05 May 2003 00:00 [Source: ICB Americas]With the market for plastics additives still recovering from the downturn of 2001, producers are cautiously optimistic about the year ahead. Resin mix is determining general patterns of consumption, but suppliers are also finding growth in new applications and services, as well as new products. Environmental concerns have also played an influential role.
In 2001, the global plastics additives market was about 17.6 billion pounds, with the largest portion comprising plasticizers, at 10 billion pounds, says Fred Gastrock, product manager for additives at BRG Townsend Inc., a Mt. Olive, N.J.-based consultancy. The overall market was valued at $14.6 billion in 2001. In 2002, volume grew about 5 percent and value about 10 percent from the major downturn of 2001. While a 10 to 15 percent volume increase is sometimes seen the year after a downturn, the additives market appears to be recovering slowly along with the general economy. In 2003, the market may see another gain of 5 percent in volume and 10 percent in value, Mr. Gastrock projects.
There is optimism for 2003 about the slowly recovering economy, but there is also concern as to how the unstable global geopolitical environment will affect markets, says Peter Welch, global vice president of vinyl additives at Crompton Corp. Pricing rose 5 to 10 percent last year in some market areas, particularly flame retardants and antioxidants, which were especially depressed over the last couple years and have still not fully recovered their losses, according to Mr. Gastrock. Additive suppliers are currently feeling significant pressure from raw materials and energy costs, as well as increasing regulatory costs, and will be looking for ways to pass this through, say industry experts.
The plastics additives market is projected to grow at about 3 percent per year through 2006 in each of the major geographic regions, BRG's Mr. Gastrock projects. In China, significant growth is occurring in the construction market, as infrastructure demand continues to grow, and in packaging, with capacity moving into China, says Dave Underwood, global business manager at Rohm and Haas Company. China is also a growth area for additives going into electrical components, whose production continues to move to the region, notes Anne Noonan, vice president of technology, marketing and advocacy for flame retardants at Great Lakes Chemical Corp.
Resin mix plays a key role in determining additive growth. High growth additive areas, used in the fast growing polypropylene (PP) resins, are light stabilizers, coupling agents and nucleating agents, all growing at about 6 percent, says Mr. Gastrock. Slower growing additives, used primarily in polyvinyl chloride (PVC) resins, are heat stabilizers (at about 2 percent) and plasticizers (about 2.5 percent). Other additives, including flame retardants, impact modifiers, lubricants, antioxidants, organic peroxides, chemical blowing agents, antiblocking agents, slip agents, antistatic agents and biocides, are growing at 3 to 4 percent.
Additive suppliers are finding value and growth in new applications. Long-fiber reinforced thermoplastics (LFRT) are growing at 30 percent per year, notes Mr. Gastrock. Coupling agents such as maleated PP and silanes are used in these products. Wood-plastic composites (WPCs) are another growth area, particularly for lubricants needed to speed processing. A large portion of this market is outdoor decking and fencing. As WPCs penetrate into more premium applications, other additives such as light stabilizers and coupling agents will grow as well, but this is not happening at a significant rate yet, Mr. Gastrock says.
Antistats may benefit from the growth in conductive polymer applications. Nanocomposites are a promising technology and potential growth area that bears watching, but commercial applications are extremely limited at this time, Mr. Gastrock notes.
Environmental regulations continue to drive additive technology trends, particularly in Europe. The European Union's white paper on a new chemical policy could have a significant impact on the European chemical industry, including the plastics additives area, by increasing costs for testing and compliance. The policy is currently under discussion.
In the heat stabilizer area, the primary activity is reducing the use of lead-based stabilizers, primarily in Europe. Tin-based stabilizers are a widely used alternative in many applications, particularly in North America. Calcium/zinc alternatives have been used for many years in flexible PVC, notes Mr. Underwood. Relatively new alternatives to lead-based products are organic-based. Crompton is selling full production quantities of its organic-base stabilizer (OBS) system to specific customers, says Mr. Welch. Rohm and Haas's Advastab organic-formulated stabilizer (OFS) is in long-term product testing in Latin America and Europe, according to Mr. Underwood. Companies are switching from lead to alternatives either ahead of or in line with the target dates in different European countries, although any major conversions of lead-based stabilizers are still a year or so away, adds Mr. Welch.
