Eastern Europeans Balk at PET Barrier Bottles

Eastern European beer bottlers are choosing monolayer polyethylene terephthalate (PET) bottles rather than barrier bottles. PET preform and blowmolding processor Zivota Radovancevic, owner of Borverk Pet Production, based in Jabucje-Lajkovac, Serbia, is producing monolayer 1.5-liter PET bottles for the country’s largest brewery. “Shelf life is not a big issue as the beer gets consumed almost as quickly as it is produced,” he reports. He says demand for the bottles nearly exceeds his company’s current capacity.

Laszló Garics, key account manager at Holland Colours Hungaria in Szolnok, Hungary, says his company is seeing growth of up to 30 percent/yr in demand for amber pigments for 1.5- to 2-liter monolayer PET beer bottles in Russia. “Shelf life of beer in such bottles is about seven days but the beer disappears in three to four days there,” Garics says. Other countries in Eastern Europe are showing high demand for PET bottle pigments, but not at Russian levels. Pigments can offer limited UV light protection. Garics adds that the cost of barrier bottle equipment may hinder its use in Eastern Europe.

Engel acquires Corpoplast’s preform machine business

Injection molding machine manufacturer Engel Austria GmbH (Schwertberg, Austria) this month acquires the preform molding machinery business of SIG Corpoplast (Hamburg, Germany), a manufacturer of stretch blowmolding machines. Until now the firms have jointly made Premax machines, based on Engel’s Classic toggle clamp machines, that were marketed and sold by Corpoplast. Engel also takes over service and guarantees on the more than 100 Premax machines already sold. Last year Engel began making and marketing the machines under its own name, but Corpoplast retained rights to sell Premax machines as part of complete preform molding and stretch blowmolding units. The new arrangement gives Engel complete control of the business, though Corpoplast customers seeking preform machines will be referred to Engel. SIG’s Moldtec business, in Essen, will continue to supply preform molds for the machines as will MHT Mold & Hotrunner Technology AG, based in Hochheim am Main, Germany. The machines will be marketed under a new brand name, MacPET, with five sizes available ranging from 2500 to 5000 kN clamp force for 32-, 48-, 64-, 72- or 96-cavity molds.

Polymerland decision shaking up distribution industry

In what appears to be a far-reaching strategic move by GE Plastics, the firm’s Polymerland distribution business is moving to limit sales through Polymerland in North America and Europe of materials not supplied by GE Plastics or its LNP Engineering Plastics compounding division. GE Plastics (Pittsfield, MA) is quickly moving to increase the range of LNP compounds using its materials, according to LNP officials, which may foretell an end to sales via Polymerland from other compounders. The process in both regions is ongoing, according to Banu Kukner, marketing communications manager.

In North America Polymerland is one of the largest distributors and handles materials from almost 20 suppliers and compounders; how many of these will be allowed to remain is not stated. In May the firm handed off its commodity plastics distribution to distributor ResinDirect LLC, of Davidson, NC. In Europe, rather than compete in what Kukner calls a market “saturated with distributors,” GE Plastics will stick to engineering thermoplastics production and sales. Distribution activities only represented 5 percent of total revenues in Europe, Kukner says. But the decision created waves, as earlier this year polypropylene supplier Borealis (Lygnby, Denmark) asked distributor Ashland, which had been handling Borealis’ small-lot commodity materials distribution, to also handle PP distribution for small and medium lot automotive and household appliance customers—the ones previously served via Polymerland. Starting this month, thermoplastic elastomers supplier AES (Brussels; Akron, OH), which also had used Polymerland, will use Resin Express as its distributor for the U.K., Ireland, and the Benelux countries (Belgium, The Netherlands, and Luxembourg).

Nylon supplier Rhodia Engineering Plastics, based in Lyon, France, has been notified that Polymerland will this year end distribution of nylons from Rhodia. Rhodia is hurriedly seeking new distribution channels. European officials at distributors Ashland and Distrupol did not return calls on whether they were competing for Rhodia’s business. Numerous other polymer suppliers are also understood to be affected.

COMPOSITES

Special-edition Corvette to sport carbon-fiber hood

General Motors is reporting that it has specified a carbon-fiber hood for the 2004 Corvette Z06 Commemorative Edition sports car. This is reportedly the first time that carbon fiber has been used in an original part for a painted exterior panel on a vehicle made in North America. Previously the car has used glass fiber-reinforced sheet molding compound (SMC) in body components. General Motors says that it expects to make between 3000 and 4000 Corvettes with the new carbon-fiber hood.

