THE FREE RADICAL

Monthly Roundup of Chemicals and Materials Industry

In the Spotlight – Polymers

  • M&A + Investment + Divestment Update
  • Key Collaborations
  • Plant Status Update
  • Pricing Update
  • Technology of the Month – 3D Printed Materials
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News Roundup (1/8)

Behind every great merger, there's a great merger branding strategy. Since, organic growth has taken a hit, goliaths in the industry eyeing inorganic growth possibilities

M&A + Investment + Divestment (1/2)

US-based phytochemical producer Wilshire Technologies acquired by Evonik

NEWYORK : Evonik?has concluded a deal to acquire?Wilshire Technologies, the US cosmetic and pharmaceutical ingredients manufacturer. Evonik?did not reveal the cost of the transaction, which is expected to conclude at the end of January. The purchase is in line with?Evonik's sustainable cosmetic active ingredients portfolio and will be part of the company's Care Solutions business unit. With the purchase,?Evonik?will be able to expand its product range into phytochemicals - plant-based chemical compounds - such as plant-derived cholesterol as a replacement for animal-originated ingredients used in cosmetics.
Evonik's healthcare business line will also gain an enhanced portfolio for its naturally-derived excipients and intermediates for pharma and food applications.

Covestro AG eyeing acquisitions in the paints, adhesives and thermoplastics segment

DUBLIN : German plastic materials maker Covestro AG is still on the lookout for acquisitions in the areas of paints, adhesives and thermoplastics, chief executive Markus Steilemann told newspaper Sueddeutsche Zeitung. The company is looking for attractive takeover candidates but has no concrete deal in sight, Steilemann said in an interview published on Monday.
Last year, Covestro sold its European polycarbonate sheets business to domestic industrial group Serafin Gruppe GmbH in line with its ongoing portfolio realignment, under which the company plans to divest all polycarbonate sheets operations.

ANALYST PERSPECTIVE

The Year 2020 doesn’t provide a glimpse of large-scale mergers and acquisition. Yet big MNC’s urge to anchor in high potential markets will keep the industry tossed for M&A Prospects. As we begin 2020, many of the same trends that drove the chemical M&A market in 2019 appear poised to continue. While US interest rates have been climbing and trade tensions have created uncertainties, other factors remain consistent. With no shortage of publicly listed chemical companies across the globe, activists could continue to impact the industry for months to come




News Roundup (2/8)

Investments and Divestments are likely to keep the momentum and expectation high in first half of 2020, with announcements from Laxness making headlines

M&A + Investment + Divestment (2/2)

Lanxess completes chrome chemical business divestment

Lanxess has sold its chrome chemical business to China based Brother Enterprises. According to Lanxess, all relevant antitrust authorities have given the necessary approvals for the transaction, which was announced in August 2019. The German chemicals company said it has received cash proceeds of approximately 80 million upon completion of the transaction. Brother Enterprises has also taken over the Newcastle site in South Africa, which employs about 220 people and where sodium dichromate is produced, some of which is processed into chromic acid. Lanxess is to continue to manufacture chrome tanning salts from sodium dichromate in Merebank, South Africa, exclusively for Brother Enterprises on a contract basis, presumably until 2024.

On January 20 21, Lanxess will be organising its fifth symposium for the leather and apparel industry at its Cologne headquarters. The manufacturer said it aims to convey a deeper understanding of the production of the leather material, especially with regard to the use of chemicals. Aimed at brand manufacturers, representatives from the apparel industry and other industrial sectors, the symposium agenda will include presentations on the latest legal requirements and sustainability in leather production.

PMC Group Completes Acquisition of Lanxess' Organotin Product Line

PMC Group N.A., Inc. and Lanxess Organometallics GmbH have announced that PMC has acquired Lanxess’ organotin specialties product line of business. The transaction, previously reported on November 13, 2019, has closed effective December 30, 2019. The Business included Lanxess' global organotin catalyst, organotin specialties and intermediates product lines.

