Hello and welcome to your late week international coatings industry update, brought to you by SpecialChem. There are a lot of deals, openings and partnerships to look at this issue, so let's not waste any time.
In deal news, Cytec Industries plans to sell its largest business unit by revenue to focus on metal-processing chemicals and composites. JP Morgan Chase & Co. is assisting with the sale of the coating resins business, which makes chemicals used in paint, Cytec said in a statement. The company plans to complete the transaction by the end of the year.
Cytec hired JP Morgan in January (before JPMC hit the skids) to review options for the unit amid slowing demand for products such as liquid-coating resins, radiation-cured resins and powder-coating resins, which are used in coatings for cars, and food and beverage cans. We have more on this deal where we continue.
In partnership news, Georgia Gulf Corporation's commitment to developing renewable materials to help end-use customers meet their sustainability goals took another step forward with the announcement of an agreement to collaborate with Segetis, Inc. to offer a new flexible vinyl compound based on Javelin technology bio-plasticizers from Segetis. "This is an exciting collaboration that combines Segetis' proprietary technology with Georgia Gulf's vinyl compounding expertise to customize formulations that deliver unique performance profiles," said William H. Doherty, VP - vinyl compounds at Georgia Gulf.
This is the second collaboration to develop bio-based flexible PVC compounds announced in 2012 by Georgia Gulf. "The addition of the specialty bio-based plasticizers from Segetis expands our sustainable product portfolio and underscores our commitment to offer a range of solutions to our customers that are free of phthalates and heavy metals," Doherty said.
In opening news, AkzoNobel Powder Coatings opened its first Powder School in China, offering customers an opportunity to learn from their experts and improve the efficiency and productivity of their powder application lines. The school is a service that offers customers hands-on training in powder application, product testing and troubleshooting support, as well as opportunities to learn how to get the best out of their production lines. Located within AkzoNobel's Powder Coatings Application Center in Ningbo, Zhejiang province, the Powder School runs one and two-day courses every month.
Nigel Shewring, Technology and R&D Manager Asia Pacific, commented: "Our state-of-the-art facilities enable customers to explore the versatility of our powder coatings products. Our experts are committed to helping customers get the most out of their powder coating choice."
Here's a little more on the Cytec deal as it stands today. Financial industry insiders believe that Cytec may get $675 million to $900 million for their coatings resins unit. Possible buyers include private equity and coatings companies, particularly in Asia, he said.
Coating resins accounted for $405 million, or 52%, of the company's sales in the first quarter, according to data compiled by Bloomberg. The unit had operating income, or sales minus the cost of goods sold and administrative expenses, of $28.8 million in the period, compared with overall earnings of $86.3 million.
The unit has the potential for annual earnings before interest, taxes, depreciation and amortization of $150 million to $200 million and could sell for 4.5 times to 6 times EBITDA, or earnings before interest, taxes, depreciation and amortization, financial types say, but likely wouldn't top $900 million.
Here's a fun statistic, (if you follow such things,) a sale at $675 million, or the low end of the range, would be the world's fifth-biggest coatings transaction in at least a decade. We've had a few huge, ginormous deals over the past few years, but most were below the $500 million level - I was surprised, too.
In the past year, Cytec has been adding to its composites and separations businesses. It agreed to acquire Umeco Plc, a U.K.-based producer of composite materials used in planes and cars, last month for about $432.6 million. Also in April, Cytec bought manufacturing assets of India's Star Orechem International Private Ltd. for $33.6 million to expand output of chemicals used to separate copper from mined ore.
In plant celebration news, current workers joined former employees at AkzoNobel's decorative paints factory in Stowmarket, UK - formerly ICI Paints - to mark 40 years of paint manufacturing last week.
Wayne Stretch, one of the management team of the factory, said: "This is a joyful occasion on which to revisit Stowmarket. The factory continues to be at the forefront of our manufacturing business, built around a strong heritage of testing and trialing paint production in ever more innovative and efficient ways.
