applications.
Basell expands melt-blown grades by commercializing high melt-flow Metocene PP
Basell has extended its product portfolio of commercially available metallocene-catalyst-based polypropylene resins marketed under the Metocene brand. Extensive pre-commercialization production runs using proprietary Avant M metallocene catalyst systems were carried out at Basell plants in Wesseling, Germany, and Bayport, Texas.
The new high melt flow grades for melt-blown fiber extrusion applications are now available. This new generation of metallocene catalysts permits the production of low-viscosity, high-melt flow resins directly in the polymerization reactor without the need for peroxide coating or an additional visbreaking step by the converter.
Peroxide-free Metocene melt-blown resins offer a cleaner and more consistent product with benefits such as prolonged time between die clean-ups, reduced scrap rates, elimination of spinning smoke, and increased output. The improved productivity is complemented by improved softness and barrier properties desirable for nonwoven fabrics.
Comments: Basell is the largest producer of polypropylene in the world and a major producer of polyethylene and catalysts. The company is a global leader in the development and licensing of polypropylene and polyethylene processes. Basell, together with its joint ventures, has manufacturing facilities around the world and markets products in more than 120 countries.
The melt-blown process is used for producing fibrous webs or articles directly from polymers using high-velocity air or an alternate appropriate force to attenuate the filaments. This process is unique because it is used almost exclusively to produce continuous microfiber that has diameters ranging from 2 to 4 microns and as large as 10 to 15 microns. Differences between PP melt-blown nonwoven fabrics and other fabrics include the degree of softness, strikethrough, and porosity.
Meltblown fibers are produced similarly to that spun-bonded fibers. However, upon passage through the extrusion orifice, the molten polymer is accelerated by high-velocity hot air jets, which reduces the filaments to a micro denier size.
The total demand for melt-blown PP nonwoven fabric in North America was 278 million pounds in 2004. The major end-use applications for melt-blown PP nonwoven fabrics include (1) hygiene, (2) medical, and (3) industrial applications such as filtration, sorbents, and wipes.
Chinese firm Shuangliang Group invests in BOPP film
China’s Shuangliang Group has bought four new bioriented polypropylene (BOPP) film lines from machinery supplier Brückner Maschinenbau. The investment is considered to be the largest single investment in the BOPP film industry.
The project started two years ago with the last of the four lines just starting production. The first of the new machines, consisting of three 8.2 meter-wide lines and one 6.6 meter-wide line, was installed in April 2003.
The Brückner lines at Shuangliang are based on twin screw extruders and run at speeds up to 450 meters a minute. Shuangliang Group is based in Jiangyin (Jiangsu Province, near Shanghai) and uses the new lines to produce a variety of BOPP films used for laminating, printing as well as co-extruded, metallizable, pearlized matt film and low heat sealable film.
Comments: As such BOPP film projects are being completed, the Chinese BOPP film market is becoming severely over capacity. The Chinese BOPP film industry was quite profitable before 2002, which led to an explosion of capacity expansion. In China from 2001 to 2003, more than 70 new BOPP film lines have been built. The total BOPP film capacity increased by 28% to 1,760 KT in 2004. It is estimated to increase to around 2,000 KT by the end of 2005. In the meanwhile, the domestic demand for BOPP film is only around 1,150kt in 2005. Therefore, there is around 850kt extra BOPP film capacity. As a result, it is expected that Chinese BOPP converters will continue to compete on price in the domestic market. At the same time, they will try to export to other regions such as India and Bangladesh. The global BOPP converters have already started to feel the pressure. The competitive scenario of BOPP film could further intensify in the next five years.
In the last five years, Chinese demand for BOPP film has been growing at double digits. It presents a good opportunity for BOPP resin suppliers. Chinese domestic suppliers such as Sinopec and PetroChina subsidiaries mainly produce general-purpose grades. Performance grades for high-speed machines are mostly imported. Most of the BOPP film equipment in China is imported “state of the art” equipment. Bruckner is the dominant equipment supplier with roughly 50% of the market share. The other suppliers include Mitsubishi and DMT. Domestic resin suppliers are catching up in the technology. However, in the next five years, there are still plenty of opportunities for global BOPP resin suppliers.
