Dow Chemical to construct petrochemical complex in Oman
The Government of the Sultanate of Oman, Oman Oil Company S.A.O.C. (OOC), and The Dow Chemical Company announced an agreement to form a joint venture that will design, build and operate a petrochemical complex in Oman. The joint venture will be owned 50% by Dow, 25% by the Government of Oman, and 25% by OOC.
Located in the Sohar Industrial Port Area, the petrochemical complex will comprise feedstock production facilities, a gas cracker, as well as three polyethylene production units. Further, the joint venture will facilitate the development of downstream industries in Oman that will convert polyethylene to end-products in Oman. Construction of the petrochemical complex is expected to begin in 2005.
Comments: Increasing feedstock costs coupled with a matured domestic market continue to prompt North American polyolefins producers to strengthen their position in regions offering (1) advantaged feedstock and (2) higher growth opportunities. Dow, at the beginning of the year, announced that it had started to take steps to better position the company to take advantage of shifting patterns of geographic growth. In order to leverage advantaged feedstock, Dow has started to increase its presence in the Middle East as witnessed by the above joint venture as well as its collaboration with PIC.
The products from the new polyethylene facilities are anticipated to help develop the downstream industry in Oman as well as satisfy the export market. Furthermore, the regional feedstock position should allow Dow to maintain higher margins and compete effectively with products originating from other Middle Eastern countries. Furthermore, Dow’s ability to leverage solution technology would allow it to differentiate its product offerings. However, it should be noted that the technology platform for the new plants has not been made available.
Mitsui Engineering and Iranian company National Petrochemical sign HDPE plant contract
Japan’s Mitsui Engineering & Shipbuilding Co., Ltd. (MES) and Mitsui Chemicals, Inc. (MCI), assisted by Mitsui & Co., Ltd. (MBK), jointly entered into a contract worth roughly 25 billion yen with Iran’s National Petrochemical Company (NPC) for construction of a high-density polyethylene (HDPE) manufacturing plant.
The HDPE plant with a design capacity of 300,000 MT/year will be constructed under a technology license from Mitsui for its HDPE production process, in Ilam located in western Iran, for Ilam Petrochemical Company (IPC) — one of NPC’s subsidiaries. Construction is scheduled to begin in April 2005, with completion expected in December 2007.
The number of HDPE plant orders won by MES will total 25 units including this time. For MCI, this will be the 41st licensed plant using its HDPE technology, with the cumulative licensed capacity reaching 4.5 million tons/yr, which altogether contributes to further strengthening MCI’s presence in the polyolefins field.
Comments: As a result of US policies, North American technology licensors cannot take advantage of the growing Iranian polyolefins industry. The National Petrochemical Co. (NPC) recently announced plans for 12 additional olefins units to supplement the four ethylene units and two crackers that are in the advantaged to planning stages. It is estimated Iran will account for over 30% of the capacity expansion in the Middle East. Mitsui and Basell have been the few leading process technology licensors that have been able to take advantage of the growing polyolefins industry in Iran.
The number of HDPE plant orders won by MES will total 25 units including this time. For MCI, this will be the 41st licensed plant using its HDPE technology, with the cumulative licensed capacity reaching 4.5 million tons/yr, which altogether contributes to further strengthening MCI’s presence in the polyolefins field. This project will represent Mitsui’s first license in Iran.
Basell has been much more active in Iran. To this date, Basell has licensed over 2.5 million tons of capacity (10 plants) including LLDPE, HDPE, and PP. Technologies licensed include Spheripol, Hostalen, Lupotech G, and Spherilene.
Mitsui’s technology is the preferred technology for HDPE in Asia and the Far East. Iran by its strategic location and its notoriety as a “member of the axis of evil” and less than optimum relationships with the true “middle east players” is hard to place in both the middle east and far east and occupies a special place.
Gas Authority India Ltd. (GAIL) to invest Rs. 647 Crore in agreement with Mitsui Chemicals for an HDPE unit
GAIL (India) Limited announced has signed a technology agreement with Mitsui Chemicals Inc., Japan, for setting up a new, dedicated high-density polyethylene (HDPE) plant with a capacity of 1,00,000 TPA at its petrochemical complex at Pata in District Auriaya, Uttar Pradesh. The project with an estimated cost of Rs 647 crore, is scheduled for completion by April 2006.
