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Mixed fortunes in sales and profits for Q1 April 30, 2003
A 40 per cent growth in its plastics sector profits helped the Solvay Group to a 13 per cent increase in first quarter earnings for 2003 compared with 2002, with a net income of Eur 98 million. Actual plastics sector sales showed no growth at Eur 472 million, but earnings increased to Eur 56 million through improvements in PVC in all regions compared to the very weak level of the first quarter of 2002 and a strong performance by the fluorine products division Solvay Solexis. Returns from HDPE compounds improved while compounds of PVC and PP declined because of raw-material price increases and weak volumes.
Solvay also has substantial plastics processing interests. Here sales dropped 5 per cent to Eur 347 million and earnings fell 23 per cent to Eur 17 million. The Inergy Automotive Systems fuel systems business continued its growth in volumes from opening new sites, notably in Asia, but its results were affected by the weakness of the US dollar and a decline in sales in the United States. The results of Industrial Films and Pipelife (pipes and fittings) were affected by the increase in raw-material prices combined with globally weak market conditions and, for Pipelife, by the weakness in winter sales.
BASF's Plastics and Fibres Division increased both sales and profits in the first quarter. Sales rose 15·6 per cent over the 2002 first quarter to Eur 2,283 million (of which 14·9 per cent came from higher volumes while higher prices and currency exchange contributed 1·4 per cent). Income rose by Eur 12 million to Eur 110 million, largely as a result of cost-cutting. Overall the BASF group increased its sales by Eur 7·2 per cent and income by 15·4 per cent, but the company is remaining cautions for the future and is expecting only a slight increase on the sales and profits figures for the second quarter of 2002.
At Eastman higher selling prices and volumes were mainly responsible for sales revenues up 17 per cent over the first quarter 2002 to $1·44 billion. Prices averaged 5 per cent more than in the 2002 quarter, and volumes were also up 5 per cent. But this was not enough to counter a 22 per cent rise in costs, and despite cost reduction measures, operating profits were down $38 million. While these are consolidated figures for the group, the general trend was mirrored across its operating divisions, although an insurance settlement did help the Polymers and Voridian divisions to a profits increase.
Plastic Cores, founded on the extrusion of plastic cores for reels, is changing its name on June 1 to A-Fax for marketing and product branding purposes. The change will assist the development of the company's other product ranges including barrier and fencing products and pallets.
Business is flat, but looks on the way up rather than down April 25, 2003
First quarter financial results are showing that worldwide the plastics business is looking slightly more encouraging, with improving sales volumes, the ability to achieve prices more in line with costs, and profits improving through the tighter financial control imposed as a necessity during the past couple of years.
Bayer started the year with group sales up 4 per cent at Eur 7·3 billion over the 2002 first quarter, and provisional profits above the 2002 figure of Eur 840 million, leading to a forecast of a double-digit percentage improvement on profits for the year - although last year operating profit was approximately halved and net income increased by 10 per cent only with the income from divestments. Despite this optimism, the world economy is still fragile, and Bayer is basing its targets more on improved efficiency than a dramatic upturn in business.
The Bayer Group is currently buoyant over its growing agrochemicals business and distracted by the massive litigation pitched against it in the USA over side effects from its Lipobay/Baycol cholesterol-lowering drug, but it is the polymers division that is forecast to bring the largest slice of income in 2003 with 35 per cent of group sales.
The group sees a significant chance of improving earnings from polymers, with the short term emphasis on cost-savings. It also has high hopes of improved business in Asia, particularly in China where it has a substantial investment programme. In the medium term Bayer is expecting a pre-tax margin of 19 per cent and is aiming for a 13 per cent return of investment from its polymers business.
Dow Chemicals turned in a 28 per cent sales increase in the first quarter over the 2002 first quarter at $8·1 billion. 21 per cent of this was due to higher prices, but 7 per cent came from higher volume. Pre-tax profits rose from $243 million to $344 million. Feedstock and energy prices in the quarter were $1·2 billion higher than a year ago, but were offset by cost reductions in addition to the higher prices and greater volume of sales.
Within these figures, Dow's Performance Plastics division increased sales with slightly lower volume and higher prices - the change in volume due in part to the company's exit from the nylon business in the middle of last year. Volume improved in polyurethanes, epoxies & intermediates and the company's automotive businesses.