MUST READ REPORTS

  • Silyl Modified Polymers Market Forecast, Trend Analysis & Competition Tracking - Global Market Insights 2019 to 2029
  • Medical Grade Polymers Market Forecast, Trend Analysis & Competition Tracking - Global Market insights 2018 to 2028
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  • Reinforced Thermoplastic Pipes Market Forecast, Trend Analysis & Competition Tracking - Global Market Insights 2018 to 2026
  • Thermoplastic Polyimide Market Forecast, Trend Analysis & Competition Tracking - Global Market Insights 2018 to 2028
News Round-up (3/8)

‘Competition Make Companies Act Faster, Whereas Collaborations Make them Better’ stands true with the Current State of Chemical Sector Worldwide

Collaborations


Fostering a circular economy: Covestro and Nongfu Spring to collaborate on upcycling of polycarbonate water barrels

Materials manufacturer Covestro has signed a cooperation agreement with Chinese bottled water and beverage company Nongfu Spring and plastics recycling company Ausell to upcycle and reuse the 19-liter polycarbonate water barrels. Through this cooperation, the companies will further optimize the recycling efficiency of Nongfu Spring's 19-liter polycarbonate barrels, improve the traceability and quality of recycled materials, and extend the life of barrels that are no longer in use. The signing ceremony was held today at Nongfu Spring's headquarters in Hangzhou, China.

"As the inventor of polycarbonate, Covestro has been focusing on developing a variety of recycling solutions for post-consumer polycarbonate. Polycarbonate is extremely valuable, so we are committed to working with partners in the value chain to enable upcycling of polycarbonate and thus foster a circular economy," said Holly Lei, President of Covestro China. "Collaboration within the industry chain to facilitate recycling will improve the traceability and quality of materials, and all parties and society can benefit from it."

Bayer, of which Covestro arose from, invented polycarbonate in 1953. The engineering plastic is extremely robust and lightweight, has excellent heat resistance and can be easily molded. The transparent plastic is odorless, does not cause harm to the human body and meets the hygiene standards set by the US Food and Drug Administration and European Union health authorities. Polycarbonate is widely used across many industries, including mobility, construction, electrical, electronics and appliances, healthcare and LED lighting.

News Roundup (4/8)

Sustainability and Lightweighting Continues to Make Headlines, as Covestro Makes Key Announcements

Collaborations

Covestro partners with GAC Group for electric concept car ENO.146; Innovative lightweight construction concept for seat backs

Covestro has partnered with the Research and Development Center of Guangzhou Automobile Group Co Ltd. (GAC R&D Center) to develop a lightweight composite seat back for the Chinese car manufacturer's latest electric concept car, the ENO.146. The vehicle recently made its debut at the Guangzhou International Automobile Exhibition.
GAC describes the ENO.146 as one of the most aerodynamically efficient vehicles in the world, thanks to a drag coefficient of only 0.146 (hence the name) and a NEDC (New European Driving Cycle) range of 1,000 kilometers. While a fully aerodynamic design is key to achieving such performance goals, the GAC R&D Center also uses lightweight and sustainable materials to reduce the weight of the car while raising the bar for sustainability. Covestro's Maezio(TM) thermoplastic composite material is one of them.

ANALYST PERSPECTIVE

Integration at technology as well as R&D front is anticipated to realign industry dynamics in the months to come. Technology integration will render results in the second half of 2020, whereas first half will be more focused on within domain. Integrated production sites will still be an advantage as the underlying drivers for economies will continue to be relevant in a world of increasing digitization.


Covestro, Recticel develop tech to make polyols from CO2, make PU sustainable

Covestro is working with insulation producer Recticel to improve the sustainability of mattresses. In conjunction with RWTH Aachen University in Germany, Covestro has developed technology which would use carbon dioxide (CO2) as a building block to create a new polyol. Recticel was the first company to support the development of the material and use it in the production of its flexible foams. The research was considered in the final round of the German President's Award for Innovation in Science and Technology and could reduce emissions in mattress production.

Both companies are part of a Europe-wide research project which comprises nine companies and academic institutions across six counties called PUReSmart. Through the PUReSmart project, coordinated by Recticel, Covestro is assessing chemical recycling technologies from post-consumer waste. The company is already investigating the feasibility of a short-term scale-up to semi-industrial level, with the aim of making chemical recycling an efficient industrial process.

News Roundup (5/8)

Shutdown and Resumed Operation for Couple of Plants due to Maintenance, Largely in Derived Polymer Segment

Plant Status

Formosa Plastics Corp (FPC) likely to shut its Methyl methacrylate (MMA) plant in February 2020

Subjected to expected to remain under maintenance for about one month the Mailiao (Taiwan) located Methyl methacrylate (MMA) plant of Formosa Plastic is likely to be un-operational in the month of February 2020. The plant has a production capacity of 98,000 mt/year.

S. Arabia's Petro Rabigh producing EVA ahead of Feb turnaround; and the company is also to shut cracker for maintenance in February

The plant - which commenced trial output of EVA in late December 2019 – is scheduled for turnaround in February or March for around 45 days, according to sources close to the company.
About 200 tonnes of EVA from the plant have been allocated to an India-based buyer on a trial basis, they said. Meanwhile, the company has also planned to shut cracker for maintenance in the month of February. The operations at cracker plant is likely to resume within a month.