The agreement provides the license to GAIL to set up the HDPE plant based on Mitsui’s CX technology. The plant will also have the capability to produce MDPE and PE-100 grades. With this addition, the company’s present polymer capacity of 310,000 TPA will increase to 410,000 TPA with the new plant being set up.
GAIL has also proposed an investment of Rs 107 billion for enhancing its petrochemical production capacity and adding three more projects in different parts of the country. GAIL has also prepared a pre-feasibility report for the Assam Gas Cracker, which will have an estimated project cost of Rs 25 billion to produce 160,000 TPA of ethylene and a downstream unit of 160,000 TPA of LLDPE/HDPE. GAIL is also involved in a joint venture with Haldia Petrochemicals for the construction of a styrene-butadiene rubber (SBR) plant with a capacity of 100 KT. The investment for this plant is estimated to be approximately Rs 5 billion.
Comments: India has the highest capacity for HDPE, closely followed by LLDPE while LDPE lags way behind. The total capacity for HDPE in India was 1,020 KT. The major suppliers for HDPE in India include (1) GAIL, (2) Haldia Petrochemicals, (3) IPCL, and (4) Reliance. Haldia Petrochemicals is the largest supplier of HDPE with a total capacity of 410 KT followed by IPCL, GAIL, and Reliance Industries. GAIL had an HDPE capacity of 180 KT in Auraiva, Uttar Pradesh. This new capacity will increase GAIL’s HDPE capacity by about 50%.
The total demand for HDPE in India in 2003 was 825 KT. The major end-use markets for HDPE include: (1) blow molding, (2) film, (3) woven sacks, (4) pipes, (5) injection molding, (6) monofilaments, and others. Blow molding is the largest end-use market accounting for 23% of the total demand. The film is the second largest market accounting for 20% of the total demand.
The projected growth rate for HDPE in India is 7.9% annually, reaching 1,131 KT by 2007. Pipes are the fastest growing market for HDPE with a projected growth rate of almost 12% followed by film applications that are projected to grow at more than 10% annual rate for the next five years.
GAIL is taking advantage of this high growth rate for HDPE and trying to grow capacity at the pace of demand.
See the comment on Iranian HDPE. Mitsui’s HDPE is the preferred technology in most Asian countries including India. Basell has attempted to reach this market with their Hostalen process for a long time in vain. Mitsui’s HDPE process success in India is attributed to its superior customer service and market understanding.
USITC finalizes anti-dumping duties on polyethylene bags against Thailand, China & Malaysia
The U.S. International Trade Commission imposed permanent anti-dumping duties against polyethylene bag imports from three countries including China, Thailand & Malaysia. In a notice published in the Federal Register on July 15, 2004, Commerce announced that the final dumping margins range from 19.79 to 77.57 percent for China, from 84.94 to 101.74 percent for Malaysia, and from 2.26 to 122.88 percent for Thailand.
Upon publication of the antidumping orders in the Federal Register, which should occur by the first week in August, U.S. importers will be required to tender a cash deposit to the Bureau of Customs and Border Protection (Customs) on each entry sufficient to cover the estimated antidumping duties. Liquidation of the entries will be suspended until the actual margins of dumping are determined in administrative reviews conducted by Commerce. Importers’ ultimate antidumping liabilities at the time of liquidation may substantially exceed those announced in today’s Federal Register notice, depending on the outcome of administrative reviews. The duties apply to imports of bags made in China, Malaysia, or Thailand, even if they are transshipped through other countries on the way to the United States.
Comments: The anti-dumping complaint was filed by the polyethylene retail carrier bag committee in earlier 2003. In August 2003, USITC made a decision to continue with an unfair trade investigation. After investigation, USITC imposed temporary tariffs on the Asian countries exporting PE bags to the US, especially China, Thailand & Malaysia.
DSM-Idemitsu joint venture to close its EPDM plant in Chiba, Japan
The DSM-Idemitsu joint venture is planning to close its EPDM plant in Chiba, Japan by 30 September 2004. The decision to shut down the facility is part of an earlier decision by DSM Elastomers to rationalize its EPDM activities.
A new EPDM unit with an annual production capacity of 80,000 MT/year was opened by DSM Elastomers in Geleen, the Netherlands, in 2003. The company said this plant is now fully operational. Asian customers of the Keltan EPDM product will now be served from the Geleen plant and DSM’s other plant in Triunfo, Brazil. Almost all customers have re-approved products from these plants and phase-out plans for the Japanese plant are in place, said DSM.
