Qatar Petrochemical to Increase LDPE Production
Qatar Petrochemical Company (QAPCO) plans to boost the production of low-density polyethylene and ethylene by initiating a major de-bottlenecking. Currently, QAPCO is the largest producer of low-density Polyethylene (LDPE) in the Middle East with an annual capacity of 360,000MT. The company is also stepping up its annual ethylene production capacity to 700KT.
In association with Atofina SA, an affiliate of the TotalFinaElf, QAPCO is planning a JV – Qatofin – with a view to participating in the Ras Laffan Petrochemical project (Q-Chem II). The project envisages a polyethylene plant (LLDPE) with an initial capacity of 400KT.
Comments: QAPCO was established in 1974 as a joint multinational venture to utilize the associated and non-associated ethane gas from petroleum production in line with the industrialization plan of Qatar. QAPCO plant is situated on the seacoast and exports its entire range of products worldwide.
QAPCO commenced commercial production in 1981 with the main products being ethylene and LDPE. The company has both autoclave and tubular capacities for LDPE based on Enichem’s technology. The required feedstock, ethane gas, is supplied by the state-owned Qatar Petroleum (QP) for the production of ethylene, a significant part of which is then used in the production of various grades of LDPE, marketed under the ‘LOTRENE’ brand name. LOTRENE is mainly sold in the Middle East, Southeast Asia, and the Far East.
This expansion will help QAPCO to continue supplying to the growing LDPE market in Asia. The other suppliers of LDPE in the Middle East are based in Iran, Israel, Saudi Arabia, and Turkey. Kemya in Saudi Arabia is the next largest supplier with a total capacity of 220 KT.
Samsung Total to construct a new PP plant using Basell’s Spherizone technology
Samsung Total Petrochemicals Company Ltd. announced the selection of Basell’s Spherizone technology for a new 250 KT per year polypropylene plant to be built in Daesan, Korea. The start-up is planned for the end of 2007. It is the first Spherizone license in Asia and the fifth worldwide.
The Spherizone process is Basell’s newest polypropylene technology designed around the company’s patented multi-zone circulating reactor system which can produce bi-modal products in a single reactor. Basell began licensing the technology in 2003.
Tecnimont S.p.A. of Italy has been selected to prepare the basic design package; Samsung Engineering will do the detailed engineering. Samsung Total intends to purchase catalysts for the plant from Basell.
In addition to the new Spherizone plant, Samsung Total plans to expand its cracker, build a metathesis unit and increase styrene capacity at the Daesan site.
Comments: Since the commercial validation in 2002, the Spherizone process seems to be making inroads into the polypropylene industry. The technology hon streams the capability to produce products with unique properties as a result of the multi-zone reactor configuration. Many polypropylene producers are looking into this technology as a way to further differentiate their products. Besides Samsung Total, Indelpro, and Sahara Petrochemical have announced the construction of new Spherizone plants. The first of these capacities is anticipated to come on-stream in the third quarter of 2006 (Indelpro – 350 KT), with the other two coming on stream in 2007 (Sahara – 450 KT, Samsung Total 250 KT). For a detailed review of this technology, please see CMR’s “New Generation Polyolefins (NGP)” Bimonthly Review publication.
Basell to license Spherizone technology to Titan for construction of PP plant in Russia
Group of Companies Titan Limited announced the selection of Basell’s Spheripol technology for a new 180 KT per year polypropylene plant it will build at Omsk, West Siberia in Russia. The start-up is planned for 2007.
Based in Omsk, West Siberia, Group of Companies Titan was established in 1998 and is a leading Russian manufacturer of synthetic rubbers, MTBE, chemicals, and gasoline additives. This will be the company’s first polypropylene plant. Tecnimont S.p.A. of Italy has been selected by Titan as the engineering contractor.
Comments: Much of the polyolefins expansion and licensing activity over the past decade has concentrated in the Middle East and China.
The former is a result of advantaged feedstock and the latter is due to increased consumption, low labor costs, and export trends in converted products. However, in the past few years, activity in Eastern Europe and Russia has increased as the economies improve and as large chemical companies start to build downstream industries.
Basell has been one of the leading polyolefins companies in this region having licensed 1.6 million tons of polyolefins capacity.
ExxonMobil introduces two new Vistamaxx grades for spunbond
ExxonMobil Chemical today announced the addition of two new grades to its family of Vistamaxx(TM) specialty elastomers, both specifically designed to bring greater elasticity to the spun bond processing of nonwoven fabrics.
