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Articles from 2009 In May

DSM, Mitsubishi Chemical swap PC, PA business units

Plastics suppliers DSM Engineering Plastics (Heerlen, Netherlands) gains in its Asian polyamide operations, and Mitsubishi Chemical Corp. (MCC; Tokyo, Japan) grabs a polycarbonate foothold in Europe, as the suppliers trade business units. The two firms have signed a memorandum of understanding for DSM to acquire MCC’s Novamid-brand polyamide (PA6, PA66 and PA6.66) business in exchange for DSM’s Xantar polycarbonate business.

DSM strengthens its polyamide business via the swap with Mitsubishi. Shown are LEDs made of DSM’s Stanyl material.

Both businesses have annual net sales of approximately €90 million each. The companies do not intend to disclose other financial details of the transaction. The agreement envisages that DSM will compound polycarbonate at its Genk, Belgium facility for MCC; MCC in turn will compound polyamide in Kurosaki, Japan for DSM. A DSM spokesman told MPW that some key personnel would transfer employers, but that an exact number of those employees had not yet been decided.

Last year DSM opened its first polyamide polymerization plant in China, and earlier this year opened a nylon compounding facility in India.  DSM polyamide is marketed under the Akulon PA 6 and PA 66 and Stanyl PA 46 brands. The supplier also recently announced it would quadruple output of its ForTii polyamide, which it introduced at the K show in October 2007.

The business unit swap between the two companies is subject to external approvals but the suppliers hope to complete the swap before the end of the year.

For Mitsubishi the swap gives it a stronger foothold in Europe, which is where the bulk of DSM’s polycarbonate business has been realized. Earlier this year MCC signed an agreement with China Petroleum and Chemical Corp. (Sinopec; Beijing, China) to establish a new joint venture to produce bisphenol-A (BPA), a monomer used in polycarbonate production. On May 29, when it announced the swap with DSM, MCC also announced it planned to withdraw from the production of caprolactam and styrene monomer as part of a restructuring. Caprolactam is a precursor to polyamide 6. Earlier this year MCC also announced it would exit the terephthalic acid business; the chemical sees use in PET production, which MCC also supplies. [email protected]

Scheer Bay exits CF Scheer JV, reverts to Bay Plastics Machinery

Bay Plastics Machinery Co. is a manufacturer of complete pelletizing systems for the plastics industry. Founded in 1997 by pelletizing veterans from Conair’s Jetro division, Bay Plastics claims more than 400 years of combined experience in the design and manufacture of strand pelletizers and systems.

“We have been considering this move for several years due to some fundamental differences in how we ran our businesses,” said Kernstock. “The relationship with CF Scheer limited our ability to market our products on a world stage. This change will allow us to make the strategic changes to our product lines and distribution channels necessary to compete in a world market.”

Kernstock added that there will be few changes in the relationship of the company with Scheer Bay customers. Bay Plastics Machinery will continue to have the ability to support its existing customers with parts and service for their equipment. In fact, said Kernstock, “Scheer Bay has been manufacturing more and more of the Scheer equipment at our facility due to the exchange rate. This fact allows us an intimate knowledge of the equipment and the ability to fully support it long into the future.[email protected]

Chinaplas: GLS debuts halogen-free, flame retardant TPEs

GLS Thermoplastic Elastomers (McHenry, IL) chose the Chinaplas tradeshow in Guangzhou (May 18-21) as the forum to roll out a new series of OnFlex TPE materials that feature flame-retardant sans halogenated additives. The materials will be marketed particularly for applications such as power cords, accessory cords, and connectors for consumer electronics products.

Halogen-free TPE compounds help answer present and future regulatory needs.

Speaking at Chinaplas, GLS director of global marketing Rick Noller said the new grades provide an alternative to traditional flexible vinyl jacketing and insulation for power cords in consumer electronics applications and will help the supplier’s customers comply with current and anticipated regulations. The OnFlex halogen-free, flame-retardant (HFFR) TPE platform comprises five groups of compounds with various mixtures of properties.

