E-Update Industry News

Temperature, resin prices rise over summer

Upward pressure in resin pricing remained a potent force in North America through the summer, but now as producers raise prices they add export demand, rising shipping costs, and growing energy costs to the familiar chorus of rising feedstock prices as justification for higher prices. (Please see Materials Pricing feature in the September issue of Modern Plastics). Resin producers have stopped absorbing added costs, and in late July several announced more price increases, covering materials from acrylics and urethanes to engineering plastics like nylon and styrenic copolymers like ABS and SAN.

BASF announced price increases on standard nylons ($.15/lb), specialty nylons ($.15/lb), and recycled nylon ($.15/lb). The company also plans $.10/lb hikes on PBT and post-consumer PET. "We must manage our business to offset the difficult environment of the North American plastics industry, which continues to experience unprecedented escalating raw material, shipping, and energy costs," said Susanne Mueller, BASF director of sales for engineering plastics in a statement.

BASF also announced hikes in MDI products in the U.S., Canada, and Mexico because of benzene prices, which have more than doubled since the beginning of the year. MDI has always presented thin margins to producers, who, because of this, never encouraged capacity expansions. "Existing plants are now sold out on a regional and global basis," explained Lawrence Berkowski, director of BASF''s urethane chemicals in North America in a release. "However, there has not been sufficient reinvestment in MDI capacities over the last several years because of unsatisfactory returns."

Acrylics manufacturer Cyro raised prices-for the third time in a 100-day stretch during the summer-on acrylic polymers and impact grades by $.08/lb due to raw material costs and U.S. and global demand, which is beyond the company''s current capacity. The company said the weak dollar versus the Euro is exacerbating demand for U.S.-made materials. Acetone, the key feedstock for acrylics, remains at historic highs.

Compounder PolyOne said in a financial statement of Q2 earnings that raw material and additive costs continue to hurt margins, and that in Q3 2004, when combined with lower sales, could reduce operating income by $3 to $5 million.

There doesn''t appear to be any relief in sight with natural gas and crude oil pricing remaining volatile; in August, prices topped the $50/barrel mark for the first time. Benzene rose 35% in the final weeks of July, doubling since the start of the summer to more than $4/gallon.

Shipping might see some relief, with the port of Los Angeles, the nation''s busiest, adding 3000 workers following an agreement between shipping companies and union leaders, according to the Associated Press. Record traffic and a labor shortage had contributed to longer waits and greater costs for delivery. The AP report said normally, three to four ships each day are stalled from entry into the port, but since the beginning of July the average had been 14 to 15 ships.

GEAM Joins Chinese Institute to Create Smart Buildings

GE Advanced Materials announced at Chinaplas 2004 that it has entered into an agreement with the Shanghai Research Institute of Building Sciences (SRIBS) to develop two ecologically friendly and energy efficient buildings, defining a new standard for next generation "smart" buildings. Under the management of the Ministry of Science and Technology (MOST), and with the support of the Shanghai Municipal Government, the design and construction of the smart buildings will be led by SRIBS, and conceptualized together with GE Advanced Materials. GE will supply the project with specialty materials.

Among the two smart buildings is an 1,800-sq-m office structure that was targeted for completion in August this year. Construction of a 600-sq-m residential apartment project will commence this September.

LEXAN polycarbonate Solar Control IR sheet, which represents the next generation of heat-management glazing, will be introduced in the smart buildings. These solar control-sheet products significantly reduce solar transmission while offering high levels of light transmission, helping reduce energy costs for cooling and lighting buildings.

The LEXAN Solar Control IR sheet materials are transparent with a green tint, which blocks near infrared heat but lets in high levels of light. Proprietary resin additives are used to manage heat instead of expensive and fragile coatings, which can be damaged during handling and installation. Because the GE additive technology is inherent to the polymer, solar control is virtually permanent and provides UV protection to both sides of the sheet.

