05 June 2013 16:49 [Source: ICIS news]
FRANKFURT, Germany (ICIS)--The European polymer industry will have to adapt to current low operating rates and there could be further capacity reductions in the region, Jean-Francois Renglet, Total’s vice president of polymers in Europe, said on Wednesday.
“There are many factors that influence the operating rates of the industry. It is not a secret that the [European] rates are low, they are higher in the US,” Renglet said during a pre-K conference event.
The polymers industry in Europe has continued to run operations at low rates in the face of poor European demand and competition from low-cost producers in other regions.
“It is a difficult exercise [forecasting the operating rate in five years time] and it is clear that part of the answer will come from the reduction of capacities in Europe, mainly in polyethylene [PE], because we know there will be new capacities coming in on stream in the US, China and the Middle East as well," he added.
In May, France-based Total announced it would invest €1bn ($1.3bn) in modernising its production facilities in Antwerp, Belgium, including a new hydrocracking unit and a scheme to convert refinery gases into low-cost petrochemical feedstocks.
Roughly 60% of the investment will be spent on the refinery and the rest on steam cracker operations, Renglet said.
The plans also include the closure of the site’s 70,000 tonne/year high density polyethylene (HDPE) line by mid-2014 and the permanent shutdown of an idled steam cracker.
“The NCI [naphtha] cracker [at Antwerp] has been closed and dismantled,” he said. The HDPE line is the company’s smallest and oldest at the site.
“Eliminating a small line of polyethylene is part of normal business practice that you do in order to adapt to the evolution of the market,” Renglet added.
No job losses are anticipated, with the site’s workforce to remain at around 1,700, Total added. Renglet also did not announce any further closures.
HDPE is used widely in the manufacture of household goods, packaging and film production.
($1 = 0.76)
Additional reporting by Linda Naylor and Tom Brown
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