Taking the company public still remains in Petkim’s future

Notwithstanding the successful startup of its new low-density polyethylene (LDPE) line earlier this year, Turkish polymer producer Petkim Petrochemical (Izmir) says it is still on the outlook for a buyer to take over the company. So far 38% of the firm has been privatized. A hoped-for buyer in the form of a Western or Japanese polymer maker or floating the company on the stock exchange has so far come to nothing.

The polyethylene expansion at the site, using tubular technology licensed from Sabic (ex-DSM), has brought LDPE capacity from 190,000 tonnes/yr up to 310,000 tonnes/yr. The development was made possible by an increase in ethylene capacity to 520,000 tonnes/yr at the site. The company’s polypropylene capacity (previously 80,000 tonnes/yr) is now 144,000 tonnes/yr, says Seniha Keser, global market research manager at Petkim.

Despite this increase, Keser says only 23% of Turkish domestic demand can be met by output from the company. Petkim is hoping to increase this to 30% next year. This is a reason Turkey remains one of the hottest spot-market trading countries, says Mirza Kadic, director of international operations at polymer market intelligence firm ChemOrbis (Istanbul).

Keser admits that the company has significant competition from Middle Eastern competitors where feedstock is substantially cheaper than in Turkey. “This could have an adverse effect on margins,” she says.

KMT carves niche in trimming market

KMT Group AB (Stockholm, Sweden) acquired privately held, American companies H2O Jet Inc. (Olympia, WA) and Robotic Production Technology (Auburn Hills, MI) to broaden its capabilities in the areas of waterjet cutting and robotics. KMT develops, manufactures, and markets advanced production machines and systems, including waterjet cutting, grinding, and sheet metal processing.

As a result of the acquisitions, KMT becomes the global leader in robotic waterjet and trimming applications, including waterjet pumps for the automotive and spare-parts market. KMT also gains process knowledge in trimming applications outside waterjet technology, such as laser cutting, router, and knife trimming. Through the acquisition of RPT, KMT Cutting Systems will have a global reach, and its sales will reportedly more than double. RPT’s growing non-automotive business provides KMT with a greater access to this business in both Europe and North America. The new company name for RPT is KMT RPT Inc.

“By combining KMT Cutting System’s and KMT Waterjet System’s existing organizations, international reach, and distribution channels with RPT’s brand and H2O Jet’s know-how in nozzle technology, we see considerable growth opportunities globally,” said Lars Bergstrom, president and CEO, Karolin Machine Tool AB.

H2O Jet has 30 employees and annual sales of approximately $10 million. RPT has a staff of 80 employees and annual sales of approximately $35 million, with an installed base of approximately 3000 robotic systems.

Both companies were consolidated in the KMT Group as of Dec. 1, 2006. The total purchase price for both companies is $36 million. Management for both companies will remain in place following the acquisition.

Bayer boosts PC compounds in China, India

Bayer MaterialScience (Leverkusen, Germany) announced plans to spend €80 million over the next two years to create a network of compounding and Color Competence Centers (CCC) for its Makrolon polycarbonate (PC) products in Asia—investing specifically in India and China. The company has plans to add a CCC to its compounding operation in Shanghai (Caojing), which opened in June 2005 with an annual capacity of 40,000 tons. It will also add a compounding plant with integrated CCC in southern China in the first half of 2008, joining the company’s existing Polymer Research and Development Center in Pudong, Shanghai. At the end of 2008, Bayer will add compounding and a CCC to its new New Delhi, India site.

Globally, the company operates compounding facilities with integrated CCCs in Filago Italy; Newark, OH; and Map Ta Phut, Thailand. Planning to produce 1.2 million tons/yr of Makrolon globally by the end of 2006, Bayer manufacturers the PC in Baytown, TX (260,000 tons); Antwerp (240,000 tons), Uerdingen, Germany (330,000 tons), Map Ta Phut, Thailand (270,000 tons); with the new Shanghai site contributing 100,000 tons in 2006.

Sales for Bayer’s MaterialScience group were up 12.4% in the third quarter of 2006, and Bayer AG Chairman of the Board Werner Wenning announced in the company’s 2005 annual report that it plans on investing $1.8 billion in “world-scale” polymer facilities in China through 2009, having earmarked €1.5 billion for MaterialScience capital expenditures in 2006, with €1.9 billion slotted for research and development. In China in 2005, MaterialScience sales rose 21.1% to €2.1 billion on higher prices and volumes. In Europe, 2005 plastics sales were €4.7 billion, and in North America they were €2.7 billion.

Extrusion up, but machinery flat otherwise for U.S.