The new Vistamaxx grades, VM-2125 and VM-2120, are being introduced at INDEX 05 in Geneva, Switzerland, the world’s largest nonwovens exhibition. Vistamaxx VM-2125 (80 MFR and 0.865 density) exhibits high elasticity and low permanent set, while Vistamaxx VM-2120 (80 MFR and 0.868 density) offers medium-high elasticity and good recovery. Both grades offer excellent processability.
According to ExxonMobil, “A breakthrough attribute of Vistamaxx is that the polymer itself has elastic properties, enabling the resulting nonwoven fabric to be elastic right out of the spun bond processing machine. Its elongation and tension set characteristics offer elasticity that’s unlike other polyolefin polymers.”
Comments: Vistamaxx products are produced at ExxonMobil Chemical’s new facility in Baton Rouge, Louisiana. The plant allows the company to manufacture products ranging from amorphous elastomers to plastic-like polymers with varying molecular weights and compositions. Since the introduction of Vistamaxx specialty elastomers and the successful startup of a new metallocene elastomer plant, ExxonMobil Chemical has produced and sold commercial quantities of Vistamaxx in North America, Europe, and Asia.
For nonwovens converters using spunbond technology, the latest Vistamaxx products offer an innovative way to provide cost-effective elasticity in nonwovens fabrics. They can be spun in most spunbond lines to produce fabrics at typical polypropylene conditions and rates.
Web properties can be tailored by the selection of resin spinning condition and downstream treatment, resulting in fabrics over a wide range of elasticity that are soft, drapeable, and tear-resistant.
Toray to produce PP spunbond in China
Toray announced its plans to start producing PP spunbond in China to meet the growing demand for use in diapers and hygiene products.
It will finalize plant capacity in summer 2005 and the plant is scheduled to start up in 2006.
Comments: China is the new global growth engine and players across the industries want a part of the growth. As China continues to demand more and more materials chemical companies are starting to build facilities in China. This helps the producers in two ways: (1) it gives access to cheaper labor and thereby lowers production costs and (2) the growing demand in China is an outlet for the goods produced at the new facility. The demand for spunbond materials in China was close to 100 KT in 2004 with a projected growth rate of 11%. The demand for spun-bond polypropylene will increase by over 50KT in the next five years. This new capacity will allow Toray to participate in this growing market.
The global demand for spun-bond polypropylene in 2004 was 1,490 KT. The major application for non-woven fabrics include (1) personal care & hygiene, (2) geotextiles (3) home furnishing (4) industrial (5) healthcare (6) automotive (7) agriculture (8) apparel, and others. Personal care and hygiene have the largest consumption for spun-bonded polypropylene fabric with close to 34% of the total demand. The second largest is geotextiles with 13% of the total demand.
The spun-bond process is the most common method used to manufacture nonwoven fabric and bulk continuous filaments. In hygiene applications, the spun-bond fabric is used as coverstock for diapers and incontinence devices. In recent years this market has grown dramatically mainly because spun-bond processed polypropylene helps the skin of the user stay dry and comfortable. Additionally, spun-bond PP webs are more cost-effective compared to conventional nonwoven fabrics. Spunbond web, as coverstock, is widely used in sanitary napkins and to a limited extent in tampons.
In medical applications, traditional materials have been replaced by high-performance spun-bond webs. Spunbond fabric advantages include (1) breathability, (2) resistance to fluid penetration, (3) lint-free structure, (4) stabilizability, and, (5) impermeability to bacteria. Medical applications include disposable operating room gowns, shoe covers, and sterilizable packaging.
Other end-use applications for spun bonds include primary and secondary backing for needle-punched carpets and interlinings for furniture and wall covering.
Lantai Group to build 400 KT PVC plant in China
Lantai Group plans to build plants to produce 400 KT of calcium carbide-based polyvinyl chloride (PVC) in the Wusitai Development Zone, Inner Mongolia, China.
The RMB5.7 billion ($688.7 million) program will also include the building of a 250 KT per year chloralkali plant, a 600 KT per year calcium carbide plant, and two 150 megawatt power plants.
Experts in Beijing have assessed the feasibility of the project and recommended that the company pursue the PVC project in two equal phases. The first phase will cost around RMB3 billion. The company is securing land and environmental approvals for the project.
Lantai plans to start work on the project’s first phase at the end of June, with the start-up of the proposed units slated for 2006–2007. But, as the assessment has yet to be completed, it is unclear which of the proposed units will be built first and when they will start up.
Comments: China has been witnessing phenomenal growth and PVC is one of the materials experiencing this growth. China had approximately 7,400 KT of PVC capacity in 2004. This new plant will increase the Chinese PVC capacity by 5%. The growing Chinese market will easily absorb the additional capacity without any impact on the pricing.
