Environment Minister Peter Kent and Health Minister Leona Aglukkaq said the money will go toward assessing the safety of plastics and researching substances such as bisphenol A, flame retardants and chemicals suspected of affecting hormones.

The government will also finance a study of the long-term effects of exposure to environmental chemicals on infants, children and pregnant women.

The government had initially invested $300 million in 2006, but that funding has now run out.

EU Chemicals Sector Production Back to Positive in July

EU chemicals production in July grew by 0.8 per cent compared with July 2010, according to the latest Cefic Chemicals Trends Report. Production moved back into positive territory in July after output in June had moved slightly into negative territory. The July production figure dragged down further year-to-date output growth, which now stands at 3.0 per cent for the first seven months of the year, well below the 4.5 per cent full-year 2011 forecast by the trade group in late June.

Data show a near double-digit, year-on-year price increase in July, led by a 15.2 per cent overall price increase in petrochemicals. For the first six months of 2011, the EU chemical sector net trade surplus reached €20.4 billion, off by €3.2 billion when compared with the same period in 2010.

Cefic Chief Economist Moncef Hadhri commented: “The July EU chemical production data show the pace of growth stalling a bit, continuing the trend seen during an unexpectedly moderate second quarter. After an impressive first quarter, the sector appears to have downshifted, in line with EU industrial growth.

“Despite slow growth in June, EU chemicals production levels remain 19.4 per cent higher as compared with the December 2008 trough.”

Chemicals output rose in July 2011 compared with July 2010

The EU production index for July was up 0.8 per cent compared with July the year prior. Petrochemicals output increased 1.4 per cent in July compared with the year prior, while basic inorganics production rose by 5.1 per cent. Year-on-year consumer chemicals production rose by 5.9 per cent in July; specialty chemicals and polymers output fell by 2.2 and 0.8 per cent respectively.

EU trade surplus at €20 billion through first six months of year

Trade data show a €20.4 billion trade surplus for the EU chemicals sector in the first six months of 2011, down 13.6 per cent compared with the same period in 2010. The EU-27 posted a €5.4 billion net trade surplus with the NAFTA region from January to June and a €3.3 billion surplus with Asia, excluding Japan and China. The EU sector ran a €1.3 billion net trade deficit with China. The EU net trade surplus with non-EU Europe reached €6 billion.

June sales level increases, remains above pre-crisis peak

June 2011 chemicals sales were 5.6 per cent higher compared with June the year prior. For the first six months of 2011, total sales were 16.9 per cent higher as compared to the same period in 2010. Sales values during first half of 2011 were 5.0 per cent higher compared to the peak level reached in first half 2008.

Prices for basic organics, plastics increase further

Basic inorganics prices pushed upward 14.4 per cent year-on-year during July, and plastics were up 9.1 per cent. The price of consumer chemicals continued to increase modestly, up 3.0 per cent year-on-year for July.

COMPANY NEWS

Dow Chemical Business Unit Building New Factory in Korea

Dow Electronic Materials said it is building a new manufacturing and testing facility in Cheonan, Korea, for metallization materials used in advanced-chip packaging.

The new facility will meet specifications to manufacture electronic-grade materials, and will include Class 1,000 and Class 10 clean-room spaces for product packaging, according to the business unit of Dow Chemical Co.

The facility also will include quality-control and applications-testing labs.

Dow Chemical expects the facility to be operational in second-quarter 2012.

"We are positioning this facility in Korea to provide material supply close to our local and regional customers," said Leo Linehan, global business director for advanced packaging technologies.

Initially, the factory will make components for Dow's lead-free Solderon BP tin-silver, which includes low-alpha tin, and electroplating copper used in Intervia and Ultralink products for advanced-chip packaging and Ultrafill and Nanoplate products for semiconductor applications.

Dow Chemical also makes metallization products at its sites in Marlborough, Mass.; Sasakami, Japan; and Lucerne, Switzerland.

