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Marketing
Additives
MARKETING Big changes in compounding for the automobile industry Targor, Monte11 and Borealis dominate (by far) the suppliers of PP compounds to the automotive industry, according to an estimate of market shares contained in the latest report on PP compounds from Applied Market Information (AMI). But the industry is facing some farreaching changes. AMI finds that Europe is now consuming one million tonnes of PP compounds, and the automotive industry accounts for more than 50% by volume. The million tonne milestone was reached in 1999, after regular annual growth rates of 6%, but the pace of growth will slow down over the next five years. The fast pace of growth, and the dominance of the automotive industry as a customer, has had its effect on the structure of the PP compound industry, in the shape of recent mergers. The largest of these is the proposed creation of Basell, through the merger of the interests of Targor and Monte11 - a giant that would have a 44% share of the market, but which would also have to sell off around 130 000 tonnes of its capacity, under EU competition rules. The buyer, and the production sites, could also have profound implications for the compounding industry. AMI’s John Nash, who compiled the report, singles out Borealis and DSM as the companies most likely to be affected. but he sees it also as an opportunity for PP producers at present under-represented in compounding - or for large independent US compounders. Nash reckons that Monte11 has a profitable compounding business and is one of the few integrated compounders where the operation actually adds real value, achieved by strong focus on higher value applications. By contrast, Targor (which was formed by the merger of the PP interests of BASF and Shell) is believed to be making little money from its compounding activities, because of its focus on lower-priced applications.
8
July 2000
for Polymers
Under pressure from market and technical developments, AM1 believes that some compounders closely linked with the automotive industry have been placing less emphasis on performance enhancements, and a less aggressive attitude to gaining new business. The automobile manufacturers (OEMs) are increasingly delegating responsibility to their Tier One suppliers, who in turn are pressing their own suppliers for greater value for money. For the compounders, the direct customer is now in most cases the Tier One supplier, and the focus is on price. Another threat to compounders is the increasing penetration of reactor resins in conjunction with masterbatch. Suppliers of PP compounds to the European automotive industry, 1999: 26 22 14 8 3 3 3 2 2 2 2 13
Targor Monte11 Borealis DSM
Appry1 TotalFina Lamplast Silon Polycom Spartech Thermofil Repsol Others Source: Applied Market Irzformation
After automobiles, the next largest sector is domestic appliances. Initially consumption here was boosted by the take-up of PP reinforced compounds for washing machine drums, but there appears to have been little development of further applications. Like the automobile compounders, there is a growing challenge here also from reactor-made resins. A bright spot on the horizon, however, is the building and construction industry, where there are good opportunities for PP compounds in pipe and sheet, especially in niche applications where PVC and traditional materials can be displaced. Contact: Applied Market Information Ltd, AMI House, 45-47 Stokes Croft, Bristol B31 3QP, UK; tel: +44-l I7 924 9442; fax: +44-l 17 989 2128
02000 Elsevier Science
Additiwsfiw
Independent e-commerce venture starts, with big plans Claimed to be the first neutral on-line marketplace for plastics materials and additives, Allplastx.com has been launched, aiming to serve as a channel for orders and looking to handle business worth EUR I billion in two years. It will not buy, sell or distribute any product, but hopes to take a commission of l-5’% on deals. The first stage will be an information service. prior to starting trading in September. Chairman Huw Radley - well-known in the plastics and additives sectors - estimates the total turnover of the European plastics industry _ resins, additives, machinery and equipment and finished and semi-finished products - at around EUR 250 billion. The materials sector alone is worth around EUR 40 billion. Significantly, a number of polymer suppliers have recently set up their own e-commerce sites, either alone or with partners. The key advantages of e-commerce are its immediacy and transparency. Hunter notes that suppliers who decide to enter the world of e-commerce put themselves in the spotlight, making their prices and conditions of sale available to all. While this might not be appreciated by large suppliers and processors (who would understandably prefer to keep their contract prices to themselves). there is still a significant part of the market that is not is such a position and might possibly use an independent service. Radley estimates that the distribution sector handles about 20% of plastics and additives materials trade, or about EUR 8 billion - but it will be a sector that the existing distributors will fiercely defend. Partners in Allplastx.com are: Andersen Consulting (global management and technology consultant), IDES (specialist in plastics information databases), Rapra Technology (specialized plastics and rubber consultancy), Reuters (international news and TV agency) and iLink Global (online track and trace facility foi shipments). Cnntcu’t: Allplustxcom Ltd, Science Srr\aices Centw. Finnabnir Industrial Park, Dundulk, County Louth, Ireland: tel: +353-42 93.3 5165; ,firr: 3_%3-42935 1376; u’M:~I~.c~~~~Ius~.~.~~oI~~ 02000 Elsevier Science
Polymers
LEGISLATION Japanese study challenges EC view on recycling of FRs A new Japanese study of recycling tlame retarded ABS compounds throws further doubt on the wisdom of the European Union’s draft proposal for disposal of Waste Electrical and electronic Equipment (WEEE). The draft requires (in Annex III) that any plastics parts containing halogenated (brominated or chlorinated) flame retardants must be separated before recycling, so imposing additional costs, and militating against use of bromines. But the Bromine Science and Environmental Forum (BSEF) claims that the latest study (from a leading Japanese plastics manufacturer, Techno Polymer) suggests that some key plastics, flame retarded with brominated additives,
Spiegelstein of producer 9
MARKETING Big changes in compounding for the automobile industry Targor, Monte11 and Borealis dominate (by far) the suppliers of PP compounds to the automotive industry, according to an estimate of market shares contained in the latest report on PP compounds from Applied Market Information (AMI). But the industry is facing some farreaching changes. AMI finds that Europe is now consuming one million tonnes of PP compounds, and the automotive industry accounts for more than 50% by volume. The million tonne milestone was reached in 1999, after regular annual growth rates of 6%, but the pace of growth will slow down over the next five years. The fast pace of growth, and the dominance of the automotive industry as a customer, has had its effect on the structure of the PP compound industry, in the shape of recent mergers. The largest of these is the proposed creation of Basell, through the merger of the interests of Targor and Monte11 - a giant that would have a 44% share of the market, but which would also have to sell off around 130 000 tonnes of its capacity, under EU competition rules. The buyer, and the production sites, could also have profound implications for the compounding industry. AMI’s John Nash, who compiled the report, singles out Borealis and DSM as the companies most likely to be affected. but he sees it also as an opportunity for PP producers at present under-represented in compounding - or for large independent US compounders. Nash reckons that Monte11 has a profitable compounding business and is one of the few integrated compounders where the operation actually adds real value, achieved by strong focus on higher value applications. By contrast, Targor (which was formed by the merger of the PP interests of BASF and Shell) is believed to be making little money from its compounding activities, because of its focus on lower-priced applications.
