First Look: Industry News & Analysis 21751

Pipe powers join forces

J-M Manufacturing (JMM; Livingston, NJ) and PW Eagle (Eugene, OR), two leading pipe processors, have announced a tentative merger that would create a North American pipe giant with 26 plants and estimated revenue well over $1 billion. In the deal, which is pending shareholder approval but has been agreed to in principal by the company’s largest shareholder, JMM would purchase PW Eagle for approximately $400 million. According to JMM Marketing Director Marc Miller, PW had estimated 2006 revenue of $790 million. JMM doesn’t release financial data. The deal is expected to close in the second quarter.

JMM was created in 1982 from the purchase of eight polyvinyl chloride (PVC) pipe plants from Johns Manville Corp. Today, in addition to PVC pipe, its 14 facilities also extrude high-density polyethylene (HDPE) pipe. PW Eagle, a wholly owned subsidiary of polyethylene pipe and fittings manufacturer USPoly Co. LLC, specializes in PVC pipe products and has 12 facilities in the U.S.

According to JMM’s Miller, the proposed combined company will offer diameter ranges of 0.5 inch to 48 inches in PVC and 0.5 inch to 63 inches in polyethylene (PE), and also process ABS and crosslinked PE pipes.

In Brief

South American first

OPP Film SA (Lima, Peru) is buying the first General K5000 vacuum metallizer to be installed in South America, from the Bobst Group (Heywood, England), for installation at OPP’s new facility in Pilar, Argentina. The machine will increase the processor’s capacity to about 100,000 tonnes/yr of biaxially oriented polypropylene. South American BOPP demand is rising rapidly.

Jamil Zaidan, proprietor of OPP Film SA, Peru (left in photo) concludes negotiations for the K5000 metallizer with Bill Duckham, sales and marketing manager for Bobst.

Bayer ups TDI capacity

Bayer MaterialScience (Leverkusen, Germany) will raise the capacity of its yet-to-be-built toluene diisocyanate (TDI) train in Shanghai from 160,000 tonnes/yr to 300,000 tonnes/yr in order to reduce initial investment costs, lower overall energy use, and meet increasing demand in the country. TDI is used to make polyurethane.

Audax buys DosiColor

Investment group Audax, which last May acquired liquid colorants and concentrates supplier ColorMatrix (Berea, OH), has acquired colorants supplier DosiColor (Buenos Aires, Argentina) and will integrate it into ColorMatrix.

Plagiarism plagues processors

During the recent Ambiente consumer goods trade fair, German customs inspector Peter Mallon (center) checks for products that may infringe on intellectual property. This year, as in 2006, the German Customs Office confiscated a number of copied items during Ambiente. The German Customs office in Darmstadt estimates 8% of world trade stems from counterfeited goods. According to Customs’ figures (www.zoll.de) of the agency’s confiscated goods, Thailand led with 24.85% of the cases followed by China (12.86%), the Czech Republic (11.44%), Poland (10.03%), Turkey (9.04%), and Hong Kong with 5.87%. Interestingly, the U.S. (3.81%) is also among the countries that are smuggling product knock-offs into Germany, ahead of Malaysia with 3.64%, and Vietnam (2.80%).

LME expands scope of polyolefin futures

The London Metal Exchange (LME)-run marketplace for linear low-density polyethylene (LLDPE) and polypropylene (PP) futures contracts is introducing three new regional contracts. In addition to the existing LME global contracts deliverable in bags, it is offering one in each region (limited to warehouses in Singapore, Northern Europe, and the U.S. Gulf region) for each of the PP and LLDPE contracts starting June 25. A total of eight plastics contracts will be traded on the exchange.

Contract specifications and delivery points for each regional contract will be identical to their existing equivalent global contract. New prompt dates are being introduced to facilitate spot trading. The changes may help LME prices be better accepted by the industry as its pricing standard, says market analyst Sebastian Castelli of Société Générale Cross Asset Research (London). The problem with the current set of contracts, he says, is that they fail to represent the day-to-day transaction price, which is regional rather than global.

BASF: demand spurs new PES, POM capacity

In January BASF (Ludwigshafen, Germany) started construction of a new 6000-tonnes/yr plant in Ludwigshafen for the production of DHDPS (dihydroxy diphenyl sulfone), a feedstock for the Ultrason E polyether sulfone (PES) that BASF has supplied from Ludwigshafen since the early 1990s. The plant is expected to go online in mid- 2008 and will bring BASF’s DHDPS capacity to 12,000 tonnes/yr. BASF to now has sourced DHDPS from other suppliers.

Ultrason annual demand growth rates have been 20%-30% for a number of years, says Harald Lauke, head of BASF’s Performance Polymers Operating Division. PES sees use in high-temperature applications such as for reflectors of automobile headlights.

In other news, BASF plans to increase capacity of its Ultraform polyacetal (POM) at its Ludwigshafen site from roughly 41,000 to 55,000 tonnes/yr. The supplier says demand for Ultraform is growing at about 4%/yr in Europe and more than 6%/yr in Asia. POM offers good sliding friction, resilience, and high chemical resistance.

