01 April 1999 00:00 [Source: APC]With phosphate use becoming restricted and alcohol derivates growing in popularity, the surfactant industry is looking to develop new, more efficient plants and processes, reports Alan Tyler
One of the major growth areas in the surfactant sector in the 1990s has been in the use of linear alkylbenzene sulphonates (LAS) and branched-chain alkylbenzene sulphonates (BAS), which between them accounted for much of the growth in the detergent market in recent years, particularly in the developed markets of the US and Europe. Now, LAS accounts for a third, but fatty alcohol sulphates (AS), such as lauryl sulphate, are reappearing.
Environmental issues and changing consumer tastes are again driving this shift. In household laundry, for example, there has been a move towards low foaming detergents that can clean at lower temperatures and can accommodate enzymes. Non-ionic surfactants, primarily alkylphenol ethoxylates (APE) and fatty alcohol ethoxylates (AE), which can be used without phosphate builders are also growing stronger in the market. Methyl ester ethoxylates (MEES) are also expected to make an increasing impact on the detergent market. MEES are produced direct from methyl esters and promise to be low foaming like AE, but with the added advantage of being cheaper. Another development is that as phosphate use is increasingly being restricted, and in many detergent formulations zeolites have replaced phosphates as water softening agents.
The use of higher alcohols is a major area of growth: according to a report from US based Colin A Houston & Associates, its use is growing by as much as 6%/year. And more of these alcohol derivatives are finding their way into detergent applications than ever before with an estimated 4%/year growth.
Faced with an economic downturn in Asia and the increasing cost of environmental compliance, the larger surfactant companies are having to restructure and refocus their businesses while the smaller companies suffer.
The customer is dictating many of the changes in the market. Consumers are increasingly demanding high-performance, 'greener' products. This is particularly evident in the household and personal care markets. And as the detergent market has matured in Europe and the US, companies are having to rely on innovations to gain a competitive edge. Multifunctionality is now seen by many as the key to gaining market share as customers demand less product with more capabilities. As a result, value-adding chemicals like optical brighteners, fragrances, speciality polymers and additive technology generally are becoming increasingly important to the detergent market.
Elsewhere in the world, as incomes have risen in emerging markets, so too has demand for soaps and detergents, particularly for personal care and consumer products. In spite of the current economic turmoil, it seems likely that consumers in the developing nations of Latin America and Asia will become increasingly sophisticated in their demands, so the market will require more complex formulations. Increased consumption is expected to be stimulated by population growth and higher living standards well into the next century. This is good news for the producers in North America and Europe who have dominated the supply of the more complex surfactants.
Although returns in the surfactant business have not lived up to some expectations, they remain attractive business opportunities to many investors. Huntsman of the US recently purchased the speciality surfactants and chemicals business of Orica Australia, formerly ICI Australia, for Aus$155m ($98m). The deal for the Melbourne-based business includes manufacturing facilities in New South Wales, which have a production capacity of 136 000 tonne/year.
Under the agreement, Huntsman will have Orica toll produce additional speciality surfactants at Orica's Deer Park facility near Melbourne. The business manufactures ethylene oxide, alcohol ethoxylates, alkylphenol ethoxylates, speciality surfactants and other speciality chemicals.
It is the only integrated surfactants business in Australia or New Zealand and the only manufacturer of ethylene glycol and glycol ethers in the region.
President and chief operating officer of Hunstman, Peter Hunstman, said: 'The acquisition is a perfect compliment to our North American surfactants business and a vital part of our global surfactants and chemicals expansion strategy. We now will be able to supply the critical Asia-Pacific region.'
Albemarle of the US has also sought to secure a strong position in the surfactants market with a £408m ($657m) offer for Albright & Wilson of the UK. A&W is a major player in the international surfactants market and also has strong positions in intermediate and speciality chemicals based on phosphates, phosphorus derivatives and acrylics. In February 1995, A&W was floated on the London Stock Exchange by Tenneco of the US. Since then the company has underperformed and analysts in London thought it was only a question of time before the company was snapped up by a stronger partner.
The A&W acquisition offers Albemarle a significant opportunity to expand its activities in the surfactants market as well as polymer, pharmaceutical, agrochemical, and water treatment sectors where the two companies have complimentary businesses.
Floyd Gottwald, chairman and chief executive of Albemarle, said: 'This combination will provide a larger global presence, new technological opportunities and new customer relationships that will increase shareholder value.'
A&W has manufacturing locations in 16 countries in Europe, the Americas and the Asia-Pacific. Among these it manufactures surfactants in Singapore, Australia, China, India, Indonesia, Malaysia and the Philippines. Albemarle has no surfactant manufacturing facilities in Asia, although it does have warehousing and office administration sites.
A&W has also been regarded for its research work into surfactant technology. Formerly based at the Whitehaven Works site in the UK, Albright & Wilson's Surfactants Research & Development unit and European Technical Service Department are now in newly renovated facilities on the Oldbury Works site, in Birmingham, UK.
A&W Surfactants also has regional technical service departments centred in Richmond, US, and Singapore, responsible for driving forward technical service within the North American and Asian regions.
In addition to these units, A&W continues to have a strong local technical service infrastructure in place at the majority of its key production sites worldwide. These local technical service functions ensure that customers' technical requirements are met on a local level, while also acting to apply innovations developed centrally.
This regional head office oversees the operation of 14 plants and marketing of Albright & Wilson products in the Asia-Pacific. The geographical coverage spans from Iran in the west, Japan in northeast Asia to Australia/New Zealand in the south. The regional headquarters and technical centre is based in Singapore.
The company has been operating in the Asian region since 1939 with its first joint venture with ICI in Australia. The second oldest plant is in India which was established in 1965.
The company and its joint venture plants in the Asia-Pacific manufacture mainly phosphoric acid, sodium tripolyphosphate, various food and technical grade phosphates, in addition to surfactants.
Other surfactant producers are also investing in new operations. US company Pilot is investing $10m to more than double its sulphonation capacity at its New Jersey plant. An air/SO3 sulphonation facility will also be expanded. The facility uses Pilot's proprietary ice-cold speciality sulphonation process. According to the company, this extra capacity will support its core business in detergent surfactants, oil additives and emulsion polymer additives.
The Indian subsidiaries of Switzerland's Clariant and Japan's Daiichi Kogyo Seiyaku are negotiating an alliance in surfactants. KJ Bharucha, vice chairman and managing director of Clariant's Colour Chem, said surfactants are a fast-growing market sector in India.
Dai-Ichi Kakaria, the Daiichi subsidiary, is a good prospective partner, he added. The company is a major surfactants supplier in India, counting such majors as Oil & Natural Gas among its customers.
Colour Chem's strengths are in pigments and related additives, fine chemicals and cellulose ethers. However, according to Bharucha, his company has access to Clariant's extensive R&D assets which, with Dai-Ichi Kakaria's market position, would make for a highly competitive alliance in surfactants.
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