The past weeks have brought unprecedented moves at multiple leading plastics and chemicals suppliers around the world as they worry that the rapidly falling demand for resin, among other products they supply, will show no sign of slowing anytime soon as, especially, slow car sales have had a detrimental effect on resin sales. Processors, lacking access to credit, are emptying their resin inventories for any current work. At this writing, just hours after a lifeline was offered to Detroit, one can assume that such moves will continue, with the associated headcount reductions as well.
Polymer and additives maker BASF (Ludwigshafen, Germany), for instance, pointed to a steep decline in demand in many of its key customer markets—with automotive singled out as especially poor— as reason for its plans to close, at least temporarily, 80 plants and reduce production at or idle an additional 100, including its polystyrene and caprolactam (a pre-product for nylon production) facilities. BASF is proceeding with its acquisition of Swiss-based additives maker Ciba.
DuPont plans to close 10 plants and, like BASF, cut output or idle 100 more. Plastics supplier Sabic Innovative Plastics in November announced it would reduce its output by up to 20% on a material-by-material basis. Other plastics suppliers also are slowing or shutting facilities, with Bayer stating in mid-December that its MaterialScience business unit, home to its plastics operations, will likely see plants idled, too.
The world’s largest supplier of polyethylene, Dow Chemical, is moving its entire basic plastics supply business into a joint venture officially formed in December after more than one year of negotiations. Called K-Dow Petrochemicals, the 50:50 joint venture with Petrochemical Industries Company (PIC) will be one of the largest petrochemicals and plastics companies in the world. Also rolled into K-Dow Petrochemicals will be two other JVs between Dow and PIC, MEGlobal and Equipolymers. Dow says the move will help it better access lower-cost feedstocks, and free cash for faster-growing business units.—[email protected]