Persico prepares for North America

Rotomolding machinery manufacturer Persico (Nembro, Italy) is launching its fully automated molding machine, Leonardo, in the North American market through two U.S.-based strategic partners. Persico signed an agreement with Lakeland Mold (Brainerd, MN) that provides sales support and customer service for Leonardo molds, and one with KOPPS (Holland, MI) that takes care of after-sales service and technical support of the equipment. KOPPS has worked with Persico’s automotive division for several years to provide production, installation, and support for Persico presses and compression molding lines, says Claudia Persico, director of the rotomolding division.

Gira pads portfolio

Precision injection molder Gira Giersiepen GmbH (Radevormwald, Germany; November 2005 MPW, p. 48) is expanding in its home market. It has acquired family-owned injection molder Stettler Kunststofftechnik (Burgwindheim, Germany) and its staff of 75 for an undisclosed sum. Stettler serves the automotive and electronics/electrical sectors. No name or management changes are in the offing. Signing the acquisition deal are (from left) Dirk Giersiepen, managing partner of Gira, and Lothar Stettler, founder of Stettler Kunststofftechnik. Directing operations of the new addition will be Lothar Stettler and Gira managing director Alfred Bulitz.

Dow fishes for partners for PS, PP

Dow Chemical (Midland, MI) is discussing placing its two commodity plastics businesses (it’s the world’s largest supplier of polystyrene and fifth-largest for polypropylene) into joint ventures. The move would help the company reduce its vulnerability to the cyclical nature of the business, a Dow spokesman told MPW.

The decision to seek joint venture partners could focus on those that can offer back integration into feedstocks or expanded geographic presence.

The company already put several assets into joint venture operations including ethylene glycol and its PET businesses with MEGlobal and Equipolymers as well as for polyethylene in the Middle East with Kuwait’s Petrochemical Industries Co. Romania’s Rompetrol produces low- and high-density polyethylene that is then marketed by Dow in Eastern Europe

Ace joins Classic for medical molding

Ace Plastics (Hong Kong) and Classic Industries (Latrobe, PA) completed a formal agreement to establish a joint venture company in Shanghai for molding of systems for health care and medical device OEM manufacturers. This operation will include medical mold building complemented by injection molding and assembly in a cleanroom operating under ISO13485.

“Combining the strengths of Ace and Classic will make us a very strong and competitive company in the medical industry,” said Jack Yeung, formerly VP sales and marketing and, since January 1, CEO of Ace. Ace Plastics has moldmaking and injection molding facilities in Shenzhen and Shanghai, China. Classic Industries is a medical molder and contract manufacturer, which, in addition to its new venture in China, also has two processing facilities in Pennsylvania, one in El Paso, TX and one in Puerto Rico.

Qatar’s Doha Plastics adding WPC extrusion

Doha Plastics (Doha, Qatar) has entered into an exclusive licensing agreement with Strandex Corp. (Madison, WI) to use Strandex’s technology for extrusion of wood plastic composite profiles across the Arabian Gulf region, including: Qatar, Bahrain, Iran, Iraq, Kuwait, Oman, Saudi Arabia, United Arab Emirates, and Yemen.

Doha operates a new 15,000m2 facility housing four 86-mm twin-screw conical extrusion lines from Cincinnati Milacron along with a full blending and compounding system and a range of finishing options. Doha Plastic is developing its own range of profiles and will have an initial production capacity of 18,000 tonnes/yr. Doha’s $10 million investment incorporates not only the standard Strandex polyethylene-based technology but also the cellular foaming Strancel technology.

Husky offers plasma coating systems

Husky Injection Molding Systems (Bolton, ON), manufacturer of hot runners, PET preform molds, and injection molding machines, now offers, in conjunction with Nano Scale Surface Systems Inc., systems for molding of plastic medical disposables with an internal barrier coating of silicon dioxide. The transparent coating provides a barrier against gas transfer and prevents any chemical reaction between fluids and the plastic. The systems are expected to help processors replace glass medical packaging, including test tubes and blood vials.

The coating system uses radio frequency (RF) energy to generate plasma in place of microwaves, the conventional approach. RF energy results in lower costs and simplified operation for coating the inside of plastic containers, according to Nano Scale (Alameda, CA); the new barrier process is expected to cost less than $6/1000 bottles, well below the $10-15 per 1000 bottles cited for other plasma coating systems. The firms claim the system has proven effective at improving the barrier of PET bottles, polypropylene bottles, and injection molded items like medical disposables.

New equipment promises inline decoration

German injection molder Balda (Bad Oeynhausen) has worked with optical media disc systems manufacturer Singulus Technologies (Kahl am Main, also Germany) to develop what the firms say is a new production line for inline surface processing of plastic parts, for instance decorating covers for molded mobile phones and handheld game devices. Balda is one of the largest molders and contract manufacturers serving the cell phone industry, with three processing facilities in Germany, three in China, and two locations in Brazil, as well as one each in Malaysia, Hungary, and India.