Comments: The Japanese economy has been stagnant for the last decade and there has been a lot of capacity rationalization in the last few years. The economy in all the regions across the globe has slowed and has forced suppliers to use different strategies to improve their profitability. One of the strategies used by suppliers is to optimize the use of their assets on a global basis. As a part of this strategy, DSM is shutting its capacity in Japan and supplying from Brazil.
The total demand for DSM in Japan is around 310 million pounds with a projected growth rate of around 2%. The total EPDM capacity in Japan is around 440 million pounds which means an excess of 130 million pounds. With so much excess capacity the operating rate is at a very low uneconomical rate of 70%. With DSM closing its 88 million pounds EPDM facility, the capacity will be down to 352 million pounds boosting the operating rate to 88%.
Other major suppliers of EPDM in Japan include (1) Japan Synthetic Research, (2) Mitsui Petrochem, and (3) Sumitomo.
The picture in Japan is constantly changing as the polyolefins and elastomers industry comes to rationalization with movement from specialties and impact from other developing nations around. In addition, the recent movement of Mitsui (post-Sumitomo defunct joint venture) towards Idemitsu also has a lot of influence. Both Idemitsu and Mitsui have several common strategic factors: (1) oil company ownership, (2) olefins and derivatives focus, and (3) superior polyolefin technology and commitment to R&D.
BP considers moving the Olefins unit from Naperville to Houston
British Petroleum plc is considering moving the headquarters of its olefins and derivatives unit to Houston. The current headquarters are located in Naperville, IL. The move could affect as many as 500 jobs, according to BP. BP is to decide by the end of August if it will make the move or stay in Naperville.
The move would affect three separate BP units — headquarters, commercial, and research and development over a given period. Of the 500 jobs, roughly 200 each are in commercial and R&D, with the other 100 coming from administrative jobs related to the headquarters function.
Comments: BP’s predecessor AMOCO was the Standard Oil of Indiana and has operated in Chicago and its Naperville suburb for a long time. The Naperville facilities of Amoco Chemical Company underwent large structural changes in the past decade including some undesirable ones due to perceived health risks in the Naperville research facilities.
BP’s acquisition of Amoco’s movement of major strategic focus to London has reduced Naperville’s strategic role. The new organization, with a strategic focus on olefins and derivatives, can and will benefit immensely by being closer to its major operations and two of its potentially major competitors, ExxonMobil and Dow.
Houston, TX is the center of petrochemicals and plastics. A 200-mile radius around the Houston ship channel would account for over 70% of North America’s plastics production. Those of us who live in Houston are proud of this fact. Welcome to BP Newco, the future giant of olefins and derivatives.
Nova Chemicals continues to improve in second quarter 2004
NOVA Chemicals Corporation reported a net income to shareholders of $27 million for the second quarter of 2004. This compares to net income of $7 million in the first quarter of 2004.
The $27 million net income resulted from (1) a net income of $54 million from olefins/polyolefins; (2) a net loss of $25 million from styrenics, and (3) a net income of $2 million in dividends and distributions.
The improvements in the olefins and polyolefins of $20 million higher than the first quarter based on a total increase in the volume of 824 million pounds in the second quarter of 2004 compared to 791 million pounds in the first quarter. The sales of Novapol HDPE and LDPE remained unchanged with a reduction of 18% in Sclair LLDPE. Advanced Sclairtech volume increased by 18% in the second quarter of 2004.
Comments: Nova Chemicals’ revenues are estimated based on benchmark prices of major plastics consultants. Per notes in their Review of operations, the benchmark consultants implemented a 5-cent/pound polyethylene price increase in North America – originally announced for February 1, 2004, was delayed to May 1, 2004, and was implemented by the end of the second quarter. An additional increase of 4 cents/pound was announced on July 1, 2004. It is not clearly outlined if the increase in earnings was due to industry developments or due to one-time unexplained adjustments in the benchmark.
Thai firms PTT & Siam Cement consider joint investment in a polypropylene plant
PTT PCL, Thailand’s largest oil and gas conglomerate, and Siam Cement PCL, the country’s largest industrial conglomerate, have announced their plans to consider joint investment in a 400,000 MT/year polypropylene plant.
