CHEMICAL UPDATE
MAY 2011
McIlvaine Company
TABLE OF CONTENTS
DuPont to Increase Titanium Dioxide Production
BASF to Build New Dispersions Plant in South Africa
Dow Picks Freeport, Texas, As Site of New Propylene Plant
Dow Opens Wind Blade Adhesive Plant
Braskem Adjusts to Meet Brazilian Demand
Georgia-Pacific Chemical’s Lufkin Plant Expands Capacity for Fracking Boom
Sabic and Sinopec Investing $1 billion in New Polycarbonate Resin Plant
Exxon, SABIC Sign Deals for Joint Rubber Plant
LyondellBasell to Boost Ethylene Output in US
M&G to Build PET and Purified Terephthalic Acid Plants in U.S.
Chemicals maker DuPont said recently it will spend more than $500 million to increase production of titanium dioxide, a key ingredient in automobile paint that is in short supply.
DuPont is already the world's largest producer of titanium dioxide, a white pigment also known as Ti02 that is used in paints and plastics.
The expansion will add 350,000 metric tonnes of capacity to the global titanium dioxide market, which currently has capacity of roughly 5 million metric tonnes.
Ford Motor Co is one of DuPont's biggest Ti02 customers. Rivals include Huntsman Corp and Tronox Inc.
As demand for cars and other consumer goods has increased, so has demand for titanium dioxide. That has been extremely positive for DuPont. The company said it saw "vibrant global demand" for the material in the first quarter.
By increasing capacity, DuPont is effectively betting that demand will continue to outstrip supply.
The company will spend $500 million to increase production at its Altamira, Mexico, plant by 200,000 metric tonnes per year. The new capacity is expected to be online by 2014.
DuPont will also upgrade its four other titanium dioxide plants in Mississippi, Tennessee, Delaware and Taiwan to add another 150,000 metric tonnes per year.
DuPont declined to say how much it is spending to expand capacity at those four plants.
BASF will invest in a dispersions plant in Durban, South Africa, the Company recently reported.
The new plant will produce acrylic dispersions mainly for the coatings and construction industry.
The facility will benefit from local availability of raw materials and proximity to key customers who serve South Africa’s and Sub Saharan Africa’s fast-growing markets.
Production is scheduled to begin in the second half of 2012.
South Africa is the largest market for dispersions in Sub-Saharan Africa.
With this new facility, we are well positioned to support our customers’ growth in South Africa and its neighboring countries providing BASF’s quality, service and reliable supply said Christoph Hansen, Senior Vice President Dispersions for Adhesives and Construction Europe.
Dow Chemical's proposed on-purpose propylene plant will be located at its sprawling complex in Freeport, Texas. The disclosure of the plant's location came during Dow's conference call related to its first-quarter earnings report.
The updated plans call for the construction of a world-scale on-purpose production facility in Freeport by 2015 and the exploration of options to commercialize technology to produce propylene from propane, with the startup of a second unit by 2018.
Together, the plants would expand the company's propylene capacity by 900,000 mt, according to company estimates.
"These investments will reduce our net purchases of propylene to less than 10% of our total use in the United States," Liveris said.
The news comes as propylene spot and contract prices have reached record levels amid healthy demand, and ongoing tight supply resulting from production issues.
As part of its ambitious olefins expansion, Dow also aims to increase ethylene production by as much 2.3 million tons/year.
It plans to achieve this by restarting an idled cracker at its St. Charles complex in Hahnville, Louisiana, by the end of 2012, improving or increasing feedstock flexibility for crackers at its Plaquemine (Louisiana) and Freeport operations by no later than 2014, and by constructing a world-scale ethylene production plant in the US Gulf Coast by 2017.
"Taken together, these actions will allow us to increase our ethylene capabilities by as much as 20% in the United States over the next two to three years," Liveris said, "and allow us to deliver as much as 90% of our North American ethylene from ethane."
The Dow Formulated Systems unit of Dow Chemical Co. has completed a wind blade epoxy adhesive production plant in Roberta, Ga.
The plant includes a new reactor and production equipment, and will be fully operational by July 1, the company announced May 24.
