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PolyOne to improve elastomers profitability, and reports third quarter losses October 30, 2003
PolyOne has started moves towards its anticipated business disposals with an announcement that two of its elastomers plants are to be closed to reduce costs and bring capacity in line with demand. The DeForest, Wisconsin, and Wynne, Arkansas, plants in the USA are to close at the end of the year and some 230 sales and administrative jobs in the Elastomers and Performance Additives business are to go.
The two plants being shut make a variety of products, including compounded elastomers and dispersed rubber chemicals. PolyOne intends to switch production to other plants.
The Elastomers and Performance Additives business is profitable, but the effects of higher raw material prices, competition from other parts of the world and migration movement of some key markets to other countries have decreased operating margins, such that PolyOne is considering selling it. The plant closures and job reductions should improve pre-tax earnings by $7·5 million for a one-off restructuring charge of $15 million, half of which will be asset write-offs.
Group sales and profits fell in the third quarter, both in comparison with the second quarter and with the third quarter 2002. The table gives the figures:
Q3 2003
Q2 2003
Q3 2002
Sales
$630·3 m
$650·9 m
$650·7 m
Operating income
$6·9 m
$10·8 m
$26·3 m
Operating income before special items related to plant closures
$16·3 m
$14·2 m
$31·6 m
Net income
($43·2 m)
($6·0 m)
$9·8 m
Fourth quarter sales and raw materials prices are expected to remain at Q3 levels, and sales volumes are expected to fall seasonally, against strengthening demand in North America from 'modest signs of recovery'. The company still expects to lose money on its operations in Q4, before further restructuring costs are allocated.
Nova revises European PS distribution October 27, 2003
European outlets for Nova Chemicals' polystyrene have been streamlined, with Distrupol, already a UK distributor, also handling the Benelux countries, Ireland, Scandinavia and France. Ultrapolymers is to manage Nova's German distribution. Other existing distribution arrangements in Europe are unchanged.
Continuing restructuring chops DSM's profits on moderately equal sales October 27, 2003
Sales and profits at the Engineering Plastics and Elastomers businesses of DSM's Performance Materials Division fell in the third quarter compared with the third quarter last year. Sales were down 1 per cent on the year ago figure at Eur 430 million, while the net operating profit was more than halved at Eur 13 million. DSM does not detail the exact split in performance, but says that the 'clearly negative' Elastomers result was because the start-up of new capacity had not fully reflected in increased sales, and because margins were considerably lower. Engineering Plastics saw its margins and sales volumes 'come under strong pressure'.
DSM has been restructuring during the past year as it continues on its plan to become a predominantly life sciences and performance materials company and the costs of restructuring have continued to hit profits. Overall the Eur 88 million net profit in the third quarter 2002 became a Eur 78 million net loss in 2003 on sales just 5 per cent lower at Eur 1,325 million.
BASF to quit polystyrene specialities to concentrate on volume October 26, 2003
BASF is to tighten up its polystyrene business, taking out speciality products and concentrating on the volume business that can most efficiently be handled in big plants. From July 1 next year it is to stop production of many grades at Ludwigshafen, Germany, cutting about 100,000 tonnes from the compounds market, and by the end of this year its Styrolux SBS plant will be mothballed. This follows its decision earlier this year to sell its Ronfalin speciality ABS business in order to concentrate on larger volume production.
In the future BASF will no longer make polystyrene compounds or niche products, which include ready-coloured materials and those with customised properties. Instead, it is to extend its Colorflexx process, introduced earlier this year as an in-house colouring alternative to colour compounded ABS, to polystyrene. Compounded BASF polystyrene will still be available, but only through licensed suppliers.
The mothballing of the Styrolux plant in Ludwigshafen will reduce capacity in Europe by 25 per cent. More recently the plant had been used for pre-marketing the product in North America. The European market will continue to be supplied from BASF's Styrolux facility in Antwerp; from 2004, the North American market will be supplied from a new world-scale plant in Altamira, Mexico, which will come on-stream at the end of this year.