Meanwhile, PTT also plans to invest, along with National Petrochemical, in a $400-million low-density polyethylene project, having a capacity of 410,000 MT/year. If approved by the board, the construction will begin in mid-2005 and be completed in 2008.
Comments: The chemical industry has transformed in the last few years and suppliers and end users have been forced to develop global strategies. The globe can be divided into supply centers and demand centers. As the projected growth rate in the demand centers is very high, suppliers are adding capacity in those regions to satisfy the growing demand. The Asian region has been experiencing significant growth in recent years and suppliers have been forced to import materials to meet the growing demand. PTT is adding capacity to match this growing demand in Asia, especially in China.
The total capacity for polypropylene in Thailand in 2003 was 1,215 KT. The major suppliers of polypropylene in Thailand include HMC Polymers, TPI, and TPP. If PTT decides to add 400 KT of polypropylene capacity then the overall capacity will increase by over 30%.
The total capacity for LDPE in Thailand in 2003 was 250 KT. The major suppliers for LDPE in Thailand include Thai Petrochemicals and Thai Polyethylene. Both suppliers have autoclave capacity based on ICI technology. IT PTT adds 410 KT of LDPE capacity then which will significantly increase the total capacity for LDPE in Thailand.
Technip Awarded Contract by Sasol for a Polypropylene plant in South Africa
Technip announced that it has been awarded by Sasol a contract worth EUR 47 million for the construction of a polypropylene plant to be built at Secunda, South Africa. The plant is based on BP’s Innovene gas-phase technology.
This project will be carried out by Technip’s engineering center based in Lyon, France, which will perform engineering, procurement services, construction supervision, and overall project management, with support from Technip South Africa. The delivery of the plant “ready for commissioning” is scheduled to be completed in December 2005.
Comments: Sasol Polymers (formerly called Polifin) was formed through merging operations of AECI and Sasol and commenced operation in the early 1990s. On a global basis, Sasol accounts for a fairly small percentage of the overall polyolefins capacity. However, regional it is a significant player. Its olefins and polyolefins operations are limited to ethylene, propylene, alpha-olefins, and polypropylene.
The new plant will have an annual capacity of 300,000 tons and is due to commence production in 2006. It will have the ability to produce homopolymers, random copolymers, and impact copolymers. Currently, Sasol operates a 220 KT polypropylene unit in Secunda.
FlexPO2004 to feature the major issues impacting the polyolefins and elastomers industry – Sept 15-17, 2004 Galveston/Houston, TX
Based on an informal survey of the forward-looking professionals (those who look beyond supply, demand, and margin issues) in the polyolefin industry, the major influencing factors for the next 5-10 years include (1) the feasibility of polyolefin monomer alternate technologies, (2) impact of the future role of SABIC and PEMEX in North America, (3) The issues of Business migration in products manufactured, packaged, shipped and used based on polyolefins – and not just the resin, (4) Moving polypropylene into engineering and disposable packaging applications based on clarity, thermoforming and blending/alloying, (5) gaining better control on polyolefin product performance by innovations at the catalyst level, thus making third-party catalysts more important.
In addition, the perennial issue of PVC opportunities was also cited as an important trend for the next 5-10 years.
We at CMR Inc. have put together the best speakers and significant contributors “by invitation only” to present at our conference. Come and participate in an intellectual encounter on issues that will impact your business and mankind.
Chevron Phillips & Saudi Investment Industrial Group to construct an integrated styrene plant
Chevron Phillips Chemical Company LLC and Saudi Industrial Investment Group (SIIG) announced their plans to construct an integrated styrene facility and expand an adjacent aromatics plant at Al Jubail, Saudi Arabia. Financing for the estimated $1.2 billion joint venture project will be provided through capital contributions from the co-venturers and loans from commercial banks and Saudi government agencies. The startup is slated for 2007.
The engineering and procurement contract for the new facility was awarded to JGC Corporation and the construction contract was awarded to JGC Arabia Ltd.
When completed, the styrene facility will include feed fractionation, an olefins cracker, ethylbenzene and styrene monomer process units, and associated utilities and infrastructure. The existing aromatics plant that will be expanded as part of the project will supply feedstock to the styrene facility. The new styrene facility will be owned by Jubail Chevron Phillips Company, a 50/50 joint venture between SIIG and Arabian Chevron Phillips Petrochemical Company Limited, a subsidiary of Chevron Phillips Chemical Company LLC. The existing aromatics plant is owned by Saudi Chevron Phillips Company, another joint venture of SIIG and Arabian Chevron Phillips Petrochemical Company Limited.