Shipments of primary plastics machinery and equipment by U.S. manufacturers and importers stayed largely flat in the third quarter of 2006, according to the latest Society of the Plastics Industry’s (SPI; Washington, DC) Committee on Equipment Statistics (CES) report, with $254 million worth of product shipped in Q3 2006, up 3% over the $246 million shipped in the second quarter of this year. SPI reports that overall, through the first nine months of 2006, $746 million in equipment shipments were made by U.S. manufacturers and importers, down 2% from 2005.

Extrusion saw the biggest increase, with machinery rising 15% compared to Q3 2005, and up 19% year to date. The value of injection molding machinery has fallen 3% from 2005’s second quarter, but was up 3% compared to Q2 2006. Plastics components were down 8% from the second quarter, and the value of blowmolding machinery shipments was down 10% compared to Q3 2005 but up 130% from the second quarter of this year.

Sumitomo expands in the West

Processor demand for its electrical injection molding machines is the reason Sumitomo Plastics Machinery, with North American headquarters in Norcross, GA, has opened a second training facility on the U.S. West Coast at the facilities of one of its local sales representative agencies, Integrated Plastics Machinery Inc. (Corona, CA).

The training facility, which will also be used for mold tests and demos, will have a new SE75DU direct-drive all-electric injection molding machine with the N-9 PC-based control system and equipped with a Yushin RAII-series take-out robot and RJG Inc.’s digital cavity-pressure sensor technology.

Four two-day operation classes and four two-day maintenance classes have already been scheduled for the center, beginning in April 2007. For more information on Sumitomo training, go to www.sumitomopm.com/training.html or call Sumitomo’s Dave Stelmat or Kevin Walsh at (770) 447-5430.

Lead-free additive demand prompts expansion

Kisuma Chemicals BV (Veendam, The Netherlands) in the past two years spent €20 million to expand but now says ongoing rising demand for lead-free heat stabilizers forces it to expand its specialty magnesium compounds production again. As a result, a fourth production line will be installed in two phases at its Veendam plant in the Netherlands, with the first phase adding approximately 5000 tonnes/yr capacity before the end of 2007, and another 500 tonnes/yr capacity added by the end of 2008.

After expansion, the nameplate capacity of the plant will be close to 30,000 tonnes per annum. Of this, approximately 20,000 tonnes from two lines is dedicated to the production of Alcamizer synthetic hydrotalcites, which are mainly used in nonlead PVC heat stabilizers. Other products include DHT-4A, a halogen scavenger for polyolefins, and Kisuma 5 synthetic magnesium hydroxide used as flame retardant in nonhalogen wire and cables and as a smoke suppressor in rigid PVC.

Kisuma’s Alcamizer products are key components for calcium-zinc stabilizers, which are rapidly replacing lead stabilizers in PVC compounds in Europe and around the world. In North America tin stabilizers are used for PVC. Kisuma Chemicals BV is the European affiliate of Japan’s Kyowa Chemical Industry Co. Ltd., which opened its European facility in 1999.

Calling all recyclers

The Indian Plastics Institute will organize two, 2-day Plastics Recycling Conferences in February, one each in Mumbai and in Delhi. Plastics recycling in India already comes to more than 1.5 million tons/yr, with more than 2000 recyclers across the country, and the country’s rapid growth is expected to propel plastics recycling to much higher levels. Firms interested in participating in the conference, either as presenters or attendees, should contact the IPI at T: 91-22-56950347 or email [email protected].

GEAM becomes Momentive

The former GE Advanced Materials (GEAM) silicone, quartz, and ceramics business, which was bought by private equity fund Apollo Management LP from GE for $3.8 billion, has been renamed Momentive Performance Materials Inc. (Wilton, CT), and it will retain the employees and management teams of former GEAM joint-venture units GE Bayer Silicones and GE Toshiba Silicones. Wayne Hewett will stay on as CEO of the renamed business.

In 2004, GE expanded its silicones business, purchasing OSi (organosilicones) from the former Crompton Corp. (now Chemtura). GE Toshiba Silicones, a JV going back 30 years, added a 20,000-tonne plant at Nantong in the Jiangsu province of eastern China this year, to existing operations in Ohta, Japan, and Seoul, Korea. Other Chinese plants included Shanghai, Songjiang, and Shenzhen, with an R&D center in Pudong. In 2005, the silicones business generated $2 billion in revenue for GE (see e-Weekly, Jan. 23-37 2006 for initial report).

