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E-Weekly News Briefs, August 1 - 5

August 5, 2005

16 Min Read
E-Weekly News Briefs, August 1 - 5

Lanxess expands in China

Starting 2006, Lanxess (Leverkusen, Germany) will launch production of advanced engineering plastic compounds in China. The Semi-Crystalline Products Business Unit (SCP) is investing €20 million in new production facilities at the Wuxi site to compound polyamide and PBT.

"This investment underscores our clear strategy of making profitable growth a priority. Demand in China for high-tech plastics is growing at a double-digit percentage rate each year. Thanks to the new plant, we''ll be increasing sales of our high-performance polymers Durethan (polyamide) and Pocan (PBT) by 50% in the next five years," explained Dr. Axel C. Heitmann, chairman of the board of management of Lanxess AG.

Approximately 20,000 tonnes of advanced engineering plastics compounds will be produced each year at the Lanxess Wuxi Chemicals Ltd. site, roughly 120 km northwest of Shanghai, once the first section of the plant has been commissioned in 2006. If demand continues to grow unabated, capacity can be expanded in further construction stages as necessary.

Market growth for Pocan and Durethan in Asia currently stands at around 8%, and in China at 13%. They are employed in the automotive industry, electrical engineering, electronics, and the domestic sector.

Polyester film stars for Toray in Korea

Toray Industries Inc. (Tokyo) has announced plans for a ¥5 billion ($44.7 million) investment in an optical PET film facility in South Korea for plasma and liquid-crystal TV applications. The facility will be installed at the Gumi Toray Saehan: a joint venture of Toray and Saehan Industries (Seoul). Capacity will be 13,200 tonnes/yr, with production likely to start in May 2007. Toray has an 89.38% share in the JV.

South Korean flat-panel display manufacturers are planning major investments in new capacity. Further, the government''s "Buy Korean" policy provided an additional prompt for Toray to make its investment. Toray has overall global capacity for PET film of 310,000 tonnes/yr and about 20% share of the overall world market

Noveon adds PUR production in Shanghai

Building on a regional sales base that has offices in Malaysia, Seoul, and four in China (Beijing, Shanghai, Guangzhou, and Hong Kong), Noveon (Cleveland, OH) will now add production of thermoplastic polyurethane (TPU), opening in Shanghai what it says is the first multinational TPU production operation in China.

The company anticipates 7% to 9% annual growth in PUR materials in Asia Pacific over the next few years, with even higher growth of 11% to 13% in China itself. In addition to manufacturing, the new Shanghai operation will feature lab testing, product development, and technical service. Noveon, which was purchased by Lubrizol Corp. (Wickliffe, OH) on June 3, 2004, already had factories in South Korea and Malaysia. In 2004, sales were down 1.3% to $1.1 billion.

Solvay finalizes industrial web deal with Renolit

Solvay (Brussels, Belgium) has signed a final agreement to sell its industrial plastics films business, Solvay Industrial Foils, to Renolit AG (Worms, Germany) for €330 million, as reported in MPW E-Weekly on May 23. The sale is expected to take effect by the end of the year once EU monopoly authorities have scrutinized the deal.

Solvay''s Industrial Foils division has nine plants in eight European countries as well as a production facility in Commerce, CA and two joint ventures in China and Brazil. This division generated €470 million in turnover in 2004 and has 2200 employees. Applications include furniture, construction, swimming pools, medical supplies, stationary, automotive, and consumer goods. The sale does not include Solvay''s rigid plastics sheet activities that were sold to Ineos at the beginning of July.

Solvay says it wants to concentrate on its core activities (pharmaceuticals, chemicals, and specialty plastics) so processing operations no longer fit into its business scheme.

IMG ups PET presence in Italy, Portugal

With a stated goal of 300,000 tons of PET capacity by June 2006, IMG Group will invest €10 million between its Selenis Italia (St. Giorgio de Nogara) and Selenis Portugal (Portalegre) operations. Selenis Italia will spend €7 million to add two solid-state polymerization units, bringing on an additional 35,000 tons/yr in capacity, while improving efficiency and reducing energy costs 35%.

Selenis Portugal will spend €3 million on its solid-state unit as well as infrastructure and process improvements to bump up the top reactor to an additional 12,000 tons/yr capacity.

More brands, warehouses for LME

The London Metal Exchange (LME) continues to update and alter its futures offerings for polypropylene (PP) and linear low-density polyethylene (LLDPE) contracts, adding two delivery points, six brands, and removing one material listing.

Futures contracts that go to delivery can now have material sent to Henry Bath Inc.''s (Baltimore, MD) and Katoen Natie Louisiana LLC''s (LaPorte, TX) warehouses in Port Allen, LA, near Baton Rouge.

