All eyes on Asia as sustainability drives 
materials development

The global demand center for all types of resin has indeed shifted to Asia. Meanwhile, energy efficiency, low carbon footprint, and the need for expanded performance envelopes are driving developments in resin technology.

The global economic recovery has Asia to thank for much of its progress to date. China and India in particular continue to exhibit strong gains and consequently, plastics demand remains strong. And whether it’s hybrid vehicles, LED lighting, or bio-derived polymers, a fair amount of the research and development work under way at resin suppliers nowadays is being driven by the need for enhanced energy and resource efficiency. Resins as diverse as polystyrene and engineering plastics have roles to play in this respect. Energy-efficient buildings, for example, require good insulation, even if they are located in the tropics, and polystyrene foam is an option here, while switching to LED lighting that employs polycarbonate lenses also enables significant energy savings. In the words of one resin supplier, “We are seeing so many areas where the pace of innovation is faster than it’s been for a long while, and the major drive for that is sustainability.”

Q: What event or condition is having the biggest effect on your sector of the plastics industry in 2010, and which one do you think will be the most important in 2011?
de Vries: The global business environment in polyolefins will continue to be challenging during the next two years. A balance of supply and demand is not expected until late 2011. Inventory levels have significantly decreased, and are expected to remain low. In addition, propylene availability continues to be challenging. Due to low demand for ethylene, the industry reduced the available cracker operating rate capacities, which led to reduced propylene production. For the first time in history, in Europe propylene pricing is exceeding that of ethylene.

Greening: In 2010 we expect a recovery of the building and construction industry. We expect this recovery to continue in 2011, though not as dynamically as in 2010. In both cases the driving force for global market recovery will be in Asia.

Hilken: The continuing recovery is clearly visible, and particularly in Asia our industries and our sales are back above pre-crisis levels, but we still have to watch for further development and its sustainability closely. We also have the continued structural shift of the polycarbonate market to Asia. The Asia-Pacific region already accounts for about two thirds of the global PC demand fueled by Asian export economies and growing domestic demand. Going forward, we see global megatrends such as energy and resource efficiency, and innovative solutions for new mobility and building concepts.

Polet: The big unknown is whether or not the recovery is stable. The concerns are more around Europe and the U.S. than Asia. Longer term, we see an increased focus on the environment. For the plastics industry, this means there will be more focus on the way we make materials, source raw materials, and the raw materials we use. Consumers will demand a lower carbon footprint and better end-of-life materials.

Westerbeek: Right now, the enormous upswing in demand is causing quite some disturbances in the whole supply chain. There is a lot of nervousness throughout the supply chain because in the crisis, a lot of people shut down plants and now the industry is scrambling to keep up with demand. The big question in 2011 is how fast the auto industry will bounce. There is also fast growth in the importance of the Chinese auto industry. It’s coming at a quicker pace than most expected.

Q: What was your company’s top technology development in 2009? What will it be this year? Is there a technology in your sector that processors are overlooking?
de Vries: With more than 2 million tonnes of Hostalen Advanced Cascade Process HDPE capacity installed or under construction, we have achieved critical mass to introduce multimodal HDPE to global markets for use in film, blowmolding, and pipe. Pipe producers also stand to benefit from Spherizone PP resins used in high-performance applications.

Greening: In 2009 we started up our new production plant for Neopor, our innovative EPS foam material that features a 20% improvement over the classical Styropor [product] in terms of insulation performance. This year, we will debut a multishock-resistant foam called Epor that will offer new options for converters and producers of packaging material.

Hilken: LED technology has become increasingly popular in China as a more energy-efficient and longer-lasting alternative to conventional bulbs in outdoor applications such as street lighting and building façade illumination. Our polycarbonate solutions are enabling LED lens designs that are optimized for light transmission and overall illumination.

Polet: Our S series of polyacetal super-tough materials is based on a new backbone incorporating reactive segments onto which we can graft various entities. Our next development is a polyacetal grade that combines the best of homopolymer and copolymer properties. It expands the design space for polyacetal. We want to make our market larger rather than compete with the existing market. These new products will allow this.

Westerbeek: Ecopaxx is a green polymer [based on polyamide (PA) 410] with a melting point of 250°C and a carbon footprint below zero. There’s a surge of new [bio-based] polymers emerging. They’re not necessarily all new technologies, though. Some have been around for 40 years but were never branded as green.