In terms of market trends in China, Noller says the second quarter of 2009 has seen a pick-up but this could be a sign of inventory adjustment. He predicted it will not be obvious until late July or early August whether the recovery is sustainable or not. [email protected]

Natta Award goes to Swedish scientist Albertsson

The Giulio Natta Award, named after the Italian chemist and Nobel laureate who discovered polypropylene, was awarded last month to Ann-Christine Albertsson, a leading scientist recognized for her contribution to the interdisciplinary areas of polymers and biological sciences. 

The award, presented to Albertsson on May 16 during a ceremony in Ferrara, Italy, consists of a €5000 monetary award and a silver medal depicting the face of Giulio Natta (1903-1979), who, in 1963, won a Nobel Prize in chemistry for his work leading to the discovery of polypropylene (PP). The prize is awarded to a senior researcher whose scientific activity contributes substantially to improving our quality of life and leaves a significant mark on society. Natta did most of his experimental work at the University of Ferrara.

Albertsson is a professor in the Polymer Technology Department at the Royal Institute of Stockholm (Sweden), where she earned her doctorate and has lectured since 1980. She is among the world’s experts on degradable and/or renewable polymers, as well as synthesis and modification of polymers. She has published extensively in international scientific journals, with more than 5000 citations, and is the editor of seven books. Examples of her research work that have gone on to commercial use include the resorbable polyesters for tissue engineering, which are used as scaffolds to grow bone tissue out of stem cells. Her current research includes work on biomedical functional polymers among other projects. [email protected]

Balloons get away with less thanks to web

Toray Plastics (America) (North Kingston, RI) has used its experience in food and medical packaging to extend the service life and durability of metallized polyester (PET) film used to make balloons. LumLife film is a result of a special treatment technology that enables balloon converters and end users to create printable, colorful balloons that do not stress crack but maintain seal integrity during manufacturing. Barrier properties, said to be up to five times those of conventional nylon balloons, keep helium in the balloon for a longer period.

Christopher Roy, sales/marketing director for the company’s Torayfan films division, says LumLife film was originally developed for the packaging industry but the barrier and metal adhesion features permitted the crossover into the balloon market. The same metallized PET film can be used for confectionary, coffee, condiment, and medical applications. [email protected]

Chinaplas 2009: Blue skies prevail in Guangzhou (but smog can be a good sign)

They say you can gauge the health of China’s export-driven economy by the level of atmospheric pollution in Southern China. Assuming that is true, then a recent low smog-level drive through the industrial city of Dongguan clearly indicated that China’s export machine is suffering as the global economy flounders. Factories have been shuttered and migrant workers have not returned from hometowns in the country after the January Lunar New Year.

The big question on everyone’s lips at the recent Chinaplas show in Guangzhou, however, was whether the current domestic stimulus-driven recovery in China is sustainable or not. Some were of the view that China was in the throes of a “W”-shaped recovery. The government had indeed succeeded in kick-starting the domestic economy through its stimulus efforts, but once these effects have flooded through the system, a repeat package of similar proportions would be difficult, and China would thus then depend on a global recovery to bolster its export-led economy. Clariant Greater China’s Juergen Heise, head in Guangzhou for the additives and colorants supplier, is one forecasting two-pronged recovery, saying, “We expect the current run-up to come to a halt in a few months, before a real recovery around May 2010.”

Chinaplas 2009 attracted 69,298 visitors, including 11,340 from overseas.

Arburg’s Man: The strong get stronger.

However, Engel Machinery Asia (Pyongtaek, South Korea) President Robert Bodingbauer expects the current global crisis to boost China’s long-term prospects. “Once the world recovers, I think the majority of companies will look at investing in production facilities in Asia rather than Europe and other developed economies. The main beneficiary will be China,” opined Bodingbauer.

Southern China export strife

The plastics processing sector in Southern China at present is characterized by two extremes, according to Max K.W. Man, general manager at injection molding machine manufacturer Arburg’s Shenzhen operation. “They either have no work whatsoever or they are busy. Customers are looking for the strongest companies when they place their orders.” The next six months will likely be critical to the survival of many, he predicted. “Processors reliant on export orders have to prove to the banks that they have orders in order to get financing,” said Man, who added that while Arburg has suffered from the downturn, it has not been hit to the same extent as machine suppliers serving the low-end market. “We have already seen some confidence restored in the second quarter, although machine buyers are taking longer to sign,” he said.

