Clariant seeks to grow footprint in North America

23 March 2017 02:36 Source:ICIS Chemical Business

Switzerland-based specialty chemicals company Clariant sees North America as a prime area for investment and growth.

“We had been underrepresented in North America for years, but this year, we will have neutralised that with sales in the region in the 22% range. Yet we are not satisfied with neutral, and see continued investment in the region,” said Ken Golder, president and CEO of Clariant Corp, and head of the North American region.

Golder and other Clariant executives spoke at a company press roundtable in New York.

As recently as 2014, Clariant’s sales in North America were just 16% compared to 23% for the overall specialty chemical sector. But with completed major capital investments and acquisitions in 2016, it has built a new foundation for growth and continued investment, Golder noted.

Clariant’s sales in North America were $1.1bn in 2016, having grown at a compounded annual growth rate (CAGR) of 4.3% since 2011.

KEY ACQUISITIONS MADE

The company operates 70 sites in the region and has a diverse set of businesses encompassing industrial and consumer specialties, masterbatches, catalysts, oil and mining services, additives, medical specialties and functional minerals.

Key acquisitions in North America 2016 were oil services companies Kel-Tech and 
X-Chem, and Flomin in the mining services area. These three deals represented around $360m in investment, noted Golder.

The addition of Kel-Tech and X-Chem in September 2016 just about tripled the size of Clariant’s oilfield chemical services business.

“The industry is clearly looking for a third Tier 1 player, and we are in position to be that,” said Golder. “It is a very strategic opportunity for us and at the right time given the condition of the oil services market.”

The new combined oil services group has around 17% of US market share and would be the third largest behind Nalco/Champion (an Ecolab company) and Baker Hughes, according to Clariant.

MAJOR PROJECTS

On the capital projects front, Clariant commissioned its new ethylene oxide (EO) derivatives expansion in Clear Lake, Texas, in Q1 2016, and held a ribbon-cutting ceremony for its new polypropylene (PP) catalyst plant in Louisville, Kentucky, in October 2016.

Clariant EO

Clariant’s capital expenditures (capex) in North America in 2016 were 11% of sales in the region, following 13% in 2015 as the two major projects were being built. Capex in 2017 is expected to fall as the projects have been completed, said Golder.

Clariant will seek to expand its North America footprint through both capital investment as well as bolt-on acquisitions throughout the portfolio, he said.

CATALYSTS SPOTLIGHT

Clariant has high hopes for its catalysts business unit which had sales of Swiss francs (Swfr) 673m in 2016 and operates across a broad range of products – petrochemicals, chemicals, syngas and polypropylene (PP) among others. Innovation with a focus on driving production with energy efficiency is a key part of its strategy.

With a growing global population and global chemical demand expected to double by 2030 amid environmental constraints, “producing chemicals with today’s catalyst technologies is unrealistic” from an energy consumption perspective, said Stefan Heuser, senior vice president and general manager, catalysts at Clariant.

However, using innovative process and catalyst technologies, energy consumption can be lowered dramatically. Around 90% of chemicals are produced via catalytic conversion, Heuser pointed out.

In catalysts, Clariant is an independent player – it doesn’t license technology as some of its competitors do, but rather partners with leading engineering and construction (E&C)/technology companies such as Air Liquide Global E&C Solutions, CBI, KBR and Foster Wheeler, noted Heuser.

Clariant ranks itself as the global leader in petrochemical catalysts, number 2 in both chemicals and syngas, and number 4 in PP, and expects total catalysts market growth of around 4% through 2020.

Underscoring its innovation focus, Clariant’s catalysts business spends around 7% of annual sales on R&D, and has over 300 of its 1,500 employees in the R&D function.

Chemical companies tend to spend 1.5-3% of sales on R&D while catalysts companies spend around 4-5%, said Heuser.

Clariant will increasingly incorporate 3D printing in the testing and eventually production of catalysts.

“3D printing provides exciting opportunities for catalysis R&D as the geometric shape of a catalyst has a major impact on its performance,” said Marvin Estenfelder, head of R&D at Clariant’s catalysts business unit.

3D printing, also known as additive manufacturing, allows unlimited access to geometric shapes, which can be evaluated and optimised in a shorter period of time than the conventional tableting, pelletising and extruding method, he noted.

Clariant is already using 
3D printing in the R&D and testing areas. While 3D printers are more known for using plastics, it’s not a huge stretch to adapt them to using ceramics and metal, said Estenfelder.

Catalysts, made from metals and ceramics, can resemble everything from gears, wheels, Tinker Toy blocks, pasta shapes, honeycombs and floral designs.

On a microscopic or nano-scale level, 3D printing could also be used for what it calls “pore engineering”, allowing the designer to create pores exactly where it wants in the catalyst for maximum effect.

Clariant uses 3D printing, along with high throughput screening (HTS) and impregnation coating technologies in creating its catalysts.

However, using 3D printing to produce catalysts in commercial quantities is well over 5 years away, said the head of R&D. “We are far away from commercial operations. Today it is more a tool in the lab,” said Estenfelder.

At the event, Clariant introduced two new catalysts – ReforMax LDP Plus to produce syngas (used to make hydrogen, ammonia and methanol) from methane, allowing for more gas throughput and greater energy savings; and PolyMax 850 which converts olefins from fluid catalytic cracking (FCC) into high octane gasoline and higher olefins with higher yields and a 50% increase in catalyst lifetime.

By Joseph Chang