Fortron Doubles PPS Production in the U.S.
Fortron Industries from (Wilmington, NC), a joint venture between Ticona and Kureha Chemical Industry (Tokyo), will double its linear polyphenylene sulfide (PPS) capacity at Wilmington, to 15KT by the first half of 2007. The company is expected to invest $65 million in the expansion. The company claims that the Wilmington facility will be the world’s largest PPS plant after the expansion.
Comments: Polyphenylene sulfide (PPS) is a semicrystalline material that offers an excellent balance of high-temperature resistance, chemical resistance, flowability, dimensional stability, and electrical properties. PPS can be loaded with reinforcement fibers and fillers for injection molding. Because of its low melt viscosity, PPS can be loaded as high as 70% with a variety of fillers and reinforcements. PPS, which can be compounded or reinforced, is usually injection molded. The main properties advantage for Polyphenylene Sulfides (PPSs) includes (1) good heat resistance, (2) chemical resistance, (3) dimensional stability, (4) impact strength, and (5) electrical properties. PPS is inherently flame-resistant because of its chemical structure of 70% aromatic compounds and 30% sulfur.
The total demand for PPSs in North America is over 50 million pounds. Injection molding constitutes almost 95% of the total PPS demand. The biggest application for PPS is in electrical and electronic parts.
The primary use of PPS is electrical connectors and compounds because of the material’s high heat deflection temperature, flame retardance, and ability to fill long, thin sections. PPS is also used in automotive applications such as engine sensors and halogen lamp sockets. Other applications for PPS include appliance applications such as small switches, heater internal housings, electric motors, end bells, and brush holders.
The major suppliers of PPS include Chevron Phillips, Ticona, and Dainippon Int. and Chemicals (DIG). The PPS market has been growing at double digits and suppliers are expanding capacity to satisfy demand.
Alcan Restructures its Packaging Business
Alcan has announced changes in two of its packaging business sectors aimed at improving their positions in their respective market segments. Alcan will close its Cayey pharmaceutical glass vial operation, based in Puerto Rico, to streamline its North American vial manufacturing network. Poor demand for glass vials in the Puerto Rican market is the main reason Alcan is taking this measure. In the food packaging sector, Alcan has completed the sale of its Pet Plas Packaging Ltd. food plastic bottles company to Esterform Packaging Limited, based in Tenbury Wells (Worcestershire), United Kingdom. The closure of the Cayey facility will affect 62 people and is expected to occur by October 9, 2005. The plant’s production lines will be redistributed to other glass tubing plants in North America. This closure will not affect the plastics packaging operations also located in Cayey, Puerto Rico.
Esterform Packaging Limited specializes in blow-molded and injection-molded plastic bottles primarily for beverages including juice, soft drinks, water, and dairy. Pet Plas, a manufacturer of custom PET Plastic bottles and preforms, employs 90 people and operates one plant in Leeds, England.
Comments: Alcan is a major player in the packaging industry and a leader in the aluminum packaging application. Alcan’s main market segments include (1) food products, (2) pharmaceutical, (3) personnel products, and (4) tobacco products.
In recent years the packaging industry has seen a shift from glass bottle packaging to plastic bottles mainly PET, HDPE, PP, and others. The move is in response to increasing market demand for lightweight packaging that is easily transportable, easy to store, and strong enough to provide ample protection for more perishable goods.
Goldman Sachs to purchase a stake in Treofan
Treofan Group, Raunheim, Germany, has gained approval from the European Commission for an ownership transfer to a U.S. equity firm. Treofan is a large global producer of oriented polypropylene film that has been troubled with heavy debt. The company, based in Raunheim, will be sold to New York-based investment firm Goldman Sachs and several other financial groups. The new owners will acquire Treofan’s debt, valued at more than 83 million euros ($101.6 million). The EU approved the sale on Aug. 1. The company has been restructuring its operations since April when negotiations started with Goldman Sachs. Treofan was formed in 2002 by merging three global film producers: Trespaphan GmbH, Shorko Australia Pty. Ltd., and Dor Moplefan Group SpA. The company had been co-owned by Dor Chemicals Ltd. of Haifa, Israel, and Boston-based equity firm Bain Capital LLC. Dor and Bain will retain a minority stake in the company.