The plant will serve customers in the U.S., China and Latin America.
“Epoxy adhesives play a critical role in the fabrication, performance and durability of wind turbine blades where large substructures are bonded together to create the finished blades,” said Jean-Luc Guillaume, global business leader for wind energy, in a news release. “Specialized properties are needed for adhesive mixing and application during the fabrication process and cured adhesives must exhibit high levels of toughness and durability to withstand the extreme loads a wind turbine blade is subjected to throughout its service life.”
Having consolidated all of Brazil’s polyethylene and polypropylene production under one corporate banner and establishing a PP beachhead in North America as well, Braskem SA now is moving to improve the overall quality of the Brazilian plastics market.
“We’re taking responsibility to support the whole value chain,” polymers vice president Rui Chammas said in an interview at Brasilplast 2011 in São Paulo. “There will be a very competitive plastic chain in Brazil in the future.”
São Paulo-based Braskem, a joint venture between Brazilian construction giant Odebrecht SA and Brazilian national oil company Petrobras, completed those first two action items last year. It first acquired Quattor Petroquimica SA, its only remaining national competitor in PE and PP, and then bought the North American PP business of Sunoco Inc. which consisted of three U.S. plants and a research center.
Chammas said it’s now important for Braskem to be able to supply enough raw material to allow the Brazilian market to continue to grow. Brazil consumed just over 9 billion pounds of plastic resin in 2005, but by 2010, that number had soared to more than 13 billion pounds. The amount of resin consumed per capita also increased from less than 51 pounds to almost 70 in that same time frame.
To better meet this demand, Chammas said that Braskem also is looking to re-organize the product mix at its 31 resin plants in an attempt to reduce the number of grades produced at each plant. A series of debottleneckings also could increase potential capacity throughout the company, he added.
“We now have the scale to compete and invest in R&D and plan for organized growth,” Chammas said.
Source: Plastics News
The natural gas shale drilling boom hasn’t fully embraced the East Texas town of Lufkin, but one chemical plant there is stepping up its role in the trend.
Georgia-Pacific Chemical’s Lufkin plant is a producer of resins used to coat proppants – the sand, ceramic pellets or other small items used in hydraulic fracturing to prop open fractures made in shale formations to release previously-hard-to-reach gas.
GP Chemicals said recently it is expanding the capacity of the plant “significantly” to produce more proppant resins in response to the booming fracking business.
Typical feedstocks for the resin facility include tall oils and phenolic chemicals said Shelley Woods Whiting, director of marketing for GP Chemicals.
The coatings on the proppants can be engineered to match the different chemistry and geology of the formations where fracking is taking place.
The expansion doesn’t necessarily mean more jobs at the facility, which employs around 60 workers. But GP Chemicals is considering other products and expansions at the facility as it tries to expand its oilfield services business.
Georgia-Pacific is owned by privately held Koch Industries, which has about 5,600 workers in Texas.
Saudi Basic Industries Corp. announced May 17 a significant expansion of its production in China, including a 260,000 ton polycarbonate plant as part of its joint venture with Chinese state-owned firm Sinopec, along with upgrades to its compounding capacities in the country and investments in innovation centers there and in India.
The PC resin plant, to be built in Tianjin as part of its Sinopec Sabic Tianjin Petrochemical Company joint venture, is expected to be operational in 2015, and reportedly is a US$1 billion investment.
SSTPC currently produces ethylene, polyethylene, polypropylene and other materials.
Both the new polycarbonate resin manufacturing and compounding investments in China reflect the double-digit growth in the PC market in China, and the fact that the country remains a net importer of the material, said Charlie Crew, president and CEO of Sabic’s Innovative Plastics unit.
When the Tianjin facility comes online, it will give Sabic 1.6 million metric tons of PC production worldwide, making it the largest producer globally, said Crew, who is also an executive vice president at Sabic.
The company recently started manufacturing PC in the Middle East at its 260,000 metric ton capacity Kayan plant in Jubail, Saudi Arabia, and “much of that production is earmarked for here,” said Crew.
The Sabic Innovative Plastics unit will market the Kayan material under the name Sabic PC resin, along with the company’s Lexan PC materials.
