The shift of plastics processing business and ballooning trade deficits with China are a major concern in the U.S. (see related story below), and Lori Anderson, SPI''s officer of strategic planning and industry relations, says SPI members are vocal regarding unfair global trade issues. "In order for action to be taken by the U.S. government, however, solid data is needed. This effort will help gather the necessary information."
"In our view [currency manipulation] is probably the single most significant factor in our trade imbalance with China," says Pat Mears, a representative of NAM''s international economic affairs section. Mears estimates that the yuan is undervalued by 40%.
By keeping the yuan pegged at 8.28 to the dollar, some claim China''s central bank has artificially weakened it, lowering the price of exports and fueling historically high trade deficits with many nations, including the U.S.
In a September interview, Mears said a legal case would take 40 to 60 days to compile. Upon completion, the Office of the U.S. Trade Representative will have 45 days to decline or accept the action, based on merit. If accepted, 12 to 18 months of investigation would follow. Mears hopes the possibility of sanctions would spur action before the lengthy process concludes.
Opponents to a floating of the yuan claim that as one of the few economic engines consistently firing in the world, any tinkering could cause a stall with calamitous effects. But Mears says NAM is only asking that China act in accordance with the laws of global trade.
Massive U.S. trade deficit in plastics
The U.S. plastics industry amassed a $14 billion trade deficit in "contained" plastics products in 2002, with more than half the total shortfall attributable to China, according to a new report from the Society of the Plastics Industry (SPI).
U.S. imports of "contained" plastics products (components in assemblies such as mobile phones, TVs, cars) and "per se" plastics products (products made entirely out of plastics such as small toys) grew 43.6% between 1997 and 2002, while exports in both categories grew only 10.7%, according to "U.S. Plastics Industry Trade Through 2002: Global Business Trends, Partners, and Hot Products." The industry''s "per se" trade surplus that existed through the 1990s reversed after 2000, with net exports falling 23.3% in 2002.
The report says prime causes were the high dollar, rising U.S. natural gas costs, and the movement of manufacturing activity to Asia, especially China. All positive trade balance improvements can be credited to trade with Mexico, according to the study. Mexico is the only trading partner in the top six countries with which the United States has a trade surplus in all plastics sectors: equipment, molds, resins, and products. Without the plastics-product surplus trade with Mexico, the trade deficit for "per se" plastic products would have been $4.6 billion, rather than the current $1.4 billion.
China soon to lead in PP consumption
China is fast overtaking the U.S. as the world''s largest consumer of polypropylene. Analyst Kevin Smith at Philip Townsend Assoc. (Houston, TX) says that five years ago, materials sales in China were just 60% of those in the U.S., but the figure is already up to 95%.
Over five years, growth in Chinese demand will be double that of the U.S. China has the world''s second-largest PP producer, Sinopec; PetroChina, the 13th largest, is set to double its capacity by 2007. China imports 2.5 million tonnes of PP annually from South Korea, the Middle East, and India, to meet its consumption needs, Smith says.
Van Dorn Demag to close U.S. facility
Citing stagnant sales and a leaner operating philosophy, injection molding machinery maker Van Dorn Demag Corp. (Strongsville, OH) will close a production facility in Fountain Inn, SC at the end of the year. A spokesman says it has been running at roughly 40% capacity. Some 40 employees are affected. Van Dorn Demag''s Ohio facility will now handle Fountain Inn''s screw, front-end component, and injection-unit production and assembly. President and CEO Bill Carteaux cites a "fundamental change" within plastics manufacturing in which many customers have gone out of business or moved offshore. "This market situation is not expected to improve," he says.
Alcan "Firmly committed to plastics packaging"
Following approval by antitrust authorities in late September of its acquisition of rival aluminum company Pecheney (Paris), Montreal-based Alcan has confirmed its intent to hold on to and grow its packaging businesses, a large part of which are in plastics. However, John Gardner, Zurich-based communications VP for Alcan Packaging, says the company is in discussions with potential "strategic owners" for its U.K.-based Fibrenyle blowmolding operation. This could be divested before the end of the year.