The hoods are fabricated by MacLean Quality Composites, based in West Jordan, UT. The hoods weigh 20.5 lb., 10.6 lb. less than the SMC version.

PEOPLE IN THE NEWS

Eschwey leaving SMS

Helmut Eschwey, a member of the managing board of SMS AG and president of the firm’s plastics technology group, is moving to chairman of the board at Heraeus (Hanau, Germany), the largest German precious metals firm and world’s second largest supplier of industrial precious metals. Heraeus had 2002 revenues of €6.4 billion. Dagmar Weiner, VP corporate communications at Heraeus, says the start date of Eschwey’s job is undetermined but will be “in the next few months.”

The plastics technology group at SMS includes machinery brand names Battenfeld, Battenfeld Gloucester, Cincinnati Extrusion, and American Maplan. Eschwey joined Battenfeld as managing director in 1992. He also serves as chairman of Germany’s plastics machinery manufacturers trade group and president of the Kunststoffe trade show in Düsseldorf. Eva Rugenstein, director press relations at Messe Düsseldorf, which organizes the K show, says a new exhibition president likely will be nominated at a scheduled July meeting of the exhibitors advisory board.

As of June 10 SMS has not named a successor. Eschwey’s predecessor at Heraeus, Horst Heidsieck, left in Jan 2003 to become CEO of Demag Holding (Luxembourg), a seven-firm group that includes Mannesmann Plastics Machinery, Munich, parent firm of Berstorff, Billion, Demag Ergotech, Krauss-Maffei, Netstal, and Van Dorn Demag.

Ferromatik, Gain sign gas assist deal

Injection machine maker Ferromatik Milacron GmbH (Malterdingen, Germany) and gas-assist technology supplier Gain Technologies (Detroit, MI) have reached agreement to protect their respective patents on gas-assist technologies, especially those that cover the use of overflows. This is an area of continuing disagreement between Gain and rival Cinpres Gas Injection (Middlewich, England), which recently applied for patents on its Plastics Expulsion Process. Gain’s patents are held by Melea Ltd. Melea and Gain have been granted the full and exclusive rights to license and enforce Ferromatik patents granted in Europe, the U.S., and Japan. The companies say the deal gives Melea/Gain licensees the right to use the Ferromatik patents at no additional royalty cost, while Ferromatik customers can obtain a special Melea/Gain license that provides them with reduced royalty terms for the use of any Melea gas process patents. Ferromatik says there are numerous processors in Europe infringing its patents, but until now it has not aggressively pursued them. This likely will change as in June Gain, Melea, and Ferromatik filed suit in a Michigan district court, claiming Cinpres is infringing two U.S. patents held by Ferromatik. The suit is centered around the process and equipment sold and licensed by Cinpres and used to produce Steelcase Inc.’s Cachet line of seating products.

POLYOLEFINS

Mergers in Japan as import tariffs fall

Japan Polychem Corp. and Japan Polyolefins Co. (JPO), both based in Tokyo, are merging their polyethylene businesses in September, while the polypropylene businesses of Japan Polychem and Chisso Corp. (Tokyo) will merge in October. The mergers apparently are in preparation for likely increased competition from imports as tariff barriers drop in Japan in 2004.

The PE deal is possible now that Mitsubishi Chemical Corp. and Tonen Chemical Corp. (Tokyo) have come to terms for Mitsubishi to acquire Tonen’s 35 percent stake in their Japan Polychem joint venture.

The new polyethylene player, Japan Polyethylene Corp., will be owned 50 percent by Japan Polychem, 42 percent by JPO, and 8 percent by plastics trader Mitsubishi Shoji Plastics. It will have capacity of 417,400 tonnes/year of LDPE, 374,700 tonnes/year of LLDPE, and 475,600 tonnes/year of HDPE. Similarly labeled Japan Polypropylene Corp., meanwhile, will be held 65 percent by Japan Polychem and 35 percent by Chisso and will boast PP capacity of 1.074 million tonnes/year.

Basell looks to value-added materials

Polyolefins producer Basell, based in Amsterdam, The Netherlands, sees prospects of a better return on investment and more price stability with its so-called Advanced Polyolefins Business (APB) than traditional commodity resin sales. This means polypropylene-based compounds, specialty polyethylene grades, polybutene-1 resins, and the company’s Catalloy-based thermoplastic olefins could play a more significant role in the future.