"Chip packaging continues to be increasingly important in electronics, particularly mobile devices, as the demand for more functionality in the same or smaller footprint grows," the company said in a news release.

"3-D packaging, which allows multiple chips to be connected and stacked, is increasingly important because it delivers greater functionality and faster data transmission - all within the same compact space. 3-D packaging requires high-performance metallization materials that are manufactured with tight quality specifications."

DuPont, 3F Forming Second Joint Venture in China

China’s leading manufacturer of fluorine chemical and polymer products, Shanghai 3F New Materials Co. Ltd., said in a Sept. 23 announcement that the company has signed an agreement of intent with DuPont China Holding Co. Ltd. to establish a joint venture in 2012.

The 50-50 venture, to be located in Changzhou, will make a “significant investment in new capacity and technology” and mainly produce polytretrafluoroethylene and perfluorinated ethylene propylene copolymer resins.

Based on the general agreement, the company will conduct in-depth negotiations with DuPont and a further feasibility study of the project, publicly traded 3F said.

In the first half of 2011, 3F more than doubled its operating revenue to about $420 million, compared with the same period last year. Net profit increased tenfold to $102.6 million. The company attributed the rapid growth to soaring market demand and product prices.

Global consumption of PTFE exceeds 220 million pounds, Huachuang Securities noted in a research report. Despite overcapacity outside China, there is a shortage of PTFE inside the country.

The partnership is also expected to bring a technological breakthrough to the Chinese fluoropolymer industry, which is expanding at a 20-plus percent compound annual growth rate, the report added.

DuPont already has a 7-year-old venture with 3F in Changshu, China — DuPont 3F Fluorochemicals Changshu Co. Ltd. — which makes refrigerant blends.

Ford Introduces Castor Oil-Based Foam

Ford Motor Co., which was the first major automaker to begin using soybean oil-based urethane foam, is now debuting a foam with a castor oil blend.

The foam is part of a soft touch instrument panel in the 2012 Ford Focus sedan, and has 10 percent of its content from renewable castor oil, which comes from a plant grown throughout Asia. BASF SE is the material supplier.

Castor oil blends have been used previously in nylon used in under-the-hood applications.

In a Sept. 30 news release, Dearborn, Mich.-based Ford said the new foam blend has a better ability to maintain its shape over the car's lifetime. It also cures 43 percent faster than traditional foam blends, which improves the manufacturing process.

Ford said it plans to expand the use of castor oil foam blends throughout its product line globally.

Paper-to-plastic Plant to be Built in Michigan

A $7 million manufacturing facility being built in Midland, MI will transform shredded paper into a paper-plastic composite used in everything from eco-friendly toy blocks to plastic chopsticks. The process, which was patented this year, micro-grinds shredded paper into a powder-like substance that is then manufactured into plastic pellets.

Midland-based Michigan Molecular Institute and Tokyo, Japan-based ECO Research Institute announced a joint venture recently called Eco Bio Plastics Midland Inc. The company plans to build a 38,000-square-foot manufacturing facility located on South Saginaw Road in Midland to initially produce 10 million pounds of plastic pellets annually.

Since 1998, ECO Research Institute has researched and developed the technology to transform shredded paper into paper-plastic composite. Japan, however, is running low on its supply of shredded paper, said a senior associate scientist for Michigan Molecular Institute.

The $7 million facility is being financed by the Japanese government.

Tronox Will Merge With Ore Supplier

In a $1 billion-plus bid to vertically integrate its business in the white pigment titanium dioxide, Tronox will acquire the mineral sands operations of South African mining conglomerate Exxaro Resources, the world’s third-largest supplier of TiO2 ores.

Tronox, which calls itself the fifth-largest global producer of TiO2, will get a 74% interest in two South African operations that mine TiO2-rich minerals such as ilmenite and rutile as well as a TiO2-rich smelting coproduct called slag. All the minerals are feedstocks for plants that produce purified TiO2 pigment.

