CHEMICAL UPDATE
JANUARY 2013
McIlvaine Company
TABLE OF CONTENTS
U.S. Chemical Output to Rise 1.9%, ACC Projects
Evonik to Boost Butadiene, MTBE, 1-Butene Production
Clariant Acquires CRM International
Invista Gains EIA Approval for HMD Plant in Shanghai
Bayer Obtains Permit for New World-Scale TDI Plant in Dormagen, Germany
Mitsubishi Chemical to Build $700 m U.S. Plant
PolyOne to Buy Glasforms for $34 million
BASF Completes Facilities for Water Treatment and Paper Chemicals in Nanjing, China
Dupont Expanding India Research Center
In 2013, U.S. chemical production is expected to grow by a modest 1.9%, not much better than the 1.5% increase in 2012, according to the American Chemistry Council, a trade group. The European Chemical Industry Council predicts that European chemical production will rise 0.5% in 2013, an improvement compared with the 2.0% contraction experienced in 2012.
In 2013, demand in the developing world will rise, but not enough to spark significant activity in the West. Economic growth in Brazil, for example, should reach 4.0%, an improvement over 2012. Chinese growth should notch up a bit to 8.1% this year.
Several bright spots dot the generally overcast landscape. U.S. chemical manufacturers can look forward to another year of low-priced natural gas. Executives in the fine chemicals sector are optimistic about 2013. Likewise, scientific instrumentation manufacturers are upbeat about prospects for the energy, environmental, forensics, and food markets. And global demand for specialty chemicals should increase a healthy 3.1%.
But Europe’s financial instability continues to cast a long shadow over the chemical enterprise, and industry executives are bracing themselves for another round of budgetary brinkmanship in the U.S. at the end of February. With uncertainties like these, the future of the industry sometimes seems no more predictable than the results of a pull on a slot machine.
Evonik to Boost Butadiene, MTBE, 1-Butene Production
German chemicals company Evonik said recently it will be expanding output of C4-based products, including butadiene, methyl tertiary butyl ether and 1-butene, at its Antwerp, Belgium and Marl, Germany, sites.
Butadiene production in Antwerp will be increased by 100,000 mt/year, while 1-butene capacity at Marl will be raised by 75,000 mt/year. The combined MTBE production at both sites will be expanded by 150,000 mt/year.
The expanded capacity, aimed at meeting increasing demand, is expected to be on stream by 2015, Evonik said, adding investments in this project would run into hundreds of millions of euros.
Evonik said the 1-butene output expansion, once completed, would make it the world's largest supplier.
Butadiene is used in the production of synthetic rubber, which is mainly used in the tire industry. 1-butene is used as a co-monomer in the production of polyethylene and other polymers. MTBE, a fuel component, raises the octane level of gasoline and improves fuel combustion.
The Swiss specialty chemicals group Clariant signed an agreement to acquire CRM International SAS, a French based manufacturer of natural ingredients for the personal care industry. The acquisition strengthens Clariant’s Industrial and Consumer Specialties Business Unit (ICS), which aims to accelerate sustainable, high performance solutions. The transaction is expected to close by the end of March 2013. Financial details of the acquisition are not being disclosed.
CRM (Cosmetic Raw Materials) is a privately held company, providing naturally derived ingredients based on olive oil. The product portfolio contains emollients, active ingredients, butters and natural alternatives to silicones. It supports customers - leading cosmetic companies globally - to develop innovative solutions for the increasing demand for sustainable and renewable products in the consumer care market worldwide.
Michael Willome, Head of Clariant’s ICS Business Unit, says the deal fits perfectly with Clariant’s growth strategy through extending its innovative and sustainable product portfolio. “With the acquisition of CRM, following the acquisition of OTC and the partnership with Kitozyme, we consequently pursue our way forward of providing innovative and high performance solutions to the consumer care markets”, says Michael Willome.
Invista, a worldwide producer of nylon intermediates and fibers, has received Environmental Impact Assessment (EIA) approval from the Shanghai Environmental Protection Bureau for a 215,000-ton per year hexamethylene diamine (HMD) plant at the Shanghai Chemical Industrial Park.
Invista has fully authorized construction of the plant and expects to commence production in 2015. This marks a significant milestone for Invista’s planned investments to create an integrated nylon 6,6 intermediates and polymer asset in the region.
