First Look: Industry News & Analysis - January '04

In Brief

Processor buys RFID technology

PACKAGING

Wal-Mart, other large firms, and government agencies indicate they will increase their use of RFID (radio frequency identification) tags to help track inflows and outflows of goods, and it appears processors will be asked to underwrite the $.05 and higher cost per tag (December 2003 MP).

To help its cause, large packaging processor Linpac Group, (Birmingham, U.K.) has acquired a majority stake in Intellident, a U.K.-based RFID designer and integrator of RFID into supply chains. The two cooperated prior to the investment with Intellident to supply RFID tags for encapsulation during injection molding in Linpac''s returnable materials-handling products, such as crates. The investment does not block Intellident from working with Linpac rivals.

According to a report prepared by consulting firm A.T. Kearney, efficient retailers such as Wal-Mart stand to save about 7.5% on the cost of labor required for managing inventory. Wal-Mart expects its top 100 suppliers to adopt the technology by the end of this year and all of them to do so in 2005. The U.S. Dept. of Defense also will require key suppliers to use these tags by year''s end. Wal-Mart expects suppliers to pay for the tags and their application.

Ultrathin-wall technology proven on Husky Hylectric

INJECTION MOLDING

U.K. company Im-Pak Technologies, whose injection-impact-compression molding technology (IIC) can slash seconds off production cycles for small and medium-sized containers, has succeeded in getting the process to run on Husky Hylectric machines loaded with a modified version of Husky''s injection-compression software. It was originally thought that IIC would work best on toggle machines, and that the Hylectric''s "lock and block" hydraulic clamping mechanism was unsuited to it.

The breakthrough is important for the success of IIC in the U.S. market, where production of thin-wall containers is largely done on Husky machines. However, the first companies to go into production with IIC will be in the U.K. One is SP Packaging in Harold Wood, England, which expects to start production of 2.5-liter PP pails using a single-cavity mold early this year.

A 1600-kN machine has been running at Husky''s technical center in Coventry, U.K., with a prototype single-cavity mold for a 5-lb margarine tub. Cycle time was around 3.8 seconds, close to half the time it normally takes using standard injection molding.

Several major molders and end-users have seen IIC running, either with the tub, or with a water cup mold on a Netstal machine.

Feedback from one potential major user in the dairy industry indicates Im-Pak may need to prove the IIC process further on multicavity, multidaylight molds, and with different mold configurations, before it will invest in the process. However, Im-Pak technical director Peter Clarke, based in Petworth, U.K., says he expects the first stack mold to go into production somewhere in Europe around the end of the year.

Im-Pak is also developing a mold for a PET preform that is subsequently blowmolded into a box with walls around .2 mm thick. Length/wall thickness ratios of 200:1 are achievable in the preform with bottle grade PET—impossible using injection molding, Clarke says.

Metal can innovations targeted at milk packaging

Blowing plastic bottles for single-serve beverages containing milk and flavored milk drinks has proven a solid market for some processors, but canmakers are aggressively pursuing that niche, too. Rexam Beverage Can Europe & Asia, working with its coatings suppliers, has developed a can with inks and varnishes able to withstand sterilizing temperature up to 122C.

Previously, these inks and varnishes would smear or disappear at such high temperatures, effectively keeping aluminum cans out of the packaging mix for product containing milk. The Rexam cans already see commercial use for Cocio Ice Coffee, and Rexam Nordic sale manager Fredrik Hellner predicts the cans will become the standard package for chocolate and coffee drinks within three to four years.

In a separate development, Ball Packaging Europe claims a line it will open towards year''s end in Saint Donat (France) will be the first commercial-scale aseptic metal can line in the world. The aseptic process allows filling of heat-sensitive beverages and allows shelf life of up to 12 months. Target markets are soy, tea, and coffee drinks as well as ''functional drinks'' enriched with vitamins and minerals—essentially, the fastest-growing segments of the beverage market.