In November 2005 Singulus introduced a metallization machine for decorative vacuum coating of plastic parts via sputtering; one was on view at the Plast trade show in Milan, Italy, integrated with a press from Negri Bossi (see April 2006 MPW). With the sputtering process, 3D plastic parts can be handled in a vacuum and given decorative and protective surfaces. Compared to traditional methods such as evaporation, suitable only for batch processes, the Balda/Singulus development integrates pre- and post-treatment into a production cell, potentially offering savings in production cycle and logistics. In contrast to electroplating, there are no high operating and disposal costs.

A machine specifically designed for the telecommunications market will at first be exclusive to Balda, with the first line to be delivered this May. Other lines are being developed for applications such as packaging for cosmetics and personal care, toys, and automobiles.

Klöckner, ALBA pen deal for PET bottle recycling

Film and sheet processor Klöckner Pentaplast (Montabaur, Germany) and trash collection firm Alba (Berlin, Germany) will jointly invest in an integrated PET bottle recycling pilot project in Eisenhüttenstadt, Germany. PET-CO GmbH will be managed by Klöckner Pentaplast Group and will use proprietary technology transferred from Klöckner Pentaplast/Americas to recycle post-consumer PET bottles into film for food packaging, thermoforming, and other applications. An Alba subsidiary is responsible for collecting and sorting the PET containers.

The plant, scheduled to start up this quarter, will produce 15,000 tonnes/yr of flake.

Gossen, India’s Jain pair up on B&C products

An exclusive toll manufacturing and technology agreement between Jain Irrigation Systems (Jalgaon, India) and Gossen Corp. (Gossen Mouldings) of Milwaukee, WI has been reached that allows Gossen to add PVC sheets and panels to its product mix and lets Jain add profiles to its building materials product offerings. Jain processes more than 100,000 tones of plastics per annum.

Jain will extrude home-construction PVC panels for Milwaukee’s Gossen Corp. and, in turn, Gossen will produce PVC molding for Jain Irrigation Systems Ltd. Jain last year acquired a 51% interest in NuCedar Mills Inc., a cellular PVC sheet extrusion operation founded in 2005 in Chicopee, MA by two lumber industry/manufacturing professionals, Andy Sears and Tom Loper. Other recent North American purchases by Jain include its acquisition of drip irrigation tube extruder Chapin Watermatics Inc. (Watertown, NY).

New PP, LDPE plants for Saudi Arabia

Saudi Basic Industries Corporation (Sabic) affiliate Saudi Kayan Petrochemical Company has awarded contracts to build a 350,000-tonne/yr polypropylene plant and a 300,000-tonne/yr low density polyethylene plant at its complex in Al-Jubail Industrial City. Saudi Kayan is a new firm owned 35% by Sabic; Kayan Petrochemical Company holds 20% and the remaining 45% will be publicly traded.

Names in the news

New technical director at the UK’s largest independent specialty masterbatcher, Colour Tone Masterbatch (Bedwas, Wales) is Mike Russell who worked for 18 years as a colorist/technologist at competitor PMB. He has been with Colour Tone for 10 years. Paul Denton, previously European technical development manager at Ferro GB, has been named as technical manager at the Welsh masterbatch operations.

Parkinson Technologies Inc., a manufacturer of large-scale web-handling, winding, and extrusion equipment, has named Mark Fisher as operations manager. Prior to his employment at Parkinson Technologies Inc., Fisher held management positions at Savage Arms (Westfield, MA) and at Anderson Products (Worcester, MA).

Rick Shaffer has been appointed director of engineering for Conair and also will help manage product development. Shaffer joined Conair in 1994 and has experience with its wide range of auxiliary equipment, including dryers, automation, and downstream extrusion systems for profiles and tubing.

Xaloy, manufacturer of barrels, screws, and other components and melt delivery systems for injection molding and extrusion machinery, has hired Artemio Palos as sales manager for Latin America. He previously represented Xaloy as an independent sales agent covering Mexico, the border area of Texas, and Central America. He is based in McAllen, Texas.

[ On the record ]

“Certainly, I would say if you look in the long view, over the next five years, there absolutely will be opportunity to sell equipment into the Middle East—extrusion and molding equipment.” Howard Rappaport, Chemical Market Associates Inc. global business director, plastics, speaking on growth of resin production in the Middle East and opportunity for conversion and equipment sales.

“This may sound strange to your readers, but we’re experiencing really the best of all possible worlds globally. We haven’t seen a period like this since before the first oil-price shock. It may not feel that way if you’re in Ohio, so we’re seeing a rebalancing of global economic growth." Kevin Swift, chief economist, American Chemistry Council, on a global GDP rate of 4%-5% over the last five years.

“You don’t just walk in the door one day and say, ’Today we’re going to innovate.’ Management has to develop a business strategy that includes innovation.” Jack Avery of Avery Plastics Consulting (Salt Lake City, UT).

“Today’s niche is tomorrow’s commodity.” Bob Hawkins, president of Kiefel’s (Worms, Germany) North American operations in Wrentham, MA.

“Renewable is a useful concept and one not fully mined or developed. I still see capturing the fuel value in plastics [the tremendous BTU value through incineration] as a viable alternative.” Roy Taylor, founder of Soy Works Corp. (Chicago), a developer of soy-based plastics.