Styrene products continue to lose heavily for Nova October 26, 2003
Canada's Nova Chemicals business has continued to lose money on polystyrene. Its styrenics division's third quarter loss of $40 million was scarcely any better than the $42 million loss of the second quarter (and a lot worse than the $19 million loss in Q3 2002). But it should have been, because lower feedstock costs helped reduce overall costs by $43 million. However selling prices for polystyrene and styrene monomer fell as fast and more than offset the benefits of falling feedstock costs.
Total sales volume rose 15 per cent, with polymer volume up 14 per cent on the second quarter, most of the improvement coming from Europe due to better business in the construction and packaging markets and inventory rebuilding.
Nova's olefins/polyolefins business increased its second quarter loss of $5 million to $8 million in the third quarter. Here the business was going the right way - polyethylene prices fell, but feedstock prices were even lower. Nova was, however, hit by a fall in volume partly as a result of the celebrated power disruption in August that reduced production at its four Ontario plants and was reckoned to have reduced profits by approximately $9 million.
Nova has also taken a step towards improving its polyolefins profitability by planning to shut down the world's first linear low density polyethylene line. The A-line at the St Clair River site in Corunna, Ontario, provides 8 per cent of Nova's capacity, but is also its smallest, highest cost production line. Around 80 per cent of the most profitable sales from A-Line will be moved to other facilities. 30 per cent will move to the new Advanced Sclairtech technology line in Joffre, Alberta. This will result in higher operating rates for the new plant and significantly lower production costs for the retained products.
Dow Chemical increased its year-on-year earnings by more than 150 per cent in the third quarter. Sales rose 13 per cent to $8·0 billion from third quarter 2002 sales of $7·1 billion due to an 8 per cent increase in price and a 5 per cent increase in volume, and despite a 20 per cent plus increase in feedstock and energy costs, net income rose from $128 million to $332 million.
Within Dow's broad chemicals portfolio, Performance Plastics' results were strengthened by improved sales and earnings in most businesses and Polyurethanes benefited from strong demand for MDI in rigid foam applications, as well as from continued growth in polyurethane systems.
In the basics segments earnings improved 18 per cent from last year, despite substantially higher feedstock and energy costs. Plastics sales increased 13 per cent, with higher prices and volume. Polyethylene volume was particularly strong in Europe and Latin America.
'Asset impairments' and restructuring charges of $496 million hit Eastman's third quarter figures and the company turned in a loss of $440 million compared with operating profits of $61 million in the third quarter of 2002. Apart from the charges operating results would have been lower anyway, primarily because of higher raw material and energy costs - although these were partially offset by higher selling prices and the continuing impact of 2003 cost reduction measures.
The Coatings, Adhesives, Specialty Polymers and Inks segment - which Eastman has warned must put up or ship out - saw lower sales volumes, but the revenue was kept even by an improved product mix, higher selling prices and favourable foreign currency exchange rates. This segment picked up charges of $411 million, but even so, operating earnings declined year-on-year due to lower sales volumes and higher raw material and energy costs that were only partially offset by cost reduction measures and higher selling prices.
In Specialty Plastics external sales revenue declined 4 per cent from lower sales volumes, primarily attributed to reduced demand for packaging, film and fibre products with photographic applications, but partially offset by exchange rates. Excluding restructuring charges of $1 million, operating earnings increased slightly compared with the year-ago period as cost reduction measures offset lower sales volumes.
Voridian Division was brighter with third quarter 2003 sales revenue increased 11 per cent over the third quarter 2002 from higher sales volumes, higher selling prices and currency exchange which more than offset a negative shift in product mix. Third-quarter 2003 operating earnings for the division were $36 million, which included restructuring charges of $1 million. Polymer sales revenue was up 16 per cent because of higher sales volumes, higher selling prices and favorable foreign currency exchange rates. The higher sales volumes were due primarily to strong PET sales in Europe, the Middle East and Africa because of warmer than normal summer temperatures, and increased sales volumes for polyethylene.
Engel's director of technology Dr Otto Urbanek is leaving the company on October 31. Engel says he is not retiring, but does not know what his plans are. The R & D role has been taken over by Dipl Ing Georg Steinbichler, who was previously area manager for R & D and plastics applications.
Dr Urbanek joined Engel in 1981, and was involved both in the building up of Engel Automatisierungstechnik, and in developing Engel's position in injection moulding machine manufacture.