Comments: Both Chevron Philips and Saudi Investment Group have a joint venture heritage of aromatics projects together so this step is a natural extension of the existing business platform. Given the current state of the aromatics markets, this expansion is a welcome sign of supply improvement for benzene and its primary derivative for buyers.
After a series of olefins-based projects announced in the region in the past year, this is the first major aromatic expansion announced. At a $1.2 billion price tag, this will undoubtedly be a world-scale facility with a capacity in excess of 700,000 MT per year of styrene monomer. Recent capacity/project trackers did not include this project. Excluding this project, over the next 4 to 5 years, about 4.5mm MT/yr of styrene capacity is being added globally, well over 50% of this in the Middle East and Asia. This capacity represents an increase in the expanded capacity base of approximately 15% of planned capacity expansion for the period so it is not insignificant in the global 28.0mm MT/yr styrene market. By coming on in 2007, it will be late in the cycle and a break for global buyers, a welcome relief for all, given the current superheated outlook for aromatics and derivatives.
Nova Chemicals Technology develops new VOC-free EPS expansion process
Nova Chemicals Technology in collaboration with Teubert Maschinenbau GmbH has developed a new process to produce water-blown expandable polystyrene beads that are free of volatile organic compounds (VOC).
Dutch lead partner Nova Chemicals developed the VOC-free EPS expansion process, while German machinery manufacturer Teubert designed and built the EPS expansion machine. The project achieved a reduction in VOC emissions resulting from PS foam, an improvement in productivity for foam molders, and improved safety during the production of the foam, according to Eureka, the European government-funded initiative promoting collaborative research in advanced technology.
Comments: VOC emissions are a growing concern throughout Europe and US. This new process creates a molecular bond encapsulating starch in a shell of polystyrene. The chemically bonded starch absorbs micro-drops of water, which becomes a safer, more environmentally friendly blowing agent inside the beads.
This is a breakthrough in EPS processing. Not only does it meet new environmental issues head-on, but it is also friendlier than other systems proposed over recent years; such as chemical nitrogen, CFCs, and other forms of incorporating water into the bead. The starch-based system should also make for better bead shelf life and according to the machinery manufacturer, Tuebert, faster cycle times which seem also to make sense. This development, when it catches on, should cut the system’s cost of EPS items.
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Alcoa completed the construction of a plastic closures plant in China & sells Brazilian flexible packaging
Alcoa announced that its Closure Systems International (CSI) business completed the construction of a new plant in Hangzhou, China, south of Shanghai. The new 8,125 square meter plant produces plastic closures primarily for export to beverage producers in Japan.
Commercial production has begun on two lines to manufacture AS-Lok (a linerless closure for aseptically filled bottles) and PS-Lok II (a linerless closure for hot-filled bottles), with customer shipments expected to start in mid-July. Volume at the facility will be 800 million closures a year. The Hangzhou plant has the capability to expand to eight lines. Construction of the plant began in January 2003 and was completed on time. The Hangzhou plant employs 110 people.
Separately, Alcoa subsidiary, Alcoa Aluminio S.A. has sold its Brazilian Flexible Packaging business unit known as Itaipava to Dixie Toga.
The decision to divest this business is part of the company’s previously announced (January 2003) divestiture program to focus the company’s business portfolio worldwide.
Comments: Alcoa entered the closure market with aluminum closures in the 1930s and over the years it developed the closures for various containers including beers and soft drinks. The company entered the plastic closure market in the 1980s when it acquired the H-C Industries which had developed a patented compression molding process for plastic closures for carbonated drinks.
Plastic closures have the following advantages of metal closures (1) lighter weight, (2) better molding characteristics, (3) wide colorability, (4) widespread consumer acceptance, and (5) lower overall costs. Caps and closures are mostly used on plastic and glass containers and to a lesser extent on metal and paper containers. In North America, over 150 billion units of caps & closures are produced.