Ineos to build plastics production site in China

British petrochemicals group Ineos plans to build a plastics production plant in China with an investment which may reach US$ 800 Mn according to The Wall Street Journal.
The construction will start in 2020 and will be completed in 2023. The facility will produce 600,000 tonnes of plastics per year and will be located in Nigbo, south of Shanghai. Ineos also signed a cooperation agreement with the municipality of Nigbo.

Japan’s Mitsui Chem to restart MIBK plant

Mitsui Chemicals' Japan-based MIBK plant was shut in early December without a definitive restart date due to poor economic margins. It is slated to restart this weekend and is targeting to achieve full run rate, in order to meet contractual obligations to buyers.

ANALYST PERSPECTIVE

China is expected to build new at-scale facilities while EU/US will mainly keep using existing facilities ? Depreciated assets in Europe and long pay-back times for new assets (15-20 years) limit capacity shift toward other markets ? Long-term shift of capacity share to emerging markets expected in order to meet increasing demand


News Roundup (6/8)

Patent Update
  • Patent Issued to Mitsubishi Chemical for Epoxy Resin Composition, Molded Article, Prepreg, Fiber-Reinforced Composite Material And Structure
  • Researchers at Mitsubishi Chemical Submit Patent Application, "Core-Shell Type Polymer Particle, Aqueous Polymer Emulsion, And Hair Cosmetic Composition"
  • "Semipermeable Composite Membrane And Method For Manufacturing Semipermeable Composite Membrane" in Patent Application Approval Process for Toray Industries
  • Researchers at Toray Industries Submit Patent Application, "Method Of Producing Acrylic Fiber Bundle And Method Of Producing Carbon Fiber Bundle", for Approval
  • "Spray Device" in Patent Application Approval Process for Sumitomo Chemical Company Limited
  • "Nonwoven Fabric" in Patent Application Approval Process for Sumitomo Chemical Company Limited
  • Patent Issued for Process For Producing Polymerizable Composition For Optical Material And Polymerizable Composition For Optical Material to Mitsui Chemicals
  • "Denture Base And Method Of Manufacturing Same, Artificial Tooth And Method Of Manufacturing Same, And Denture And Method Of Manufacturing Same" in Patent Application Approval Process for Mitsui Chemicals
News Roundup (7/8)

Despite Symptoms of Declining Polymer Pricing, Recent Developments at Geopolitical spectrum likely to Pull Prices up

Pricing Update

Polymer Price Trend, 2018-2019

Despite large capacity additions PE prices to rise in 2020

PE prices could easily rise by US$ $110-220/tonne from current levels. Key reasons why PE prices could be stable to higher in 2020 despite weakening supply/demand fundamentals - current negative Asia margins being unsustainable, the lack of Asian arbitrage opportunities to ship product to the US and thus the maintenance of a US-Asia price gap, and Brent crude oil prices already being about US$ 6/bbl higher than their average in 2019.

If Asian PE margins were to rise to breakeven, it would imply a price hike of 12 cents/lb. And if Asian product were to arrive in the US, it would make a loss of 4 cents/lb at current prices.


US MMDI prices fall on supply length, sluggish demand

US prices for monomeric methylene diphenyl diisocyanate (MMDI) were assessed lower on persistent supply length as well as sluggish demand. The construction season is experiencing its normal seasonally slow period during the winter months. The sector overall saw a significant deceleration in demand during 2019, resulting in slower uptake for MMDI and other chemicals used in construction applications.
MMDI markets built a significant premium over polymeric MDI (PMDI) in recent years as MMDI remained tight through 2018 even as PMDI supplies began to loosen. This premium is beginning to face some pressure as MMDI supply has lengthened. MDI is consumed mainly in polyurethane foams, which account for about 80% of global consumption. Rigid foams, the largest outlet for MDI, are used mostly in construction, refrigeration, packaging and insulation. MDI is also used to make binders, elastomers, adhesives, sealants, coatings and fibres.
Major US MDI producers include BASF, Covestro, Dow and Huntsman

News Round-up (8/8)

Big Announcements Pertaining to New Product Launches Freezes in Global Chemical Ecosystem, with Companies Prioritizing Bottom-line Optimization

In Other News

SK Chemicals Begins Exploration to Bio Heavy Oil as Ship Fuel

SK Group's chemical and pharmaceutical subsidiary, SK Chemicals Co., launched a project to merge biodiesel with petroleum-based fuels to create vessel fuel amid demands for cleaner energy sources that will comply with International Maritime Organization’s (IMO) new regulation

Henkel launches photoreactive 3D printing material that meets UL 94V-0 and burn tests

Materials giant Henkel has introduced the first 3D printable photopolymer that meets fire, smoke and toxicity safety standards of the aerospace industry. The material was developed in cooperation with 3D printer manufacturer 'Origin' and is compatible with Origin One DLP 3D printers.

