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Faurecia, others embroiled in bribery scandal

An investigation by German officials into bribes paid by Tier 1 and 2 automotive systems suppliers to carmakers has spread to include up to 10 suppliers. German newspapers report automotive parts supplier Faurecia (Nanterre, France) has admitted to the Frankfurt prosecutors that it paid bribes to car companies to win their business, with Faurecia CEO Pierre Levi cognizant of these since 2001. On August 1 Faurecia announced Levi''s resignation. PSA Peugeot Citroën owns 71.4% of Faurecia; about 27% of its sales are generated by VW and VW''s Audi subsidiary.

German reports name Grammer and Magna International among other suppliers firms being investigated. Lear''s offices in Germany were searched last November as part of an investigation into bribes to a since-arrested BMW purchasing manager.

Austrian newspaper Salzburger Nachrichten reports that Austrian supplier Magna Intl. is being investigated by officials in that country.

In Brief

APEX has good news

Trade and investment promotion agency APEX Brasil (Sao Paulo, Brazil) reports Brazilian exports of plastics products rose from 142,000 tonnes in 2002 to 270,000 tonnes last year. The value more than doubled from $485 million in 2002 to $1 billion in 2005.

IDI adds capacity

IDI Composites Intl. (Noblesville, IN) has opened a new manufacturing facility near Birmingham, which will increase its capacity for bulk molding compound (BMC) and sheet molding compound (SMC).

Fiat in India JV

Carmaker Fiat says it will work with India''s Tata Motors in a joint venture in India to build engines, transmissions and passenger cars for the domestic and export markets.

Vitasheet closes two

Europe''s largest thermoplastic sheet extruder, Vitasheet Group (London), the former British Vita, will close two of its 10 processing facilities this year. Closing are ones in Redhill, England and Caleppio, Italy.

PUR in MI for K-M

Krauss-Maffei will open a polyurethane technology and prototyping center this year in Detroit, MI. With two acquisitions in Germany last year, the company has expanded in RIM to include molds, punching tools and everything PUR processors require except materials.

Re-elected to EuPC

The European plastics processors'' association, EuPC (Brussels), has re-elected David Williams as president for another two-year term. Claude Thibaut de Maisières was re-elected as the organization''s treasurer.

Planning for ''ladies in waiting''

Plastics analyst Sebastian Castelli from Société Genérale Cross Asset Research (London) asks, "What if the `ladies'' hit again?" By `ladies'' he means the violent hurricanes that devastated much of the U.S. Gulf Coast last year, and with it the petrochemical industry, logistics, and infrastructure.

"The names (and gender) of future tropical storms and hurricanes will vary but their mere possibility is already bringing consequences to the plastics industry," Castelli says.

Katrina and Rita severely affected the petrochemical industry last year; Castelli says U.S. polyolefins prices were the most affected as the U.S.''s net export status did not allow a quick cooling down of prices through physical regional arbitrage. "Prices in the U.S., particularly for polyethylene, took some months to return to normal, regional, relative levels. As a result, buyers in the region left doors open to foreign markets," he says.

"The threat of another hurricane hit this year is clear (the first storm, Alberto, already struck the Gulf in mid-June) and comes on top of increased energy price volatility due to political instability in the Middle East," Castelli says. He recommends hedging as a management tool for companies bearing increased risk. "As the industry is facing an extreme situation, the financial harm caused by a price cycle without any financial cushion could prove grave for some players'' margins and profits, particularly in the plastics'' conversion and final user industries," he says.

Huge merger in works in glass-fiber/composites industry

Two of the largest firms active in the composite plastics industry, Owens Corning (OC; Toledo, OH) and Saint-Gobain (Paris, France) have announced their intent to merge their plastics reinforcements businesses. The combined operation would have annual sales of about $1.8 billion. Key competitors would include PPG and Johns Manville.

Owens Corning and Saint-Gobain both are leading glass fiber suppliers, and both have extensive long-fiber-reinforced thermoplastics technology and compounding capacity. Both are active in reinforced thermoplastics and reinforced thermoset plastics.