Other Western European suppliers also are shifting focus to higher-value polyolefins as more of the commodity materials’ production shifts to highly integrated Middle Eastern suppliers with direct access to precursor materials.

According to Sergio Danesi, president of APB, the high-value sector accounts for about 28 percent of the company’s total annual turnover; Catalloy accounts for 25 percent of the APB total.

Basell plans to increase Catalloy capacity by 200,000 tonnes/yr through 2005 by debottlenecking three existing plants and converting a decommissioned gas-phase polyethylene facility in North America to the process. Current Catalloy capacity is 385,000 tonnes/yr.

PACKAGING

Packaging giants get bigger

The size of the world’s largest plastics packaging firms continues to grow, as proven again by two announcements last month. First, Amcor PET Packaging in Melbourne, Australia announced it has acquired the South American plastics container business of Alcoa Inc. (Pittsburgh, PA) for $76 million. The operations had 2002 sales of $130 million. Following the acquisition, Amcor will control 30 percent of the South American PET bottle market.

Last spring Amcor purchased the PET operations of Schmalbach-Lubeca (Ratingen, Germany) for $2.875 billion. That acquisition made it the leading PET bottle blower in Europe and North and Latin America with about 20 percent market share. Amcor paid about 6.7 times trailing EBITDA for the Schmalbach business; the price for Alcoa’s assets was a comparative steal at 4.8 times trailing EBITDA. The recent purchase includes equipment for PET bottle processing and preform molding spread across nine Alcoa facilities. Amcor already has 13 PET container facilities and another 14 blowing bottles at customer sites, and expects to close some of the acquired Alcoa plants, though details have not yet been released. As Alcoa is keeping five of the sites for other operations, Amcor will consolidate bottle and preform processing equipment from those sites to its facilities already in the region.

In a statement, Russell Jones, Amcor managing director, said the acquisition will deliver returns on funds invested above 15 percent within three years—the time frame and rate of return Amcor says all its acquisitions must meet. In separate news, Rexam (London), one of the world’s five largest consumer packaging firms, announced it reached an agreement to acquire plastics pharmaceutical package molder Risdon Pharma Development—formerly part of Crown Cork & Seal and owned since last year by Montagu Private Equity—for e125 million ($146 million). Risdon Pharma has processing sites in Offranville, France, and Neuenburg, Germany; 2002 sales were e51 million ($60.5 million).

INJECTION MOLDING

Management shakeup at Italtech

Francesco Baldinelli, until recently president of Negri Bossi, now heads up Fiat-owned Italtech (Brescia, Italy), which specializes in production of large injection molding machines. He took over from Adelio Grasselli, the founder of Italtech, who last year sold his remaining share in the company to Comau, Italtech’s parent and a major supplier of industrial automation systems.

Italtech was the subject last year of acquisition discussions with the Sacmi group, which already owns three other Italian injection machine manufacturers, BM Biraghi, Negri Bossi, and Oima. Sacmi is understood to have balked at the offer price.

Long-time Fiat director Umberto Pecchino recently took charge at Comau and is set to reorganize the entire Comau group over the next three years, with Baldinelli charged with strengthening Italtech’s global position in the large-machine sector. Some new machine configurations are expected shortly.

MARKETS

Russia sees its polymer success tied to reforms, exports to the East

Russia needs to reform its polymer industry, provide standardized tax and ownership laws, and support the private sector if it expects plastics and chemicals to continue to provide 6 percent or more of the country’s total turnover. That’s the opinion of Andrey Svinarenko, first deputy minister of the Ministry of Industry, Science, and Technology, in Moscow, speaking at the recent fourth International Chemical and Petrochemical Industries conference in Frankfurt, Germany.

“Production is slowing. Growth in 2002 was only 1.6 percent . . . due to low world market prices and a lack of investment in [Russian] polymer industry,” says Svinarenko. The petrochemicals sector is hampered by a lack of cash and inefficiency and cannot afford the latest production technology available. He thinks the government should work to improve the foreign investment climate.

Michail Fedorenko, sales manager of JSC Sayanskchimplast (Irkutsk, Russia), the country’s largest PVC producer, sees his company’s future tied to export opportunities in the Far East, particularly China, Korea, and Japan. He says demand there exceeds that from the firm’s traditional markets of Western Europe, the Middle East, and Africa. Its output of 212,200 tonnes/yr equals 43 percent of total domestic PVC production volume. Production capacity is at 85 percent, he says. The company claims to supply 39 percent of China’s PVC demand.

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