Other plastics sales increased on higher price and flat volume, with modest volume gains in North America and Latin America offset by declines in Asia Pacific, which had a very strong first quarter last year. Earnings switched from a loss of $62 million to a profit of $137 million, but the company commented that they were still well below normal levels due to extremely high feedstock and energy costs.
Nova Chemicals turned from loss to profit in the first quarter, relative to both the 2002 first and last quarters. Its $4 million profit compared with a first quarter loss last year of $66 million and in the fourth quarter of $48 million. Within these figures, the olefins/polyolefins business earned $4 million, the same as last year's fourth quarter (and better than the $14 million loss in Q1 2002 mainly due to better margins), while the styrenics business cut its fourth quarter 2002 loss of $33 million to a loss of $17 million. Ethylene and polyethylene sales prices rose to cover feedstock costs, and saw a 5 per cent drop in volume from the strong fourth quarter 2002 demand, while styrenics held higher feedstock prices with higher selling prices, and also increased volume.
Within Nova's polyethylene business there was a marked shift in geographical sales caused by the company's need to raise prices. While total volumes dipped 3 per cent on Q4 last year and increased 3 per cent over Q1, volumes in North America were unchanged. International sales, 11 per cent of this year's first quarter sales, dropped 22 per cent, and sales to China dropped 37 per cent because local pricing would not support the sharp increase in North American feedstock costs.
In plastics machinery Milacron reported improved sales and orders, although its mould business saw sales slip slightly.
The Machinery Technologies-North America division which makes machinery for injection moulding, blow moulding and extrusion in North America and India had new orders of $85 million in the first quarter, up 9 per cent from a year ago. Sales rose almost 30 per cent to $88 million. Milacron says the increased orders were an indication of higher levels of spending in key markets such as packaging, housewares, automotive and medical, compared to a year ago. Consolidation and rationalization over the past several quarters helped this segment post $2·1 million in operating earnings, up from $1·4 million in the 2002 first quarter.
Interestingly Milacron says its first quarter 2002 operating earnings also included $4·5 million in royalty settlements: over the past few years Milacron has publicly and privately pursued a number of foreign machinery builders manufacturing in the USA over its patent for controlling a plastic processing machine from a personal computer, but has never revealed settlement terms.
The Machinery Technologies-Europe division which builds injection moulding and blow moulding machines had new orders of $33 million, 24 per cent up on the 2002 figure, and sales of $35 million, up 47 per cent - although a substantial part of the gains came from favourable currency translation effects. Restructuring and cost-cutting in Germany and Italy brought a number of machinery lines back to profitability. The segment posted an operating loss of $0·7 million, excluding $2·2 million in restructuring charges, compared with a loss of $3·0 million in the first quarter a year ago with no restructuring charges.
Milacron's Mold Technologies division, which makes mold bases and related parts, had sales in the quarter of $45 million, down $1 million. Restructuring in both North America and Europe caused temporary inefficiencies which led to a decline in operating earnings in the first quarter of 2003, to $0·3 million, compared to operating earnings of $2·5 million a year ago.
Bayer and PolyOne join forces in PU systems April 25, 2003
Bayer has entered another 50:50 joint venture to supply polyurethane systems, this time with PolyOne in the USA and Canada. The new company will be known as BayOne Urethane Systems and will operate from St Louis, Missouri.
Rhodia increases Asian compounds capacity April 25, 2003
Rhodia has opened a new compounding plant at its Onsan site in South Korea. It will serve both the Korean and Japanese markets for engineering plastics, and will produce a range of compounds based on Rhodia's nylons and other plastics. Capital expenditure is $16 million and the investment increases capacity by 20 per cent.
BASF buys to expand US plasticizer production April 25, 2003
BASF is planning to buy the plasticizer business of Sunoco in the USA, and combine it with its own North American plasticizers operation. The acquisition will include the Sunoco Pasadena, Texas, site, but not the Sunoco Neville Island site, which will produce plasticizers for BASF under a tolling agreement. No financial details have been released, but the business represents $150 million of Sunoco's annual sales.
SMS broadens film interests with third party agreements April 25, 2003
SMS has extended the operations of its film equipment divisions with third party equipment agreements. SMS Folientechnik of Austria has become agent for film test equipment made by Highlight Industries in the USA, while in the USA, Battenfeld Gloucester Engineering has joined in an extrusion coating and laminating alliance with Polytype of Switzerland.
Highlight Industries makes test equipment for monitoring all aspects of a stretch film. SMS Folientechnik is taking over the sales and service of the equipment, and will also offer customer training in its Vienna Technical Centre.