A definitive agreement wasn''t ready at press time but the new company would be called Owens Corning-Vetrotex Reinforcements, with OC owning 60%. Headquarters would be in Toledo. After at least four years, the joint venture provisions would give an option to Saint-Gobain to sell its 40% stake to Owens Corning, and Owens Corning to buy the same. The firms hope to close the merger by early next year. Chuck Dana, now president of Owens Corning''s Composite Solutions Business, is projected as CEO.

China slams brakes on car exports

The latest China Update from international law firm Squire, Sanders & Dempsey LLP (Cleveland, OH) notes that the Chinese government intends next year to restrict car exports only to manufacturers it licenses. Although Chinese car exports still account for less than 1% of all cars exported, the export volume has grown at a rapid rate. China now exports more cars than it imports.

During the first quarter, China''s car manufacturers exported 62,628 vehicles for total value of $647 million ($10,331/vehicle). The new legislation is intended to increase the overall quality of Chinese automotive exports while also decreasing domestic competition that has left many carmakers there with low profits or even losses.

The new system takes effect January 2007. Only companies with a large enough export volume to warrant one will receive an export license. According to the Squire, Sanders & Dempsey report, last year 1025 Chinese companies exported vehicles, but more than 600 of those companies exported fewer than 10 vehicles, and 106 of the companies exported only one vehicle.

Mexico JV targets Tier One suppliers

Two automotive parts injection molders, Wiesauplast (Wiesau, Germany) and Plastic Moldings Company LLC (PMC; Shelbyville, IN) have established a new joint venture in Queretaro, Mexico, with the initial focus on molding braking and fuel system parts for automotive Tier One suppliers. As part of the JV the two firms acquired injection molder ACG (Queretaro).

ACG, established there in 1996, has 40 employees and 10 injection molding machines. The plant is currently ISO 9001/2000 certified and plans also to earn the TS16949 certification.

The new joint venture is called Wiesauplast-PMC de México S. de R.L. de CV (WPMX), Torsten Kutschinski, Wiesauplast''s managing director, said, "Together, we supply high-precision, functional plastic parts for more than one out of every three cars in the world." Wiesauplast last year opened a new 30,000m2 of production facility at its German headquarters.

Repsol investing big in polyolefins

Spanish/Portuguese energy concern Repsol YPF intends to invest some ?600 million in new capacity between 2006-2010 at its Sines Petrochemical Complex is southern Portugal. Repsol YPF acquired the Sines complex from polyolefins supplier Borealis in 2004.

The complex now has 275,000 tonnes/yr of HDPE and LDPE capacity total. New will be 300,000 tonnes/yr of LLDPE, a new material for Repsol, plus 300,000 tonnes/yr of PP, a material not yet produced by Repsol in Sines.

Repsol''s current total global plastics capacity is 450,000 tonnes of LDPE, 370,000 tonnes of HDPE, 520,000 tonnes of PP and 80,000 of EVA

Rosti expanding facility before it opens

Injection molder and contract manufacturer Rosti (Farum, Denmark) says new business will cause it to expand its Suzhou Alpha facility, only months before that facility was to actually open.

Rosti says three new contracts received earlier this year, totaling about $20 million/yr in new business, dictate that the new Alpha factory, which is under construction, needs at least 30% more manufacturing space than the 10,000m2 originally planned. The expansion in floor space will more than double the assembly manufacturing area, space Rosti says it needs to meet the significant assembly requirements for two of the new projects.

The construction will be completed by December with production to begin in January 2007.

Rosti already has three other facilities in Suzhou Industrial Park (SIP), about an hour''s drive from Shanghai, where it has been since 2001. Rosti''s customers in China include OEMs and Tier One suppliers to the business machine, domestic appliances, and automotive markets.

CSP plus Budd equals more processes

Continental Structural Plastics Inc. (CSP; Bingham Farms, MI), through its July purchase of Budd Plastics, can now offer customers compression or injection molded long-fiber thermoplastics (LFT), as well as the supply or processing of direct long-fiber thermoplastics (DLFT), glass-mat thermoplastics (GMT), sheet molding compound (SMC), and bulk-molding compound (BMC) composites, with the ability to formulate materials and form parts.