Healthy homeland

Closer to the home market, the picture brightens significantly. Since March, various government stimuli and initiatives have kicked in, and the local economy has begun to tick again. While the majority of China’s $586 billion fiscal stimulus package is destined for infrastructure and construction, other government initiatives are boosting the processing sector. Tax rebates have seen auto sales in China at record levels of late, while ready availability of credit and VAT (Value Added Tax) rebates have boosted capital investment. A voucher distribution program has ignited appliance demand, to quote some examples.

As part of its efforts to boost the local economy, China exempted purchases of injection molding machines from a 17% VAT burden in January, a move that helped drive sales, according to Helmar Franz, chief strategy officer of Ningbo Haitian Co. (Ningbo, China). “After an extended New Year break, buying activity returned in March and we are now at 80% of the peak level of 2008,” said Franz, who has also noticed a fall-off in production at many multinationals in China. “In a recession, it’s easier to lay off people and cut back on production in China than in a home market in Europe.”

Haitian debuted an all-new “low-cost” injection molding machines series at Chinaplas dubbed the Tianjian Pluto Series. The 860 to 5300-kN machines are designed and manufactured at a dedicated facility in Wuxi, China, operated by subsidiary company Wuxi Haitian Machinery Co. Explained Franz, “Our standard machines were improving year by year and actually getting too sophisticated for standard applications in the Chinese market. We decided to go back to basics with this new ‘simple and solid’ machine line.”

In China, there is a burgeoning need for quality products that are relatively low-tech. “One billion Chinese do not have TVs or refrigerators,” mentioned Franz. The Tianjian Series is targeted at such applications where quality is required, but not necessarily high machine performance.

Echoing Haitian’s sentiments, Taiwan’s Fu Chun Shin (Tainan) reported that orders in January and February of this year were at just 20% of the level of 2008. However, “During March through May, we returned to a level of 70%,” said John Hsieh, planning department manager. “Outside China, Africa is doing quite well because it’s not as integrated into the global economy.”

Packaging progress

Netstal China Ltd. (Shanghai), is also “quite happy” with recent business in China. General Manager Andreas Nydegger said his company is gaining market share in the higher cavitation market for 72- and 92-cavity PET preform molding systems, albeit a smaller market there than lower cavitation units. “The key to success in the China market is (supplying) machines that are easy to set up and maintain. Chinese processors are not quite ready for the cavitations of 144 and even 192 that we are seeing in North America,” said Nydegger. He added that Chinese processors are showing an increased appreciation for the benefits of reliability, less material usage, and faster cycle times, which he said plays well to his company’s machines’ strengths. Although a typical Netstal rigid packaging system costs four times more than 15 Chinese machines, production efficiency is better by a factor of six to seven and ROI is around one year, he claimed.

Packaging production efficiency will be a key component of revisions that are to be made to China’s packaging legislation. Observers say this change will push industry consolidation and demand for energy efficient machinery.

Hosokawa Alpine (Augsburg, Germany) Divisional Manager Christopher Tarrant says orders for blown-film extrusion lines such as the ones his company makes were put on hold in China for around six months but now seem to be gaining momentum. “It will take some time to see if this continues, but a lot of projects that were shelved last year are restarting,” stated Tarrant. In particular, petrochemical joint ventures need flexible plastic packaging for their production, he said. Increased fertilizer production in China coupled with a tendency to switch from woven sacks to polyethylene ones is also boosting demand.

Chinese processors naturally are also looking to reduce their resin costs by reducing material use, which should drive a shift to greater use of linear low density polyethylene (LLDPE) for flexible packaging. One thing standing in the way of downgauging, however, is that China continues to manhandle bags rather than use automated handling. “They are handled roughly and 120 µm or 140 µm bags wouldn’t be able to handle such treatment,” noted Tarrant. Currently the standard in the country is 160 µm. “China needs to revisit its logistics system before downgauging to gauges of advanced countries,” adds Tarrant.

