Q&A: What Makes Heartland Polymers Tick?

Heartland Polymers, the newest player in the North American polypropylene (PP) market, had its NPE debut this year. It’s the first of what the company hopes will be many more appearances at the largest plastics-focused trade show in the Americas.

Heartland Polymers began initial production of PP at its petrochemical complex in Alberta in July 2022, and in March 2023, the company announced the successful startup of its propane dehydrogenation plant to produce feedstock for its PP production. It’s the only operation in North America producing polymer-grade propylene and PP at a single site. Plant production capacity is 525,000 metric tons per year, which is roughly equivalent to 1.1 billion pounds annually.

At the show, I sat down with Polypropylene Sales & Marketing Director Yonas Kebede and Corporate Communications Manager Steven Noble, who talked about Heartland Polymers’ business model, its commitment to sustainable practices, and the milestones it has achieved in just a couple of years. 

Here’s our conversation.

Let’s begin with resin capacity, which is growing in North America. Do you have any worries about the material supply affecting prices, your return on investment, and so forth?

Kebede: There is always a concern about that. We're the newest technology out there in terms of what we're offering to the market — taking low cost propane and converting it into polymer-grade propylene (PGP) and then polypropylene (PP) to serve the market. It’s really a value play for us — there's a lot of abundant propane in the province of Alberta, and we're trying to get the most value out of that propane. We figured out that making polypropylene and selling it all year long will get a better return than just selling propane during the cold months and kind of suffering through the rest of the year. So, for us it’s more of a diversification plan. We think there is room for us in the market. Typically PP demand grows with the population, and people are still having babies so there should be room for us in the market.

It's certainly been a struggle over the last couple of years. There was a little bump in polypropylene demand around COVID, and that's come back down a bit. And, obviously, a lot of new capacity is coming on line. We've got to fight and get our piece of the pie— that’s what we’re trying to do.

Noble: What we've done with our business is to identify niches that we can fill. We’ve got the single-site monomer PDH unit, that is part of our complex.

You just started that up, right?

Noble: Yeah, it's ramping up right now. And we have a storage cavern that also stores feedstock. So when that's down, it helps us continue to be able to operate. And we're not on the Gulf Coast, so we're less prone to weather disturbances.

Kebede: That’s a huge advantage. A lot of converters are coming to us saying, “I want somebody outside of the US Gulf Coast,” and we fill the bill.

We don't sell 100 million pounds to anyone — we sell a lot of lower volumes, but to a lot of different people. It’s a nice diversification in markets and customers.

Quality over quantity is part of Heartland’s messaging, in fact. But can’t you have both?

Noble: We're focused on providing a very good product. You definitely can have both, but the struggle I have seen with a lot of startups is that they try to go quickly to quantity and miss out on quality. Our focus has been to get this product right straight out of the box.

There are a lot of things people can hit us with — you’re a single site, you're all by yourself, you've never run polypropylene before. So we've been very determined to maintain quality, provide good service to our customers, and repeat that over and over. From a product quality standpoint, I believe we're leading in some market segments.

In terms of quantity from a financial perspective, we want it to come up. And we have to lower our costs overall. That’s the long game, but quality definitely has been a very important part, and we've been fortunate to have very good partners in terms of technologies to help us.

Tell us about your technology. What makes it special?

Noble: We’re taking the propane and putting it in a propane dehydrogenation (PDH) unit. From that we basically extract two hydrogens off the propane molecule, and we convert the PGP into polypropylene. It’s an advantage from an environmental standpoint, because we use that hydrogen again as a fuel in our process and, thus, lower our greenhouse-gas (GHG) emissions.

Sustainability is a big part of your message. The general public is a bit skeptical of that sort of messaging. Talk a little bit about how Heartland is operating in a sustainable manner.

Kebede: Our process allows us to capture the hydrogen we extract and feed it back into our process, as I mentioned, which helps to lower our GHG emissions. Second, we use a glycol cooling process that reduces water usage and further reduces GHG emissions. That was part of the design early on, as we were very sensitive to making our operation as environmentally friendly as possible. We're now in the process of trying to get certification.

What sort of certification are we talking about?

Kebede: We're looking basically at doing a lifecycle analysis (LCA), and determining how our process impacts GHG emissions. We'll be able to give those LCA numbers to our converters who are working with the end users that are trying to get to net zero. I don't know the exact point system, but we can certainly help them out.

Noble: Heartland Polymers is owned by a pipeline company, which is doing some interesting things in the sustainability space, too. We’re evaluating an underground carbon emissions storage cavern project right now, where a lot of businesses could potentially see some of their emissions run underground to further reduce pollution.

I’ve been hearing some griping here and there about Canada's regulatory environment, which is causing headaches for companies in the plastics space. What are your thoughts?

Kebede: We are certainly looking at the way we process our products, even in terms of recycling, and the different things that we can do to help not just ourselves as a business, but also as good stewards of the environment. It's a challenge, but we're not saying [the regulatory framework is] wrong. We're trying to figure it all out.

Noble: In this day and age, it just seems like it's table stakes — or it will be soon. I hope everybody would say this — but we’re the last people to want to see plastic in any environment. Our plant is located in Alberta, and the 400 or so people who work there spend their weekends in the mountains hiking and skiing, or boating in the summer. They like being outside and they want to take care of the environment. There’s a lot of nature in Alberta!

To wrap up, tell us more about your recent milestones, and what’s in the pipeline?

Noble: A big milestone for us happened last March, when we entered commercial production. We are celebrating a one-year anniversary!

Kebede: In terms of milestones, I’m thinking about nonwovens. It takes a long time to get qualified for that market, and I made the decision early on that we needed to make that product and start working on qualifications. Today, we are selling to some of the largest nonwovens producers in North America. By the end of this year, I think we will probably get qualifications across the board. To me, getting to that point within two years was a huge undertaking. And it's one of the more complicated markets — you're dealing with something near the baby, the diaper backing and things like that, and you need to earn customer confidence. Achieving that has been a big thing from my perspective.

Noble: In terms of what’s ahead, we're looking to make random copolymers, which bring clarity to food storage containers and such, and will help us penetrate the injection molding market to a greater extent. That will be coming in the third quarter.

I guess one other milestone, which is obvious and simple but we'd be remiss if we didn't mention it, is just being here at NPE. We’re new entrants in the market, trying to convince people to give the newbie a chance, right? NPE 2021 didn’t happen, so this is kind of our coming out party. A lot of people have come to the stand and there’s been a buzz, so we are very excited about our future.