When production comes on line, Invista’s global HMD enterprise will be well-positioned to serve the rapidly growing Asia Pacific markets for a variety of nylon 6,6 applications, as well as high performance polyurethanes.
“This new plant will give INVISTA and its customers a significant competitive advantage,” says Steve Kromer, Invista senior vice president, responsible for implementation of Invista’s integrated nylon 6,6 intermediates investment strategy in Asia. “With new local production, the plant will facilitate the growing needs of our Asia businesses and strengthen our position in the region.”
The new plant will be the most energy efficient HMD facility in the world, according to Kromer. It underscores Invista’s continuing focus on improving energy efficiency, minimizing environmental impact and developing innovative technologies.
Invista is also working on the next phases of its China investments in nylon 6,6, including facilities to produce ADN using its proprietary technology, nylon 6,6 polymer, and engineering polymer compounds.
Given Invista’s strong commitment to the Asia market, the company has invested more than $100 million in various projects in the region in the past 12 months, including a new Easy Set Lycra fiber production line in Tuas, Singapore, the expansion of its nylon 6,6 airbag fiber facility and opening of its China Textile Research Center in the Qingpu District of Shanghai.
Following a detailed appraisal, the Cologne district authority has granted Bayer MaterialScience the permit to build and operate the new high-tech facility for the production of the chemical TDI (toluene diisocyanate) at Chempark Dormagen. TDI is needed as a precursor for the manufacture of flexible polyurethane foams to make products such as high-quality foams for mattresses, chairs and car seats.
“We are delighted that the approval process has been successfully completed and we can press ahead with our construction work as planned,” says Dr. Joachim Wolff, who is the member of Bayer MaterialScience’s Executive Committee responsible for the Polyurethanes Business Unit. “This innovative high-tech process marks the start of safe and eco-friendly world-scale polyurethane production that makes the best possible use of energy and resources. Compared with a conventional plant with the same capacity, the new facility will reduce energy consumption by up to 60 percent and require as much as 80 percent less solvent. This will also give us a decisive competitive edge,” he adds.
With an annual capacity of 300,000 metric tons, the future world-scale plant is a key part of a long-term investment strategy at Bayer MaterialScience to turn its Dormagen site into a global technology center for the development and production of polyurethanes. The employees who will be working at the new TDI facility started their training last spring. They include 15 new employees who are working alongside staff at the current pilot plant and receiving intensive instruction.
The approval authorities gave the go-ahead for the provisional start of construction in February 2012. Since then, work at the giant construction site has been progressing in leaps and bounds. In November, for example, the construction team reached a key milestone when the TDI plant’s 90.5 metric ton distillation column – a cylindrical steel structure – arrived at Chempark by truck. “If progress on site continues at this pace, there is nothing standing in the way of us completing and commissioning the plant midway through 2014,” says Dr. Steffen Kühling, who is in charge of production and technology in the Polyurethanes Business Unit.
The construction phase of the project will create between 500 and 1,500 additional jobs. Many contractors come from the region, such as the piping planning firm Keynes from Neuss and equipment manufacturers Quast and Dormagen-based APL. Later on, when the facility is up and running, companies from Dormagen and the surrounding area will be involved in maintenance, construction and repair work, plus the provision of technical services in the area around the new plant. The project also safeguards existing upstream and logistics jobs at the site. The same applies to numerous additional jobs associated with TDI production in the value-added chain in North Rhine-Westphalia and Germany.
With 2011 sales of EUR 10.8 billion, Bayer MaterialScience is among the world’s largest polymer companies. Business activities are focused on the manufacture of high-tech polymer materials. The main segments served are the automotive, electrical and electronics, construction and the sports and leisure industries. At the end of 2011, Bayer MaterialScience had 30 production sites and employed approximately 14,800 people around the globe. Bayer MaterialScience is a Bayer Group company.
Japan's Mitsubishi Chemical Holdings Corp will invest about 50 billion to 60 billion yen ($590 million to $710 million) in a plant that will use low-cost materials from Dow Chemical Co and take advantage of cheap North American shale gas, the Nikkei business daily said.
Mitsubishi Chemical plans to build an acrylic resin-processing plant next door to a planned Dow ethylene plant in Freeport, Texas, as estimates put the cost savings of making chemicals there at about 95 percent of making them in Japan, the paper said on Sunday without citing sources.