Brückner (Siegsdorf, Germany), meanwhile, has received orders for seven bi-oriented polypropylene (BOPP) and polyethylene terephthalate (BOPET) lines in China so far this year, and officials there reason it is benefiting from the availability of financing and a relatively strong local economy. “At present, processor margins are slim but their operating rates are high so cash flow is good,” noted Phillip Chen, managing director of Brückner Far East (Hong Kong). As Chinese processors invest in the more cost-effective lines, older lines will have to be shut down or be devoted to niche products, according to Chen.

“We expect to sign a few deals after the Chinaplas show,” says Peter Oswald, managing director of tenter equipment manufacturer DMT Guangzhou Machinery. The two latest BOPP projects in Asia for the manufacturer are at processors Paoyan (Taipei) and Zhejiang Yiwu YiMei Film Industry (Yiwu, Zhejiang Province). Both lines are equipped with DMT’s TDO inlet sprocket drive that reduces the chain load and results in higher uptime with lower energy and oil consumption.

YiMei just installed its second line from DMT rated at 450m/second. “Higher output is the key requirement in the industry on account of its commodity nature, but there is some interest in specialty lines,” said Oswald. Zhejiang Hangbao Group Co., for example, operates a 5-layer high-barrier line from Oswald’s firm. There’s also a need for flexibility to switch from commodity to specialty products using the same line. For example, Fujian Quanzhou Lichang Plastic Co., switched from BOPP film extrusion to production of synthetic PP paper (filled with CaCO3) when the market had a previous downturn.

Jürgen Rehkopf, GM for the Asian-Pacific headquarters in Singapore of extruder manufacturer Reifenhaüser (Troisdorf, Germany) was surprised how busy Chinaplas turned out to be, saying, “We has solid talks on technology and will see what comes out of them…. The ones that didn’t survive the crisis are not our customers. Now the larger players are benefiting from less competition.”  Rehkopf says that in times of crisis, processors with the most efficient machinery can gain some advantage. “We’ve had five contracts signed in Southeast Asia and China this year. There is demand for machines but definitely a hurdle in terms of getting finance because most money is going into large projects.

Reifenhaüser’s Rehkopf also noted a lot of international visitors from countries such as Morocco, Thailand, Mexico, Chile, and Pakistan. “They want to see how close the Chinese machine builders are getting to us in terms of performance, and at what price,” said Rehkopf. “We’re still ahead, but we need to keep an eye on the Chinese competition.”

During a downturn, processors become price sensitive and Chinese machines are seen as attractive in developing countries,” said Stanley Chu, chairman of Chinaplas organizer Adsale Exhibition Services (Hong Kong). “We saw buying delegations from Jordan, Brazil, Egypt, Turkey, and Russia.” In fact, 16.4% of Chinaplas’ 69,000-odd visitors were from overseas.

Mark Lueddecke, executive VP of extrusion blowmolding machine manufacturer Shunde Kautex Plastics Technology Co., notes that during tough economic times, many of its users were choosing to retrofit or upgrade their machinery rather than buy new machines. He estimates that 30% of China’s blowmolders and moldmakers have disappeared “But when business picks up they will reappear,” he predicted.

Germany’s Kautex has seen its Chinese subsidiary transform from an 80% reliance on export sales in 2007 to an 80% reliance on the local market in 2008. “Domestic processors are returning to us after having tried local machines,” said Lueddecke. “Minimizing energy consumption is high on the agenda in China.” Kautex has improved the energy efficiency of its Chinese machines by generating more friction in the screw and barrel (for faster plasticizing), using Bosch Rexroth hydraulics to gain cycle improvements, and downsizing the hydraulic motor and combining it with accumulators. “Our machines use 20–25% less energy than Chinese machines and you can do away with labor-intensive flash removal,” said Lueddecke.

If you build it …

As mentioned, China’s $586 billion stimulus package is seen as most benefiting the infrastructure and construction sectors, with 25% of the funds dedicated to reconstruction of quake-devastated Sichuan Province. A further 37.5% is earmarked for construction of roads, railways, airports, irrigation, and other basic infrastructure nationwide.