On the resin side, Formosa''s Formolene 4100-P, -N polypropylene, with melt flow rates of 20 and 12, respectively, are now recognized brands. Melt-flow-rate 12 Tipplen H 385 F PP3, -4 polypropylenes from Tiszai Vegyi Kombinat (Hungary) are also listed now. For LLDPE, Formosa''s Formolene is a recognized brand, as well as two grades of El-Pro PP from Thai Polypropylene Co. (Rayong, Thailand); DFDA-7047 from Dow, and El-Lene from Thai Polyethylene. Dow Chemical''s 5E89 PP, with a melt-flow rate of 3.4, has been removed for technical reasons, according to the LME.

The LME established its first settlement price on August 31. As of July 28, September buyers of PP were paying $1080/ton with LLDPE going for $1060/ton. November buyers were paying $1075/ton for PP and $1065/ton for LLDPE.

Ampacet puts the custom in custom compounder

Compounder Ampacet (Tarrytown, NY) has added an extrusion line to its Heath, OH production facility to create masterbatches with higher-than-normal loadings of standard colors as well as fluorescent, pearlescent, and metallic-effect pigments. The line can produce custom-color materbatches for ABS, SAN, nylon, polycarbonate, amorphous PET, and other engineering thermoplastics for use in injection molding or extrusion applications.

Ampacet has doubled the size of the Heath facility with the eventual goal to make it a flexible plant for customers needing fast, custom, material batches. The plant has added a blowmolding machine as well as injection molding presses to undertake product evaluations of rigid packaging like detergent bottles and shampoo closures.

Zip-Pak seals deal

Two leaders in resealable packaging have been joined through Zip-Pak''s (Manteno, IL) purchase of Supreme Plastics Ltd. (London) reclosables division. As part of the deal, Zip-Pak receives Supreme''s resealable zipper and bag businesses, its technology portfolio, and its Whitby, England production facility.

Zip-Pak billed the acquisition as complementary, explaining that Supreme specialized in narrow zipper profiles while Zip-Pak focuses on wider, value-added zipper profiles. In terms of European production, the Whitby plant joins Zip-Pak''s new production facility in Winschoten, Netherlands, and a Murcia, Spain operation. Michael Burton, who was business unit manager of Zip-Pak''s Ottawa, IL business, has been named general manager of European operations. Zip-Pak, which is part of industrial conglomerate Illinois Tool Works, offers more than 200 patented zipper profiles.

Kuka plus conveyors equals cells

Looking to offer customers start-to-finish conveying and part handling, automation supplier Kuka Robotics (Clinton Township, MI) has signed a system-partnership agreement with custom conveyor provider Nercon Engineering and Manufacturing Inc. (Oshkosh, WI). Nercon provides material handling equipment and conveyor systems as well as project management; line and conveyor controls; and installation services.

Kuka also announced that it has become a member of the Society of the Plastics Industry Inc. (SPI; Washington DC) trade association. Established in 1937, SPI represents processors, equipment suppliers, and resin producers.

GM puts VW in rearview in China

As General Motor''s "employee discount" program winds to a close in North America after helping sales boom, the world''s largest automaker can take heart in its performance in China, where a 18.9% year-over-year increase for June helped it overtake market leader Volkswagen. According to the Shanghai Daily, the National Car Makers Assn. reported that overall sales for passenger vehicles in June were up 55.8% to 296,811, making up for a poor first quarter, and putting first-half nationwide auto sales at 1.46 million-a 15.6% increase over 2004. For all of 2005, the Japan Automotive Digest puts the total Chinese vehicle market at approximately 6 million.

The China Daily reported that GM (308,722) edged out VW (262,198) through the first six months of 2005, giving it a market share of 10.9%. GM launched 10 new or updated vehicles in China this year and is counting on 10% to 15% growth in the market for the foreseeable future. The company is building towards a capacity of 1.3 million vehicles/yr in China, with much of the production coming from its Korean subsidiary, Daewoo.

Earnings season

As July came to a close, several companies that serve the plastics industry reported second-quarter and first-half earnings reports. Thanks in large part to its June 2004 acquisition of Noveon, Lubrizol Corp.''s (Cleveland, OH) Q2 2005 earnings were up 57% over 2005, with consolidated earnings of $60.1 million vs. $3.9 million in 2004. Overall, business within its specialty materials unit, which consists of Estane TPU and TempRite engineered polymers, declined slightly.

