Hello and welcome to your early week international coatings industry update, brought to you by SpecialChem. There's lots going on in coatings and inks, here are the high points.
SE-Tylose (SE-Tylose GmbH & Co. KG, Germany), a 100%-owned subsidiary of Shin-Etsu Chemical Co., Ltd. has decided to establish a manufacturing plant for hydroxyethyl cellulose in the U.S. The production capacity of the new plant will be 9,000 tons/year. The investment amount will be about $120 million, and this total amount will be covered by funds on hand.
The new plant will be constructed on a lot in Plaquemine, Louisiana by Shintech, the U.S. subsidiary company of Shin-Etsu Chemical. If appropriate regulatory permits are obtained, SE-Tylose expects to begin construction late this year and start-up operations at the beginning of 2014. Shin-Etsu Chemical is a manufacturer of cellulose derivative products, and Shin-Etsu Chemical's Naoetsu Plant (Joetsu City, Niigata Prefecture, Japan) and SE Tylose in Wiesbaden, Germany are producing these products. Presently, SE Tylose's HEC annual production capacity is 16,000 tons. When construction of the U.S. plant is completed, the production capacity of HEC of the Shin-Etsu Chemical Group will become 25,000 tons.
In ink news, FujifilmCorporation announced the launch of a digital inkjet web press at drupa 2012 as a technology showcase. Fujifilm's new digital inkjet web press is unique in that it enables duplex printing within a single tower design, resulting in an extremely compact footprint, while retaining a maximum printing speed of 127 meters/minute.
The press uses Fujifilm's new high performance Vividia ink, developed specifically to facilitate superb image quality. The VIVIDIA ink allows high density images to be printed at high speed, with less ink transfer from sheet to sheet, with high quality reproduction possible even on thin paper. A variety of ink types, including both pigment and dye-based inks, have been developed for use with this press.
In financial news, Bayer Group saw a successful start to 2012. "All the subgroups contributed to the encouraging increase in sales, particularly CropScience, which experienced a strong start to the season," Management Board Chairman Dr. Marijn Dekkers explained last Thursday when the first-quarter interim report was published. Earnings of the Group rose sharply. "In view of the good start to 2012, we are increasingly confident for the rest of the year," Dekkers added. Given the continuing uncertainties, however, he said Bayer is currently adhering to the guidance for 2012 that was issued at the end of February.
Sales of the Bayer Group advanced by 6.8% in the first quarter, to a record 10,056 million Euros (Q1 2011: 9,415 million Euros). When adjusted for currency and portfolio effects, business expanded by 5.2%. Net income increased by 53.5% to 1,050 million (Q1 2011: 684 million Euros). Sales of the high-tech materials business rose by 3.8 percent% in the first quarter, to 2,788 million Euros (Q1 2011: 2,686 million Euros). "Bayer MaterialScience achieved higher volumes in all regions, while selling prices as a whole were level with the prior-year quarter," said Dekkers.
About eight years ago, the chemical industry hit the skids (well, more accurately, stepped off a cliff) which heralded a world economic retrenchment unseen since the 1960's. As I wrote at the time, we should have seen it coming, chemical manufacturers were absorbing raw material price increases until they could no longer while remaining solvent. I also said that the expected upshot of all of this would be material shortages when the economy recovered, as it inevitably does. All it required was a supply disruption. Wait a minute, we've been here recently.
I know that I did my bit to speed the recovery this year by passing along my nine year old Caddy STS and getting a new CTS-V. A lot of others also did this, if Detroit sales figures are to be believed, and the once beleaguered auto industry in the USA, once bankrupt and bailed-out, began making money again. This seems to have ushered in a shortage scenario, at least in the auto industry.
The offending material is PA-12.
DuPont, a maker of chemicals used in auto manufacturing, has capacity to provide additional polymers such as Zytel, Delrin and Hytrel to the industry, CEO Ellen Kullman of Wilmington, Delaware-based DuPont, told reporters last week on a conference call. DuPont expects additional demand from automakers seeking to work around a shortage of resin used to make braking and fuel parts, its CEO said.
Automakers including General Motors, Toyota and Ford and their suppliers are seeking other options for a resin called PA-12 after a March 31 explosion at chemical maker Evonik Industries AG. The blast at Evonik's Marl, Germany, factory that made Cyclododecatriene, also called CDT, halved the global source of PA-12.
You know where I'm going with this, remember the Merck plant in Japan that made Xyrillac pigment in the shadow of a nuclear complex?
"It does look like we'll get some upside from the shortage of PA-12," Kullman said. The auto industry is "an area where our volumes are down versus last year but sequentially improving, so we do have some capacity. It's really difficult for us to size it now because each application is different."
Koch Industries Inc.'s Invista, the maker of Stainmaster carpet, also produces CDT and has "limited excess capacity to make more of the material," Jodie Stutzman, a spokeswoman for the Wichita, Kansas, USA-based company said.
"We have a number of customers that we are committed to supplying and we will honor those commitments first," she said. "We'll work to squeeze any capacity we can from Invista's plant in Victoria, Texas."
The explosion at Evonik's plant poses "real and substantial risk" to vehicle production, Jeff Schuster, Senior VP of forecasting at LMC Automotive, said in an e-mailed statement.
"Automotive manufacturers may begin to slow the pace of build that has been in overdrive in recent months," said Schuster, who is based in Troy, Michigan, USA. "More intensive production management in relation to product mix and inventory is expected to be a means to cope with the looming shortage."
Japan's automakers may avoid "large-scale" disruptions to production as suppliers prepare alternative parts in response to a global resin shortage, Takashi Moriwaki, an analyst at Deutsche Bank , wrote last week in a research note.