"The event reflected the pride of our employees as well as the growth of our business. It certainly hasn't stood still since I was manager here, the site continues to change and I am sure will go from strength to strength over the next 40 years." Eighty-five employees at the factory attended the anniversary of what was a significant step in manufacturing, and technology.
In 1972 a major investment was made at Stowmarket which saw the development of the "Premier Whites Plant" (PWP), designed to make large volume water based white paint, plus light colors and base paint for tinting purposes.
David Ruffley, MP for Bury St Edmunds said: "This celebration reminds us of a great industry that has been an important part of the local Mid Suffolk economy for decades. It is important that the celebrations honor the men and women who have made such a great contribution."
Earlier this year, the Stowmarket team conducted a UK-wide search to find past employees who may have lost touch since retiring or moving on from the company. The day included an exhibition of past and present images of the site, as well as factory tours for those who want to revisit, and see what has changed.
In paint technology news, nets and sprays have been the only effective methods for controlling the mosquitoes that cause malaria and dengue fever for decades. Pilar Mateo thinks she can do better. The Spanish chemist has invented a way to embed pesticides in microcapsules stirred into house paints at her Valencia, Spain-based company, Inesfly. The insecticides are released from the paint slowly, remaining effective for two to four years, while sprays typically need to be reapplied at least every six months. "The paint acts like a vaccine for houses and buildings," she says.
Mateo says she's received offers to buy her patent but refuses to sell out. Instead, her new venture, Inesfly Africa, will produce it commercially at a €10 million ($13 million) factory in Ghana. After years of donating paint to poor people in Latin America and Africa, Mateo wants the venture to fund her broader humanitarian efforts. "It's not just the insects that are the problem," she says. "It's the poverty."
The minute amounts of pesticides released from the paint aren't harmful to people but are devastating to insects, according to independent tests by scientists. The paint is already approved for use in 15 countries, including China, Germany, and Spain. Mateo is seeking approval in the U.S. and a recommendation from the World Health Organization. Her idea is to sell it as an affordable alternative to sprays.
Mateo didn't plan to spend her life killing bugs. While earning a Ph.D. in chemistry from the Universitat de València, she settled into a comfortable routine, tinkering with formulas at her father's paint factory, Industrias Químicas Inesba. In 1988, inspired by a newspaper article about a local hospital overrun by cockroaches, she shifted to pest control and developed her microencapsulation technology, patenting it in 1996. A Bolivian doctor visiting Valencia contacted Mateo and asked her if it might work to combat vinchucas, bloodsucking insects found across Latin America that transmit a nasty parasitic disease called Chagas.
Mateo had never heard of Chagas, which can cause heart failure and other cardiac or intestinal complications. In 1998, Mateo traveled to Bolivia to test her technology, a visit that morphed into an ongoing love affair with the country. She divides her time living with indigenous peoples in Bolivia's forests, building and painting houses, and conducting research in her lab in Valencia. "We spend all this time talking about medicines and diseases when the primary problem for half the planet is that their homes are sick," she says.
Using roughly $6 million of her family's money and $12 million in grants from nonprofits, Mateo has done research, created educational programs about hygiene, and helped paint more than 8,000 homes in Latin America and Africa. After the former Bolivian health minister tried to rescind the country's approval of the paint, locals protested. Bolivian President Evo Morales in November invited Mateo to his office, and the Andean nation again allowed the paint.
Health authorities are increasingly receptive to technologies that can overcome resistance bugs build up to insecticides, says S. Patrick Kachur, chief of the malaria branch of the USA's CDC in Atlanta, Georgia. Mateo's formula helps slow the development of resistance because the paint is packed with multiple pesticides, which she buys from big companies such as BASF, Bayer, and Dow AgroSciences. Traditional sprays typically hold just one formula because mixing them could render them ineffective; the microcapsules keep ingredients from interacting. Most important, the microcapsules reduce the quantities of insecticides needed.
Mateo is planning to launch a U.S. partnership to make and distribute the paint. A tinkerer whose husband says she often dreams up projects in the middle of the night, Mateo is also unveiling an insecticide-free lice-killing shampoo in Europe. Her new partnership in Accra plans to employ 500 workers in Ghana and sell the paint around the world. "By taking production outside Spain...we can reduce the cost and make it more accessible," says Alejandro Pons, Chief Executive Officer of the Ghanaian venture. "It will cost the same as normal paint but will mean you don't get malaria."