Hu Wei, VP wire and cable at polyethylene supplier Borouge (Singapore), said his company started seeing the positive effects of the stimulus in the second quarter. “We’re seeing genuine demand for water, gas, and sewage pipe HDPE grades, as well as high-voltage power cable XLPE grades. In terms of sales, we’re already back where we were before the crisis hit,” he said. Borouge is adding 540,000 tons/yr of HDPE capacity at Ruwais, Abu Dhabi, by May 2010 to respond to growing demand in infrastructure markets, while 350,000 tons/yr of LDPE capacity will be on stream around 2013.

Automotive market growth? Indeed

The global economic crisis might not necessarily be a bad thing for China’s growing automotive sector. Firstly, the Chinese government has reduced the sales tax from 10% to 5% on cars with engines smaller than 1.6 liters. This has boosted sales at a time when other countries’ markets are experiencing severe downturns. Secondly, a government initiative to reduce the number of major automakers from 14 to 10 bodes well for increased adoption of plastics.

Explained Hermann Althoff, group VP, engineering plastics Asia Pacific at plastics supplier BASF (Ludwigshafen, Germany), “Average polyamide usage in Chinese vehicles is currently only 5–6 kg compared with 20 kg in Europe. This is because the market is very fragmented and with lower per-vehicle production volumes, it often makes sense to use metals.” However, the government’s consolidation initiative combined with efforts on the part of Chinese automakers to reduce the number of models they offer and focus on best sellers will most likely see the equation tilt in favor of plastics.

Recent examples of successful adoption of the company’s Ultramid polyamide 66 include a PA intake manifold for the Jianghuai Automobile Co. Refine multi-purpose vehicle (MPV) that reduced manifold weight by 40% and improved horsepower by 3%, and a lower bumper stiffener that prevents pedestrians from getting pulled under the car during collisions in the Shanghai GM Regal.
BASF also unveiled a new Ultradur PBT grade at Chinaplas that enables direct metalizing of automobile headlamp bezels. “The grade does not cause fogging because it does not use a demolding agent, despite the fact that it realizes a highly smooth surface suited to metalizing,” said Althoff. Conventional PBT grades require surface pretreatment prior to metalizing.

Future prospects

Moving forward, one issue China confronts is an over-reliance on exports. For example, it accounts for 67% of global shoe production but whereas the U.S. buys 8.7 pairs per capita per year, Chinese consumers on average only buy 1.8 pairs annually. “One more extra pair per year would be 1.3 billion more pairs,” noted Adsale’s Chu. “But people are afraid to consume. They are worried about healthcare, housing and education,” he said. “The government plans to provide low-cost housing and improve healthcare so that they will become consumers.”

China is also, belatedly, paying more attention to its environmental problems. China as the ‘World’s Workshop’ is no longer something to be proud of if it comes through sacrificing the environment, energy consumption, and material waste, noted one observer. “Stricter environmental regulations will almost certainly push up production costs unless production is more efficient,” said Adsale’s Chu. “China will be driven by the need to save energy and reduce production costs. This in turn realizes the need to prioritize quality and high tech equipment." [email protected]

Visteon files for Chapter 11 protection for U.S. operations

The company supplies climate systems, interior components and assemblies, and lighting and electronic products to a wide spectrum of vehicle suppliers, through about 31,000 employees working at its facilities in 27 countries around the globe. Its in-house plastics processing includes injection molding, thermoforming, and blowmolding, plus it is a customer of many custom molders and processors.

In a prepared statement, Visteon chairman and CEO Donald J. Stebbins said the company is taking the Chapter 11 step to maximize the long-term value of the company. During the reorganization, he said, “... we will seek to address our capital structure and legacy costs that are not sustainable given the current economic environment. The results of these actions, combined with our innovative products and excellent product quality, will allow Visteon to emerge a financially sound and well-positioned company.”

Visteon says it expects to fund operations with its U.S. cash balance, operational cash flow, and a debtor-in-possession facility. Also, Ford Motor Co., which spun off Visteon in 2000, has committed to support debtor-in-possession financing of Visteon restructuring to ensure long-term supply continuity. The company says other global customers have also expressed support.