Unilever, Evonik commercialize rhamnolipid surfactant

Evonik in association with Unilever is now the first in the world to use biotech methods for producing industrial-scale quantities of high- quality surfactants—key components of modern shampoos, shower gels, and household cleansers. The first household cleansers containing Evonik biosurfactants are already available to consumers in supermarkets. These products contain what are known as sophorolipids, which are produced in nature by a yeast and which can be found in the honey produced by bumblebees, among other sources

Petchem complex starts up in Uzbekistan

Uzbekistan is planning to establish a major gas chemical complex at the heart of what will be Central Asia’s biggest technological cluster to supply polymers to more than 10 local plastics processing plants. In a bid to take its energy sector to a new level, the former Commonwealth of Independent State aims, with foreign assistance, to construct the new unit which will have a 1.3-1.5 billion cubic meters of gas processing capacity.
The cluster, using the methanol to olefins technology, is expected to have a capacity to turn out up to 250,000 tons per annum of polypropylene, 100,000 tons per year of polyethylene terephthalate and ethylene vinyl acetate, 100,000–150,000 tons per annum of ethylene glycol and polyethylene and 100,000 tons of ethylene-propylene elastomer every year

Adama obtains regulatory approval in Paraguay for new fungicide

ADAMA Ltd. has announced that it has successfully obtained regulatory approval in its first market, Paraguay, for ARMERO, its new dual-mode fungicide containing the active ingredients prothioconazole and mancozeb, benefiting from its new in-house production of prothioconazole, a broad-spectrum systemic fungicide.

Technology of the Month – 3D Printed Materials

New businesses models and opportunities are predicted to be just a few years away as demand for polymers and other materials could surge for 3D Printing

Manufacturing sector stakeholder’s priority for 2020 is to find quick wins on cutting costs. For that same reason, 3D printing technology surfaced as an epicenter that promises cost optimization for almost all industry verticals.


Chemical companies around the globe are in process to leverage the newly unfolded opportunity pocket by developing and launching materials for companies engaged in 3D printed product manufacturing. Such chemical companies have emphasized on lightweight polymer that withhold the potential to substitute metal, and can advantage to finished product manufacturers.


The industry can also be said to be on rightly navigated direction as it witnesses custom demand for 3D printing materials. A cumulative effort as well as synergistic strategy between 3D printing material and 3D printed tool / product manufacturers offers a agile and potent business and operating models.


THE NEXT FIVE YEAR


50-100X

Increase in 3D printing speeds

HOME

Sustainable, affordable, 3D printed neighborhoods to be mainstream

METAL3D

will overtake plastics in printers

COMPOSITE 3D PRINTING IS TAKING OFF

Composites offer next wave of growth for 3D printing material manufacturers. According to analysts at Fact.MR, the global composite 3D printing market is slated to reflect an impressive annual growth of over 23.4% till 2025, and stabilize around 19.5% in long term forecast till 2030. This indicates a high value-generating opportunity — one that could see composite 3D printing comprising a not insignificant chunk of the overall composite manufacturing market


MATERIAL PRODUCTION IS INCREASING

Amastan Technologies, a US-based material producer, announced the acquisition of AL Solutions, a producer of refined titanium materials. The latter will be rebranded as Amastan Additive and become part of Amastan’s yet-to-be-built AM metal powder facility. Companies engaged in 3D material manufacturing are investing in technology and enhancing capacity. More companies are establishing R&D as well as material production facilities, helping to further the mainstreaming of the technology


OPEN MATERIALS IS TALK OF THE TOWN

New material development in 3D printing space is not at par with technology’s adoption among key end users. A challenges to greater material diversity is the proprietary nature of many 3D printable materials. Many 3D printer manufacturers develop their machines to work exclusively with the materials they develop in-house. This limits the opportunities for their customers to use third-party materials. A proprietary materials model typically results in higher material prices and a slower pace of innovation for new material formulations. One possible solution to overcoming these constraints is an open materials model. This model encourages major material producers to partner with 3D printer manufacturers and develop new materials for their systems.


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