Earlier in 2006, Apollo and Graham Partners paid $2.25 billion for plastics packaging and closure giant Berry Plastics (Evansville, IN). Founded in 1990, Apollo has spent $16 billion acquiring companies, and started its sixth private equity fund in 2006, which represents $12 billion in new capital.

The Plastics Exchange Week in Review

The Plastics Exchange (TPE; Chicago, IL) reports that polyethylene (PE) producers are sticking to higher prices on the spot market in advance of a proposed January price increase of $0.06/lb (for more information and detailed, historical charts go to www.theplasticsexchange.com). Ethylene feedstock was up more than a nickel over its low to $0.36/lb, but contract ethylene prices are expected to come in around $0.03/lb lower for December in the low $0.40/lb. Thus far a mild winter has helped depress natural gas prices below $7.40/million Btu, creating a situation where TPE thinks ethylene’s rally will cease, or refiners will once again enjoy beefier margins. Demand for PE exports remains strong, but bottlenecks in Houston could temper that demand, especially with year-end property taxes looming for shipments that don’t make it out. Domestically, demand is strong with many building an inventory in advance of expected January price increases.

In the spot polypropylene (PP) market, prices rose another half-cent, and poor production margins are improving, according to TPE, with producer inventories being cleared. Offgrade materials, particularly copolymers, are seeing good demand, and supply is tight enough that PP producers issued a $0.05/lb price increase.

In polystyrene, prices held steady in spite of increases in spot supplies. Offers for higher quality resin are coming in at slightly lower prices, but TPE feels prices may have topped out, and the chance exists for reduced contract prices going forward at the start of 2007.

Briefs

Ashland Distribution (Dublin, OH), which previously distributed Dow Chemical plastics materials to processors, says it is now seeking alternatives since Dow has terminated its supply agreement with the company. “Because of our partnerships with a variety of global plastics manufacturers, we are prepared to offer our customers a range of options to meet their ... needs,” says. Ted Harris, company president.

Production problems at the carbon-monoxide production unit of Bayer MaterialScience’s Uerdingen, Germany site used for the production of methane diisocyanate (MDI) has caused force majeure for the company’s polyurethane production there. The production of polycarbonate is also affected to some extent, says company management. When the unit will be back in service was not known at press time.

Auxiliaries equipment maker Conair (Pittsburgh, PA) has installed a 90-mm extruder from Davis-Standard (Pawcatuck, CT) at the company’s technical center for use in developing and testing new downstream equipment designs.

Plastics supplier Dow Deutschland (Rheinmünster) will temporarily shutdown its expandable polystyrene (EPS) production at this site during January for maintenance work and to upgrade the existing line.

Processor Excelsior Packaging Group (Yonkers, NY) has started up its nine-layer cast-film Filmex line from equipment maker Windmöller & Hölscher (Lengerich, Germany). Although the current configuration of the line is for nine layers, the company says it is capable of producing 17 or 28 layers for special applications when different feedblock technology is added.

Constantia Multifilm (Elgin, IL) has introduced a five-layer, cast, modified, high-crystalline polyethylene-based film, WrapSTar, which is claimed to be a direct competitor to cellophane twist wrap. The web was developed in conjunction with the company’s German subsidiary Ebert Folien to give good dead-fold properties, high clarity, and gloss. The material is heat-sealable and processes in existing cut-n-wrap machinery.

Two extruders, an AMC/BEX54 and AMC Compact from American Maplan (McPherson, KS), part of the SMS Plastics Technology group, have helped processor Central States Marketing & Mfg. (also McPherson, KS) increase efficiency by up to 15%, says company President Chuck Singleton. The company is a producer of window profiles, fencing and siding accessories, and custom profiles.

Customer trials and extrusion seminars at the joint Davis-Standard/Jorgenson Machinery laboratory (Houston, TX) have increased since the facility opened in 2005, reports Emery Jorgenson, owner of Jorgenson Machinery and lab manager. So far the facility has hosted seminars and testing to processors and their staffs from across the U.S. and the U.K.

Film-extrusion equipment maker Rajoo Engineers Ltd. (New Delhi, India) has installed a seven-layer blown-film line at the processing operations of Boubyan (Kuwait City, Kuwait), where it is being used to produce stretch hoods and sacks to bag polymer produced by resin manufacturer Equate.

Two European plastics associations, PlasticsEurope, the European polymer producers association, and TEPPFA, the European Plastics Pipes and Fittings Assn., agree with the initiative of the European Commission to harmonize test methods and procedures for testing drinking water quality and the pipes that supply water. The project to model and predict water quality within plastic-pipessystems, says Tiem Meijering, project manager at TEPPFA, are complex and costly but the group expects to have results shortly to provide a common platform throughout the continent.

