Polymer stabilisation industry needs to expand by 2017
Tahir Ikram
16-Apr-2014
Interview story by
Tahir Ikram
SINGAPORE (ICIS)–The global polymer stabilisation market
will need a major capacity expansion by 2017 because of
normal demand growth and new applications, said Maurizio
Butti, the chief operating officer for South Korean polymer
additives producer Songwon.
“If [global] economic recovery takes place and demand in
polymer industry grows, we will need additional capacity in
2016-2017,” Butti told ICIS in a telephone interview from
Frauenfeld, Switzerland.
The polyolefin market grows by 4-5% on average and growth in
polymer stabilisation is slightly higher because of new
applications, Butti said.
“Where you use polyolefins for high-end applications there is
little bit more stabilisation [needed],” he explained.
He cited the growing use of polymers in automotive industry
as well as recycling of polymers as new demand areas for
stabilisers.
“You actually have an application under the [car] hood where
polypropylene [PP] now seems to be best candidate, but it
needs specific stabilisation to be able to withstand high
temperatures,” he added.
Butti said Songwon is continuously working on technology “to
create additional capacity” but has no immediate plans of
major expansion. “Major expansion in the short term?
Not.”
“We are in discussion to make an acquisition, not huge but
strategically important, but unfortunately I am bound by
confidentiality,” he said. “In July[or] August we should be
able to announce something.”
Songwon had announced last year that it intended to make a
major investment in either the US or Middle East but Butti
said no final decision in this regard had been taken
yet.
“We actually did not take any decision yet, but we are still
looking at the same possibilities,” he said and added: “…the
decision will need to be taken next year. We are not too far
away from a decision.”
Earlier this month, Songwon announced its net profit for the
full year of 2013 was up by 12.1% year on year at W22.9bn
($22m), but sales rose only by 1.8% to W692.1bn.
Butti said its lower-than-expected sales last year was
because of several reasons including slower global economic
recovery as well as lower demand along with discontinuation
of four products by the company.
“One product we sold and stopped production of three other
products. This affected sales. Without the discontinuations
of the products… the growth was about 3%, not huge, but
slightly better,” he added.
The company sold its biphenol business and
discontinued production of antioxidant RD/FR and
para-tertiary butylphenol (PTBP).
However, Butti expects better sales this year on the back
improved demand.
“We are actually still looking at a growth of about 10% for
this year. Actually, the year didn’t start as strong as we
expected but now there are real signs of recovery so we
believe that demand…will be better than last year.”
($1 = W1,040)
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