InterviewBASF remains upbeat on Asian engineering plastics ops

05 February 2009 04:58  [Source: ICIS news]

By Prema Viswanathan

(Adds words “project development work” to replace “orders” in para 2 and adds "a technical centre in" to precede the word “Japan” in para 16 for clarity)

NEW DELHI (ICIS news)--Despite the global economic meltdown and the petrochemical downcycle, BASF's engineering plastics business in Asia remains relatively unscathed, a senior executive of the German chemical major said on Thursday.

"Despite the decline in demand seen in the automotive sector, which is a key consumer of engineering plastics, no project development work has been cancelled in Asia," BASF Asia-Pacific group vice president for engineering plastics Hermann Althoff told ICIS news in an interview on the sidelines of PlastIndia 2009.

Engineering plastics such as polyamide and polybutylene terephthalate (PBT), which were niche, customised products, are not as sensitive to market volatility as high volume commodity plastics, he said.

Asia would be a key market for BASF's engineering plastics business in the coming years, Althoff said.

"Asia occupies No 3 position in terms of our sales, after Europe and North America, but is currently the fastest growing market," he added.

"Even though automotive sales has declined in Asia in recent months, our sales of polyamide and PBT continue to be robust, largely because we are able to offer cost-effective solutions to our customers to help them tide over the ongoing global economic crisis," Althoff said.

The solutions offered by BASF to automotive makers, for instance, included innovative products that reduced production cost, increased fuel and energy efficiency, enhanced safety and reduced emissions, he said.

"By replacing metal components with engineering plastics in India's low-cost Tata Nano car, which will start production in early 2009, we have been able to reduce the weight and increase cost savings for the car maker," said Althoff.

Even aluminium parts were 40-50% heavier than plastic parts, he said. "By substituting metal car seats with those made from engineering plastics, we have been able to reduce weight by 40% and cut production cost by 25%," he pointed out.

The one-shot moulding process also speeded up the production process, which would otherwise have consisted of 22 assembling steps and been more labour-intensive, he said.

In the case of electrical and electronic applications, BASF offers halogen-free flame retardant materials made of polyamide and PBT which eliminate waste disposal issues, Althoff said.

"These materials are also less dense than halogenated materials, and therefore more cost-efficient."

BASF's new Ultramid PBT grades conform to the new regulations imposed by the European Union for products coming in contact with food items and were therefore an attractive option for Indian customers seeking to export to Europe, Althoff added.

The German major, which is one of the world's leading engineering plastics makers, had no intention of shutting down its plants in Asia or elsewhere, he said.

"India and China are important markets for us, which is why we have set up compounding plants there," said Althoff.

BASF had set up a 45,000 tonne/year polyamide and PBT compounding plant in Shanghai, China in 2007 and expects to achieve mechanical completion by the second quarter of 2009 for a 9,000 tonnes/year compounding plant in Mumbai that would cater to Indian customers. The company also has a compounding plant in South Korea and a technical centre in Japan.

The raw materials polyamide and PBT for the Asian compounding plants come mainly from BASF's polyamide and PBT plants in Malaysia, which also feed the 45,000 tonne/year compounding facility in Pasir Gudang, Malaysia.

The low per capita consumption of engineering plastics by the automotive industry in Asia offers a significant opportunity for growing the company's presence in the region, said Althoff.

"Compared to European cars, which use 25kg of polyamide each, South Korean cars use only 15kg, Japanese cars 7kg, and Indian and Chinese cars less than 7kg. So there is tremendous scope for replacing metal car parts with engineering plastics."            

PlastIndia 2009, India's largest plastics exhibition and conference, started on Wednesday and ends on Monday.

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By: Prema Viswanathan
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