Budd Plastics, formerly a division of ThyssenKrupp Automotive, has facilities in Carey, MD; Van Wert, OH; and Tijuana, Mexico. CSP says it was especially interested in Budd''s patented TCA (Tough Class-A) SMC compounds, which helps overcome outgassing problems in SMC automotive exterior panels.

Last year, CSP purchased Venture Industries'' Conneaut, OH facility to add BMC and SMC composites to its own GMT processing. CSP believes the Budd acquisition will make it the largest composites processor in North America. Majority equity owner of CSP is Richard L. Scott Investments LLC, which invested in CSP in 2005.

Polimoon adds to European powerhouse

Packaging and automotive component supplier Polimoon (Oslo, Norway) has acquired fellow European plastics and automotive component supplier Plastohm (Villefranche-Sur-Saône, France), in a deal that closes on Sept. 6 and values Plastohm at ?8/share.

Plastohm, which makes health, beauty, and pharmaceutical packaging, as well as automotive systems and components, has manufacturing and sales offices in France, Germany, England, Italy, Tunisia, Spain, Switzerland, and Slovakia. Sales last year exceeded ?105 million, and the company employs approximately 1000. Its business is split 50:50 between packaging and technical parts. The company has 250 thermoset and thermoplastic injection molding machines, as well as 60 injection and extrusion blowmolding lines.

Polimoon, which has 29 facilities across Europe, says combined annual sales for the two firms will be in excess of ?500 million. Other recent acquisitions for Polimoon include Rosti AS''s packaging business in January of this year, Rim Tech in Czech Republic in December 2005, and Polish packaging firm PPH Lima-Pol in November 2005.

Mazda consortium develops high-strength bioplastic

Mazda Motor (Hiroshima, Japan) and its R&D consortium partners have developed a bioplastic comprised primarily of corn-based polylactic acid (PLA) that reportedly has three times the impact strength and 25% higher heat resistance than existing PLA materials. The bioplastic also has higher rigidity than polypropylene.

The resin is 88% corn based and 12% petroleum based. It is manufactured via a fermentation process that leverages regional expertise in sake brewing. Use of the material is targeted in auto interiors and exteriors.

Consortium members Nishikawa Rubber (Hiroshima) and Hiroshima and Kinki Universities focused their efforts on developing a new nucleating agent for crystallization, and a compatibilizer to raise the strength and heat resistance of the new plastic. Other members of the government-subsidized project include JSW (Hiroshima), processor G.P. Daikyo (Higashi-Hiroshima), and flame retardant supplier Manac (Hiroshima).

Processor acquires Solvay pipe technology

Polyethylene (PE) pipe processor Egeplast Werner Strumann GmbH & Co. KG (Egeplast; Greven, Germany) has acquired the HexelOne reinforced plastic pipe processing technology developed by plastics and chemicals supplier Solvay (Brussels, Belgium). Egeplast is Europe''s fourth-largest extruder of PE pipe.

The HexelOne process allows extrusion of multilayer reinforced pressure (25 bar and higher) pipes in 180- to 1200-mm diameters using a single material. The financial details of the agreement, which cover the transfer of technology, production equipment, and know-how to Egeplast, were not disclosed.

HexelOne reinforced HDPE pipes consist of two smooth extruded inner and outer layers that sandwich a layer of alternately wound, mono-oriented HDPE film cut into tapes. These increase pipe pressure resistance. The technology can be adapted to most existing extrusion lines. (More on HexelOne in January 2005 MPW, pg. 25)

U.S. engineering graduate gap inflated

The rise of China and India has triggered alarms on various fronts in the U.S., with perhaps the greatest hew and cry attached to the transition from the outsourcing of manufacturing jobs by Western-based companies to the offshoring of white-collar engineering jobs, fed by the seemingly infinite number of engineering graduates produced by Asian universities.