In the flame retardant area, there is some substitution of halogenated flame retardants with non-halogenated replacements, but use of halogenated materials is still strong. Flame retardants overall are growing at about 4 percent, with non-halogenated flame retardants growing at 5 percent, brominated flame retardants growing at 4 percent, and the smaller volume chlorinated flame retardants are declining in use. Within non-halogenated flame retardants, phosphorus-based flame retardants and alumina trihydrate (ATH) are growing at about 5 percent, antimony oxide at about 3 percent and other, smaller volume alternatives, at about 7 percent, says BRG's Mr. Gastrock.
Drivers for flame retardant growth include increasing fire safety standards in furniture, voluntary adoption of higher flammability standards in televisions in Europe, and increased flame retardancy needed for roofing materials, Great Lakes' Ms. Noonan notes. Fire marshals are also considering increasing flame retardancy requirements for car interiors. Brominated flame retardants are seeing strong use in Japan due to the better recyclability of brominated flame retardants compared to phosphorous-based flame retardants. The debate over whether brominated flame retardants or non-halogenated flame retardants are overall more environmentally friendly will continue in Europe, particularly as the Waste, Electrical and Electronic Equipment (WEEE) directive governing waste reduction for the European Union electronics industry comes into play, and the better recyclability of brominated flame retardants is recognized, Ms. Noonan adds.
Phthalate plasticizers, used in flexible PVC, have been under attack by environmental groups. However, infant toys, which are of the greatest concern, make up less than 1 percent of the flexible PVC market, with more significant volumes of flexible PVC going into packaging and medical applications, says Mr. Gastrock. Even if the phthalates in toys were replaced by alternative plasticizers or resins, it would have only a minimal effect on the overall plasticizer market.
While additive technology is advancing, the biggest market trends are not in technology but in the way additive suppliers sell, says Mr. Gastrock. Global suppliers are broadening their bases, filling out their product line in many cases by buying additives from other suppliers. "Suppliers are providing 'one-stop shopping,' and 'solution selling.' They find where they can add value, such as in service," he explains.
"Ciba has encountered lots of interest in our expert services, which include regulatory expertise and laboratory testing," comments Felix Meyer, global head of plastic additives for Ciba Specialty Chemicals. "Plastic users, such as OEMs, pharmaceutical companies and cosmetic companies, use us as an unbiased source of expertise." Solution selling also includes working with customers to identify problems and then developing products for specific applications.
Another example of selling value is the use of blends, which combine several additives into one product. Blend use has been strong in Europe, where users were already familiar with PVC lubricant-stabilizer one-packs. It is now growing in the US and just beginning to grow in Asia, say industry experts. Blended products help in controlling inventories, which are being held low for cost-savings, explains John McChesney, business manager for antioxidants at Albemarle Corp. Additive suppliers are driving growth by commercializing additives that differentiate a plastic product and create unique selling points by conferring additional properties, Ciba's Mr. Meyer observes.
The specialty additives market is opening up at the compounder level, owing to a growing tendency among resin producers to limit the number of specialty additive grades they offer, says BRG's Mr. Gastrock. "This a potential customer source for additive suppliers, but the challenge is that it's a very fragmented market. E-commerce may find a niche in meeting the challenge of selling to many, smaller-volume customers," he adds.
Acquisitions and Expansions
With hopes of a recovery this year, several of the major plastics additives producers are proceeding with investments-either in the form of acquisitions or production capacity.
Ciba Specialty Chemicals acquired DSM's non-halogen, melamine-based Melapur flame retardant product line in May 2002. "The Melapur line, used in engineering plastics, complements Ciba's current flame retardant products, which primarily go into polyolefins and styrenics," comments Mr. Meyer. Ciba also started production of light stabilizers at its Puebla, Mexico facility in January 2003.
Clariant expanded capacity of Exolit AP ammonium-polyphosphate flame retardant at its Knapsack, Germany, site in 2002. In March of this year, the company began construction of a commercial plant for the Exolit OP range of metal phosphinate flame retardants at Knapsack, Germany. Capacity was also added at its Gersthofen, Germany, facility for production of Ceridust ultrafine waxes used as dispersing additives.
Crompton Corp. acquired Basell's Interloy polymer modifier business assets and nonexclusive worldwide rights to Basell's Hivalloy technology in November 2002. Interloy polymer modifiers compatibilize non-polar polypropylene for blending or alloying with polar resins, promoting a homogeneous mixture by allowing bonding between the dissimilar polymers. "We are in the process of activating the technology and manufacturing equipment. We are also doing lots of application development work," says Bill Murrell, global vice president of olefins and styrenics additives at Crompton.
