While there is no dearth of claims and hype around digital by manufacturers, industrial OEMs, software vendors, and management consulting firms, it is difficult to avoid the conclusion that progress has been incremental or “evolutionary” as opposed to be “revolutionary”. ADI Chemical Market Resources’ research and consulting in the chemical industry has highlighted four specific reasons why digital has failed to achieve this transformation so far.
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Key Chemical Industry Drivers
GDP growth across major economies has not recovered but some economic indicators are showing signs of recovery
Global GDP growth is forecasted to contract by 4.5% to 6% for 2020
Both auto sales and Purchasing Manager’s Index have witnessed growth at the end of third quarter across most economies except Europe
Select Industry News Highlights
LyondellBasell targets production and marketing of 2 MMtpy of recycled and renewable-based polymers, increase its investment in the recovery and recycling of plastic, and accelerate solutions to end plastic waste by 2030. The goal is included in the company's 2019 Sustainability Report which was released recently and is aligned with company’s sustainable ambitions for the next decade.
Itochu, Borealis, and Borouge have collaborated to promote renewable polypropylene (PP) in Japan. Itochu plans to launch Japan's first food containers and packaging materials made of renewable PP by the end of 2020. Due to ongoing developments regarding climate change, Japan has formulated a plan to introduce approximately 2 MM tons of renewable plastic products by 2030.
China's Hengli Petrochemical will invest $1.7 billion to build two 2.5-MMtpy purified terephthalic acid (PTA) production unit in Daya Bay petrochemical park in South China. The PTA units are expected to begin operation in 2021 and will increase Hengli’s PTA production capacity to 16.6 MMtpy making it China's top PTA producer ahead of current market leader Yisheng Petrochemical.
India’s Manali Petrochemicals will invest around ~$20 million to triple its propylene glycol (PG) capacity. The company plans to ramp up its PG capacity by adding 48,000 tonnes over two phases to take the total capacity to 70,000 tonnes.
LyondellBasell will invest $2 billion to acquire a 50% stake in Sasol's new 1.5-MMtpy ethane cracker, LDPE, and LLDPE plants to form a JV. Sasol will retain full ownership and continue to operate its research and development complex, an ethane cracker and a performance chemicals business in Lake Charles. The JV will help Sasol to reduce its net debt and focus on specialty chemical business while LyondellBasell will have an expanded footprint for future cash flow potential once market conditions improve.
Shrieve buys styrene business assets from CLP Chemicals, a market-leading industrial chemical distributor based in Houston, Texas. CLP specializes in distribution of styrene, acrylates, acetic acid, glycerin and other niche chemicals. The acquisition will help Shrieve expand its product portfolio to serve growing demand for specialty chemicals.
India's Polyplex will invest $103 million to build a 50-ktpa biaxially-oriented polyethylene terephthalate (BOPET) film plant by 2023 adjacent to the existing line in Decatur, Alabama. The investment will also include debottlenecking company’s existing polyethylene terephthalate (PET) unit in Alabama from 58 ktpa to 86 ktpa. BOPET is a polyester film made from stretched PET and is used for its high tensile strength, chemical and dimensional stability, transparency, reflectivity, gas and aroma barrier properties, and electrical insulation.
A JV of Saudi Arabia's Advanced Petrochemical Company and SK Gas is planning to add a 70,000 tpy of Isopropanol (IPA) facility to the existing propane dehydrogenation and polypropylene (PDH/PP) plants in Jubail complex. The companies plan to invest $80 million in addition to $1.8 billion total estimated cost of complex in Saudi Arabia that is expected to begin operation in 2024.
U.S. oil and gas producer Range Resources will provide 15,000 barrels per day of ethane as feedstock for PTT Global Chemical America’s (PTTGCA) planned 1.5-MMtpy ethane cracker in Belmont county, Ohio. The new ethane cracker will use ethane to manufacture polyethylene and will take 4-6 years to build.
Formosa restarts its 1.2-MMtpy ethylene cracker at Mailiao, Taiwan that was shut in August 2020 for maintenance. The cracker also has 600,000 tpy of propylene capacity. Formosa's Mailiao petrochemical base has two other crackers with 700,000 tpy and 1.04 MMtpy of capacity and the company now plans to run all three crackers at capacity and expects favorable olefins market conditions in the fourth quarter of 2020.
Arkema has placed its first ever Green Bond to finance its new world-scale 100% bio-based Rilsan polyamide 11 (PA-11) plant in Singapore for a total amount of $706 million. The Green Bond will have a maturity of 6 years and an annual coupon of 0.125%. Arkema aims to generate responsible growth contributing to the Sustainable Development Goals defined by the United Nations by offering innovative solutions to its customers, notably in the field of lightweight materials, new energies and bio-based products.
Chevron Phillips started commercial-scale production of polyethylene using chemical recycling technology. CPChem has been exploring the technical viability of producing circular polymers from waste plastic for two years and is taking steps to increase production by working with proven suppliers of pyrolysis oil, a feedstock made from waste plastic. CPChem is also pursuing certification of its circular PE to market its new circular polyethylene products under the trade name Marlex Anew Circular Polyethylene.
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