Second quarter earnings per share at DuPont (Wilmington, DE) were up 13%, with consolidated net sales of $7.5 billion. Compared to 2004, income from performance materials was up 84% from $103 million to $190 million. Geographically, sales grew fastest in the Asia Pacific region, jumping 17% over 2004. Sales for performance materials, which launched 21 new products in Q2 2005, were $1.8 billion, but DuPont warned that higher gas and oil prices could hamper profitability going forward. When the company created its 2005 outlook, it assumed oil priced at $43/barrel and gas at $6.80/million BTU, now it says higher prices will force the company to double its assumption on energy costs, making them $1 billion higher than 2004.

Eastman Chemical Co.''s (Kingsport, TN) sales revenue for Q2 2005 was $1.75 billion-a 5% increase over 2004. Specialty plastics were up 17%, with Eastman attributing much of the growth to demand for copolyesters used in consumer and medical goods. Within its Voridian division, sales revenue increased 25%, thanks mostly to higher prices needed to offset paraxylene and ethylene glycol feedstock costs.

Packaging and aerospace company Ball Corp. (Broomfield, CO) saw earnings at its North American packaging segment drop to $74.9 million from $91.4 million in Q2 2004, but performance within plastics packaging had improved. Through the first six months of 2005, sales were up 25% within Ball''s plastic containers group. The company cited increased demand for carbonated soft drinks, water bottles, and barrier and heat-set containers. Sales in Europe were down thanks in some part to Germany''s deposit laws regarding cans. The company had seen some cans make a reemergence at major retail chains, which Ball thinks is important in terms of consumer acceptance in advance of the 2006 World Cup soccer championship, which will be held in Germany.

Mega project opens for Chinese processor

The single largest investment in bioriented polypropylene (BOPP) film equipment was commissioned at the Shuangliang Group (Jiangyin, China) as the last of four tenter frame stretching lines recently started up production. The company operates three 8.2-m-wide lines and one 6.6-m unit from Brückner Maschinenbau (Siegsdorf, Germany). With this investment, the Shuangliang Group becomes one of Asia''s largest BOPP film producers.

German PVC changes

Vinyl producer Vestolit (Marl, Germany) is set to expand its PVC and VCM (vinyl chloride monomer) production in a €100 million investment program. VCM capacity is jumping from 350,000 to 400,000 tonnes/yr, and PVC for rigid applications is increasing from 165,000 to 200,000 tonnes/yr.

In other news, PVC competitor Vinnolit (Ismaning, Germany) has established a marketing office to distribute its range of paste, extender, and thermoplastics vinyl resins in Moscow.

LDPE still in demand

Polymer producer Basell (Hoofddorp, Netherlands) has licensed its tubular low-density polyethylene (LDPE) technology to PTT Polyethylene (PTTPE, Bangkok, Thailand) for a 300,000 tonnes/yr capacity plant to be completed in 2008 at Map Ta Phut in Rayong, Thailand. Just Jansz, president of Basell''s technology business, says when it is in operation, the facility will be one of the world''s largest LDPE plants. Earlier this year Basell licensed three other tubular LDPE facilities for China, but these have an annual capacity of 200,000 tonnes/yr each.

Additives in high demand to enhance applications

According to Ron Babinsky, senior consultant at analysts Townsend Polymer Services & Information (Houston, TX), global plastics additives consumption last year was estimated to be between 19 to 21 billion lb (8.6 to 9.5 billion tonnes). Of that amount, plasticizers took the largest share with 58%, followed by property extenders, which include heat stabilizers, flame retardants, and antioxidants to name a few (23%). Polymer modifiers such as impact modifiers and coupling agents registered a 12% share, and processing aids that are slip agents, antiblocking materials, lubricants, and mold releases tallied 7%. Of the total, 27% is used by processors in North America, 24% in Europe, and the rest is mainly processed in Asia.

Microtrace signs new deal with laser systems company

Microtrace (Minneapolis, MN), producer of brand-protection systems, has agreed to a partnership with Photoscribe Technologies (New York, NY) that will offer Microtrace customers direct part marking for brand protection, covert tracking, and tracing applications. The laser system is said to allow multiple levels of security when paired with Microtrace''s Microtaggant identification particle technology [April 2005 MPW]. Markings made by the Photoscribe laser cannot be seen or located by the unaided human eye. High magnification is needed for detailed viewing.

RTP starts global colors division

Specialty compounder RTP Co. (Winona, MN) is launching a global color division to solidify its offering to promote aesthetic and functional color solutions to plastics processors around the world. The new division is headed by Jean Sirois, general manager. It focuses on the growing demand for colorants in the plastics market by providing global grades of both precolored resins as well as color masterbatches. "We can assist customers with cost-analysis tools for evaluating the cost variances between precolored resins and masterbatches," Sirois says.