Along with the Chapter 11 filing, Visteon also filed what are called “first day motions” that are meant to ensure a smooth transition to Chapter 11 status. These request authority to continue serving customers, honoring customer programs, paying critical suppliers, and honoring employee obligations, among other things. [email protected]

Kansas cashes in $4 million for bio based medical composite research

Bio-based composites for medical products are one outlet for a $4 million grant bestowed to a Kansas research center. The Kansas Bioscience Authority awarded the Kansas Polymer Research Center (KPRC) at Pittsburg State University, and the newly created Center of Innovation for Biomaterials in Orthopedic Research, the multimillion grant that will study sturdier yet lighter materials that can be used for a number of medical purposes. Steve Robb, executive director of the KPRC, told MPW the focus on the medical market matches up with the research of Via Christi Health System (Wichita, KS), which organized the Center of Innovation. In addition to Pittsburg State, the Center involves researchers from Kansas State University (Manhattan, KS) and Wichita State University, among others, and is expected to lead to the creation of thousands of jobs in the Wichita area from its headquarters on Wichita State’s campus.

Robb said the center will research materials that are lighter in weight but stronger than steel, applying composites to deal with obese patients, as well as using them to replace metal hips and knees with a composite material that would allow bone to grow into the composite material and form a joint. The KPRC will specifically deal with composites developments, tackling any research that involves polymer-based compounds. The research facility has become a center for the development of plant-derived polymer composite materials, including vegetable-oil-based resins.

On March 12, the KPRC was awarded nearly $1.3 million in U.S. federal government money from the 2009 omnibus bill, with plans to use those funds to support additional research and jobs in agriculture and bio-based product technology. Robb told MPW that KPRC just completed the submittal for the monies to the U.S. Dept. of Agriculture and will receive them over three years, with the first capital likely to be available in September 2009. That research is focused on bio-based polyols, using soybean and other vegetable oils to create the polyol element of polyurethane, which can be applied in foam and rigid plastics. Last year, the KPRC was awarded $1.1 million through the 2008 omnibus bill, with that money and the current funds to be disbursed over a three-year period. In 2007, the center was awarded a Presidential Green Award, making it one of only five organizations in the country to be so honored. [email protected]

Sly Inc. forms new material handling equipment company

(Strongsville, OH), a 135-year-old manufacturer of dust collectors and other air pollution equipment, will design, manufacture, and supply plastics processors with material handling and processing equipment. The unit has been named Sly Process Systems LLC, and will be led by three former employees of bulk material handling supplier Walton/Stout Inc. (Lithonia, GA). W. H. Wilson, former executive VP/COO, Deborah Ellington, former national sales manager, and Patrick Jones, former CAD design manager, bring a combined 75 years experience in the plastics material handling field to the new company.

Product offerings from Sly Process Systems will include rail car unloaders, storage silos, pneumatic conveying systems, volumetric and gravimetric blending equipment, PET/PLA crystallizers, and resin dryers. Sly Inc.’s existing range of wet and/or dry industrial dust collector systems can be combined with Sly Process Systems’ material handling equipment to provide a complete turnkey system, and the companies can also supply individual components and customized equipment for unique applications.

“Combining the proven talents of three well-known pneumatic conveying experts with Sly’s long presence in many industrial fields and manufacturing experience gives us a very strong offering for customers,” said Ted Kurz, CEO of Sly, Inc. and Sly Process Systems, LLC. “We expect many firms will appreciate the stability and expertise we have to offer.” [email protected]

ACS rounds out its drying, crystallizing technologies with acquisition

(St. Louis, MO) investment firm, says the purchase will give processors nearly all the technologies needed for single auxiliary equipment source.

In a release, Tom Breslin, president of ACS, said that for Walton/Stout, which also supplies equipment for material handling and blending, the combination will allow it to offer relevant technologies in temperature control, process cooling, and size reduction to its existing customers through one combined company. ACS will continue to support Walton/Stout equipment in operation through its parts and service group. Walton/Stout serves the plastics, process, chemical, and food markets, with a 50,000 ft2 manufacturing center, including sheet metal fabrication and in-house painting and electrical design.

ACS, through its AEC, Sterling, Sterlco, Sterltech, Ball & Jewell, Cumberland Engineering, Colortronic, Economizer, and Wabash and Carver lines, supplies size-reduction, material conveying, heat exchangers (mold temperature controls units and chillers), drying system, presses, robots, and metering and blending equipment. —[email protected]