This year, it’s our Stanyl 46 Diablo range boasting a continuous use temperature of 210°C-220°C over 5000-7000 hours. We are also quadrupling capacity for Stanyl ForTii (4T), which has a melting point above 320°C.

Q: Are there particular end markets that are hot now or will be soon for your customers?
de Vries: Innovation and product differentiation will be essential to remain competitive. Demand for high-performance resins continues to increase for applications such as caps and closures, pharmaceutical packaging, and pipe and sheet. In rigid packaging, there has been a developing trend involving the use of highly clarified PP and specialty grades.

Greening: In addition to an upcoming market for cold-climate protection via insulation foams like our Neopor in China, for example, there are also first attempts going on for hot-climate protection, especially in countries like India, Malaysia, and Singapore. This kind of protection against the climate by using highly energy-saving insulation foams is becoming increasingly important.

Hilken: We believe global mega-trends such as energy and resource efficiency, and new mobility and building concepts will bring about opportunities to take a solution-oriented approach in addressing such areas as lightweight mobility, sustainability, smart technologies, and future living.

Polet: Forty percent of our business is auto. It continues to be important with CAFE standards and strict regulations in the EU for CO₂ emissions. There’s also a movement in electrical and electronics to remove halogens, and we are addressing this. This year, our LCP range will be halogen free. Apple pioneered this trend and has shown that you can charge a premium [for green products]. It doesn’t have to be cost driven.

Westerbeek: Electric and hybrid vehicles, as well as medical. Another not-so-new globally but fast-emerging market for China is food packaging. Here, we’re talking growth of 20%-25%/year.

Q: Which breakthroughs or major trends in your segment of the plastics business should processors watch closely?
de Vries: One trend is a move towards wall thickness reduction in packaging production. Thin-walled products help save raw material costs. Our Clyrell EC340R is characterized by a unique combination of rigidity and flowability, leading to a wall-thickness reduction of up to 10% in ice cream packaging.

Greening: There is huge overcapacity for EPS, especially in Asia. It is important that this capacity is digested in the near future through healthy domestic demand. The industry must also highlight the value and sustainability of plastic packaging, which is still perceived as environmentally unfriendly in some countries. This misunderstanding can only be removed by sound and reliable eco-efficiency analyses that compare EPS and cardboard packaging for one specific application case.

Hilken: In construction, there is increasing focus on more energy-efficient and sustainable buildings. Globally the cost of heating and cooling buildings equates to 40% of energy consumption. Using today’s technologies, a building built today should use one-tenth the amount of an old building. In transportation, we are facing a paradigm shift. The automotive industry cannot provide the solutions alone—it needs the material science and chemical industries for delivering the solutions to the problems it is confronted with.

Polet: R&D as a percentage of sales will continue to grow. Why? Because there’s no better time than the next five to 10 years to be in engineering plastics. Electrification of cars, for example, will require that they be 500 lb lighter. And over the past 10 years, 500 million people have joined the middle class in India and China. They need appliances, irrigation, and medical devices. There will also be more of a focus on sustainable low-carbon-footprint products because young consumers will demand these.

Westerbeek: Biopolymers is a huge trend. But I stress that we will only introduce a bio-based solution when it has a better footprint than the current solution. Some bio-based polymers have an inferior carbon footprint compared with fossil fuel-based materials.

Q: What is your prediction for your industry segment’s growth in 2011? Better than 2010?
de Vries: Growth rates for polymers are expected to be modest, especially for the developed world. Non-integrated and commodity-grade producers might be at risk. Although innovation can be a strong weapon, clearly that alone will not be enough. We will see further consolidation, particularly of older assets when it comes to cost competitiveness.

Greening: 2010 will show strong growth, which is due to the deep valley in 2009. In comparison, 2011 will only show moderate growth.

Hilken: We are confident that there will be double-digit growth in China for 2010. We are confident about future growth in China and in the Asia-Pacific region, which already accounts for roughly one-quarter of our sales.

Polet: Inventory rebuild has been the story of 2010 so far. We now need to focus on quarter four of 2010. Any recovery will be disproportionate, with Asia faring better.

Westerbeek: We are very positive about growth in BRIC countries [Brazil, Russia, India, China]. India and China will see sustained plastics growth well above GDP. We do expect auto to bounce back in Europe and the U.S., but it will take some time before we’re back at pre-crisis levels. —Stephen Moore