Price and market trends: Solvay to close Warrington, UK, sodium percarbonate plant

28 March 2014 09:45 Source:ICIS Chemical Business

Solvay is to close its sodium percarbonate plant at Warrington, UK, cutting global capacity by around 25% amid challenging market conditions and regional overcapacity.

Moves by detergent formulators to switch from powder to liquid formulations are reducing demand for sodium percarbonate, especially in Europe, according to Alain Jeanmart, general manager, Europe, Middle East and Africa for the peroxides global business unit.

The 50,000 tonne/year plant will close by the end of April with the loss of 15 posts. Solvay currently has global capacity of around 200,000 tonnes/year for sodium percarbonate at four sites in Warrington, UK, Bad Honningen, Germany, Rosignano, Italy and Deer Park, US.

Key feedstocks for sodium percarbonate include hydrogen peroxide and soda ash.

Jeanmart said the west European market for sodium percarbonate has shrunk by around 25% over the last five years driven by the switch by detergent manufacturers to liquids and other reformulations.

The product has bleaching and hygienic properties with detergents accounting for 99% of demand.

Market shift
“The market is moving from powder to liquid detergents, especially in Europe [sodium percarbonate is not used in liquids]. Also reformulation within powders has led to lower usage as the detergent sector seeks to reduce the chemical load into powder.”

UK customers will now source material from Solvay’s Germany plant where investment is taking place to convert all sodium percarbonate production to more stable grades suited to modern formulations.

The conversion will be complete by the end of 2014.

Jeanmart explained that newer detergents are more concentrated, requiring less reactive forms of the product.

Lower demand and exports from Asia have led to capacity utilisation rates below 70% for the sector in Europe.

“The profitability of sodium percarbonate has deteriorated over the last few years and this was a very important element in our decision to close the site. We need to restore profitability over the next two to three years.”

He added: “It’s one step in the right direction [towards balancing the market]. There is some increased use of sodium percarbonate in the Middle East and North Africa which should compensate a little. Over the next two to three years we should see the market stabilise.”

Jeanmart said Solvay is the global leader in the product as well as in Europe where Germany’s Evonik and Finland’s Kemira are major players while smaller producers serve local markets in Russia and Turkey.

Investment in energy efficiency is taking place at Solvay’s Warrington site – a major producer of hydrogen peroxide – to improve its competitive position.

By Will Beacham