Mitsubishi Chemical had been considering methyl methacrylate monomer production in the U.S., but nothing concrete has been decided, a Mitsubishi Chemical spokesman said.
Cheap shale gas is prompting petrochemical companies such as Chevron Phillips Chemical Co to build new plants in the U.S., intensifying price competition for resin products.
Mitsubishi Chemical's new plant will be able to make 250,000 million tons of acrylic resin materials a year, making it one of the largest in the world, the Nikkei said.
Acrylic resin is used in liquid crystal display panels, car lamps and construction materials, and the Japanese firm is eyeing rising demand in central and South America, Southeast Asia and in Africa.
PolyOne Corp., which makes resins used in plastic pipe and other products, said recently that it is buying privately held Glasforms Inc. for $34 million.
Glasforms makes advanced composite products for the electrical, telecom and energy industries. PolyOne said the company will continue to operate from its Birmingham, Ala., location.
Peter Pfaff, founder and president of Glasforms, will stay with the company along with other members of management. Glasforms has about 300 employees.
BASF has begun production of chemicals for water treatment and paper manufacturing at the Nanjing Chemical Industry Park in Nanjing, China. These wholly-owned, world-scale production plants for quaternized cationic monomers (DMA3Q) and cationic polyacrylamide (cPAM) further strengthen BASF’s leading position in supporting the water treatment and paper industries in Asia.
The facility has an annual capacity of 40,000 tons of DMA3Q and 20,000 tons of cPAM, and is strongly backward integrated. Key precursors are supplied by the adjoining facilities at BASF-YPC Co., a 50-50 joint venture between BASF and SINOPEC which is one of six BASF Verbund sites worldwide.
“The completion of these facilities is an important milestone, allowing BASF to establish a globally cost-competitive supply for the water treatment industry,” said Dr. Matthias Halusa, Head of BASF’s Global Business Management Water Solutions. “ Production right at the heart of the water treatment industry in Asia further strengthens BASF’s position in this region as a supplier of innovative solutions.”
The demand for sustainable solutions to improve water and waste water management in Asia, specifically in China, is rising in order to provide long-term water security. Access to clean water is among the major local challenges. BASF contributes with innovative solutions to close the water supply gap as a leading provider of chemical solutions for water recycling, reuse, water savings and drinking water treatment.
“As the first global player for powder polymers and monomers in this rapidly growing region, we can respond to the growing demands of our customers. Becoming a local producer demonstrates BASF’s commitment to support these important industries in Asia ,” emphasized Magali Simon, Regional Head of BASF Business Water Solutions Asia Pacific.
Cationic polyacrylamides are used as organic flocculants and coagulants as well as retention and drainage aids in the paper industry. With Zetag® and Magnafloc® BASF provides a comprehensive range of water treatment chemicals especially designed for the solid/liquid separation process in the industrial and municipal waste water treatment sectors. BASF offers innovative solutions on increasing productivity and reducing total cost of operations in paper industry with Percol® and Organopol®.
“ This plant will underpin BASF’s position as one of the leading players in providing retention and drainage solutions as well as water management to our paper customers. At the same time, we will be setting new sustainability standards in the way we use water and energy, ” said Heng Lin, Senior Vice President, Paper Chemicals Asia Pacific.
The plants at Nanjing are built according to BASF’s high global standards of safety and environmental protection. Particular importance is put on training the employees and the safety experts to ensure the same high safety standards as in all other production facilities.
DuPont Co. plans to expand its research work in India, adding staff and space to its existing center in Hyderabad.
The project will include application development capabilities for performance polymers, the company noted at the Society of Plastics Engineers’ Antec event, held Dec. 6-7 in Mumbai.
“The facility would focus on engineering plastics, specialty elastomer and lightweight application for the growing Indian automotive market,” said Pascal Ferrandez, technology manager for performance polymers for DuPont Private Ltd. The facility will focus on the India and Southeast Asia market.
Wilmington, Del.-based DuPont plans to hike employment at the center from 450 currently to about 1,000 within five years. In addition to plastics, the center handles industrial biosciences, packaging and industrial polymers, titanium technologies and protection technologies.
The center opened in November 2008 and is the company’s largest R&D center outside the United States.
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