Names in the News

Akihiko Shirahata has been named science and technical manager of silane products at Dow Corning (Midland, MI). He has been with Dow Corning for 25 years and was previously with Toray Silicone.

SFC (Brunnthal, Germany), a leading manufacturer of fuel cells for mobile use, has appointed Pieter Bots as chief marketing and sales officer. He is the founder of Freecom Technologies, a manufacturer of external computer peripherals.

Cognis transfers oleo-based additives business to Malaysian JV

As part of a wider restructuring of its oleochemicals business, Cognis (Düsseldorf, Germany) will transfer part of its plastic additives business to an existing joint venture with Golden Hope (Kuala Lumpur) - Cognis Oleochemicals (M) Sdn. Bhd. The transfer will be completed by the end of this year, and includes oleochemicals-derived plasticizers, lubricants, and release agents. Also included will be Cognis'' oleo basic and other derivatives businesses.

The two companies have cooperated in the production, marketing and sale of fatty acids, fatty alcohol, glycerin, and associated products in Malaysia since 1989. Expanding the scope of this relationship globally will integrate and improve the future competitiveness of both companies'' operations. Cognis and Golden Hope both see substantial opportunities through the expansion of the 50:50 joint venture, which will rank as one of the leading global oleochemicals companies. Golden Hope, already one of the leading plantation companies in Malaysia, will progress further towards becoming a fully-integrated vegetable oils and fats producer and processor.

Albemarle to expand presence in Asia

Albemarle (Richmond, VA) has entered into a letter of intent to acquire land in China for the construction of a technology center, a repackaging facility for polyolefin co-catalysts, and future production centers for various polymer additives.

Initial activities at the wholly owned site, which is located in the Nanjing Chemical Industry Park, will include basic flame retardant technical service for customers in China and Asia. Additionally, the facility will feature a complete flexible polyurethane-foam flame retardant testing lab.

Concurrently, Albemarle has signed definitive agreements to form a second joint venture for the production and marketing of polymer stabilizers and intermediates for polymer stabilizers. The new joint venture company will be named Shanghai Jinhai Albemarle Fine Chemicals and will be a sister company to Albemarle''s existing JV, Ningbo Jinhai Albemarle Chemical and Industry.

"Albemarle is committed to using our technical solutions capability to support growth in China and Asia. The Nanjing technology center represents a significant milestone in our Asia plans," said Albemarle President and CEO Mark Rohr. "In addition, the second polymer stabilizer joint venture will allow the Jinhai Albemarle Companies to maintain the leading antioxidant position in China and increase our export presence."

Gusmer | Decker merger complete

With the merger of Gusmer and LLC/Decker now complete, the two reaction injection molding (RIM) molding equipment suppliers are promising customers improved technical and customer support; standardization and stocking of machine components; integrated spare-parts support; and expanded product offerings.

As RIM technology improves and advancement are made in equipment, new applications are finding their place with PUR.

"We see tremendous opportunities in RIM markets for new applications," says Dennis Commette, vp and gm of Gusmer | Decker. "The performance of polyurethane materials make it an attractive solution for demanding applications or where higher quality product is required."

Commette adds that as global markets continue to be more responsive to customers'' demands for better product performance and higher quality, manufacturers will seek alternative material solutions such as RIM technology.

"We have seen a significant growth in polyurethane product outputs in countries around the world, which in the past made up only a small portion of the RIM market," Commette states. "This is where the performance of polyurethane products, combined with the inherent adaptability of the RIM process to automated manufacturing processes will prove to be a key technology solution."

Motion Controls celebrates 10th anniversary

Motion Controls Robotics Inc. (Fremont, OH), a provider of integrated robotic systems, celebrated its 10-year anniversary on July 21. The founders, Scott Lang and Tim Ellenberger, initially started the company as Motion Controls Plus Inc.; an engineering consulting firm specializing in controls, systems, and programming that primarily served local machine builders and manufacturers. In 2004, Motion Controls shifted its focus to concentrate 100% on robotics.

Manufacturing Execution Systems top $1 billion in revenue

AMR Research (Boston), released a report on June 23 that found global Manufacturing Execution System (MES) market revenue reached an estimated $1.06 billion in 2004, a 50% increase since 2001. Compliance initiatives and ERP maturity are the two major drivers that have combined to create a perfect environment for MES market expansion.

AMR Research first coined the term Manufacturing Execution Systems (MES) in November 1990. The report found that since 2001, an increasing number of companies have begun to use MES to make the connection between enterprise systems and manufacturing.

Although no single vendor dominates, AMR Research predicts large automation vendors such as GE Fanuc, Invensys, Rockwell, and Siemens will increase their footprints in specific vertical segments.

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