There are other proposed projects that would bring the Chinese PVC capacity in 2007 to 9,500 KT. This new announcement will increase the total capacity to 9,900 KT. Overall the calcium carbide process has better cost economics compared to other PVC manufacturing processes.
BASF and Shell’s differences delay Basell sale
The sale of BASF and Shell’s polymers joint venture Basell has been held up by differences between the owners over which buyer to pick. Reuters reported last month that BASF and Shell were close to a sale of Basell either to Iran’s National Petroleum Company or a group of Indian investors.
Shell favored a sale to Indian trade buyer Haldia Petrochemicals and investor Purnendu Chatterjee because it wanted to continue to supply feedstock to the Netherlands-based group. By contrast, Iran has huge supplies of oil and natural gas and is investing heavily in refining capacity and could supply Basell’s plants.
Comments: The industry is awaiting the completion of the sale of Basell to determine its impact on the industry. The buyer of the company will influence the overall strategy and direction of the company. Further, if NPC buys Basell then there might be further opportunities to buy the United States portion of Basell.
NPC will also give the largest supplier of polypropylene access to cheaper feedstock and this could influence the overall cost economics of the industry.
Both the groups competing for the bid are in different parts of the world and are culturally different from the current Basell. The mixing of the cultures and operations will be interesting and could provide opportunities for a business school case study.
Mitsui Chemicals to introduce new elastomer with controlled crystalline structure in nano-order
Mitsui Chemicals has decided to launch a new line of alpha-olefin-based elastomers, made using metallocene catalysts, with the crystalline structure controlled in nano-order. The new elastomer will be marketed under the Notio trade name.
Notio will be commercially available in November this year. It will be manufactured at one of the existing plants at Mitsui’s Ichihara Works, after minor modifications of the plant. The facility will use the company’s proprietary metallocene catalyst technology. The new elastomer is projected to achieve annual sales of at least ¥1 billion by Fiscal 2008.
The company plans to market Notio for various applications including the protection films of electronic and optical parts and a variety of sealing materials. The nanostructure control of the material is supposed to provide superior characteristics in transparency, heat resistance, flexibility, rubber elasticity, and scratch resistance. As a modifier, the new material is expected to exhibit superior characteristics for use as an impact modifier for polypropylene. The blend is expected to provide better impact resistance and scratch resistance at high levels, without impairing transparency.
The heat-resistance property of Notio will allow its use in high-performance films for food packaging and its scratch-resistant characteristic will allow its use in the skin materials for automotive and construction parts.
Comments: Mitsui has been at the forefront of developing specialty polyolefins over the last two decades. In the early 90s, Mitsui signed joint-development agreements with both Exxon and Hoechst to address metallocene catalysts. Later, Mitsui and Dow cross-licensed the rights to certain metallocene-based ethylene/alpha-olefin copolymers and ethylene/alpha-olefins/propylene terpolymers. Today Mitsui participates in this market via its TAFMER product line including TAFMER A & P (ethylene-based) and TAFMER XM & XR (propylene-based). The current innovation by Mitsui seems to have utilized some of the benefits of nanotechnology. Nanocomposites have been projected to show high growth rates and the ability to span across a wide variety of applications. However, the markets have not yet seen significant commercialization in this area. If this product is commercially successful it might pave the way for other players trying to take advantage of nanotechnology.
Ticona launches next-generation COC for multilayer films
Ticona has announced that it has enhanced its Topas COC (cyclic olefin copolymer) to give blown film producers greater processing flexibility and the ability to make highly transparent films that are practically free of gels. The company claims that the new Topas 8007F-400 is an excellent choice for multilayer films in which it may be used in discrete or COC-rich layers. In blown films, it can be used in applications such as pouches, flow-pack, lidding, and twist wrap.
Ticona claims that when used in a multilayer blown film for twist wrap applications, it provides excellent stiffness, twist retention, and dead fold. Unlike Cellophane, they do not need a moisture barrier coating and offer overall cost benefits.
Comments: Ticona is one of the businesses of Celanese Corporation. Ticona produces and markets a broad range of engineering polymers with approximate sales of €675 in 2003.
Topas 8007F-400 is a clear cycloolefin copolymer that adheres well to polyolefins, especially linear low-density polyethylene. It can be metalized and colored easily and has an inherent moisture barrier that can extend product shelf life. It also has good thermoforming characteristics, a modulus of 2,500 MPa, and a glass transition temperature of 80°C.