Now here's something to think about - is all of this "nanostuff" that we're currently developing really safe in the long term, or will we have to learn our "lead lesson" all over again in 20 years. Now I'm only a physicist, and you need to be a chemist to know some of this stuff, but hear me out.
A recent research development at USC both makes me smile for its cleverness and chills me with its implications. University of Southern California's developed a coating using cadmium nanocrystals that are stable enough to conduct electricity and are able actually dispersible, allowing them to make both paint and ink with the stuff.
Now as we all know, the main obstacle to metal nanocrystal solutions is that in order to make them stable they are paired with what's called a ligand. (In other words, a molecular glue that allows the creation of a larger complex via atomic binding). This ligand usually causes a significant reduction in electronic conductivity, sometimes to the point of ruining the bond to begin with. Cadmium selenide works for cadmium nanoparticles, but is it really safe in a weathering application either?
Now I'm sure these folks thought about this and answers are hitting the news services as I scribble this, but it seems to be worth asking the question: What is the lifecycle of this coating? What happens with sloughed material, how does it decompose? (Please say benignly...)
Finally, based on technologies used in the auto industry a savings of 60,000 Euros per year is being predicted through the introduction of a new process to reduce chemical waste from the painting process at its Amsterdam, Netherlands, factory by Hitachi Construction Machinery (Europe) - HCME.
Developed in co-operation with Advantage Chemicals, the process will save money on labor and energy, as well as disposal costs for waste water and sludge. Before the new system was introduced in December 2011, the painting process produced approximately 260 tons of waste per year.
It used a classic system, in which the paint would sink or form as sediment at the bottom of the pool of water beneath the paint facility. Twice a year, the pool had to be cleaned, and the water and paint had to be removed, which was costly in terms of labor, energy, water and waste removal.
The new system is said to have reduced the amount of waste by 88% per year. HCME production engineering manager Robin Huijsman, who is also compliance officer for environmental regulation, said, "Cleaning the pool beneath the paint facility twice a year was a difficult and dirty job. With the new system, we are able to remove the overspray paint from the water, and reuse the water.
"Thanks to the new system, the facility is cleaner and the filtering system that removes paint particles from the air functions better."
The new process combines real-time CoAg (coagulation) systems with waste water treatment systems. Instead of sinking or forming as sediment, the paint is suspended in the water and pumped to a waste treatment tank.
"For this tank, we asked Advantage Chemicals to develop a chemical that is able to remove the paint by making it float," added Mr Huijsman. "The floating paint sludge is then skimmed off the top of the tank and is estimated at 30 tons per year."
In other news, Nordson Corporation announced that it has entered into a definitive agreement to acquire Chippewa Falls, Wisconsin-based EDI Holdings, Inc., a leading provider of slot coating and flat polymer extrusion dies for plastic processors and web converters. The $200 million purchase price will be financed with availability under an existing $500 million revolving credit facility...more
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Covalon Technologies Ltd. announced that it is showcasing its advanced medical coating capabilities, including its SilverCoat Antimicrobial Silicone Foley Catheter as well as its recently FDA cleared IV Clear antimicrobial silicone adhesive film dressing from at the American Urological Association 2012 Annual Meeting ("AUA") in Atlanta, Georgia...more
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EFI Jetrion digital label press customers experience rapid growth and accelerated rate of innovative applications. As a result, EFI has reported a record 93% boost in ink volume for the Jetrion segment alone in Q1 2012, these figures are strong confirmation that label converters now rely on the benefits of digital printing and the unique versatility of UV-curable formulations...more
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And finally, Nubiola has been presented with one of the most influential industrial awards in China, the Ringier Technology Innovation Award for the Coatings Industry. A panel of independent judges for technical and product excellence has singled out their Zinc Free Anticorrosive Pigments, Nubirox 300 Series, for their significant technological contribution to China's Coatings industry...more
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