Treofan is one of the world’s largest producers of cast PP and OPP films, producing about 628 million pounds of capacity annually. The company’s only North American production facility is in Zacapu, Mexico.
Treofan film is in packaging for snack foods, baked goods, chocolate bars, and candy. The company also makes packaging film for tobacco products and wraps metalized capacitors and coils.
Comments: Treofan Group was formed in 2002 by the merger of Trespaphan, Shorko, and Moplefan. The company has 285 KT of total capacity distributed across 11 production sites. The company has 22 BOPP lines, 10 cast lines, 6 metallizers, 2 pilot lines, 1 coater line, and 1 PLA line. In April 2005 the company announced that it has completed the first stage of its turnaround process by agreeing with its shareholders and creditors to the terms of a financial restructuring including the provision of an additional credit facility. In April 2005 the company envisaged t the Treofan Group, with existing shareholders, DOR Chemicals and Bain Capital, becoming minority shareholders. As a first step, Treofan Group strengthened its financial position through additional credit facilities from Goldman Sachs.
Now it seems that the company has completed the majority of restructuring and as planned Goldman Sachs will become the new majority shareholder of Treofan Group. The new financial structure is supposed to allow Treofan to accelerate its turnaround process and enable it to become a more successful business. The BOPP film market has been growing well however capacity growth in countries such as China has outpaced demand growth. It seems the merger of three companies was not able to provide the expected economies of scale or efficiencies. However, after the injection of new capital by Goldman Sachs the company might be able to improve its financials.
Noveon launches TPU plant in China
China’s first thermoplastic polyurethane production facility completed by a multinational company began operating early this month in Shanghai. The plant, Noveon Specialty Chemicals (Shanghai) Ltd., is a fully owned subsidiary of compounder and resin supplier Noveon Inc., a unit of specialty chemicals maker Lubrizol Corp. The location provides both the manufacturing facility and laboratory testing capabilities. The plant has full computer process controls requiring fewer employees. Noveon has reserved about 14 acres for the Shanghai subsidiary, including its TPU plant, with future expansions planned. The operation will sell 50 percent of its TPU products in China, and the rest to other Asia-Pacific countries. The main target applications are film and sheet, wire and cable, fabric coating, and specific injection molding applications.
Noveon currently operates three factories in Asia: Shanghai; Seoul, South Korea; and Seremban, Malaysia. The company also has labs in Shanghai, Beijing, and Hong Kong, and an office in Guangzhou. Lubrizol Corp. of Wickliffe, Ohio, acquired Brecksville, Ohio-based Noveon Inc. for $1.8 billion about a year ago. Noveon currently employs more than 3,500 worldwide and generates yearly sales of about $1.1 billion.
Comments: Thermoplastic polyurethane Elastomers have increasingly been used in several applications due to their high-performance characteristics. The main property advantage TPU bring include (1) abrasion resistance (2) low-temperature flexibility, (3) tear resistance, (4) weather resistance, (5) compression set (6) impact resistance (7) toughness, and others. The main markets for TPU include (1) automotive (Side moldings, Lumbar support, Constant velocity boots) (2) coated fabric (Inflatable rafts, Life vests, Protective clothing) (3) consumer goods (Footwear, Weatherproof clothing), (4) industrial (gaskets and seals, hoses and tubing, Film and Sheet, Wire and Cable, Caster Wheels) and (5) sporting goods (In-line skates, Ski boots) and others.
Noveon’s expansion in China is a result of the Asian market moving from more commodity-oriented products to higher-performance materials. The Asian market for PU materials has been growing at 7 to 9 percent annually with China having a growth rate close to 11 to 13.
ExxonMobil Chemical France to Expands Escorez(TM) 5000 Capacity in Notre-Dame-de-Gravenchon
ExxonMobil Chemical France is expanding its Escorez 5000 hydrogenated tackifier plant in Notre-Dame-de-Gravenchon by 50 percent. The plant is expected to be completed by the 1st quarter of 2007.