Compared to polyvinyl chloride, they stretch less in wrapping, do not yellow at the twist, and pose no environmental issues as it does not have any plasticizers. Compared to oriented high-density polyethylene, they have a better dead fold, cut easier, and do not require changes in wrapping equipment. Ticona had recently announced its plans to exit the COC business. For more information, please refer to Global PO&E – Issue 06, Vol. 3.
Bayer and PTS Plastic Technologie join forces to develop TPEs
Bayer MaterialScience AG and PTS Plastic Technologie Service Marketing & Sales GmbH have signed a cooperation agreement to develop and market new thermoplastic elastomer compounds together.
The compounds are based on the thermoplastic polyurethane (TPU) Desmopan® from Bayer MaterialScience and special thermoplastic elastomers (TPE) from PTS. They will be marketed together under the trade name DesmoflexTM.
Comments: Bayer MaterialScience is one of the leaders in TPUs (trade name Desmopan®, Texin®) and has extensive expertise in the production, development, and use of TPUs. PTS is one of the leading producers of TPE compounds based on styrene block copolymers (SBCs, trade name PTS-Thermoflex) and thermoplastic vulcanized rubbers (TPVs, trade name Uniprene®).
This partnership will bring together Bayer’s expertise in thermoplastic polyurethanes and PTS’s position in styrene block copolymers and TPVs. PTS has been producing SBC compounds with small proportions of Desmopan® for a long time. Some of the areas of use include indoor and outdoor applications and the engine compartment of cars.
The use of TPU as one of the main components will offer new possibilities for combining the properties of both components. Desmopan® has good abrasion resistance, tear strength, and tear propagation resistance as well as high chemical resistance. SBCs, by contrast, are softer materials. Through intelligent compounding, innovative products with new property profiles can be developed.
Matrix Polymers signs Iranian supply deals
UK rotational molding material specialist Matrix Polymers announced its plans to extend its supply scope to Iran through different deals with Iranian producers Tabriz Petrochemicals and IPCC.
The first deal with Tabriz Petrochemicals covers the use of the group’s BP gas phase polyethylene technology for developing materials tailored to the needs of the rotomolding industry under the designed for Roto concept established by Matrix Polymers.
The second deal with IPCC gives Matrix the right to sell these improved materials to the European rotational molding industry.
Comments: The first decade of the new century is all about cost savings via excess to cheaper feedstock and supply contracts. This deal by Matrix Polymers is yet another example of companies expanding their reach in the Middle East in search of cost savings.
Matrix’s designed for Roto approach already covers partnerships with SABIC, in Germany, and Chemopetrol in the Czech Republic. This new deal will further strengthen its cost position.
The roto-molding industry has been plagued with decreasing profitability due to threats from vertical integration, competition among producers, and increasing raw material prices. Deals like this will allow the participants in the industry to maintain profitability in these tough conditions.
It remains to be seen if this deal will initiate a flurry of similar deals from Matrix Polymers’ competitors.
India and China strengthen business ties
Laying the foundation for the corporatization of two emerging world economies, India and China on Monday agreed to establish a “strategic and cooperative partnership” as leverage to negotiate with a changing global order.
Indian Prime Minister Manmohan Singh and his Chinese counterpart Wen Jiabao, while accepting that both countries would stand to gain substantially by working as partners rather than rivals, got down to the business of identifying areas of convergence. The result of the meeting was a bilateral trade target of $20bn in ’08. A regional trading arrangement has been proposed, which will be looked into by a joint task force.
The joint study group (JSG) has identified a series of measures related to trade in goods, services, investments, and other areas of economic cooperation, which could be achieved through the regional trading arrangement. A meeting of the JEG is planned within the next six months. The JSG has also said that a bilateral trade target of $30bn by ’10 is very much achievable.
Comments: Asia is the nexus of all trade agreements in this new world. It is only natural that the two largest populated and fastest-growing economies are combining their strengths.
Few developments would shake up things as much as the two most-populous and fastest-growing major economies combining their strengths. China, the world’s low-cost factory, and India, its low-cost intellectual power, could close the ranks against mature, aging high-cost nations. India under colonial rule for over 250 years maintained its cultural values intact in addition to acquiring “ENGLISH” the language of the world.
That could indeed be the future for Asia’s No. 2 and No. 4 economies. Wen and Singh are accelerating efforts to transform a relationship known more for conflict and rivalry into one of “peace and prosperity.”
NOVA says it is set for two rosy years
Nova Chemicals Corp. is expecting its profit to peak in the next two years spurred by a global surge in demand for its products — contrary to the general fear that the rising energy prices may hurt commodity-producing companies.