Chinese investment plan for Atofina October 26, 2003
Atofina is to build an organic peroxides production plant in China. The 3,000 tonnes annual capacity plant will be built on the Atofina Changshu industrial site near Shanghai and will be 100 per cent owned by Atofina. The company has had joint ventures in Korea, Japan and India, and has bought out its minority partners.
Organic peroxides made by Atofina are used as polymerisation initiators, crosslinking agents for rubber and polyethylene, and curing agents for unsaturated polyester resins. They are marketed under the tradename Luperox. Atofina has 10 organic peroxides plants around the world - in addition to its three Asian sites, there are plants in the United States (New York and Texas) and in Europe (Günzburg in Germany, Spinetta in Italy, and Loison in France).
Demag to double Asian injection machine capacity October 26, 2003
Demag Ergotech is planning to double the capacity to build injection moulding machines at its Indian and Chinese joint venture plants.
Increasing capacity at L & T Demag Plastics Machinery in India to 600 machines per year has been prompted, says Demag, by the strong position the joint venture has built in India, alongside the increase in exports of machines to Africa, Australia and the Near and Middle East. Machines built in India are standard hydraulic and hydromechanical machines with clamping forces between 40 and 500 tonnes.
In China the Demag Haitian joint venture established five years ago with Ningbo Haitian Corporation will also be increased in capacity to 600 machines per year. The company has been building machines between 50 and 150 tonnes which have been sold in China and neighbouring countries such as Taiwan. There have also been increasing orders for speciality machines from Germany.
Demag Haitian is also shortly to start building machines of 1,600 tonnes and upwards, and a new production hall is under construction, with series production expected to be started at the turn of 2004/2005.
DuPont to double high temperature nylon production October 26, 2003
Increasing demand for high temperature nylons has persuaded DuPont to more than double the capacity of its Richmond, Virginia, USA, Zytel HTN plant. The 13,600 tonnes expansion is scheduled to start up by the end of 2004.
PolyOne plans to slim down and become leaner October 26, 2003
Plastics compounding, colour and additive masterbatch production, and distribution are to be the three prongs of PolyOne's future development, and its other current businesses are likely to be sold off.
The company says its chosen businesses are those with 'the strongest market synergies and potential for success'. Its other operations - elastomers and performance additives, engineered films and specialty resins - are being considered for divestment, although PolyOne has set no deadline. In 2002 they contributed $617 million of PolyOne's $2·5 billion annual sales and $12 million in operating income.
After divestiture, the 'smaller but more focused company' would comprise:
Plastics Compounding
Vinyl Compounds, with 2002 sales of $627 million, which represented 24 per cent of total company sales.
Engineered Materials (2002 sales of $332 million, 13 per cent of the total).
Formulators (2002 sales of $180 million, 7 per cent of the total).
Color and Additive Masterbatch ($341 million in 2002 sales, 13 per cent of the total). Distribution ($520 million in 2002 sales, 20 per cent of the total).
Of the businesses slated for divestment, Elastomers and Performance Additives had 2002 sales of $364 million (14 per cent of total sales); Engineered Films had $153 million in 2002 sales (6 per cent of total); and Specialty Resins had 2002 sales of $100 million, contributing 4 per cent of total sales.
PolyOne also has a stake in the Oxy Vinyls, LP and SunBelt Chlor-Alkali joint ventures which it has previously described as non-core businesses, but no decision has been made about whether to sell them.
Excluding the expected divestments, 18 per cent of PolyOne's 2002 sales would have been outside North America, in Europe and Asia. To further strengthen overseas business the Board of Directors recently approved plans to build a new masterbatch and compound plant in China - the company's third plant in China and fifth in Asia.
Investment follows business boost at Stadium October 26, 2003
Injection moulder Stadium Plastics, which was sold 18 months ago to enable the Stadium Group to concentrate on electronics, has grown its turnover 25 per cent, added major new automotive business, and is now investing in five more injection moulding machines.
Since the beginning of the year the company has added six automotive customers, including Jaguar, MG Rover, Visteon and a BMW subsidiary, and has had 100 tools transferred to it in the past six months. In its first year under new management turnover rose from £25 million to £30 million.
The new moulding machines are all from Toshiba, and range from 220 to 650 tonnes.
