Clariant announced plans on 18 February to raise production of masterbatch for high temperature plastics, one day after the Swiss group said its 2015 sales were hit by the strong Swiss franc and global economic uncertainty.
Speciality chemicals producer Clariant said it plans to invest more than CHF7.5m (£5.2m) in Europe, Asia and North America to expand production capacity in colour and additive masterbatches for use in engineering resins and high-temperature plastics like PEEK (polyether ether ketone). The largest part of the investment will be made at plants in Shanghai, Singapore, and at two plants in the USA, although Clariant did not break down the investment at these facilities.
“Global demand for high-temperature plastics and compatible masterbatches is booming,” said Jeff Saeger, who heads the expansion program for Clariant. “Fuelled by new products in the automotive, small consumer electronics and electrical markets, the use of engineering materials is growing at annual rates of 7 or 8%, well above the growth rate of the plastics industry as a whole. Clariant has state-of-the-art capabilities in the United States to handle these materials and will now leverage that experience and expertise around the world.”
The three US masterbatch plants referenced by Saeger are in Holden, Massachusetts; Lewiston, Maine; and Albion, Michigan; these plants, said Clariant, “already have vast knowledge and experience in working with both engineering and high-temperature materials [processed at temperatures of 300°C or higher]”.
However, Clariant continued: “Capabilities in Asia have previously been more limited, focusing mainly on engineering materials (like ABS, polycarbonate and certain nylons), which are processed at moderate temperatures. Customers in this region have therefore often had to source the more advanced products from overseas and thereby facing longer product development and delivery times. That is about to change.”
The group said that in Shanghai, it is installing new equipment and implementing procedures required for masterbatch production based on engineering and high temperature resins. The new production lines and associated capabilities are expected to be ready for start-up by the end of 2016.
In the USA, Clariant installed equipment for processing fluoropolymers in Lewiston, Maine, in late 2015. It said new lines for specialty engineering compounds and black masterbatch for high-temperature resins will be added in Holden, Massachusetts, beginning in the first quarter of 2016.
Clariant had announced full-year 2015 sales of CHF5.8bn (£4.1bn), down from CHF6.1bn (£4.3bn) in 2014. The firm said this equated to a 3% growth in local currencies mainly driven by higher volumes. But the company said due “to the strong currency headwind”, sales in Swiss francs decreased by 5%.
Earnings before interest, taxes, depreciation and amortisation fell to CHF853m (£597m) in 2015, down from CHF867m (£607m) in 2014.
From 1 January, Plastics & Coatings was comprised of Masterbatches, Additives and Pigments.
“It [Plastics & Coatings] is not dragging [overall company's] results down. All three business areas are industry leaders. [However] Due to the nature of the business, it doesn't perform like Catalysis or Natural Resources – neither you can't expect margins like in other divisions,” said Kottmann.
“The carve-out into three separate entities had two main reasons - we recognised and understood that this business can't be managed like innovation-driven divisions and that it has a different business model.”