Nova, with $ 4.2 billion in market capitalization, made money in 2004 after three years of losses. “In our view 2004 just represents a jumping-off period. We’re going to see earnings peak in the next two years,” chief executive officer Jeffery Lipton said at the annual general meeting in Toronto yesterday.
Pittsburgh-based Nova is banking on the demand revival for its two key products — polyethylene and styrene monomer — which are used to produce plastics products such as grocery bags and automobile panels.
Nova posted an annual profit of $ 252 million (U.S.) or $2.91 a share for the year ended Dec.31, compared with a loss of $ 1 million or 2 cents a year ago, helped by strong revenue, the sale of assets, and a tax-related settlement.
Mr. Lipton said Nova is close to finalizing a 50-50 joint venture in a cashless deal with British Petroleum to set up styrene operations in Europe. “We hope that we’ll be fully operational by midyear, and on our way to reducing cost significantly in Europe,” he said. The joint operation is expected to create assets worth about £ 1 billion to expand their market in Europe and North Africa. Nova is also considering buying back more of its shares, a move that would increase share earnings.
Comments: The financial industry does not seem to be buying the rosy picture portrayed by NOVA. Prudential Equity Group cut its rating on NOVA from overweight to underweight and Smith Barney cut its rating on NOVA from buy to hold. The financial industry seems to be worried about the increasing cost of raw materials.
NOVA is not fully integrated into benzene and has to buy the expensive benzene from the market. The producers of styrene and polystyrene are not able to fully transfer the cost of higher benzene and this is a major concern related to NOVA’s profitability. NOVA has not announced any specific strategy to cope with this increasing benzene price. The financial industry will be skeptical of NOVA’s claims till the company announces its feedstock strategy.
Kuraray buys Celanese’s VECTRAN fibers unit
Kuraray announced its acquisition of Celanese’s Vectran polyarylate fiber business. Vectran had sales of approximately $6 million in 2004. A contract covering the purchase of all CAMI assets related to its VECTRAN business was signed on April 1, 2005.
The acquisition is expected to take place by the end of April 2005. Vectran is a fiber made from a liquid crystal polymer, which can be used to produce thermoplastic fibers and multifilament yarn.
Comments: This business is headquartered in Fort Mill, South Carolina, and is engaged in the development and sale of VECTRAN fiber throughout the Americas and in Europe. After the acquisition, this business will become a division of Kuraray America Inc., the US subsidiary of Kuraray Co., Ltd. This acquisition will make the Kuraray Group the world’s sole source of VECTRAN fiber.
VECTRAN fiber is made of polyarylate polymer which is a liquid crystal polymer and is commonly categorized as super high-performance fibers with ultra-high strength and high Young’s modulus. The special property of VECTRAN is a low creep, no moisture absorption, high strength retention at extremely low temperatures, and abrasion resistance in wet conditions.
VECTRAN fiber was selected for the special airbags used on NASA’s 1997 Mars Pathfinder landing vehicle, and then again in 2004 for the special airbags used on the Spirit and the Opportunity Mars rovers. Celanese has developed a broad range of applications for VECTRAN in the U. S. market, and this led to its use by NASA. In the American and European markets, VECTRAN is used for example in ropes for marine exploration and development, high-pressure inflatables, protective gloves, in the fields of civil engineering & construction, and optical cable.
Since VECTRAN manufacturing started in 1990, Kuraray has expanded its business through close cooperation with Celanese. This acquisition will allow Kuraray to strengthen its fiber business for industrial applications.
Oman to get the world’s largest plant to manufacture shipping pallets
The world’s largest plant to manufacture shipping pallets will soon come up in Oman under an agreement signed between the Sohar Industrial Port Company (SIPC) and PVAXX Industries LLC, a wholly-owned subsidiary of Bermuda-based PVAXX Limited.
The $230 million 100 per cent foreign-owned venture will produce in its initial phase 150 million PVAXX ‘Siluma’ pallets per year that will be mainly exported to the Far East and other countries. The company has already ordered 25 million pallets from Iceland, South Africa, and GCC states.
The build-own-and-operate project, in which PVAXX will invest $100 million, will be built on a 15-hectare area at the Port of Sohar in the Batinah region. Production is scheduled to start in the second half of the year.
Silica sand, the major raw material that is used together with polyethylene to manufacture the pallets, will be sourced from Oman and the other GCC countries.
Comments: This is an example of the construction of an end-use-related plant in the Middle East. Until now, the capacities coming on-stream were related to feedstocks. The plant in Oman will have access to cheaper feedstocks and also benefit from economies of scale.
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