Polypropylene is the most common polymer used in manufacturing plastic caps and closures. In food and beverage applications, the growth for plastic/polypropylene is higher because of the growing trend to replace metal with plastic caps & closures. Polypropylene caps & closures are either injection-molded or compression molded. Close to 30% of the total caps & closures used are compression molded. Compression molding has become more prominent recently, as it can use polypropylene grades having lower MFR.
Polypropylene competes with polyethylene to a smaller extent in the low end of the market. PE competes with PP on a cost basis while offering comparable properties. The disadvantages of using PE include (1) stress cracks in the presence of detergents, (2) warpage problems, and (3) loss of torque.
Alcoa expanded its business into Europe by acquiring MCG closures and today it has become a major global player in the manufacturing of caps and closures. It supplies caps and closures for several applications including soft drinks, juice, bottled water, dairy, beer, food, liquor, pharmaceutical, personal care, automotive fluids, and other markets.
Sigma Plastics Group to construct stretch-film plant in California
Sigma Plastics Group announced its plans to construct and launch a major stretch-film plant in Southern California by September 2004.
Sigma Stretch Film Corp. unit, a division of Sigma Plastics will open a 76,000-square-foot plant in Riverside dedicated to stretch film. During the next 15 months, Sigma plans to move five cast and blown film lines to the plant and hire about 80 people. Once all the equipment is running, the facility will have an annual capacity of 70 million to 75 million pounds of polyethylene film.
Comments: The stretch film is one of the largest and fastest-growing polyethylene film markets. Total North American demand for stretch film amounted to about 1,500 million pounds in 2003.
About two-thirds of the PE industrial film market is accounted by five major processors: (1) Tyco Plastics, (2) AEP Industries, (3) Pliant Corporation, (4) Sigma Stretch, and (5) Atlantis Plastics.
Sigma Stretch Film is a division of the Sigma Plastics Group. The Sigma Plastics Group was founded in 1978 and is the largest, privately owned film extrusion group in the United States. It has altogether 13 divisions. Total annual producing film and sheet sales amounted to 880 million dollars in 2003. The company employs over 4,000 people. 2003 Plastics News ranked Sigma Plastic Group as the 6th largest film and sheet manufacturer in North America.
Sigma Stretch has five North American plants including (1) Tulsa, OK, (2) Shelbyville, KY, (3) Rancho Cucamonga, CA, (4) Lyndhurst, NJ and (5) Belleville Ontario, Canada. These five manufacturing plants are strategically located to efficiently and economically service the North American stretch film market. The total stretch film capacity for all five plants amounted to about 300 million pounds. Of that, the total stretch film capacity at Shelbyville amounts to about 90 million pounds per year, and the total Rancho Cucamonga plant capacity amounts to about 40-45 million pounds. Rancho, CA facility is mainly dedicated to non-stretch film applications including garment, produce bags, and industrial film applications.
The recent news is in line with the so far Sigma Plastic’s strategy. The company will continue to focus on the “less” performance-demanding applications, including bags, etc. Riverside’s addition is a strategic as well as a supply/demand move for the company. It is an excellent addition to the Rancho site to further strengthen and expand Sigma’s West Coast operation.
Occidental Chemical to reduce VCM emissions by 2005 and pay $150,000 in fines
The US Environmental Protection Agency announced that it has reached a settlement with Occidental Chemical Corp. for alleged environmental violations at the company’s plant in Pottstown, PA.
In a consent agreement with EPA, Occidental has agreed to pay a $150,000 penalty and complete three special projects designed to reduce the plant’s air emissions of vinyl chloride and the plant’s industrial wastewater flow to the Borough of Pottstown’s Publicly Owned Treatment Works.
The settlement resolves EPA’s October 2003 complaint, as amended May 2004, which alleged violations of a variety of environmental statutes and regulations discovered in the agency’s January 2003 multimedia inspection of Occidental’s polyvinyl chloride (PVC) plant in Pottstown, PA.
In addition to the $150,000 penalty, Occidental will spend more than $900,000 on three supplemental environmental projects, or SEPs, that will substantially reduce pollution discharges from the Pottstown plant.
First, the company has agreed to expend at least $850,000 in process changes and equipment upgrades which will permanently reduce the plant’s permitted emissions of vinyl chloride by 38 percent. Second, the company has agreed to an amendment to its Pennsylvania-issued Title V air permit, which will reduce its yearly permitted vinyl chloride emissions from 75 tons to 48.5 tons. Occidental will also permanently retire all emission credits generated by this reduction, resulting in an overall air quality improvement in Southeastern Pennsylvania.