Fibrenyle "doesn''t fit our strategic mix, it''s not in markets that Alcan is advantaged in," Gardener says. Together, Alcan''s and Pechiney''s packaging operations have sales of about $6 billion, and Gardener says about 40% are in plastics, mostly flexibles. Alcan continues to invest heavily. It bought VAW Flexible Packaging (FlexPac) for e345 million from Norsk Hydro earlier this year; it recently installed a new metalizing plant for BOPP film for cigarette packaging in Berlin—the largest of its type in the world; and opened a flexible packaging operation in Valencia, Spain.
Gardener says a brand unification program that has been running for close to 18 months is almost complete. Much of Alcan''s growth has come via acquisitions from such companies as Alusuisse, Lawson Mardon, and Wheaton.
Tier Ones invest heavily in R&D
Plastic Omnium''s recently-inaugurated Sigmatech global automotive R&D center outside Lyon, France, covers 15,000 sq m, cost e20 million to build, employs 400—most of them engineers and technicians—and has its own molding and painting operations to mimic production conditions. The operation is dedicated to such areas as pedestrian safety, impact absorption, integrated exterior modules, personalized bodywork, eco-design, and recyclability.
Company CEO Laurent Burelle reckons PO is about a year ahead of competitors in development of technologies—active and passive—for pedestrian safety. The European car industry has committed itself to new pedestrian impact performance levels for 2005 and 2010. But while there are indications that not all suppliers will meet even the first deadline, PO modules to be used on a sedan scheduled for launch in 2005 will enable it to meet 2010 standards.
A prototype fender module shown at this year''s Frankfurt Motor Show incorporated an energy absorber made using Bayer''s hybrid thermoplastic/metal technology that provides cushioning for head impacts. The module also incorporated headlamps, an "acoustic" wheel arch with overmolded sound-absorbing pads, and electroluminescent "night-time signature" lighting (see photo, p. 11)
Meanwhile Faurecia, another major automotive equipment supplier, is opening a new R&D center in Hagenbach, Germany, devoted to the design and development of instrument panels and cockpits.
StaMax production expansion?
Looking to boost sales of StaMax long fiber-reinforced PP outside Europe, Owens-Corning (Toledo, OH) says it may license its manufacturing technology. Dick Lantz, president of the supplier''s composites solutions business, believes North America offers the biggest opportunity for growth. Polymer producer Sabic (Riyadh, Saudi Arabia) acquired OC''s 50% share of the StaMax business earlier this year (May 2003 MP, p. 15; MPI, p. 14), but OC owns rights to make and market the material outside Europe.
Speaking at an event in September to mark the opening of a new glass furnace in Apeldoorn, The Netherlands, European VP Raymund Trost said demand for glass fiber in composites is growing 5% annually and rose to about 2.2 million tonnes last year. He says Europe remains the largest composites market, with 39% of use there.
In related news, Dick McKechnie, the company''s Battice, Belgium-based automotive business director, says prototypes of an all-plastics automobile muffler (May 2003 MP, p. 19; MPI, p. 18) are now being tested by unidentified carmakers, adding that the "huge weight reduction" versus metal mufflers is drawing OEM''s attention. Prototypes are of fiber-wound thermoset plastics, but work continues on thermoplastic ones, he says. A South African processor, Poly-Zhaust, already makes a plastics muffler using a glass-fiber reinforced DuPont nylon 66.
LG Chem moves into nylons
LG Chem (Seoul, South Korea) plans to add nylons to its portfolio of engineering thermoplastics, which already covers acetals, PBT, and PC. It says it will focus on high-value products, using its technologies for nanocomposites, long fiber-reinforced compounds, and alloys. It claims its nanocomposite technology produces compounds with the same physical properties and heat resistance of other nanocomposites with only 10% of the normal amount of montmorillonite nano-clay.