8
July 2000
for Polymers
Under pressure from market and technical developments, AM1 believes that some compounders closely linked with the automotive industry have been placing less emphasis on performance enhancements, and a less aggressive attitude to gaining new business. The automobile manufacturers (OEMs) are increasingly delegating responsibility to their Tier One suppliers, who in turn are pressing their own suppliers for greater value for money. For the compounders, the direct customer is now in most cases the Tier One supplier, and the focus is on price. Another threat to compounders is the increasing penetration of reactor resins in conjunction with masterbatch. Suppliers of PP compounds to the European automotive industry, 1999: 26 22 14 8 3 3 3 2 2 2 2 13
Targor Monte11 Borealis DSM
Appry1 TotalFina Lamplast Silon Polycom Spartech Thermofil Repsol Others Source: Applied Market Irzformation
After automobiles, the next largest sector is domestic appliances. Initially consumption here was boosted by the take-up of PP reinforced compounds for washing machine drums, but there appears to have been little development of further applications. Like the automobile compounders, there is a growing challenge here also from reactor-made resins. A bright spot on the horizon, however, is the building and construction industry, where there are good opportunities for PP compounds in pipe and sheet, especially in niche applications where PVC and traditional materials can be displaced. Contact: Applied Market Information Ltd, AMI House, 45-47 Stokes Croft, Bristol B31 3QP, UK; tel: +44-l I7 924 9442; fax: +44-l 17 989 2128
02000 Elsevier Science
Additiwsfiw
Independent e-commerce venture starts, with big plans Claimed to be the first neutral on-line marketplace for plastics materials and additives, Allplastx.com has been launched, aiming to serve as a channel for orders and looking to handle business worth EUR I billion in two years. It will not buy, sell or distribute any product, but hopes to take a commission of l-5’% on deals. The first stage will be an information service. prior to starting trading in September. Chairman Huw Radley - well-known in the plastics and additives sectors - estimates the total turnover of the European plastics industry _ resins, additives, machinery and equipment and finished and semi-finished products - at around EUR 250 billion. The materials sector alone is worth around EUR 40 billion. Significantly, a number of polymer suppliers have recently set up their own e-commerce sites, either alone or with partners. The key advantages of e-commerce are its immediacy and transparency. Hunter notes that suppliers who decide to enter the world of e-commerce put themselves in the spotlight, making their prices and conditions of sale available to all. While this might not be appreciated by large suppliers and processors (who would understandably prefer to keep their contract prices to themselves). there is still a significant part of the market that is not is such a position and might possibly use an independent service. Radley estimates that the distribution sector handles about 20% of plastics and additives materials trade, or about EUR 8 billion - but it will be a sector that the existing distributors will fiercely defend. Partners in Allplastx.com are: Andersen Consulting (global management and technology consultant), IDES (specialist in plastics information databases), Rapra Technology (specialized plastics and rubber consultancy), Reuters (international news and TV agency) and iLink Global (online track and trace facility foi shipments). Cnntcu’t: Allplustxcom Ltd, Science Srr\aices Centw. Finnabnir Industrial Park, Dundulk, County Louth, Ireland: tel: +353-42 93.3 5165; ,firr: 3_%3-42935 1376; u’M:~I~.c~~~~Ius~.~.~~oI~~ 02000 Elsevier Science
Polymers
LEGISLATION Japanese study challenges EC view on recycling of FRs A new Japanese study of recycling tlame retarded ABS compounds throws further doubt on the wisdom of the European Union’s draft proposal for disposal of Waste Electrical and electronic Equipment (WEEE). The draft requires (in Annex III) that any plastics parts containing halogenated (brominated or chlorinated) flame retardants must be separated before recycling, so imposing additional costs, and militating against use of bromines. But the Bromine Science and Environmental Forum (BSEF) claims that the latest study (from a leading Japanese plastics manufacturer, Techno Polymer) suggests that some key plastics, flame retarded with brominated additives,
Spiegelstein of producer 9