Distributor Laird gets new owner

Laird Group PLC sold its U.S. plastics-distribution unit (Laird Plastics Division) to a unit of closely held Blackfriars Corp. of Delaware for $65 million (€52.8 million), and bought Centurion Wireless Technologies, a closely held maker of cellular antennae in Lincoln, Nebraska for $114.9 million (€63.2 million) plus 14.3 million new Laird shares to be issued to Centurion''s shareholders. The deal is part of a strategy by Laird, a U.K. electronics materials and technologies company, to concentrate on high-growth technology markets.

Crompton chief says Davis-Standard doesn''t fit

Robert Wood, chairman of Crompton Corp. (Middlebury, CT), says he would be surprised to see extrusion and blowmolding equipment maker Davis-Standard (Pawcatuck, CT) remain part of the total company in 18 to 24 months. Responding to a questions from Bob Koort, an analyst from Goldman Sachs, following the release of Crompton''s second-quarter financial results, Wood says the idea of combining an equipment maker together with raw materials producers "doesn''t seem to translate very well into practice. That business frankly just doesn''t fit long term with us based on the dynamics in that industry and the cyclical nature of the business."

Wood admitted that Davis-Standard had improved its orders backlog within the last quarter compared to a year ago, but that doesn''t appear enough to convince him or the company to keep Davis-Standard long term since turnover dropped from more than $310 million in 2000 to less than half that in 2003. A Crompton spokesperson, however, told Modern Plastics that Davis-Standard is not currently up for sale.

SPI trade report: U.S. processors losing domestic market share

The Society of the Plastics Industry (SPI) released its latest report, "U.S. Plastics Industry Trade Through 2003: Global Business Trends, Partners and Hot Products," compiled for SPI by Probe Economics Inc., and it shows a massive $20.2-billion trade deficit in contained plastics products in 2003.

The report, unique to SPI, contains data collected on the import and export of plastics that are contained in other products, such as automobiles, appliances, medical devices, computers, and phones. Data from the report also indicates that plastics consumption is not growing as fast as it once had. This is gauged through "apparent consumption" (the measure of domestic resin shipments, plus imports, minus exports), which was $41.15 billion in 2003. This measure does not take into consideration the resin that comes into the U.S. already processed and contained in other products ("true consumption"), which was a notable $50.4 billion in the same time frame, nearly 22% higher than "apparent consumption" figures. The higher growth rate of "true consumption" indicates that U.S. resin and plastics products producers are losing share in their domestic market.

The full report can be purchased from SPI at a cost of $390 for members and $780 for nonmembers. Contact SPI at www.plasticsindustry.org.

Shell, BASF mull offloading polyolefin joint venture

Oil, gas, and chemicals producer Shell (London) and chemicals manufacturer BASF (Ludwigshafen, Germany) have announced plans to "review strategic options regarding (polyolefins joint venture) Basell." Both companies hold a 50% share in Basell (Hoofddorp, Netherlands). Formed in 2000 by joining the polyolefin businesses of Shell and BASF, Basell is the world''s largest producer of polypropylene and Europe''s largest producer of polyethylene, according to business analyst Hoover''s. Basell''s parent companies are also weighing a public offering of the company, which had sales of $5.8 billion in 2001. German news reports claim that Saudi Arabian supplier Sabic is in the lead to purchase Basell.

In related news, Basell has started producing metallocene-based polypropylene (mPP) at a 200,000-tonnes/yr-capacity plant in Bayport, TX. Previously it had exported mPP to North America from Europe.

Protective packaging processor adds some punch

ProtecPac has acquired the assets of GW Worldwide Protective Packaging Corp., a three-year-old business based in Brampton, ON. ProtecPac is headquartered in Lachine, Quebec.

The two firms have similar product lines. Jan Willem Wieringa, general manager, ProtecPac, says the addition will help his firm expand in North America''s protective packaging market. Products include air cushioning, mailers, laminations, and film conversion. The new capacity will also be used to allow ProtecPac to enter the polyethylene bubble mailer market, a new product for the firm.

In addition to the Brampton facility, ProtecPac has two manufacturing facilities in the Montreal area. The firm is a division of Montreal-based IndusPac, a plastics and paper packaging manufacturer with 18 facilities in North America.

