Reach gets the go-ahead

FOCUS ON SURFACTANTS A MONTHLY REPORT FROM CAROLINE EDSER

AN INTERNATIONAL NEWSLETTER MONITORING TECHNICAL AND COMMERCIAL DEVELOPMENTS FOR ALL SURFACE ACTIVE AGENTS ISSN 1351–4210

JANUARY 2007 In this issue

REACH GETS THE GO-AHEAD

SURFACTANTS

2-3

Introductions from Air Products & Cognis

ASSOCIATED PRODUCTS

3-4

Builders Other

APPLICATIONS

4-5

Personal & household care Other

PATENTS

5

New patent grants for Kao, Unilever & Henkel

ENVIRONMENT & HEALTH

5-6

Wal-Mart to substitute hazardous chemicals

MARKET REVIEWS

6

Opportunities in food processing

COMPANY RESULTS

6-7

Strong 3Q results for Stepan, Henkel & P&G

COMPANY NEWS

7

P&G plans growth in Czech Republic

EVENTS

SURFACTANTS

8

The final months of 2006 saw intense activity in an attempt to achieve the second reading of the European Union’s REACH (Registration, Evaluation and Authorization of Chemicals) legislation in the European Parliament within the required timeframe. Indeed, at one point a six-month delay looked inevitable when discussions between MEPs and EU state ministers reached an impasse, but a rescheduled deadline and some frantic negotiations ‘to the wire’ finally achieved the necessary consensus for the vote to proceed in mid December. While the draft version of REACH passed at its first reading in November 2005 [see Focus on Surfactants, Dec 2005] made some concessions towards the interests of the chemical industry, a number of the amendments passed by Parliament were subsequently resisted by a majority of the 25 EU member states, represented by the council of ministers, and, indeed, many groups within Parliament itself. Chief among the outstanding issues were the degree to which REACH should embrace the substitution principle – whether industry should be forced (by the withdrawal of authorization) to abandon ‘problematic’ substances when safer alternatives are available, or just encouraged to replace them – the degree of due diligence required from industry, and the promotion of alternative, non-animal test methods. Authorization proved another contentious issue, with Parliament pushing for a five-year time limit and many lobby groups opposing the imposition of any such limits once

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authorization has been granted. The need for an overhaul of the EU’s chemical legislation was not in dispute, but clearly a consensus position between opposing sides had to be arrived at before that overhaul – REACH – could pass into the statutes. In addition, a second reading must achieve a ‘super majority’ of at least half of Parliament’s 732 serving members in order to proceed. The date for the second reading was set for 24 October 2006 with a final deadline of 30 November, and compromise negotiations within Parliament and between MEPS and ministers got underway. The process was almost derailed in early October when, to the dismay of the proindustry lobby, Parliament’s influential environment committee reaffirmed its strong endorsement of the original set of first reading amendments, with no concessions on mandatory substitution or authorization. Amid warnings from industry bodies such as CEFIC of potential unnecessary bans of beneficial substances and damage to the competitiveness of Europe’s chemical industry, negotiations were intensified. By 20 November, talks between MEPs and ministers had again broken down over the substitution and authorization issues. With the prospect of a sixmonth formal conciliation procedure threatening at this point, new deadlines for the second reading were agreed (and re-extended), and the arguments continued. Finally, lastditch talks achieved a deal between MEPs and the EU ministers on 1 December, clearing the way for the second reading vote on 13 December,

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FOCUS where the compromise package was backed by more than 70% of members. Opposition from the Netherlands, Poland and particularly Germany, where a powerful lobbying exercise was led by BASF, successfully overruled the demands for mandatory substitution. Instead, the agreed deal broadly accepts that Europe’s £265 bn chemicals industry can continue to use between 1500 and 2000 ‘substances of high concern’, provided that processes are ‘adequately controlled’. (The principle of adequately controlled risk has long been championed by the chemical industry lobby but had previously been rejected by MEPs.) The revised REACH regulation now requires producers and importers to present an analysis of possible alternatives to hazardous substances. If alternatives are available, the applicants must produce ‘substitution plans’ showing how they intend to phase out the hazardous substance. If alternatives are not available, the applicants must present an R&D programme aimed at finding alternatives. In addition, it is proposed that some 17,000 existing substances produced in small quantities will be either exempted from REACH or subject to less-stringent safety data requirements. This and the new substitution plans will result in a consequent reduction in testing requirements, another area of concern. Sharing of data on animal testing will also be encouraged. A further change to benefit industry sees the length of time that commercially sensitive data should remain confidential doubling from three to six years. Finally, a contentious declaration that producers and importers have a general duty of care to prevent harm has been moved from the body of the REACH legislation to a declaratory preamble, allaying legal concerns because of differences in liability laws in EU member states. All in all, these compromises go a long way towards meeting the concerns of the chemical industry. REACH – one of the largest and most complex EU legal texts ever drafted – will now enter into force around April this year, with the new rules being phased in over the next 11 years. The new European Chemicals Agency (ECHA) being established in Helsinki, which will 2

