19 February 2002 17:53 [Source: ICIS news]
In life as in sport you could say you win some, you lose some. In chemicals, though, you are never sure. Shell announced this week that it will build a world scale, $100m (Euro115m) PTT (polytrimethylene terephthalate) plant in Canada in a joint venture with SGF Chimie. A significant carpet market in North America beckons for this thermoplastic polymer which can be spun into both fibres and yarns that are, Shell says, inherently stain resistant and easy to clean. Perhaps Shell is, as they say, on to a winner.
How different though, from earlier attempts by the company to introduce radically new polymers to the market. Shell’s thermoplastic polyketone Carilon is a case in point. That polymer emerged from research begun in 1982. By the mid-1980s Shell was customer testing the product but it never really emerged as a winner. Management was keen on the technology but could not make up its mind what to do with it.
The drive to introduce Carilon to the market was lacking and it floundered. Shell began commercial production of Carilon only in 1996 from a small plant in the UK. Eventually it built a larger plant at Geismar in the US. By the late 1990s, however, even this limited commitment had evaporated. The Carilon business was put up for sale. There were no buyers and in 2000 the production plants were closed.
This rather sorry tale highlights a lot of what can go wrong with new technology and product development and says a lot about how Shell operated in chemicals through the 1980s and much of the 1990s. On the one hand, Carilon never really made its mark as a new polymer and applications were limited. On the other, Shell’s famous bureaucracy stood in the way of Carilon’s development. No-one seemed able to make the decision to go ahead aggressively with the polymer and end-use markets were not adequately developed.
The PTT story looks and feels different. Shell has changed and clearly wants to make more PDO (1,3-propanediol), a product it first synthesised in 1941 but abandoned in the 1970s. Only in 1990 did Shell have another go at PDO, this time using an ethylene oxide (EO) hydroformulation route. Its process was cost effective and the current phase of development began.
Shell brought its 75 000 tonne/year PDO plant at Geismar, Louisiana up to full capacity towards the end of 2000. It initially fed a 21 000 tonne/year PTT plant at Point Pleasant in Virginia. A new PTT unit was planned for Altamira in Mexico but the project switched to Canada last year. The SGF Chemie joint venture facility will have a production capacity of 95 000 tonne/year and could be operational by the fourth quarter of 2003. Shell began working with carpet producer Shaw Industries in the mid-1990s looking at potential outlets for Corterra and focused in recent years on markets which need products with high wear and stain resistance characteristics. Corterra carpet marketing began in August 2000 and Shaw says sales so far have been good.
The size of the new PTT plant alone demonstrates Shell’s commitment to Corterra but there are other potentially important outlets for the polymer which the company is keen to develop. Shell is already talking of expanding its PDO/PTT business portfolio into other polyesters and into polyurethanes (PUs). There are potential engineering polymer applications. The work that has to be done downstream to support PDO and PTT, of course, does not necessarily fit well with current Shell strategy to develop the businesses close to the cracker but the PTT outlet – run through joint ventures – fits nicely with the company’s desire to add value to the products (in this case EO) that it knows best.
At present, Shell has no real competitors in PTT, although it knows they will emerge, but it is facing a potential threat in PDO from DuPont. DuPont has developed a biotechnological route to PDO from corn sugar in a joint venture with Tate & Lyle and Genencor. Last year, DuPont started-up a continuous polymerisation plant for a new polymer called Sorona which uses petrochemical-derived PDO supplied by Degussa. DuPont calls Sorona, which can be spun into apparel grade textile fibres, one of the most significant new polymers it has developed in recent years.
The competitive battle in PDO/PTT is heating up and Shell looks set to spend a great deal more time and effort developing the business than it might have done with other products in the past.
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