Also to be included in the nylon product slate are Lumid grades of nylon 6, nylon 66, and copolymers for automotive, electrical/electronics, and industrial machinery applications; Lucon conductive grades that incorporate carbon powder, carbon, or stainless steel fibers; and LG Supran long-glass-fiber-reinforced nylon.
LG Chem also has developed its own low-cost nonphosgene route for polycarbonate. Investment costs are expected to be 70% less than those for the conventional phosgene process, it says. A 60,000 tonnes/yr plant should cost less than $100 million, according to Jong-Kee Yeo, CTO and president of LG Chem. The company is considering a tie-up with a foreign partner to commercialize the technology at a location outside of South Korea. It already produces PC in a joint venture with Dow Chemical (Midland, MI) in Yeochun.
PP from natural gas
With global PP demand growing at a rate where capacity in 2010 (on the basis of announced plans) will fall short of consumption by the equivalent of 21 world-scale plants (source: Maack Business Services), resin maker Borealis (Lyngby, Denmark) is looking for new sources of propylene to provide cost-effective alternatives to the petroleum used almost exclusively today. The company has produced thermoformed cups from PP derived from natural methane gas.
Borealis is working together with process engineering company Lurgi (Frankfurt, Germany), which developed the MTP (methanol-to-propylene) process, and oil-and-gas producer Statoil (Stavanger, Norway), which supplies methane from its gas fields in Norway and converts it to methanol.
DSM bids for higher ETP profile
Shorn of its polyolefins businesses, Dutch chemicals company DSM (Sittard) is looking to boost its activities in performance materials. Executives from DSM Engineering Plastics, one of five operations in DSM''s Performance Materials business cluster (the others are elastomers, coating resins, composite resins, and high-performance fibers) recently highlighted developments in nylons, thermoplastic polyesters (PBT and PET), and polycarbonate.
As part of its Vision 2005 program, DSM deputy chairman Jan Zuidam says the company, which is currently debt-free, intends to strengthen its coatings and engineering thermoplastics businesses, partly through acquisitions.
Capacity for Arnitel PBT polymer and compounds in Emmen will rise 25% next year. DSM will also carry out further debottlenecking of its plants for Stanyl nylon 46, and also for Stamylan UH ultrahigh molecular weight PE.
DSM introduced its first PC/ABS blends in 2002 and says they are "best in class." It recently introduced halogen-free flame retardant grades. It sources polycarbonate from a joint venture plant with Dow in Stade, Germany, while bought-in mass-polymerized ABS provides a consistent neutral color that facilitates coloring with masterbatch.
Fewer options for processors?
Polypropylene processors may find their choice of grades substantially reduced in coming years. Weeding out grades is a measure resin producers say is necessary to limit their expenses (February 2003 MP p. 28; MPI p. 30). Suppliers say cost pressures require them to maximize the length of product runs and use world-scale plants concentrating on standard product ranges.
Gert Coun, technical manager at Sabic EuroPetrochemicals (Sittard, The Netherlands), makes no bones about the fact that processors will see far fewer commodity PP grades in the future. Speaking at the PP 2003 conference conducted by Maack Business Services (Au, Switzerland), he said the answer will be to provide "multifunctional" grades that should be sufficient for a variety of applications.
Jacques D''Heur, PP Europe product development manager at BP Belgium (Brussels), agrees, although he says there are limits to how far grade offerings can be cut back. He sees more future demand for specialty PPs, like metallocene-catalyzed PP.
Faig takes reins at Tech Group
The day after taking early retirement as president and chief operating officer of Milacron Inc. (Batavia, OH), Harold Faig was made president and CEO of The Tech Group (Scottsdale, AZ), a custom injection molder and moldmaker on whose board he has served since 1991.