Self-adhesive film converter expanding in U.S.

French converter Novacell (Deville les Rouen) this summer has opened three service centers in North America for its expanding customer base there, says the firm. It entered the market with its purchase in 2000 of the surface protection division of U.S. firm Ivex in 2000, then renamed Ivex Novacel and since May 1 called Novacel Inc.

Protective films are used to protect semi- or finished goods from scratches and dirt during assembly, handling, storage, and transport. The films also are used to protect the screens of electronic devices and appliances such as cell phones, laptops, CD players, and PDAs. The three service centers are in Bellwood, IL, Palmer, MA, and Dallas, TX.

Ubertini tops at distributor Bamberger

Lawrence Ubertini, formerly president and COO at independent thermoplastics distributor Bamberger Polymers (Jericho, NY), has been named the firm''s CEO. He has been with the firm since 1973 and played a leading role in the company''s 1993 management buyout. According to the company, he intends to improve the existing business while also seeking new growth opportunities in the plastics industry.

Swiss concentrates supplier opens U.S. site

Sukano Products Ltd., a privately owned Swiss manufacturer of plastic additives, opened its first facility in the U.S. in August in Duncan, SC. Sukano Polymers Corp. will manufacture masterbatches and compounds primarily for extruded film and sheet, blown film, and injection molded polyester and copolyester applications. The supplier previously imported to the U.S.

Key products are functional additives for PET and PETG as well as products for polycarbonate and polypropylene. Included in the product line are white color concentrates, matting agents, mold release masterbatches, UV absorbers, optical brighteners, and clarifying agents.

In Europe, Sukano''s range includes slip/antiblock, antistatic, matting agents, UV-inhibitor/UV-absorber, impact modifiers, mold release agents, and nucleating masterbatches; flame retardants; and compounds.

Injection machine makers opening European technical centers

Husky Injection Molding Systems officially opened its Copenhagen Technical Center in July. The facility will support service and sales needs in Denmark, Finland, Norway, and Sweden. Copenhagen is Husky''s 20th such center worldwide and sixth in Europe. The centers provide such services as parts and service support, machine and hot runner training, mold trials, and systems integration. About half of the 900-sq-m facility is dedicated to a machine hall. Demonstration machines are scheduled to be installed in October.

Meanwhile, Engel plans to open its second automation center outside its Austrian home territory next year. It credits the first, which opened in Hagen, Germany at the end of 2002, with helping it reach record sales in the country last year, which were up 30% on 2002, giving it a 20% share of the market. Now it is turning its attention to Italy, and says the concept will be implemented step by step in other important European markets. The center is likely to be co-located with its existing sales and service operation in Milan. Like Hagen, it will operate as an extended assembly facility of Engel''s Austrian automation technology center in Dietach, combining core components from Dietach, such as linear robots, tray servers, and conveyor belts, with locally manufactured components to make complex automation systems.

Rocker panel transition underway

Nylon supplier Rhodia Engineering Thermoplastics (Lyon, France) says molded nylon engine rocker panels are quickly finding a home under the hoods of cars made in North America and Japan, having already gained acceptance in Europe. The supplier this summer commercialized its Technyl A218 MZ15 V25 grade specifically for the application.

"We''ve the first applications in Japan already," where aluminum is the standard material, says Jean-Claude Steinmetz, president of Rhodia''s nylon business. "And in the U.S., we are seeing swift changes at OEMs from aluminum or BMC (bulk molding compounds) to thermoplastics. Globalization of car platforms is driving this, as is the strength of European Tier One suppliers [bringing their expertise in molding these to other regions]."

New PP capacity for Mexican supplier

Indelpro S.A. de C.V., the leading Mexican polypropylene supplier, will build a new 350,000-tons/yr-capacity plant, with operations to begin during the third quarter of 2006. Indelpro is a subsidiary of Alpek S.A. de C.V. (the petrochemical unit of ALFA and the largest producer of petrochemicals in Mexico) and Basell (the world''s largest producer of polypropylene and a leading supplier of polyethylene and catalysts).