The deal also includes Exxaro’s 50% interest in the Tiwest joint venture between the two companies in Australia. This partnership operates a TiO2 plant that is back-integrated into mineral sands.

In exchange, Exxaro will receive a 38.5% stake in Tronox, which is planning to list on a major stock exchange after the transaction is completed in the first half of 2012. Tronox delisted from the New York Stock Exchange in 2008 just before declaring bankruptcy as a result of liabilities inherited from its former parent, Kerr-McGee. Tronox emerged from bankruptcy earlier this year.

On the basis of recent Tronox share prices, the deal is worth about $1.3 billion. The combined firm would have had before-tax profits of $495 million on sales of nearly $2 billion in the 12-month period ending on June 30.

The key to the deal for Tronox is securing raw materials. “Because of the assurance of ore supply, we believe we will be uniquely positioned to take advantage of future expansion and profitable growth opportunities,” said Tronox CEO Dennis L. Wanlass in a Sept. 26 conference call. The company is already considering a new TiO2 plant in South Africa as well as expansion of the mineral sands operations.

GlaxoSmithKline Eyes Acquisitions in India

GlaxoSmithKline is eyeing acquisitions worth $2 billion in India, the world's fastest-growing drug market, The Economic Times reported.

“India is clearly on the radar. We plan to spend between $500 million and $2 billion. I would love to buy something in India,” GSK Chief Executive Andrew Witty said.

GSK, which employs 5,000 people and has turnover of more than $1 billion in India, was, however, unlikely to pursue large-scale merger and acquisitions, and was unwilling to overpay for companies, according to the story.

Overall, GSK's drug sales in emerging markets grew by 22 per cent last year to 3.6 billion pounds, while profits swelled by nearly a third.

India's pharmaceuticals market is worth 5.8 billion pounds a year, making it the eighth largest in the world.

Between 2010 and 2015 it is expected to grow by 15.7 per cent a year as newly affluent Indians spend more on healthcare, boosted by annual GDP growth of nearly 8 per cent.

The Indian government has also pledged to raise its overall spending on healthcare, which stands at only 1.2 per cent of GDP, making it among the lowest in the world.

His comments come amid India's Industry Ministry seeking the Prime Minister's intervention in regulating foreign direct investment (FDI) into pharmaceutical companies, as it is concerned over a large number of acquisitions of Indian drug firms by multinational corporations (MNCs).

The ministry fears that a spate of acquisitions by MNCs would create "an oligopolistic market with large companies working as a cartel".

The Health Ministry has also suggested that the FDI be capped at 49 per cent in the pharmaceutical sector, fearing that acquisitions would increase the prices of generic drugs.

At present, 100 per cent FDI through automatic route is allowed in the pharma industry.

ACQUISITIONS/ EXPANSIONS

Ticona Opens World's Largest Acetal Plant

Ticona has opened the world’s largest acetal production plant in Frankfurt, Germany. The plant has an annual capacity of more than 300 million pounds.

The new plant required almost 18 million pounds of steel, almost 500 miles of cable and 49 miles of piping. Construction began in late 2008 and eventually involved about 1,200 workers.

Ticona officials decided to place the massive plant in Frankfurt after an airport expansion required them to relocate an existing acetal plant in Kelsterbach, Germany.

The Frankfurt plant produced its first commercial material in July. The Kelsterbach plant will be decommissioned by the end of 2013, officials said in a Sept. 27 news release.

Ticona ranks as the world’s largest acetal maker, selling the material under the Celcon and Hostaform trade names. The firm is the engineering polymers business of Celanese Corp. of Dallas. Ticona employs more than 1,600 and posted sales of more than $1.1 billion in its 2010 fiscal year.