Third, Occidental will implement equipment and operational changes, designed to reduce the volume of industrial wastewater discharges from the plant to the Pottstown Publicly Owned Treatment Works.
The multimedia investigation of Occidental’s Pottstown, PA facility is part of a new EPA mid-Atlantic enforcement approach that evaluates how pollutants, in this case, vinyl chloride, move from one medium to another, such as from water to air, through the production process and the regulations that apply. EPA uses this approach to produce better, more protective, public health and environmental results.
Comments: Vinyl chloride monomer (VCM) is mainly used in the manufacture of polyvinyl chloride (PVC) and PVC manufacture represents over 95% of total global VCM consumption. VCM is produced mainly by the pyrolysis of ethylene dichloride (EDC) and all VCM plants are backward integrated into EDC. In a few developing nations VCM is produced by the chlorination of acetylene. This process is now absolute in most developed nations however a few regions still use this route for VCM production mainly because of shortages of ethylene.
In North America, the leading VCM producers are OxyVinyls LP and Dow Chemical. The American Conference of Governmental Industrial Hygienists (ACGIH) lists VCM as a carcinogen. Cases of angiosarcoma (liver cancer) were reported among workers exposed to VCM. Manufacturing processes have long since been modified to control vinyl chloride emissions, worker exposure, and residual content in PVC resins.
Greenpeace, the international environmental organization, has been very active in the past few years in its campaign against all chlorine-containing chemicals. Greenpeace has been very critical of PVC because of its large consumption of chlorine. Greenpeace has funded a variety of studies to support its claims of environmental problems in PVC manufacturing as well as on PVC disposal. Its claims are being actively challenged by the Vinyl Institute and PVC and VCM producers.
EPA to act against DuPont for Teflon ingredient, perfluorooctanoic acid
The Environmental Protection Agency is preparing to take “formal action against DuPont soon” over allegations that the company failed to report possible health problems connected with a key ingredient used in making Teflon.
EPA has been investigating for about a year now if the company violated the Toxic Substances Control Act, which requires companies that produce chemicals to report to the EPA any information indicating that a substance it uses “presents a substantial risk of injury to health or the environment.”
Perfluorooctanoic acid is used in the manufacturing of fluoropolymers, including Teflon products, at DuPont’s Washington Works facility near Parkersburg, WV. DuPont maintains the chemical isn’t harmful to humans or the environment, and that it has complied with reporting requirements.
Comments: PTFE was first introduced into the market over 40 years ago by DuPont under the trade name of Teflon®. The property advantages of Teflon® include (1) high-temperature resistance, (2) high chemical resistance, (3) nonstickiness property, (4) weather ability, and (5) low dielectric constant among others.
PTFE resin finds applications in various end-use segments which include: (1) cookware coatings and waffle irons, clothes irons, muffin pans, electric grills, etc. (2) household applications as a stain protector primarily for carpets, and furniture upholstery, and surface protector in flooring applications, (3) wire & cable applications, (3) automotive applications, (4) building and construction, (5) industrial, (6) business machine and (7) appliance industries.
Perfluorooctanoic acid (PFOA) is soap like chemical that serves as an essential processing agent in making stain- and stick-resistant surfaces and materials. DuPont also manufactures telomers, products in which PFAO is also used. DuPont currently denies any health problems linked to PFOA. Previous studies have linked PFOA to possible hazards which include (1) cancer and (2) birth defects. In the case of fluoropolymers, pyrolysis can lead to the release of toxic products, like hydrogen fluoride.
Wacker Silicones develops new thermoplastic silicone for medical tubing and soundproofing applications
Wacker Silicones announced the development of a new thermoplastic silicone elastomer, Geniomer®. Geniomer is a polydimethylsiloxane urea copolymer that is thermally moldable, according to the company. Silicone forms the basis of its soft segment giving the product elasticity. An organic group builds the hard segment and gives strength and heat stability. Wacker Silicones has developed a proprietary process to cure the soft segment, with a physical, rather than catalyst-based, curing process. The company said an advantage is high purity and the absence of by-products.