The agreement between Gloucester and Polytype will combine the companies' abilities in extrusion coating and laminating technology to produce complete converting systems which will be sold as Polycoat, initially in North America but soon with worldwide availability. Target applications include flexible packaging using various combinations of film, paper and foil; paper packaging and specialties such as photo paper; release liner, semi-rigid paperboard/foil containers; and some woven and non-woven synthetic fibre materials. Although most extrusion coating is done with LDPE and copolymers, there is growing use of other materials such as LLDPE, custom blends, metallocene copolymers, and barrier materials including EVOH and polyester. All these options will be available with Polycoat lines.
Deceuninck buys Thyssen PVC extrusion business April 17, 2003
The Thyssen Polymer PVC extrusion business is to be sold to Belgian PVC extruder Deceuninck, and, subject to monopolies considerations, will make Deceuninck a global major in this sector. Before integration of the Thyssen Polymer business Deceuninck claims a ranking of number three worldwide. Thyssen Polymer claims to be number five in Europe and the USA.
Thyssen Polymer's production of profile systems for windows, doors, conservatories and facades brought sales of Eur 186 million in 2002, but is not considered a core activity within ThyssenKrupp Technologies. Deceuninck, which is also involved in PVC compounding, recycling and other related activities, had consolidated sales in 2002 of Eur 362·2 million.
Deceuninck has operations in 32 countries and has 18 subsidiaries. Thyssen Polymer has production sites in Germany and the USA and sales companies in Poland and Thailand. It has a total extrusion capacity of approximately 86,000 tonnes per annum and is also active in injection moulding, tool construction, lamination and compounding.
The 2002 sales of both companies amount to Eur 549 million EUR with a geographic spread of: Benelux 9·1 per cent, Germany, Austria and Switzerland together 10·4 per cent, United Kingdom 14·2 per cent, Southern Europe 18·8 per cent, Central & Eastern Europe 16·2 per cent, North America 26·2 per cent and Asia 5·1 per cent.
DuPont in talks to sell fibres business April 17, 2003
DuPont has started negotiations 'with a third party' to sell its Textiles & Interiors company. This is a grouping of some of DuPont's fibre operations which was put together early last year as a vehicle for disposing of these businesses.
DuPont Textiles & Interiors is a substantial part of the operations of DuPont Canada. DuPont Canada is not wholly owned by DuPont, and DuPont is bidding to buy the remaining 24 per cent it doesn't own. The announcement of the discussions with a potential buyer for DuPont Textiles & Interiors is a necessary action in making an offer for the remaining DuPont Canada shares. The offer document is due to be issued today.
Calling all toolmakers - where are you? April 8, 2003
The Gauge and Toolmakers Association is compiling what it says is the first ever fully comprehensive database on toolmaking activity in the UK. It has the support of the DTI and Com-met 2005 in the project, and says that with firm figures to prove the sector's size and value the DTI will have a stronger argument with which to convince the Government to provide additional support.
Census forms have been sent to more than 2,500 firms and preliminary responses show 1,078 companies engaged in toolmaking, employing a total of 9,935 hands-on toolmakers. The GTMA is convinced that there are many other companies who are engaged in toolmaking, such as making press tools, plastic injection mould tools or prototype/rapid toolmaking, who have either not received forms or not yet responded.
Toolmakers' present statistical invisibility is partly due to the fact that the sector does not fall neatly into one of the SIC classifications that the Government uses. Negotiations have begun with Eurostat, the body that controls the SIC classification system, to create a new category which would include all toolmaking activities and it is hoped legislation will be put before the European Parliament in 2005 to come into operation with the new SIC coding in 2007.
Com-met 2005 is an initiative to increase the competitiveness of UK industry and support it towards greater success in global markets. It was launched in November 2000, as a partnership between the DTI and the production machinery and tooling sectors. The project was formulated as a result of several meetings between 14 trade associations representing companies in these sectors, which recognised that other countries - particularly Germany, USA and France had gained a lead in the marketplace.
Sunoco becomes one of the biggest US PP producers April 8, 2003
US oil refiner Sunoco is increasing its capacity in polypropylene, a market which it only entered three years ago, and expects to become one of North America's largest producers.
It has signed an agreement with the Equistar Chemicals joint venture between Lyondell Chemical Company and Millennium Chemicals to form a new limited partnership which will buy 320,000 tonnes of propylene per year from Equistar's La Porte, Texas ethylene facility, for the next 15 years. Sunoco will also buy Equistar's Bayport polypropylene facility at Pasadena, Texas, which has an annual capacity of around 180,000 tonnes.