PACKAGING JV forms to cut tag cost

Electronics company Siemens (Munich) and printing foil specialist Leonhard Kurz GmbH (Furth, Germany) founded PolyIC GmbH in Erlangen, just outside Munich, in November to develop and produce polymer chips. Kurz holds 51%. The intent is to develop printed, flexible low-cost electronic components. A typical application is RFID tags, which have a variety of uses, including remote tracking of pallets and trays, and ''smart'' tags on retail items (see story, facing page). The potential for RFID tags using more conventional technology turns on cost, which ranges from $.05 to $.10/unit. Plastics tags should be much cheaper.

INJECTION MOLDING Nypro plans mold manufacture in Russia

Nypro Inc. (Clinton, MA) has secured $2.7 million in financing from the Overseas Private Investment Corp. (OPIC; Washington DC) for construction of the first moldmaking facility in Russia owned by a U.S. firm. The U.S. government-sponsored loan is part of Nypro''s $4 million to $5 million investment in a new tooling center that will build and service precision molds and new injection molders in Russia.

Nypro already operates 11 injection molding machines in its Nypro-Russia operation, and the loan will be used to expand that site''s toolmaking shop.

"We intend to establish a world class moldmaking operation, with the best moldmaking equipment available anywhere," says Gordon Lankton, Nypro chairman. Among Nypro''s Russian customers are ULEX (supplier of cups to Aeroflot and other airlines) and OKTEON (an electronics company).

Xaloy Europe finds new home with Italian screw, barrel makers

Screw and barrel maker Xaloy Europe (Olten, Switzerland) has been acquired for an undisclosed sum by a group of Italian investors who already own Italian screw and barrel company O.M.G., based in Camignone, and surface treatment specialists Spreafico, based in Milan.

It will trade as Bernex Bimetall Holding, which revives the Bernex trade name used by the Olten-based Berna AG, a barrel and screw producer that was merged into Xaloy in 2000 by owners Saurer Gruppe Holding (Glattbrugg, Switzerland).

Saurer, which says it wants to concentrate on textile equipment and vehicle transmissions, is still seeking buyers for its Xaloy businesses in Asia and North America. Xaloy plants in Switzerland and the Czech Republic as well as O.M.G. in Italy, which will retain its name, are being taken over along with most employees, says group marketing manager Claudia Streuli.

ENGINEERING THERMOPLASTICS Bruggemann wants to expand Nyrim business

Bruggemann Chemical says there is still significant growth potential for the Nyrim elastomer-modified nylon 6 reaction injection molding business it acquired from DSM last year. The company, in Heilbronn, Germany, produces complete additive packages for the systems, and sources caprolactam from DSM in Sittard, the Netherlands. Plans are to grow the business, currently worth around €2 million, to around €5 million over the next five years.

Nyrim is used for production of finished parts that require high impact resistance, and complements other castable nylon 6 systems that Bruggemann Chemical supplies to producers of semi-finished shapes.

Nyrim was invented by Monsanto, which originally intended it for high-volume automotive applications. But its high performance and high cost led DSM, which acquired the business in the late 1980s, to target it at specialty engineering applications, which include rapid prototyping. Nyrim parts can have mechanical properties close to those of the intended production part.

Rapid-prototyping equipment company MCP Equipment (Stone, U.K.) recently introduced a module for its vacuum casting equipment (photo, below), normally used for casting parts in polyurethane, that enables parts to be made in Nyrim. Sales manager Robert Bennett says the module is well suited to such parts as car airbag containers, air intakes, cable harnesses, and cases for electric tools, as these are made in nylons in series production. Trials are now being done with short and long glass fiber-reinforced material.

Bayer polymers to be cut back to PC, PUR...

As part of a wider reorganization, Bayer Group in Leverkusen, Germany, plans to set up a new company incorporating much of its chemicals business, including ABS, nylons and thermoplastic polyesters (PBT). The company, still to be named and currently referred to as NewCo, is scheduled for an initial public offering by early 2005.