Pelletron Corp., which makes pellet dedusting equipment in Lancaster, PA, appointed Heinz Schneider as president and CEO. It says the move is part of a corporate restructuring "designed to launch the company into a period of aggressive growth and expansion." Schneider is the former VP of trading for Coperion''s U.S. operations. Schneider takes over from Pelletron founder Jerry Paulson, who remains as chairman.
George Hamilton, who recently took over as president of Dow Automotive (Auburn Hills, MI), named Paul Turner VP for sales and sales service in Europe and South America.
William M. Lowman was named president and CEO of Cyro Industries (Rockaway, NJ), producer of acrylic molding and extrusion compounds, and acrylic sheet products and monomer. He replaces John Medina, who has retired.
DuPont Dow Elastomers appointed John R. Lewis president and CEO, to succeed Theo G. Krapels, who has retired.
Degradable disk debuts
Japanese electronics and chemical companies have cooperated to develop a biodegadable optical disk. Sanyo Mavic Media Co. (Gifu, Japan), Sanyo Electric Co. (Osaka, Japan), and Mitsui Chemicals Co. (Tokyo), have teamed up to develop the disk, made from Lacea corn-derived polylactic acid (PLA). The disk is said to have durability on par with PC. According to Sanyo Electric, one head of maize is enough to produce 10 of the MildDisc products, which go on sale in December in Japan for use in audio CDs, CD-ROMs, and video CDs. The company is targeting initial annual sales of $9 million. Mitsui Chemicals signed a collaborative agreement with Cargill Dow (Minnetonka, MN) in September 2001 to accelerate market development for PLA.
Auto plastics recycling method
A German research outfit has developed an economical and safer way to recycle polyethylene fuel tanks from end-of-life vehicles (ELVs). Over the course of their working lives, the tanks absorb up to 5% of their weight in gasoline or diesel. Currently, about 15,000 tonnes of such waste is collected from scrap yards and workshops in Germany every year, but the figure is likely to rise sharply when European legislation on recovery and recycling of ELVs takes effect.
A group of seven industrial firms led by the Fraunhofer Institute for Chemical Technology (ICT) are studying the use of supercritical carbon dioxide to separate fuel from plastic. Says ICT project manager Birgit Bohlmann, "The shredded fuel tanks are placed in pressurized vessels and diffused with CO2 gas. At a specific pressure and temperature, the gas acts as a highly efficient solvent, extracting the fuel that has infiltrated the plastic. The gas is then pumped round a circuit, and the pressure is reduced to release the dissolved fuel."
HEALTH & SAFETY
Intake of plasticizer assessed
A German risk-assessment institute says bodily intake of an important PVC plasticizer could be much higher than previously assumed.
The Bundesinstitut fur Risikobewertung (BfR), a government advisory body, says tests done to date on intake of diethyl hexyl phthalate (DEHP) have not taken into account the amounts of the plasticizer that migrate from packaging into food. It bases its arguments on the new study findings from the University of Erlangen and wants the European Chemicals Bureau (ECB) to review the study. DEHP is widely used in PVC for food and nonfood contact applications. It has a low acute toxicity and is not classified as mutagenic. High doses may have damaging effects on the testicles, kidneys, and liver.
Average daily intake of DEHP through respiratory air, skin, and blood is currently calculated to be 12 µg/kg body weight and day (µg/kg body weight/day). The EU Scientific Committee for Food has set the tolerable daily intake of 50 µg/kg body weight/day. BfR says that when researchers at Erlangen examined urine samples from 85 participants for levels of DEHP degradation products, they calculated an intake level for 5% of the participants that was higher than 52.1 µg/body weight/day.
September MP''s New Products section included the wrong photo for Sterling''s SCD & SMD Series dryers. Here is the photo that should have appeared.
It was reported in Modern Plastics'' September issue that Mark Paddock has joined Arburg Inc. as sales director. He is in fact a regional sales manager.
The reference to Kaneka Corp. in an article on microspheres (July 2003 MP/MPI p. 33) should have actually referred to Kureha Chemical.