Sunoco will pay $190 million plus the value of the polypropylene inventory to purchase the Bayport facility and form the partnership.
This deal secures for Sunoco a long-term supply of propylene for its Gulf Coast polypropylene business. Sunoco currently operates a 360,000 tonnes polypropylene plant at La Porte, as well as having polypropylene facilities at Neal, West Virginia and Marcus Hook in Pennsylvania. The acquisition gives Sunoco an operational capacity of more than 1·1 million tonnes of PP.
Interplas dates changed because of Fakuma clash April 4, 2003
The dates for the next Interplas exhibition in Birmingham in 2005 have been changed because of a clash with the Fakuma exhibition in Germany. Interplas was originally scheduled for October 10 - 14, and Fakuma is from October 18 - 22. This gave an impossibly short time for major exhibitors to break down from Interplas and set up at Fakuma.
Interplas organiser Reed Exhibitions has negotiated with the NEC to pull the dates forward a week to October 3 - 7 - an earlier date was not available because of the Motor Show. Fakuma organiser P E Schall has not been able to put its dates back, so there is still only an 11 day window for companies with large stands or large exhibits at Interplas to dismantle, ship to Germany and re-build in time for Fakuma.
Russians expect to start making PET next year April 4, 2003
The first step to PET production in the Russian Federation is scheduled for the end of the year when a 115,000 tonnes PTA plant comes on line. A second 115,000 tonnes PTA plant, and a 120,000 tonnes textile and bottle grade PET plant will start up next year.
The plant is being built by OAO Polief at Blagoveshchensk (Bashkortostan Republic) to meet demands for PET in Russia which, in 2002, amounted to some 340,000 tonnes.
Thermoforming, fabricating and sheet/stock shapes distribution group Barkston has been bought by its management. Tim Kiernan, managing director, Steve Rock, commercial director, and Roy Kitchman, sales director, have bought out chairman and major shareholder, Chris Lord, who founded the company in 1969. Company secretary Jenny Duxbury has been appointed group financial director.
Chris Lord will devote more time to his other role as managing director of Bartuf Systems.
Barkston was founded as Barkston Rubber & Plastics in 1969, and over the years dropped its involvement in rubber, set up a fabrication company called Skyrack Technical Plastics and bought the vacuum forming division of Hyware Plastics and fabricators Isocrylic and Plastech. Its operations were merged into Barkston Plastics (distribution), Barkston Plastics Forming (vacuum forming) and Barkston Plastics Engineering (fabrication).
The company has a turnover of £7 million and employs 100 people at sites in Leeds, Hull, Bolton and Newcastle.
SABIC buys European rights to long glass PP April 3, 2003
Long glass fibre PP specialist StaMax of Belgium is to become wholly owned by SABIC in a deal in which SABIC EuroPetrochemicals is buying Owns Corning's 50 per cent share. SABIC EuroPetrochemicals is the former DSM petrochemicals business which was bought by SABIC last year. StaMax was set up by DSM and Owens Corning in 1999.
Owens Corning will continue to supply its PerforMax glass and StaMax will use the Owens Corning process to compound its StaMax P material under license for exclusive sale in Europe. Owens Corning retains sole market development and sales rights in North America.
BP quits EVA to concentrate on LDPE coating April 3, 2003
BP is to switch its capacity for EVA at its Köln, Germany site to extrusion coating grades of LDPE and quit the EVA business altogether.
BP's two reactors at Köln have a total capacity of 370,000 tonnes a year. They made 190,000 tonnes of extrusion coating materials last year, alongside film and wire coating grades. They also made 50,000 tonnes of EVA. BP sees the LDPE extrusion coating market as more beneficial than the EVA market, hence the switch in output.
An expansion at Atofina's Antwerp, Belgium, HDPE plant adds capacity for new bimodal grades, metallocene-catalysed grades, and coloured pipe grades. The 160,000 tonnes increase brings plant capacity up to 510,000 tonnes. Atofina says the Antwerp plant accounts for 10 per cent of Western European HDPE consumption.
Worldwide the company has seven sites plus involvement in a joint venture in Qatar and another, with Samsung in Korea, in final negotiations. Its 2003 polyethylene capacity is around 2 million tonnes.
Injection moulder Birkby's Plastics has been bought by its management from Japanese trading house Marubeni, which has owned it since 1990. Marubeni also part funded the deal.
