Dow Wolff Cellulosics expands capacity to met growing specialty industry needs

Big bite

11 August 2008 00:00  [Source: ICB]

Celebrating its first anniversary, Dow Wolff Cellulosics is looking to take a greater share of the regulated specialty food, pharmaceuticals and personal care markets

Joseph Chang/New York

VERSATILE AND capable of high performance across high value-added industries, cellulosics have a bright future, according to one of the world's leading producers.

"We see strong growth across the board, but especially in the regulated platforms of pharma excipients, food and personal care," says Martin Sonntag, general manager of Germany's Dow Wolff Cellulosics, in an interview with ICIS.

"We are also well positioned in the international growth regions of Eastern Europe, Latin America, Asia-Pacific and the Middle East."

Launched in July 2007, Dow Woff is the combination of US-based Dow Chemical's water-soluble polymers business and Germany's Wolff Walsrode, which Dow acquired for €540m ($837m).

The company produces high-performance cellulosics for pharmaceutical, food, personal care, construction, paints and other specialty industrial applications.

With sales in the double-digit percentage range in its first year, Bomlitz-based Dow Woff now has annual sales of around $1.3bn, half of which are in its "regulated" platforms.

Dow Woff will boost its cellulosics capacity by more than 20% with its latest series of expansions, says Sonntag.

The expansions include a worldscale methyl cellulose (MC) plant in Bitterfeld, Germany, scheduled to come on stream in the first quarter of 2009, a new low-viscosity (LV) cellulosics train in Bomlitz, Germany, to start this month and another MC train in Midland, Michigan, US, which started up in February.

"The MC train in Midland came on line ahead of schedule and was very timely - it serves technical applications in specialty industrial sectors such as PVC [polyvinyl chloride] polymerization," says Sonntag.

While Dow Woff will not disclose exact capacities or investments, Sonntag says its new worldscale cellulosics trains (with the exception of those for LV) will have capacities of at least 15,000 tonnes/year.

The Bomlitz LV train will meet growing demand in regulated markets such as food, personal care and pharmaceuticals, says Sonntag. "This LV train will give us the largest multisite footprint among regulated-market focused LV producers." He adds: "And this won't be the last. We are really pushing ahead to serve our customers in the regulated areas."

DWC's other LV units are in Plaquemine, Louisiana, and Midland, Michigan, both in the US. The Bitterfeld plant, which will have one MC train and will be the largest MC facility in the world, will be focused on construction applications, says Sonntag.

"This project is also running ahead of schedule and much better than anticipated," he adds. "And while it will be focused on construction applications, we can take this within our large asset portfolio and further optimize our product and supply mix to help customers in other end markets get more supply where there are constraints."

PUSH FOR ASIA

While production is located in Europe and the US, the growing demand in construction and regulated markets such as pharmaceuticals in India and China is likely to warrant a facility in Asia in the future.

"Five years out, you can expect us to have manufacturing in Asia-Pacific and/or in India," says Sonntag.

Dow Wolff's latest product launch was in the personal care arena. Its SatinFX delivery system, unveiled last April, enables encapsulation of hydrophobic and hydrophilic actives in skincare products.

In food ingredients, Dow Wolff is gaining traction with its FORTEFIBER soluble dietary fiber product, which helps reduce cholesterol, as well as other cellulose ether-based products that replace ingredients that cause allergies, says Sonntag. "We are taking our products into new areas of food involving health attributes."

In late June, DWC announced price increases of up to 25% for July, on top of price hikes of 15% for June. The business has been impacted by high cellulose pulp prices, as well as higher energy and freight costs.

"Customers are not surprised because they see these costs rising," says Sonntag. "We are putting these through as contracts allow and as it makes sense account by account."

Dow's planned $18bn acquisition of US-based specialty chemical giant Rohm and Haas will be a positive development for Dow Wolff as it underlines its focus on market-facing performance chemicals, says Sonntag.

"I expect Dow Wolff to flourish in this environment because it is much more supportive of what we need versus the traditional Dow Chemical," he says. "We've had great support, but this emphasis on specialty chemicals, markets and capabilities, will be even better."

ICIS Copyright © Reed Business Information 2009

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