Following the reorganization, Bayer will have three operating subgroups: Bayer MaterialScience, Bayer HealthCare, and Bayer CropScience. Core businesses of Bayer MaterialScience will be polycarbonates, polyurethanes, and coating raw materials, all now part of the recently formed Bayer Polymers group, and in which Bayer has leading global positions.

The group will also include Bayer subsidiaries H.C. Starck (whose business includes metal and ceramic powders and specialty chemicals for the electronics industry) and Wolff Walsrode, which makes cellulosics, biaxially oriented polypropylene film, sausage casings, and coating additives.

NewCo will have a portfolio of approximately 5000 products covering basic, specialty, and fine chemicals as well as polymers. These products include inorganic pigments, flame retardants, and plasticizers.

EXTRUSION Extrusion tool maker Technoplast changes hands in MBO

Werner Kampichler, present managing director of extrusion tool and downstream extrusion equipment maker Technoplast Kunststofftechnik (Micheldorf, Austria), has acquired the company in a management buyout. Kampichler joined the company as manager in 1999. "The change of ownership represents the end of a somewhat turbulent time for the company since 1995. There are no other changes involved for Technoplast and its 250-strong workforce," says Kampichler. He bought the business from Linz, Austria-based Feichtner, which is a manufacturer of pleasure boats.

Program hopes to convince processors to buy Italian MACHINERY

The Italian Trade Commission (ITC, New York) has launched a multi-year marketing program aimed at increasing sales in North America of Italian machinery in targeted industries, including plastics processing. The project is funded primarily by the Italian government, with 14 machinery manufacturer associations also donating. ITC estimates that Italy ranks fifth among countries that manufacture machinery for plastic and rubber processing.

To help promote Italian-made plastics processing machinery, ITC is organizing meetings in Italy with purchasing managers and manufacturers. "We want to not only show them the characteristics of Italian technology, but also educate Italian companies about the criteria that purchasing managers apply to make decisions," says Paola Bellusci, ITC Chicago trade commissioner.

Walt Bishop, an executive director of the Society of the Plastics Industry (Washington DC), notes that Italian plastics machinery is already well established. "I''m not sure that a promotional campaign at this stage will have much of an impact on the U.S base, unless the promotional campaign [offers] deep discounts and off-the-wall terms," he says. MP bets sponsored trips to Italy might draw processor attention.

TRADE SHOWS Rival show organizers face off in Italy

Fresh from the increasing success of the Fakuma plastics show it organizes two years out of three in Germany, P.E. Schall GmbH is now planning a show in the heartland of Italian processing country, Modena. Plastika Italy is set for the end of this May. Schall says exhibitors will mostly be Italian suppliers, but is also looking for backing from German exporters. Just as Fakuma takes place in years when there is no K show in Dusseldorf, Schall says Plastika won''t run in years when there is a Plast show in Milan.

But the company is ruffling feathers at Assocomaplast, the Italian plastics and rubber machinery trade association that organizes Plast, last held May 2003. Assocomaplast recently reached an agreement with the organizers of a regional plastics show, Samuplast, which takes place in Pordenone, near Venice, the week before Plastika. Samuplast was biennial, but will now fit into the Plast three-year cycle. Assocomaplast already organizes another regional triennial show in the south of Italy, called Macplas, the next edition of which is in Bari in February 2005. Assocomaplast president Claudio Celata says there is no need for a new show in Italy.

ROTATIONAL MOLDING Cyclic PBT gets into rotomolding applications

Rotomolder Clarehill Plastics in Moira, Northern Ireland, is partnering with Cyclics Corp. (Schenectady, NY) on market development of rotomoldings made from the latter''s cyclic polybutylene terephthalate (CBT). Clarehill will concentrate on the U.K. and possibly later on mainland Europe. CBT polymerizes during molding into regular PBT. In rotomolding, its low viscosity enables good parts definition. Clarehill makes various types of static fuel tanks. It says PBT has improved barrier properties over polyethylene, the most commonly used material in rotomolding. Fiber reinforced CBT compounds have also been rotomolded. Parts can be demolded while they are still hot, minimizing cycle times.