The buy-out team is Ian Hunter, managing director, Stephen Harrison, operations director and finance director Andrew Bullivant. Tom Brown, chairman of the Dyson Group, has been appointed chairman.
No value has been put on the deal, but Birkby's has net assets of more than £18 million and an annual turnover of £33 million. It employs more than 500 people at Liversedge in Yorkshire and Detroit in the USA.
Biggest ever Chinese PP contract goes to Basell April 3, 2003
PetroChina is to use Basell's Spheripol technology for three new plants making a total 800,000 tonnes/year of polypropylene. The licence for the plants in Daqing, Lanzhou and Dalian is the largest single contract ever awarded for a polypropylene license in China. The Daqing and Lanzhou plants will each have a capacity of 300,000 tonnes and the Dalian plant 200,000 tonnes.
According to Basell roughly half the new PP plants in the past 20 years have used the Spheripol process.
Improved operator safety provisions for the use of robots with injection moulding machines are incorporated in a new Euromap standard. Euromap 67 calls for a dual safety channel in the interface, and replaces Euromap 12, which will only be used for replacement purposes on existing equipment when 67 comes into force in August.
Another price increase for Eastman specialities April 3, 2003
Eastman is planning the second price increase in two months for its speciality plastics. On May 1 DuraStar, Provista, Eastapak and Eastalloy polyesters, Eastar, Eastman and Spectar copolyesters and Ecdel elastomer will go up in price by $0·15/kg. This increase will include all color concentrates and additives. The last increase was on March 1.
An explosion at DSM's melamine plant at Geleen in the Netherlands on April 1 killed three people - a DSM employee and two contractors. Two other people were hurt but were allowed home after treatment. The explosion did not cause any damage outside the plant, nor were any toxic substances released. An investigation has started into the cause.
PC sheet makers combine distribution April 1, 2003
The UK operations of two Israeli-based polycarbonate sheet suppliers have joined forces to improve logistics. Palram Europe has taken over the operations of Polygal (UK), which distributes from Newport Pagnell in Buckinghamshire. Palram makes multi-wall PC sheet under the Sunlite brand at a plant in Doncaster. Polygal imports similar products from Israel.
By pooling resources, Polygal will replace its long-distance imports with British-made Sunlite product, and Palram will acquire both an outlet in the South of England, and a means of utilising the capacity at Doncaster which was freed up when Palram opened a PC plant in the USA - Doncaster previously supplied the American market.
Polygal also supplies specialist sheet products made in Israel under the Polygal name, and will continue to do so. Many of these will be added to the product lines distributed by Palram.
New plant for advanced flame retardant April 1, 2003
Clariant has started work on a plant at Knapsack, near Cologne, Germany, to make a new flame retardant, developed especially for use in glass fibre reinforced thermoplastics. Exolit OP is a non-halogenated flame retardant based on a metal phosphinate and combines the high effectiveness of organophosphorus compounds with the advantageous properties of mineral flame retardants, says Clariant. It satisfies fire classifications such as UL 94 V0 or GWFI 960 degC (Glow Wire Flammability Index) as well as electrical standards such as a CTI of 600 V. It also complies with the requirements of the recently published European Directive on Waste of Electrical and Electronic Equipment (WEEE).
The mechanical properties of the plastic in which it is incorporated are only slightly less than those of the base polymer. Exolit OP is colourless so that colour formulations are unaffected. It also allows the production of non-halogenated printed circuit boards based on epoxy systems, and its heat resistance permits lead-free soldering.
Typical applications are in components for household appliances, computers and IT equipment as well as in aircraft and other means of transportation.
The plant, which is scheduled to start operation at the end of 2004, is designed to produce several thousand tonnes per year.
Johns Manville is to invest around $100 million in a greenfield glass fibre operation at its Trnava, Slovakia site. The company will start up a new furnace in the fourth quarter of 2004 to make glass for fibre reinforcement systems, with an eye on Slovakia's planned entry to the European Union next year, and the automotive and industrial companies who have already set up shop there.
Another joint venture polyurethane systems company has been set up by Bayer, this time with Büfa Beteiligungen of Germany. Bayer already has systems houses - companies which supply ready-for-use polyurethane materials at a local level - in Spain (Betapur), Italy (Deltapur) and Denmark (Tectrade). The new venture, called Büfa PUR, is owned 50:50 by the two companies. Last year Büfa had sales of around Eur 20 million.
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