Suppliers recognized that PA-12 was produced by few companies and are only carrying several months' supply, Moriwaki said. Auto-parts makers could supply parts with alternative materials as soon as June and plan to propose options to automakers within the next week, he wrote, citing telephone interviews with companies he didn't identify.
More than 200 executives from automakers including GM, Toyota, Ford and Volkswagen AG and their suppliers met April 17 at a summit near Detroit to find alternative materials and parts and avoid losing vehicle output. The companies are unlikely to find other options immediately because of their pre-production vetting processes.
Automakers and suppliers formed six technical committees aimed at mitigating the effect that the PA-12 shortage may have on production of parts and finished vehicles, Randi Berris, a spokeswoman for the Automotive Industry Action Group said last week. The group is hosting "multiple technical follow-up meetings" during the next few weeks on the issue, she said.
TI Automotive Ltd. warned its customers in an April 12 letter of severe shortages interrupting production "in the next few weeks." The Auburn Hills, Michigan, USA-based company supplies brake and fuel lines, as well as fuel tanks and pumps, to all major automakers, including GM, Ford, Toyota and Volkswagen.
Evonik has begun repairs at the Marl factory, which the company aims to rebuild "before winter," Ruben Thiel, a spokesman for the closely held Essen, Germany-based company, said April 16 Other makers of PA-12 are France's Arkema SA, Switzerland's Ems-Chemie Holding AG and Japan's Ube Industries Ltd.
While we don't use PA-12, you could substitute just about anything that we do use for it in almost any sentence. TiO2 and about 12 other chemicals and resins that we do use are currently in extremely short supply, and would devastate the industry in the event of a production glitch. Perhaps we should do some advance planning, rather than disaster recovery.
In new facilities news, paint and varnish manufacturer Kansai Nerolac Paints plans to invest Rs.300 crore this fiscal for setting up a new manufacturing facility in Bengaluru, India, reports said, quoting Managing Director H.M. Bharuka.
With the new plant, the company's annual capacity will increase to 260,000 tons from 220,000 tons across its existing 4 units. He said the capital expansion would be funded from cash.
The company also plans to expand its distribution network by five percent from 14,000 dealers. It will add 5 new Nerolac Style Zone outlets in the current fiscal year. Presently, it has 30 such stores.
On price hikes, Bharuka said, "We have taken a price hike of up to 13% on average last fiscal. The market remains volatile and a lot depends on how crude oil prices behave. We have not decided on any price hike yet, but going by the market trend, it can't be ruled out."
In award news, Hempel's accomplishments in the protective-coatings market for wind turbines have won the company the 2011 Frost & Sullivan Product Line Strategy Award. Business research and consulting firm Frost & Sullivan's Best Practices Award recognizes outstanding achievement and superior performance in areas such as leadership, technological innovation, customer service and strategic product development. Hempel says that for the wind industry, most of its coatings are used on the tower. It is always looking for what is needed so it can tailor products accordingly.
The company has developed products that meet low VOC requirements and have short curing times, which means more efficient production. And we're currently working on other exciting projects for wind towers." All this means lower production costs for wind turbine and tower manufacturers. A key element of the company's strategy is a willingness to customize products for the wind industry and offer onsite technical support.
Hempel's product portfolio for wind turbines consists of products based on epoxy, polyurethane, zinc silicate and polyaspartic, as well as a range of waterborne anti-corrosive products. Besides adhering to industry standards, the company's protective coatings are durable, provide ultra-violet (UV) stability, and are abrasion-resistant.
Akzo Chief Executive Officer Ton Buechner, who took the helm on April 23, won't split up the specialty chemical and coatings maker and new targets have been handed to managers of the U.S. decorative paint business that is under review.
A decision on the strategic future of the U.S. operation, which makes the Glidden brand of household paint, has yet to be taken, Buechner said in an interview with Dutch financial newspaper Het Financieele Dagblad. Comments from the CEO of the Amsterdam-based company were confirmed by spokeswoman Dieuwertje ten Feld.
"It is about how we are dealing with the business and when we want to have something done," Ten Feld said.
The report said analysts and investors have suggested that Buechner may reassess the current combination of a coatings and specialty-chemicals business. But in his first interview as Akzo Nobel CEO, Buechner said he is happy with both units. "For me there is no reason to shake that up," he said. "It is a portfolio with very good and strong positions in markets, both in coatings and in specialty chemicals."
Buechner, who joined Akzo Nobel after 18 years at Swiss industrial conglomerate Sulzer AG expects to present a strategy update in October, the report said. "There are still a lot of things that we can do more beautifully and better," Buechner said.
I already like this guy!
In other news, Otto Bayer discovered polyurethane chemistry 75 years ago. Since that time, this versatile chemistry has evolved, ushering in a number of coatings technologies, including one- and two-component solventborne and waterborne chemistries, radiation-curing polyurethane coatings and polyurethane powder coatings formulations...
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With over 25 percent more exhibitors and visitors, the 4th PaintExpo registered record growth. The 410 exhibitors from 24 countries experienced an excellent atmosphere thanks not only to the quantity but also the quality of the inquiries and concrete projects the 8,028 visitors brought with them when they came to the international trade fair for industrial coating technology in Germany from 17-20 April 2012...
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Since drupa 2008, finding new food-friendly packaging inks and coatings has become more of a priority among printers and converters as well as their brand-owner customers. Even long-accepted standards and products are being called into question by a steady stream of studies and news reports detailing the migration of chemicals used for packaging into the food and ultimately, consumers...
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And finally, Lanxess announced that its distributor, E&A Supply Corp., has expanded its territory for sales and distribution of Bayferrox® inorganic pigments in the US. Long Island, New York-based E&A Supply has taken on additional responsibility in the SE US to include the Carolinas, Georgia, Alabama and Florida, as Lanxess' non-exclusive distributor to the ready-mix concrete industry...
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