Cyclics currently has product made for it on a toll production basis by Pressure Chemical in Wilmington, NC. Its own plant in Schwarzheide, Germany is targeted to be operational in late 2004 with capacity near 2500 tonnes/yr. The company has plans to begin doubling capacity there in 2005. "We can stretch the capacity on that site to over 25 million pounds/yr [11,500 tonnes/yr] before putting a larger second plant on line sometime in 2007 or 2008," says CEO John Ciovacco. "We have not confirmed a location for the second plant yet."

AUTOMOTIVE PO foams challenge PUR in interiors

A report on auto interior trim says the recent emergence of several forms of polyolefin (PO) foam is posing a challenge to polyurethanes (PUR) in various applications.

The report, "Automotive Interior Soft Trim: Skins, Foams, Coated Fabrics, Textiles, and Acoustic Barriers," from Robert Eller Assoc. Inc. (Akron, OH), highlights such developments as the application of chemically crosslinked PO sheet foams to door trim applications; the entry of new manufacturers of radiation crosslinked PO sheet foams; the development of techniques for laminating PO sheet foam to textiles; the combination of expanded PP molded in combination with textiles for panels and recently (at Audi) rear seating; and the introduction of Dow Automotive''s Strandfoam EA. Robert Eller says the driving forces behind the substitution of PO sheet foams are cost, recyclability concerns, and the elimination of gassing, which occurs in the PU foam flame lamination to textiles.

Peguform sale said to be ''imminent''

The lawyer handling the sale of insolvent automotive parts supplier Peguform (Botzingen, Germany) was quoted in the German weekly Automobilwoche as saying the sale was imminent. Six unidentified firms are still in the hunt including three strategic and three financial ones. The sale include the German operations plus Peguform Spain, which owns plants in Mexico and Brazil; together, these realized about €1.6 billion sales in 2002.

Interest in Dynamit Nobel also seems high

And elsewhere in the German auto market, the Financial Times Deutschland reports that the sale of German auto parts processor Dynamit Nobel has drawn plenty of potential buyers since parent firm mg technologies announced it would divest the processor and its chemicals businesses, also part of Dynamit Nobel (see December 2003 MP, p. 12, MPI p. 14).

The FT reports there are at least eight potential buyers: Bain Capital; Permira; and Goldman Sachs Capital Partners and CVC (bidding together); Kohlberg Kravis Roberts together with Credit Suisse Group; BC Partners; and Cliven. The parent has said it would like to sell the business as one but a breakup could occur, as the FT also reports that DSM is interested in some parts of the chemicals business.

ADDITIVES Health concerns force FR change

Additives maker Great Lakes Chemical (Indianapolis, IN) will phase out penta- and octa-polybrominated diphenyl ether (PBDE) flame retardants (FR) by the end of the year. The two products will be replaced by a new penta-PBDE, Firemaster 550, which has been approved by the U.S. Environmental Protection Agency (EPA) as both non-toxic and non-bioaccumulative. Great Lakes claims the new material exceeds UL94 flame retardancy standards.

PBDEs have come under scrutiny as high levels have been found in breast milk, causing fear they may be harmful to infant development.

California has banned both octa- and penta-BDE beginning in 2008, while the EU''s prohibition starts later this year.

Bayer breaks ground on China PC plant

A new Makrolon polycarbonate plant now under construction at Caojing, Shanghai, is expected to start production in the second quarter of 2006. Bayer says capacity will be expanded step by step according to the market development, finally reaching 200,000 tonnes/yr. The plant will cost around $450 million.

There are plans to eventually invest a total of about $3.1 billion in the integrated production site. Bayer has allocated around $1.8 billion to the construction of production facilities for plastics and raw materials for polyurethanes and coatings (see related story in World Tour). Of this amount, $800 million has been allocated to future projects that will fall within the MaterialScience business, and some $500 million to NewCo.