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handle registration applications and safety data for an estimated 30,000 widely used substances in due course, will become fully operational in mid-2008. It is expected to make its first series of recommendations on the most hazardous substances by mid-2009. Caroline Edser

SURFACTANTS Thai Ethoxylate opens plant Thai Ethoxylate Co Ltd, a 50-50 joint venture of Cognis and PTT Chemical Public Co, has commissioned its new 50,000 tonnes/y plant in Rayong, Thailand, to make fatty alcohol ethoxylate surfactants for the personal and home care sectors [see also Focus on Surfactants, Mar 2005]. Feedstock oleochemicals will come from local sources and ethylene oxide from a PTT subsidiary. Chemical and Engineering News, 27 Nov 2006, 84 (48), 16-17 (Website: http://www.cen-online.org)

Air Products introduces new surfactants for the coatings industry Air Products recently introduced Carbowet 106 and 109 surfactants for waterborne architectural and industrial coatings. Carbowet surfactants are targeting wetting agents that contain alkylphenol ethoxylates (APE) or nonylphenol ethoxylates (NPE), which are persistent in the environment and suspected of being endocrine disrupters. Carbowet surfactants contain no phenolic compounds. Carbowet 106 and 109 surfactants offer excellent surface tension reduction, while also being costeffective and biodegradable, the company says. These surfactants are multifunctional, low-foaming, solventfree additives for pigment and substrate wetting. They are clear, lowodour, low-viscosity liquids that are 100% active and easy to use. Carbowet 106 and 109 surfactants differ in their degree of water solubility and are environmentally preferable alternatives to APE and NPE. The cost-effective APE and NPE replacements are ideally suited for architectural and industrial coatings, adhesives, inks and pigment

synthesis and dispersion. Air Products serves customers in technology, energy, healthcare and industrial markets worldwide with a unique portfolio of products, services and solutions. Press release from: Air Products, 7201 Hamilton Boulevard, Allentown, PA 18195-1501, USA. Tel: +1 610 481 4911. Website: http://www.airproducts.com (1 Nov 2006)

Rhodia to increase speciality surfactant production in India Rhodia Novecare is building a second surfactant production unit on its Roha site near Mumbai in India. This new facility is expected to be operational in 4Q 2007 and will triple capacity at the site. It will allow Rhodia to meet the rapidly growing Indian demand for surfactants for the home and personal care markets. This investment increases Rhodia Novecare’s presence in the Asia Pacific region and completes its industrial footprint, which already comprises five surfactant and speciality chemicals plants in China, Indonesia, Thailand, and Japan, as well as research facilities in Singapore and Shanghai. Asia Pacific is a strategic growth area for Rhodia and India is an especially promising market, moving towards more sophisticated products, comments Pascal Juery, Rhodia Novecare’s Global Business Director for Home & Personal Care. “We aim to be the supplier of choice for multinational and local customers, combining world-class quality products with reliable supply.” With global sales of €935 M, Rhodia Novecare serves selected consumer care and industrial market segments and holds leading positions in the surfactants, phosphorus derivatives, natural polymers, synthetic polymers and monomers technologies. In its latest financial results, for 3Q 2006, Rhodia reported net sales at €1179 M, up 9.3% versus 3Q 2005, driven by strong volume growth (up 5.5%) and price increases (up 7%) to offset the rise in the cost of raw materials and energy. Recurring EBITDA climbed 60% to €160 M. There was a sharp rise in operating profit, to €112 M from €8 M in 3Q 2005, while the company recorded a net income of €71 M, against a loss of €121 M for the same period in 2005. Rhodia Novecare achieved a 1.3% JANUARY 2007