The company also announced it was building new technology and innovation centers in Shanghai and Bangalore, India, by 2013, and that the Shanghai center would house its Greater China regional headquarters.
Crew said Sabic IP’s existing research staff in the two cities are housed in General Electric facilities there, a legacy of when the IP unit was part of GE, but will move to the new facilities.
The new centers will also house Sabic research in other areas, such as basic chemicals, fertilizers and Sabic’s other grades of plastics, he said.
“It will be a true Sabic center and not just Sabic Innovative Plastics,” Crew said. “We’ll try to look at China more broadly in this new technology effort.”
Crew said the investment is part of China’s development in new technology research.
“China has moved from a world manufacturing center to a world manufacturing and technology center,” he said. “That’s been the evolution over the last 10 years.”
Wrapping up the firm’s spurt of investments, Sabic’s Innovative Plastics unit also said it was adding production for polycarbonate resin and films at its existing factories in Shanghai and Nansha, Guangdong province.
It also said it added a specialty extrusion line at its Nansha plant for optical grade Lexan and textured products in early 2011, and that it plans additional capacity expansions of those materials in Asia between 2012 and 2014. The optical grade capacity is in a class 1,000 clean room, the company said.
The capacity expansions are designed to help ensure sufficient supplies of PC for growing Asian markets, the firm said, particularly in the consumer electronics, electrical, solar, security and automotive industries.
The company also expanded its Lexan compounding capacity in Nansha in late 2010.
Saudi Basic Industries Corp (SABIC) and Exxon Mobil Chemical signed engineering and licensing deals for their joint synthetic rubber project in Saudi Arabia, SABIC, Reuters reports.
U.S. firm Jacobs Engineering and Japan's Mitsui Engineering & Shipbuilding will carry out front-end engineering and design (FEED) work for the process units of the Kemya project at Jubail on the Gulf coast, SABIC said in a statement.
Fluor Transworld Services Inc will execute the FEED for the associated support facilities, the statement said.
In a separate statement, SABIC said it signed two deals with Continental Carbon for a technology licence and marketing of the carbon black produced at the planned plant.
SABIC did not give a value for the contracts nor provided a cost figure for the project, although an executive from Exxon Mobil Chemical has said it would cost $5 billion.
The capacity of the project is more than 400,000 tonnes per year of carbon black, rubber and synthetic polymers for domestic and international sales.
SABIC did not say when the FEED work would be completed.
LyondellBasell to Boost Ethylene Output in US
Bloomberg reports LyondellBasell plans to boost U.S. ethylene output and may build another plant as rising shale-gas supplies increase the country’s competitiveness. Expansions at existing plants, possibly in Channelview and La Port, Texas, over the next few years will increase ethylene output by about 500 million pounds a year, Chief Executive Officer Jim Gallogly said recently in a telephone interview with Bloomberg.
Rotterdam-based LyondellBasell also is considering the construction of a cracker, as ethylene plants are known, in a joint venture with other producers, he said. Low natural-gas prices relative to oil are prompting LyondellBasell and its competitors to invest in increased U.S. output of ethylene, used to make plastics.
Resin supplier M&G Group, a family-owned company based in Tortona, Italy, plans to build new PET and purified terephthalic acid plants in the southern United States.
Marco Ghisolfi, CEO of M&G’s Polymers Business Unit, said the company has had the technological ability to build a single reactor plant with an annual capacity of 1 million metric tons since 2007. But the company delayed the project during the global recession.
“As a result of demand growth fully recovering in 2010 and of several plants in North America having closed or been sold over the past few years, the industry supply/demand balance has now been restored, creating room in the market for our new plant,” Ghisolfi said in a May 11 news release.
The company will narrow down the site for the collocated plants to a site in Texas, Mississippi or Louisiana by June. Construction time for both plants is about 30 months. When finished, the plants will employ about 250.
The plant will use the same technologies as M&G’s single-reactor PET plant in Suape, Brazil, which has annual capacity of 650,000 metric tons.
In addition to touting the efficiency of the large reactor – which is more than four times larger than those with other commercially available technologies -- Ghisolfi said the PET plant will benefit from being integrated into its PTA supply.
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