The new plant, which will be one of the largest in the Americas, would give Indelpro a combined capacity of 570,000 tons/yr. The current site would then be one of the largest polypropylene complexes in North America.

Californians turn to Web to recycle bags

The American Plastics Council has teamed with Moore Recycling Assocs. (Sonoma, CA) to tap into California''s market of largely discarded plastic bags and films through the creation of a website for consumers, businesses, and local government. Designed to help recover retail bags, stretch wrap, and shrink wrap, plasticbagrecycling.org allows visitors to create a list of grocery stores, recycling centers, and transfer stations in their local area.

An environmental group, Earth Resources Foundation (Costa Mesa, CA), is calling for a $.25 tax on the sale of plastics bags within the state to eliminate waste and litter.

DSM investigates melamine production in China

In conjunction with the China National Offshore Oil Corp. Chemical Ltd. (CNOOCC), DSM Melamine is studying the feasibility of a 120,000-tonne melamine plant on Hainan Island, China. The $100-million investment for the thermoset melamine facility would be split 70/30, with DSM taking on the larger portion.

A decision won''t be made until Q1 2005, but if pursued, a capacity of 120,000 tonnes would make it the largest melamine plant in the world according to DSM (Sittard, Netherlands), which manufactures the material on three continents and claims a 25% stake in the global melamine market. CNOOCC is state-owned and produced the equivalent of 33.36 million tons of oil and natural gas in 2003.

Sekisui in China Medical JV

Sekisui Chemical (Osaka, Japan) has established a joint venture with medical device company China CYTS Trank Technology (Beijing) to manufacture and sell PVC vacuum tubes for blood sample collection in China. Sales operations were to begin in earnest by early September.

The 2003 China market for blood collection tubes is estimated at 200 million annually, and half of those are currently glass and nondisposable. With the SARS outbreak of 2003, authorities are recommending a switch to disposable plastic tubes. The joint venture, Beijing Sekisui Trank Medical Technology Co., targets sales of 200 million tubes in 2008.

Big pipe project

Battenfeld Extrusiontechnik (Bad Oeynhausen, Germany) has installed a 1600-mm-diameter polyethylene pipe extrusion line to produce water and sewage pipe at Zhejiang Zhongyuan Fengye Pipe Co (Zhuji, China). The new line, with its 150-mm extruder, has a throughput of 1500 kg/h.

Distributor increases French presence

Nearly doubling the company''s size, European polymer distributor Distrupol strengthened its position in the French marketplace by absorbing the facilities and staff of SABIC-owned Aimé Vistalli SA. Vistalli''s presence in Oyonnax, near France''s so-called "plastics valley," will give Distrupol a strong position in the south of the country according to the company''s David Jukes. SABIC''s (Riyadh, Saudi Arabia) Dutch subsidiary had decided to divest Vistalli, providing the opening for Distrupol.

RFID continues to snowball

News from the world of radio frequency identification (RFID) systems continues. Though still in its infancy, with a few large retailers insisting that suppliers include RFID tags on pallets, large cases, and other industrial packaging, the technology is expected to eventually extend well backward into the supply chain, affecting processors.

In recent RFID news, one of the leaders in RFID systems, Matrics Inc. (Rockville, MD), was acquired by Symbol Technologies Inc. (Holtsville, NY) for $230 million in cash. The acquisition gives Symbol, which makes barcode scanning and retail tracking systems, access to RFID systems that it can integrate with its current technology.

RFID systems use small tags containing electronic chips to allow stores to track goods via sensors.

UCB films division trades hands

A group led by the former managing director of Hays Chemical Distribution and Candover Partners is acquiring the films business of Belgium-based UCB Group for ¤320 million. The acquisition is expected to be completed this month.

The new owners intend to name the firm Surface Specialties UCB. It had about ¤360 million annual turnover last year as UCB Films. Specialties include BOPP and cellulose films at processing sites in Australia, Belgium, the U.K., and the U.S.

