Flexibility key to market edge - amines producer

03 June 2008 15:37  [Source: ICIS news]

By Peter Salisbury

 

BUDAPEST (ICIS news)--In times of accelerating feedstock prices, raw material flexibility is key to maintaining market competitiveness, a major amines producer said on Tuesday.

 

Werner Gurtner, Americas supply chain manager for Belgian producer Taminco, explained how when isopropanol (IPA) prices rocketed in 2003, squeezing margins on basic higher amines, the company had looked to other production routes.

 

"Things were going well; we had our contracts in place and we were beating the acetone production price," Gurtner told the 5th ICIS World Phenol/Acetone conference.  

 

This situation was soon to change, however. 

 

"There was a gradual uptick on IPA and then it rocketed. We had some contract disputes; our competitors in Asia were switching to acetone, and so we had to follow suit," he said.

 

The spike in IPA prices, Gurtner said, had been a "nightmare" for the company.  Now, however, it had a new flexibility and thanks to the competitive nature of its pricing had recovered costs of the new production within seven months.

 

This had been  aided by switching to a widely available feedstock such as acetone, with producers and distributors eager to compete for new business, he added.

 

Using acetone to produce basic higher amines did, however, have its drawbacks, Gurtner conceded.  It required the use of increasingly costly and tightly supplied hydrogen.

 

Fortunately, however, the company had long term contracts in place, although current cracker costs were a concern.

 

Talk of diminishing acetone supply on the back of reduced margins and production rates, meanwhile, was something Taminco was prepared to encounter.

 

"If you cut back or halt acetone production, we can go back to IPA," he explained.   "If market place costs increase you can go ahead and change feedstocks."

 

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By: Peter Salisbury
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