In addition to the new plant in Frankfurt, Ticona is building a 110 million pound-capacity plant in Jubail, Saudi Arabia, through a joint venture with Saudi Basic Industries Corp. That plant is expected to be operational in 2013.

Acetal’s high mechanical strength and inherent lubricity make it a preferred material for gears and similar applications. The automotive market makes up about one-third of global acetal demand.

Global acetal demand is expected to increase through 2016, according to Priya Ravindranath, a market analyst with Chemical Market Associates Inc. in Houston. Global demand is expected to be almost three billion pounds per year by the end of that forecast period, she said.

But even as demand increases, Ravindranath said that global acetal operating rates are expected to decline to around 70 percent, largely due to large amounts of new capacity coming online in Asia.

Demand growth for acetal has been particularly strong in China, rising an average of 14 percent since 2006. Through 2016, Chinese demand for the material is expected to grow at an eight percent annual rate.

Eastman Plans More Non-Phthalate Plasticizer Production

Eastman Chemical Co. is again increasing capacity of its Eastman 168 non-phthalate plasticizer.

The company said Oct. 3 that it is adding about 6,000 tons in annual capacity to its Kingsport plant. The expansion begins less than a month after Eastman bought a manufacturing facility in Texas City, Texas, to make Eastman 168, and less than a year after completing a debottlenecking process in Kingsport.

The new capacity is scheduled to be online by the end of 2011.

Natronx Technologies to Spend $60M on NJ Plant

Church & Dwight Co. Inc., FMC Corp. and TATA Chemicals said recently they've joined forces to make products that remove pollutants from coal-fired power generation.

The companies formed Natronx Technologies LLC, based in Princeton, N.J., to produce and sell sodium-based chemicals that are useful in pollution control. It expects the market for those chemicals at $200 million to $400 million by 2015 as coal-fired power plants comply with air quality regulations.

Natronx will spend $60 million to build a factory that can produce 450,000 tons of chemicals classified as "sorbents" by the fourth quarter of 2012. The sorbents are used by coal-fired utilities to remove pollutants, such as acid gases, in treatment processes.

The founding partners will invest equal amounts in the project.

Church & Dwight makes a variety of household products under the Arm & Hammer brand name. FMC is a chemical and agricultural company and TATA Chemicals makes soda ash for a variety of industries.

Berkshire Hathaway Completes Acquisition of Chemical Maker Lubrizol for $9 billion

American conglomerate Berkshire Hathaway has completed its $9 billion acquisition of specialty chemical maker Lubrizol, according to Banking Business Review.

With the closing of this transaction, Lubrizol is now a wholly-owned subsidiary of Berkshire Hathaway.

As a part of this acquisition, Lubrizol’s international headquarters remain located in Ohio and the company continues to be led by chairman, president and CEO James Hambrick.

Huntsman to Build Technology Center in China

Chemical maker Huntsman Corp. said recently that it will spend about $40 million to build a technology center in Shanghai to help meet growing demand from customers across the Asia Pacific region.

The Salt Lake City company said the facility will include machine halls, laboratories and offices for up to 400 people and will replace a nearby center that opened up in 2008.

In addition, part of the existing technology center will be converted into an auditorium and display area, Huntsman said.

Construction is expected to begin in January, with completion expected in mid-2013, the company said.

Daikin’s New Production Facility for Fluoropolymer Coatings at Changshu Factory

Daikin Industries, Ltd. has decided to establish a new production facility for manufacture of ZEFFLE fluoropolymer coatings at the Changshu Factory of its subsidiary Daikin Fluorochemicals (China) Co. Ltd., a company that manufactures and sells fluorochemical products in China. Mass production is scheduled to start from June 2013 at a planned capital investment of approximately 1.2 billion yen.

Accompanying infrastructure construction and development of environmental and energy-related industries, the Chinese market is particularly expected to increase within the globally expanding fluoropolymer coating market.

