21 May 2012 11:34 [Source: ICIS news]
LONDON (ICIS)--Novapex plans to double the isopropanol (IPA) capacity at its 40,000 tonne/year plant in Roussillon, France, a company source confirmed on Monday.
The expansion will be done in two phases. The first will add 10,000-20,000 tonnes/year of extra IPA capacity at Roussillon, and is expected to be completed by mid-2013.
A timeframe for the second phase of the expansion has not yet been set.
As with the existing capacity, the additional output will be manufactured using Novapex’s own high-purity acetone. This will limit Novapex’s merchant market sales of acetone as a higher volume will be used captively.
The majority of IPA production in Europe is manufactured using propylene as feedstock.
The extra volume at Roussillon will be geared towards high-end products.
“We’ve always had a higher focus on high-end markets... it fits with the group focus at Novacap [the parent company] which is very active in the pharmaceutical and food sectors. As a group we have a focus on the higher end,” a company source said.
Novapex considers that the high-end IPA market will see greater long-term stability than the acetone market.
“Acetone is more a commodity product than IPA. With additional capacity in Asia, we think acetone will structurally weaken,” the company source said.
European technical grade IPA demand is weak. Buyers and sellers have moved to the sidelines of the market because of uncertain trading conditions.
Players are expecting upstream propylene costs to fall in June, although the extent of any decline remains unclear.
Coupled with this, there is growing uncertainty over macroeconomic conditions, particularly caused by the growing threat of a possible Greek exit from the eurozone.
As a result, purchasers are reducing stocks in order to militate against macroeconomic risk.
Nevertheless, higher specification cosmetic and pharmaceutical grade demand has remained firm as it is more resilient to bearish macroeconomic conditions.
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