Dow taking further steps in Middle East production

Polymer producer Dow Chemical (Midland, MI) has become at 50% joint partner in a petrochemical joint venture in Oman; the Omani government and Oman Oil Company (OOC) will each take 25%. Located in Sohar Industrial Port Area, the new company will construct a complex including feedstock production, gas cracker, and three world-scale polyethylene production units. One of the aims of the Omani government was to commit the joint venture to develop "downstream industries in Oman that will convert polyethylene to end-products in Oman, thus enhancing the level of job creation that will result from the complex."

Dow will not reveal the exact capacity of the plants other than to say that it views world-scale plants as having a capacity of 300,000 tonnes/yr or more. Dow spokesman R. Matt Davis also declined to divulge what grades of PE would be produced, or what catalyst system would be used. Construction is scheduled to start next year and could take three to four years to complete, Davis says. The main market for the output is expected to be Asia, but Middle Eastern and European markets could also be served.

"This project is another step in achieving Dow''s strategy of having cost-competitive feedstock," says Andrew Liveris, president and COO of Dow.

Dow already has a joint venture in Kuwait-Equate, which it inherited from Union Carbide when Dow merged with that company-producing polyethylene for the Asian and Middle Eastern markets. Davis says the new Omani setup would augment rather than compete with Equate sales in the Fast East.

Review of low-environmental-impact polymers

Two workers at the Warwick Manufacturing Group, part of the University of Warwick in England, have put together a 360-page overview of the manufacture and uses of polymers that come from renewable resources and/or are biodegradable. It is aimed at those wanting to use biodegradable materials, and may also be useful to designers, specifiers, and waste managers.

Topics covered include: synthesis of polymers from sustainable resources; chemistry and biology of polymer degradation; polymer properties; natural fibers as fillers/reinforcements; manufacturing technologies; the economics and market potential; and ecodesign. "Low Environmental Impact Polymers," edited by Nick Tucker and Mark Johnson, costs €152 and is available from the Rapra Technology website at www.rapra.net/bookstore.

New TiO2 plant planned

A plant in Eastern Kazakhstan, part of the former USSR, plans to launch titanium dioxide production later this year. The Ust-Kamennogorsk company has just completed construction of its first furnace for processing the material and the second unit is under construction. In the past, the bulk of TiO2 was imported from non-CIS countries. The move is seen as a way to reduce reliance on imports.

Lasers used to boost crystalline HDPE

Researchers at the University of Florence (Italy) and the European Laboratory for Non-linear Spectroscopy say they have found a way to use laser light and pressure as a catalyst to produce high-density crystalline polyethylene. The system, described in Nature Materials magazine, is said to be cost effective and could be scaled up to commercial production.

Radici Group exits PET supply

The Italian firm will concentrate on engineering plastics, especially nylons, and fibers. It sold its Aussapol PET business to Portuguese firm Selenis, which is already in the sector. Aussapol includes two plants in S. Giorgio de Nogaro with 145,000 tonnes/yr capacity. Selenis had 70,000 tonnes/yr capacity prior to its purchase.

Passing of the reigns at Tinius Olsen

C. Robert Tait, III is now president of the testing machines manufacturer, based in Horsham, PA. He also continues as a member of the board of directors. He succeeds his own father, Robert Tait, Jr., who steps down after 32 years in Tinius Olsen senior management, and 46 years with the company. He will likewise continue serving on the board. C. Robert Tait, III represents the fifth generation of the founder''s family to run the company.

Compostable cups get concert debut

At a series of music concerts in Belgium in August, Belgian brewer Alken-Maes Breweries served some 1.5 million beers in thermoformed compostable cups made from NatureWorks polylactic acid (PLA), supplied by Cargill Dow LLC (Minnetonka, MN). Finnish packaging processor Huhtamaki (Espoo) supplies the cups.

"We view NatureWorks PLA as a more practical and economical solution for reducing the amount of waste generated at festivals," says An Steylemans, a spokesperson for the brewery. Huhtamaki expects demand for PLA packaging to increase and this autumn will launch its environmentally friendly BioWare range of packaging.

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