The material is considered ideal for medical tubing because it has no organic volatiles. Geniomer-based soundproofing sheets could also be used for automotive windscreens and windows. Several other advantages include (1) paintability, (2) good release and slip properties, (3) low-temperature flexibility, (4) storage stability, (5) water repellency (6) high tensile strength, and others.
Comments: Silicone elastomers offer outstanding performance attributes which include: (1) heat resistance, (2) low-temperature flexibility, (3) weatherability, and (4) chemical resistance. Silicone elastomers are generally relatively high in price and are used only in applications where superior performance is needed. They are increasingly being used to substitute for organic rubbers, because of their advantageous properties. Silicone elastomers find usage in specialty applications that include: (1) medical, (2) wire & cable, (3) electronics, (4) industrial belts & hoses, (5) automotive, (6) aerospace, and others.
In chemical terms, Geniomer® is a polydimethylsiloxane/urea copolymer that combines the typical properties of silicones with the advantages of thermoplastics. Geniomer® grades display good thermoplastic processability, are easy to paint over, and have excellent release and slip properties, plus outstanding low-temperature flexibility, good storage stability, excellent water repellency, and high tensile strength without needing fillers. Geniomer® is completely transparent. Applications for Geniomer® include (1) automotive, (2) medical, (3) construction, (4) electrical and electronic industries, (5) cosmetics & consumer care among others.
Crompton Corp. to merge Performance Chemicals and Elastomers & Plastic Additives units into a new unit
Crompton Corp. announced its plans to merge two of its largest divisions into a new entity, Crompton Specialty Chemicals.
The new division will consist of the Plastics and Petroleum Additives (PPA) and Performance Chemicals and Elastomers (PCE) business groups. PPA includes Crompton’s olefins, styrenics, vinyl, and petroleum divisions and PCE comprises urethanes, refined products, rubber, and ethylene propylene diene monomer (EPDM).
Crompton’s operating profit decreased from $85.4 million in 2002 to a loss of $35 million in 2003. Polymer additive sales were up 21 percent from $301.6 million to $363,3 million. Crompton attributes these increases mostly to the acquisition of GE’s Specialty Chemicals business on July 31, 2003.
Comments: Crompton Corp has been undergoing restructuring for the last two years to boost profitability. The company’s decision to merge its divisions into a separate entity is part of the actions to achieve profitable results. Moreover, the company is also involved in price-fixing allegations regarding rubber chemicals, EPDM.
Bayer to pay $66 million for rubber chemicals price fixing
Bayer AG pled guilty to participating in an international conspiracy to fix the prices of rubber chemicals and agreed to pay a fine of $66 million.
Per US District of Court in San Francisco, CA documents, Bayer conspired to “suppress and eliminate competition for certain rubber chemicals sold in the US and Europe from 1995-2001”.
The Department of Justice had charged Crompton Corp. with participating in the same conspiracy in March.
London Metal Exchange sets the date for PP and LLDPE futures trading on 27th May 2005
The London Metal Exchange (LME, www.lme.com) has named 27 May 2005 as starting date for trading polypropylene and linear low-density polyethylene futures. It said the date “is the result of detailed project planning and reflects the contribution of a number of third parties whose involvement, as planned, is vital.” According to CEO Simon Heale, with many years of experience in delivering risk management services to the industry, the LME is ideally positioned to provide the plastics industry with an effective and robust environment in which to manage price risk volatility within the plastics supply chain.
Israel’s Keter Plastics is a potential suitor to take over Rubbermaid’s Wooster facilities
Israel’s Keter Plastics with a grand plan for takeovers? Plans by Israeli consumer goods manufacturer Keter Plastics, Herzliya, to acquire parts of Newell Rubbermaid ́s, Wooster, Ohio, plastic consumer articles business were only the tip of a very large iceberg. In an exclusive interview with the Israeli business newspaper “Globe”, Keter CEO Sami Sagol said Keter is negotiating with “more than seven” consumer plastics producers worldwide and wants to acquire all of Rubbermaid, with annual sales of USD 1.2 billion. The deals, if successful, would propel sales to USD 3-4 billion, making the company by far the world’s largest manufacturer of plastic consumer goods. In December 2003 Keter became Europe ́s largest with the acquisition of French bathroom fixtures manufacturer Allibert.
Comments: Rubbermaid’s Wooster, OH facility is a representation of the US Midwest workforce and a symbol of US manufacturing activity and the recent outsourcing discussions.
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