UPM promotes high speed infrared drying for PET October 26, 2003
Infrared drying equipment specialist SIAC has appointed UPM Machinery Sales to represent it in the UK and Ireland, with initial emphasis on the PET business.
Infrared reaches moisture at the core of the PET granule, drying the material in around 12 minutes rather than 6 hours with conventional drying systems and reducing power consumtion by around 60 per cent.
An installation running in the UK is processing 1,500 kg/hour of virgin and regrind blends of PET, achieving a crystallising and drying time of 12 minutes. It comprises a UPM (CMG) granulator capable of reclaiming PET sheet and film down to a minimum thickness of 30 micron. The regrind is automatically conveyed with virgin material to a UPM (Ferlin) gravimetric blender having a 10 kg batch weight, and the blend is then conveyed to the infrared dryer.
The blend of regrind and virgin is crystallised and dried to a final moisture content of 50 ppm and fed by a crammer feeder to the extruder feed throat.
UPM and SIAC have developed a control system to interface the gravimetric blender with the dryer and extruder to cater for a wide range of material blends and extruder output rates fully automatically.
The dryer eliminates the need for a separate crystalliser prior to drying the material, making the system compact and price competitive.
The sale of the Valmet converting equipment division of the Finnish Metso Corporation to the Bobst Group of Switzerland is to go ahead, with probable completion at the end of December. The expected price - dependent on the balance sheet at the time of the transaction - of Eur 75 million is somewhat lower than the Eur 90 million forecast when the memorandum of understanding was signed nearly a year ago.
The group makes film slitters, rewinders and metallisers under the Atlas, Titan and General Vacuum brands in England, and Rotomec film printing and coating equipment in Italy. Net sales of the group last year were Eur 160 million and it has approximately 800 employees.
Sullivan adds Italian converting equipment October 26, 2003
Sullivan Machinery has taken on UK representation of the Italian-made FBF range of film production and converting equipment which includes spread rollers, air shafts in steel, aluminium and carbon fibre and hot and cold microperforators which can be mounted on extruders, printers and converters.
Ticona to increase European UHMWPE capacity October 10, 2003
Ticona is to increase the output of its GUR UHMWPE plant at Oberhausen in Germany by a third, to 40,000 tonnes. The extra 10,000 tonnes will come from a de-bottlenecking in the second half of next year.
Ticona also makes GUR at a 30,000 tonnes plant at Bishop, Texas, USA, which was opened last year. The expansion will bring an expanded product range, and meet annual global growth in demand for UHMWPE of around 5 per cent.
BP is planning to sell its European Special Products Business, which includes rubber additives, to H & R WASAG of Germany. Included in the deal will be two UK manufacturing plants at Chorley and Tipton; the Neuhof base oil refinery in Hamburg, Germany; a manufacturing plant near Maastricht, the Netherlands; and marketing operations in Spain, Portugal, Benelux, Germany, Eastern and Northern Europe and the UK. The sale has been agreed in principal, and is expected to be completed early next year.
Cincinnati reveals size of Chinese extruder order October 7, 2003
The size of the order placed by Chinese window frame extruder Dalian Shide with Cincinnati Extrusion has now been confirmed. The company is buying 165 extruders in what is the biggest order ever received by the Austrian machinery builder.
These new extruders will bring up the total number of Cincinnati extruders used by Dalian Shide in PVC profile production to 352. The 165 new machines number 126 conical (Titan 45 and 58) and parallel (Argos 72, 93 and 114) twin screw extruders, plus 39 CE 30 single screw extruders. The single screw extruders will be installed as co-extruders on 39 new co-extrusion lines to manufacture coloured window profiles.
The extruders will be delivered to Shide's facilities in Dalian and Chengdu, and to a new production site in Shanghai. Dalian Shide is planning to increase its annual output to 1 million tonnes of profiles, and as well as domestic sales, intends to sell in Japan, Korea, and also in Europe.
Krauss-Maffei is also an established supplier of extruders to Dalian Shide, and when this expansion
was revealed it too was expected to receive a substantial order for extruders. A statement is awaited from the company.