Great Lakes Chemical Corp. doubled production capacity of its no-dust blends (NDB) stabilizers by opening a production and service center in Arlington, Tex., in December 2002. Anox NDB production capacity was also increased earlier in the year at Great Lakes' facilities in Al Jubail, Saudi Arabia, and Pedrengo, Italy. Also in December 2002, Great Lakes acquired Flexsys America's non-staining phenolic antioxidants business. Great Lakes will market the Flexsys products under its line of Lowinox non-staining antioxidants.
Rohm and Haas Company purchased the global plastics additives business of Kureha Chemical Industry Company Ltd. of Japan in late 2002. The acquisition included commercial operations throughout the Asia-Pacific region and other areas, along with manufacturing facilities and a laboratory in Singapore.
Last December OM Group annnounced plans to divest its PVC heat stabilizer product line as part of restructuring plan. OM Group said it hopes to generate up to $100 million from the sale of non-core assets, including its SCM powdered metals business, tungsten carbide technology and assets, the PVC heat stabilizer product line and other assets including the Microbond product line. Earlier this month, OM sold its SCM powdered metals business line to Hoganas AB for $65 million in cash.
New Plastic Additives
Last year and so far in 2003, the market has seen several new plastic additive products or enhancements of existing products lines. Below is a roundup of some of the key developments.
Albemarle: Albemarle recently introduced Ethanox 330P, an antioxidant in pelletized form that provides easier handling and maintains good dispersion.
Ciba Specialty Chemicals: Ciba Irgasurf HL 560, introduced in September of 2002, is a hydrophilic internal additive that gives polyolefin fibers and nonwoven fabrics a durable, wettable surface effect. The additive has a short initial strikethrough time, and it retains hydrophilicity after repeated use. It is also easy melt processable, and has no effect on the physical properties of fibers, although it does imrpove the softness of nonwoven fabrics, according to Ciba.
Ciba Irgastab film NPO, introduced in February of 2003, is a TNPP free solution for PE film resins. It effectively maintains flow properties during processing, says Ciba, and improves film haze by reduced blooming.
Clariant: Clariant introduced several new products in early 2003. Exolit OP 1311 is a new, non-halogen flame retardant for engineering plastics. The company says the metal phosphinate combines the effectiveness of organophosphorus compounds with the positive properties of mineral flame retardants.
Hostastat FA 24 TP is a new liquid anti-static agent for polystyrenes, polyolefins, and engineering polymers. Also, the company points to its licocene waxes that use metallocene-catalyzed synthesis to tailor properties for specific applications. Licocene (TP) PP 6102 polypropylene wax improves pigment dispersion in polypropylene, says the company.
Nylostab S-EED is a multifunctional additive based on a sterically hindered amine (HALS) to provide light stabilizing, antioxidant and processing aid properties for polyamides. Hostavin N 30 HALS light stabilizer is a low-migratory additive recommended for large-area plastic articles. Sanduvor VSU UV absorber is recommended for PVC and polyesters. DrizPearls are free-flowing, dust-free, pre-wetted pigments available in several colors.
Crompton: Crompton's new Liquid Peroxide Initiator System was introduced in 2002 for cure-in-place pipe. The new two-part system reduces emissions by eliminating the need for solvent and provides a slower cure rate for improved material handling at the repair site, says the company.
Mark 2910, a liquid lubricant and heat stabilizer one-pack targeted for PVC water pipes, was introduced in early 2003.
Mark 2289 PVC window profile heat stabilizer, introduced in 2003, offers improved stability and reduced yellowing for exterior applications with high UV exposure, such as in the southwestern US.
Great Lakes Chemical: Great Lakes introduced a new Anox FiberPlus product line at the end of 2002. The line includes various antioxidant product solutions for specific fiber applications. Firemaster 520, a higher reactivity flame retardant for rigid polyurethane and polyisocyanurate foam applications, was introduced in October 2002.
The Fyreblock product line was launched in 2002, with more new products expected in 2003, to provide customer-specific solutions, including blends of flame retardants with other additives such as UV stabilizers, says the company.
Rohm and Haas: Rohm and Haas introduced a new line of Paraloid acrylic impact modifiers in 2002, and plans to commercialize several more products in the line in 2003. The additives are designed for better cost-performance or for additional functionality, such as improved gloss or melt rheology.
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