This new production facility combines with the Yodogawa Plant in Japan (Settsu, Osaka Prefecture) and Daikin Fluoro Coatings (Shanghai) Co. Ltd. in China to make three production sites for the manufacture of fluoropolymer coatings. Upon completion, production capacity will approximately triple to meet the expected rise in demand.

ZEFFLE fluoropolymer coatings are used in the areas of anti-fouling and weather-resistance, which are special characteristics of fluorine compounds, and, when a ZEFFLE fluoropolymer coating is applied, repainting is not needed for 15 to 20 years.

Furthermore, since the same level of protection efficiency can be obtained compared to conventional fluororesin films, costs are lowered by using the thin layer achieved with ZEFFLE in back sheet coating applications that protect solar battery cells.

Custom Polymers PET Invests To Handle More Curbside Bottles

The new $10 million PET wash and sort line at Custom Polymers PET LLC in Athens, AL illustrates how much the company has grown in six years, Plastics News reports.

“We’ve gone from shipping probably 10 million pounds of recycled PET in 2005 to where we now expect that we will ship 120 million pounds next year,” President Byron Geiger said in an interview prior to a Sept. 12 grand opening ceremony and open house.

The new wash system, custom built by AMUT North America, can wash 100 million pounds of material annually, or 9,000 pounds/hour, producing a yield of 70 million pounds of PET flake.

With the new wash-and-sort line, Custom Polymers PET now has the capacity to reprocess 175 million pounds of PET annually. It also has capacity to pelletize 30 million pounds of food-grade recycled PET.

The new 50,000 square foot plant, built behind and connected to the company’s existing food-grade PET plant at its corporate headquarters site will bring the workforce to 120 — double what it was prior to the expansion.

Custom Polymers PET is owned by parent company, Custom Polymers Inc., based in Charlotte, N.C.

To achieve the quality of flake it needs, the new wash-and-sort line has numerous features designed to separate out contaminants. Fail-safe measures built into the wash system and combined with the system’s the state-of-the-art water-filtration system reduce overall operating costs.

The water-filtration system, for example, enables Custom Polymers PET to use less water, less energy and to reduce the chemicals needed to reprocess the material, said Anthony Georges, president of AMUT North America, which is based in Richmond Hill, Ontario. “That gives them a $20 to $30 per ton cost advantage,” he said.

“The efficiencies of the equipment is getting better and better, and so is the water filtration system,” Geiger said. “AMUT has done a good job of working with us on modifications to get the quality we need. From what we’ve seen internally and with external customers, we are able to produce a product equivalent to [recycled PET flake] made from deposit material” — which is generally regarded as a cleaner feedstock.

“Some of our customers who previously have only been able to use [recycled PET from] deposit material have been able to use our materials and been very pleased,” Geiger said.

Custom Polymers PET gets 75 percent of its material from within 600 miles of its plant and uses curbside bales instead of deposit bottles because “that is where the volume of materials is in our region,” Geiger said. “We have a lot of years of experience in processing curbside PET.”

Its customers for recycled PET include blow molders that make bottles for PepsiCo, sheet extruders and thermoformers that make cookie trays, deli trays, and food containers for products such as strawberries, raspberries, and and other grocery items, and companies that turn recycled PET in high-end fiber products.

“The demand for a good clean flake is very strong in the bottle market, the sheet market and in the higher-end fiber markets,” Geiger said. “The customer wants a better quality product to ensure the quality of their finished product because they are using a higher percentage of recycled content.”

Geiger called the sheet market the “fastest-growing segment” of the recycled PET market.

“There is demand for recycled content in that market, and the PET sheet market is growing, in general, because there is very good demand from the general food sector and the general packaging sector,” he said.

Geiger said the company is probably about six months from obtaining a letter of non-objection from the Food and Drug Administration so the flake from the new line can be used for food-grade products.

McIlvaine Company

Northfield, IL 60093-2743

Tel: 847-784-0012; Fax: 847-784-0061

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