The investment in Escorez(TM) 5000tackifiers will help ExxonMobil to serve global demand for adhesives and demonstrates ExxonMobil Chemical’s long-term commitment to customers in the fast-growing, hot melt adhesive market.
Comments: The expansion will allow ExxonMobil to strengthen its position as a global supplier to the growing adhesive market. ExxonMobil Chemical has Escorez tackifier manufacturing facilities in the United States, France, and Japan.
The hydrogenated tackifiers are used in the manufacturing of hot-melt adhesives for nonwoven items such as diapers, training pants, feminine hygiene, and adult incontinence products and packaging applications.
The tackifiers comprise close to 35% of hot melt adhesive formulation. In recent years the hot melt adhesive market has seen a significant growth rate due to automation and a push for the industry to move away from solvent adhesives due to environmental issues. In the US the demand for adhesive in 2004 was over 15 billion pounds growing at close to 4.5 %.
Lawsuit Seeks Compensation for DuPont’s Teflon Customers
A Florida law firm is suing DuPont over alleged health problems associated with Teflon cookware and is seeking compensation for Americans that have purchased pots or pans coated with DuPont’s nonstick coating. The Attorneys at Kluger, Peretz, Kaplan & Berlin (Miami) claim that DuPont knew for more than 20 years that Teflon and its component chemicals had the potential to make people sick and hid that fact from customers. The law firm says it will file the suit in federal courts representing more than a dozen states.DuPont will defend itself against the allegations raised in this lawsuit, claiming that the government agencies have approved Teflon-coated cookware for conventional kitchen use.
The lawsuit wants DuPont to pay damages to every plaintiff, compensate them for purchasing replacement cookware, create a medical monitoring fund, create a fund for further research into possible adverse health effects caused by Teflon, and require that DuPont provide a warning label on cookware.
The lawsuit involves alleged health problems posed by gases released when the cookware is used, and the health problems associated with perfluorooctanoic acid (PFOA), which is used to make Teflon. EPA is assessing the potential adverse health effects of PFOA.
Korea to Ban Phthalates in Toys
The Korean government is planning to ban the use of phthalate plasticizers in toys and other children’s products, on safety grounds. The ban is expected to start next year according to the Korean Agency for Technology and Standards (Seoul), a state-run body.
The agency is temporarily restricting the use of phthalates in toys, a move that has been in operation in the European Union (EU) since 1999. The European Parliament recently voted to ban permanently the use of six phthalates in toys and certain childcare products in the EU.
Comments: PVC-made toys have been in the marketplace for close to over 40 years. To give PVC its excellent flexibility and softness, plasticizers are used in varying degrees depending on the design of the toy. In some toys, as much as 50% plasticizers are used. The plasticizers used in PVC toys are a family of compounds called phthalate, particularly diisononyl phthalate (DINP) is most commonly used in toys. Now the problem with phthalates is that over time, they tend to migrate or leach out of the PVC causing a possible threat to the child.
Some environmental organizations and scientists have announced that phthalates do leach from PVC toys at levels high enough to pose a risk of cancer or liver damage or to interfere with the development of young children. The most common toys affected by the ban include teething rings and rattles that are designed to be chewed.
Crown to Sell Its Plastic Closures Business
Crown Holdings, Inc. has announced that it has agreed to sell its Global Plastic Closures business to funds managed or advised by PAI partners, a leading European private equity firm. The purchase price of approximately US $750 million includes an assumption of certain liabilities. The net cash proceeds from the sale are expected to be approximately US $650 million and will be used for general corporate purposes including the repayment of debt. Approximately 75% of the proceeds will be paid in Euros.
Comments: Crown Holdings, Inc started in 1890 with William Painter inventing the bottle cap for soft drinks and beer. Today Crown Holding is a global leader in the packaging industry. The company is one of the largest producers of caps and closures in Europe. In Western Europe close to 495 billion closures were sold in 2004 with close to 40% being plastics.
The demand for plastic closures in Western Europe has been increasing by close to 5% attributed to the growth in the beverage industry. The growth of plastic closures is also influenced by inter-material competition mainly due to glass bottles moving to plastic bottles such as PET, and HDPE.
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