DuPont in 'bio-refinery' project to make feedstocks October 7, 2003
DuPont is joining with the United States Department of Energy's National Renewable Energy Laboratory in a $7·7 million project to develop a 'bio-refinery' that uses corn or other renewable resources - rather than petrochemicals - to produce fuels and value-added chemicals. The aim will be to make fuels and chemicals from the entire corn plant - including the material in the stalks, husks, leaves, and the starchy material in the kernels.
The agreement is part of the larger $38 million DuPont-led consortium known as the Integrated Corn-Based Bioproducts Refinery Project which includes DuPont, NREL, Diversa Corporation, Michigan State, and Deere & Co. This project was awarded $19 million in matching funds from the Department of Energy last year.
Purified sugars from the corn kernel will be the primary source of value-added chemicals, while the remainder of the corn plant - commonly called 'the stover' - will be converted into fuel-grade ethanol and electrical power. One of chemicals produced could be 1,3 propanediol (PDO), the key building block for DuPont's Sorona polytrimethylene terephthalate which the company intends to switch from petrochemical to bio feedstocks.
Basell is joining with Saudi industrial group Al-Zamil in a project to build a 450,000 tonnes polypropylene plant in Saudi Arabia. The two companies have signed a memorandum of understanding for the plant, which should be built by 2007, to use Basell's Spheripol process to convert propylene from a propane hydrogenation plant based on the UOP Oleflex process.
Al-Zamil is a wide ranging industrial group which has companies making engineering plastics components and packaging, including a PET division. It also includes Saudi International Petrochemical Company which is involved in three major chemicals projects at Jubail Industrial City.
The propylene/polypropylene complex will cost around $550 million and will be built at two sites, the propane plant at a Saudi Aramco site, and the polypropylene plant at a site allocated by the Royal Commission.
Acrylics company Lucite International, which owns the Lucite and Perspex brands, is moving into China with plans to build a 93,000 tonnes methyl methacrylate plant. The $100 m plant will be located in Caojing, 70 km south of Shanghai, and will come on line by mid-2005. Lucite will have the option to expand it to 150,000 tonnes in a later phase.
China is said to be the fourth largest and now the fastest growing market for acrylics with a current consumption of 200,000 tonnes, rising by around 10 per cent annually.
Lucite has around 25 per cent of the world market for MMA by volume and the capacity to produce 850,000 tonnes/year of acrylic products.
New UV stabiliser technology from Ciba October 3, 2003
Ciba Specialty Chemicals has developed what it describes as 'a new class of stabiliser technology' for preventing UV degradation. At present it is not being used in plastics stabilisers - the first two products are for use in home and fabric care and personal care products - but the company believes there may be potential for the technology 'in other areas'.
Excited State Quencher Technology, 'outperforms existing stabilisers, which simply absorb UV light' by quenching the excited state of molecules when exposed to light. The effect applies not just to degradation caused by UV radiation, but also shuts down degradation pathways, such as those caused by exposure to higher temperatures.
Joint venture to push PVC-specific masterbatch in Europe October 3, 2003
The Vynacol polymer-specific colour masterbatch for PVC developed by Colour Tone Masterbatch is being given a marketing boost outside the UK through a joint venture between Colour Tone and Irish additives/packaging group MetPro. They have set up an Irish-based joint venture company called Vynacol Ltd (55 per cent MetPro/45 per cent Colour Tone) which will market Vynacol in Europe, North Africa and the Middle East - Colour Tone retains the UK sales territory.
Targeted sales are Eur 5 million within 12 months. Vynacol sales in the UK have grown 300 per cent annually for the past three years.
The new head of marketing, sales and application technology at Swiss injection moulding machine manufacturer Netstal is Dr Thomas Robers, who for the past 10 years has worked at Battenfeld in Meinerzhagen, Germany where he became head of development and project work, and eventually sales and marketing manager.
Dr Robers takes over from Bernhard Merki who was promoted to CEO of Netstal at the beginning of this year.
Eastman sells PE colour masterbatch business October 2, 2003
Eastman has sold its polyethylene colour concentrate business to the US subsidiary of German masterbatch and compound manufacturer Polyplast Müller. The deal is with Colortech, which operates compounding plants in Morristown, Tennessee and Brampton, Ontario, Canada.