A new study by Duke University, which attempts to create an apples-to-apples comparison among the three countries, finds that the U.S. remains more than competitive in the number of engineers it produces on an annual basis.

The Duke study found that typical numbers passed on uncritically state that in 2004, the U.S. graduated 70,000 undergraduate engineers, while China and India graduated 600,000 and 350,000, respectively.

Duke researchers found, however, that the U.S. figures included only four-year engineering degrees from accredited universities, whereas statistics from China and India included three-year training program and diploma holders, in addition to one-year degrees, with the end result being inflated Indian numbers and vastly underreported U.S. figures. China''s figures were roughly accurate, but truly transparent insights into the country''s school system are difficult.

Duke determined that in 2004, the total number of bachelors and sub-baccalaureate engineering, computer science, and information technology degrees in the U.S. was actually 222,335, while India came in at 215,000, and China registered 644,106.

SPS available globally, again

Idemitsu Kosan Co. Ltd. (Tokyo) started production near Warrington, England of syndiotactic polystyrene (SPS) compounds, a heat-resistant engineering plastic independently developed by Idemitsu.

Idemitsu already produces these in Japan, Asia, and North America. SPS'' excellent heat-resistant properties are obtained by using metallocene as a catalyst to give polystyrene a syndiotactic structure. The company began supplying SPS commercially in 1997.

Previously, Dow sold its own SPS under the commercial name Questra in North America and Europe, while Idemitsu sold its own product, Xarec, primarily in Japan and Asia. Dow''s decision to suspend production of SPS gave Idemitsu the opportunity to global. Idemitsu started producing SPS resin compounds in North America in January 2006.

The supplier is expanding the scope of applications for this plastic to include lead-free solder compatible connectors for automotive electrical system components, IH (induction heating) cookers, washer-dryers, among other home appliances with heating components, and antennas and other electronic components.

Names in the news

Lando Ferretti has been appointed group president of the technical polymers business unit of resin producer Arkema (Paris). He succeeds Bernard Roche. Ferretti previously worked for GE Plastics, Vantico, and CHEP Europe.

Metabolix (Cambridge, MA), a developer of bioplastics preparing for its IPO, named Robert Findlen as VP sales and marketing. He comes to the firm from GE Plastics, where he was VP at compounder LNP.

Dryer, blender, and pneumatic conveying systems manufacturer Novatec Inc. (Baltimore, MD) has appointed Donald Wood as regional vice president for systems sales in the western part of the United States. Wood previously worked at Sterling Inc., now part of the ACS Group.

Australian processor Boss Polymer Technologies (Melbourne) has hired former Empire Rubber key account executive Robert Andrews to the position of business development manager, to continue Boss'' AAGR of 15%-20%.

Wolfgang Pöschl has been appointed CEO of Coperion Werner & Pfleiderer, the Stuttgart, Germany-based compounding extruder and melt pump producer.

Extrusion Dies Industries (EDI; Chippewa Falls, WI) has named Mark Miller as project/manufacturing engineer with responsibility for technology developments at the company.

Richard Osborne of Madison Capital Partners (Chicago) is the new chairman at mpm group (Demag Plastics Group, Krauss-Maffei Kunststofftechnik, Netstal and Berstorff). Osborne replaced Pepyn Dinandt.

[ On the record ]

"Energy [for a processor] is a large controllable cost, but processors need to make decisions on how to best deal with this. Our focus continues to be on maximum energy savings in plastics processing technology."

Conrad Bessemer, CEO/managing partner of auxiliary equipment manufacturer Novatec (Baltimore, MD).

"Europe''s REACH regulations could easily mean that development of new additive solutions will die. It will kill innovation."

Michael Gauss, Sr VP, business unit functional chemicals, Lanxess Deutschland GmbH (Leverkusen, Germany).

"In value-added, niche applications, price [of additives and polymers] is not the main concern. Processors want to be a step ahead of the competition and are willing to consider new solutions that support their products."

Bernard Nigen, marketing manager elastomeric modifiers at Eliokem (Courtaboeuf, France).

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