Thermoforming machine manufacturer Kiefel AG (Freilassing, Germany) announces it recently delivered its 50th thermoforming machine for refrigerator interiors and door liners. The KIV/KID machine range used for processing these was first launched in 1999.

Sekisui Alvero, an international polyolefin foam manufacturer, is taking orders online through its web portal www.evolucel.com for its 60 top-selling products. Orders can be submitted around the clock, 24/7 for countries within Europe.

Fiberforge (Glenwood Springs, CA) has been named one of 47 Technology Pioneers for 2007 out of 225 nominees by The World Economic Forum for its patent-protected system that creates advanced thermoplastic-based composites at high speeds. Granted to companies identified as “developing and applying highly transformation and innovative technologies,” Technology Pioneers are invited to The World Economic Forum’s annual meeting (Jan. 24-28; Davos, Switzerland). Past winners include high-profile names like Google and Napster. Fiberforge’s tailored-blanks technology, which is covered by two U.S. patents, creates parts with high fiber alignment, fraction, and length at fast speeds with low scrap rates (see MPW November 2005 for initial report).

Names in the News

Frigel North America (Lake Zurich, IL), the U.S. subsidiary of process-cooling equipment manufacturer Frigel Firenze S.p.A. (Firenze, Italy) has named Stephen Petrakis as president of its North American operations effective Dec. 18, 2006. Petrakis comes to Frigel from the Society of the Plastics Industry where he served as director, Midwest and Northeast operations since September 2005. Prior to his work with the SPI, Petrakis worked as vice president, sales and marketing, of auxiliary equipment manufacturer Sterling Inc. and ACS Group.

Frigel’s fluid coolers replace traditional cooling towers with ambient air cooled ones. The firm supplies its temperature control units and cooling units globally. Frigel North America is a sales, parts and service operation supporting Frigel distributors, sales representatives and customers throughout the Americas.

Resin drying, blending, and pneumatic conveying systems manufacturer Novatec (Baltimore, MD) continues to strengthen its staff. The firm was acquired in mid-May 2006 by Conrad Bessemer, formerly president of Conair North America and Conair-Americas until he resigned in February 2006, plus Novatec’s management. Since then, it has rapidly added personnel to key marketing, sales and engineering positions.

Most recently the firm named Don Gruber as regional vice president of sales in the southern U.S. and the Maquiladora area in Mexico. Gruber’s experience includes 38 years of work at both plastics processors and at plastics processing equipment manufacturers. Before joining Novatec he spent seven years with LaBelle Industrial Sales, a plastics equipment manufacturers representative based in El Paso, TX.

The manufacturer also hired Matt Van Dyke as a project manager. He will oversee installations of Novatec’s resin-handling systems, including system design, hiring of crews, and supervision of all aspects of a job. Before joining Novatec he spent six years with plastics auxiliary equipment manufacturer Motan Inc. as an electrical engineer and project manager.

Gholamhosein Nejabat has been named managing director of Iranian polymer powerhouse National Petrochemical Co. (Tehran). He has more than 25 years of experience in the oil and petrochemical sectors and was managing director/CEO of the country’s Petrochemical Industries Development Co. for the last 10 years.

Judson W. Smith has been named VP at Ashland Performance Materials and general manager of Composite Polymers for Ashland Inc. (Dublin, OH). He joined the company in 1987 and has held various positions throughout the company.

New managing director and member of the management board of Iran Petrochemical Commercial Co. (IPCC, Tehran), the distribution arm of resin producer NPC, is Mohammad Ebrahim Mohammadi. He has a Ph.D. in economics from Oxford University.

Wilfried Haensel is the new executive director of PlasticsEurope (Brussels, Belgium), the European association of resin producers. He replaces retiring Nancy Russotto who served as managing director of APME, which was later renamed PlasticsEurope during the last 16 years. Haensel has worked for polymer maker BASF (Ludwigshafen, Germany) for the last 22 years.

Weekly futures activity from the LME

Futures trading of linear low-density polyethylene (LLDPE) and polypropylene (PP) on the London Metal Exchange (LME) for the week of Dec. 4-8 saw a low price for LLDPE of $1120/tonne set on Monday, Dec. 4 for January buyers. LLDPE’s high of $1155/tonne was reached on Tuesday, Dec. 5 for February sellers; and Wednesday, Dec. 6, and Friday, Dec. 8, for March sellers.

For PP, a low price of $1150/tonne was reached on Monday, Dec. 4, and Friday, Dec. 8, for January buyers. The high of $1195/tonne was reached on Tuesday, Dec. 5, for March sellers.