Eastman has sold the business because it is a niche market and is no longer making the profit margin demanded of it. In August Eastman announced plans to get tough with low profit operations in its coatings, adhesives, specialty polymers and inks group, with divestment a possibility.
SABIC to become world's biggest in ethylene glycol October 2, 2003
SABIC is planning to build another ethylene glycol plant - its seventh - as part of a plan to become the world's leading supplier of ethylene glycol by 2006. The 625,000 tonnes plant will be built at Jubail United Petrochemical Company and is expected to be on stream by the end of 2005, adding to the 575,000 tonnes plant that is currently under construction there.
By 2006, SABIC's total ethylene glycol production capacity will reach 3·5 million tonnes meeting more than 20 per cent of global demand. 1·5 million tonnes will be produced at Eastern Petrochemical Company, Al-Jubail; 1·2 million tonnes at Jubail United Petrochemical Company and 800,000 tonnes at Saudi-Yanbu Petrochemical Company, Yanbu.
Ethylene glycol is the primary feedstock for polyester manufacturing and is also used in anti-freeze, marine engines, x-rays and luggage.
Ex Ticona boss to run DSM in China October 1, 2003
Former president of Ticona, Stefan Sommer, is joining DSM to head its operations in China. He becomes corporate vice president DSM China, based in Shanghai, reporting to DSM deputy chairman Jan Zuidam, who is responsible for China within DSM's managing board of directors. From April next year he will also take over the Chinese duties of Ari van der Steenhoven, director of DSM corporate and sales offices in China, who is due to retire.
Before becoming head of Ticona in 2001, Mr Sommer held a variety of other posts within the Celanese group, and prior to that, worked for Hoechst, Arthur D. Little and Klöckner Industrieanlagen. He left Ticona in April this year. DSM currently derives roughly 14 per cent of its sales in Asia - about the average for its principal competitors - amounting to some Eur 800 m. Of this, about 40 per cent (Eur 300 m) is from China. The company has a target to more than double its Chinese turnover in the next five years.
Albis improves profitability, but US business gets no better October 1, 2003
Plastics distributor Albis Plastic is credited with the profits growth at its parent company Otto Krahn in Germany, which also owns specialist chemicals distributor Krahn Chemie. The group increased operating profits by more than 54 per cent to Eur 19·3 m in 2002 on a turnover 5·9 per cent lower than in 2001 at Eur 567·3 m.
The contribution by Albis followed a period of rationalisation in which its Canadian compounding site was shut in mid-2002, reducing the company's head count by 9 per cent worldwide to 1,055, and a distribution company was opened in Hungary.
The Canadian closure, and the global drop in plastics selling prices coupled with overcapacity in compounds, cut Albis' turnover by 8·3 per cent to Eur 468·7 m in 2002. The American market was particularly difficult and continues to be so, and the company warns that this year's figures will be worse than last year's.
Minolta gets technology input in Konica merger October 1, 2003
Japanese colour and imaging equipment companies Konica and Minolta have merged, with consequent changes in the structure of the Minolta colour instruments division in the UK. Konica UK and Minolta (UK) officially merge today to form a unified photographic, imaging and instruments systems company which has been registered as Konica Minolta Photo Imaging (UK), with the instrument systems division in Milton Keynes taking responsibility for all colour, light, display and 3D meters.
The merger is expected to bring greater economies of scale in production with more competitive pricing, a wider choice through an enhanced product range, new product developments, and increased flexibility and access to sales and service support through combined nationwide coverage.
The new company has set a target to gain 30 per cent of the UK colour instruments market within three years.
Gabriel-Chemie drops the Bühler name October 1, 2003
Gabriel-Chemie's German masterbatch producing subsidiary Bühler Kunststoffe, Farben und Additive has been renamed Gabriel-Chemie Deutschland. The company has been part of the Austrian Gabriel-Chemie Group since 1989.
Birkby's Plastics has won a £3 million annual contract to supply Xerox with office equipment components following the commencement of work on another project, and expects to hear whether it is in the running for a third in the next few months.
The new contract is to mould 18 components for the CopyCentre, WorkCentre and WorkCentrePro multifunctional machines, including external covers and some internal components in PC/ABS, and involves printing - for which the company has bought a £20,000 printer - and heat staking.
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