VCI forecasts decline in Germany's chemicals output, sales in 2020

MOSCOW (MRC) -- Germany’s chemical industry association VCI (Frankfurt) says it expects the country’s production of chemicals and pharmaceuticals to fall by 3% in 2020 compared to the prior year, with annual sales to decline by 6% year on year (YOY). A return to pre-COVID-19 levels is not expected before the end of 2021 at the earliest, it says, said Chemweek.

Initial signs of a recovery are, however, now being seen, says Christian Kullmann, VCI president and chairman of Evonik Industries. “If another shutdown can be avoided, demand for chemicals and pharmaceuticals is expected to stabilize in the second half of the year," he says.

Production by Germany’s chemical and pharmaceutical industry fell by 2.5% YOY in the first six months of this year, while sales shrank by 6.1% YOY to EUR96 billion (USD113 billion). Excluding pharmaceuticals, chemicals output fell by 3.6% in the first half of the year, compared to the equivalent period last year.

After a positive start to 2020, production in the second quarter fell by 5.8% compared to the prior-year quarter, with average plant capacity utilization falling to 77.5%, according to the VCI. All product areas in the chemicals and pharmaceuticals sector were affected by weak demand both domestically and internationally, with production of specialty chemicals falling by 3.9% in the first six months of the year compared to 2019, it says. Polymers production declined by 8% YOY due to the slump in demand from the automotive industry and plastics processors, it says. Production of pharmaceuticals recorded only a slight fall of 0.3% over the same period, while the decline in soaps and detergents output was 0.7%.

"For one in four companies, the lack of orders continues to have a major impact on business activities,” the VCI says. The chemical and pharmaceutical sector “bottomed out” in the second quarter, with a survey of the VCI’s members showing that disruptions to operations are decreasing, it says. Overcoming the COVID-19 crisis “will take some time,” it adds, with 49% of its member companies expecting the industry to return to pre-pandemic levels by the end of next year. About 20% of those surveyed expect it to take a further year, with 13% expecting only to be able to compensate for the decline at a later date or not at all, it notes.

Acknowledging the “rapid and consistent action” of Germany’s federal government during the crisis, Kullman says it is now important to look ahead. “The emergency aid was right and indispensable, but they will not secure the future of Germany,” he says. A stimulus package must be followed by a political program that provides sustainable growth opportunities and which makes Germany attractive once again for large-scale industrial projects “so that investment and innovation can be mobilized,” he says. He urged the government to take measures including reducing corporation tax to 25%, cutting green energy costs, streamlining planning and approval procedures, and establishing an investment program for climate protection and the circular economy.

As MRC informed earlier, Russia's output of chemical products rose by 4.4% year on year in May 2020 . Thus, production of basic chemicals increased year on year by 5.4% in the first five months of 2020. According to the Federal State Statistics Service of the Russian Federation, polymers in primary form accounted for the greatest increase in the output in January-May. Production of benzene was 110,000 tonnes in May 2020, which equalled the figure a month earlier. Overall output of this product reached 615,000 tonnes over the stated period, up by 1.7% year on year.

Sasa to license Invista PTA technology for new plant in Turkey

MOSCOW (MRC) -- INVISTA’s technology and licensing group, INVISTA Performance Technologies (IPT), and SASA Polyester Sanayi A.S. (SASA) reached an agreement on Aug. 25 for the license of IPT’s P8 process technology for SASA’s PTA project in Adana, Turkey, said the company.

With an annual PTA production capacity of 1.5 million tonnes, this would be the largest single-stream design capacity licensed by INVISTA. Built on the demonstrated performance of IPT’s P8 technology platform, the variable cost, capital productivity and environmental performance of this PTA plant is expected to set new benchmarks within the industry.

Ibrahim Erdemoglu, SASA’s chairman, said, “SASA will continue to invest in polyester to position itself as the leading polyester producer after China and India. This agreement will enable self-sufficiency in PTA, terminating all PTA imports into Turkey. This is also the first step of SASA’s investment in petrochemicals with more investment in polyester, PTA and MEG to follow in Adana's Yumurtalik district."

Mike Pickens, IPT president, said, “Our companies have a long history of cooperation dating back to 1974, when SASA licensed IPT’s polyester technology. We are honoured that our industry leading P8 PTA technology has been selected by SASA. The signing of this license agreement has great significance in terms of long-term collaboration between SASA and IPT."

IPT’s industry-leading PTA technology, including its latest version of P8 technology, is available as a license package from IPT.

As MRC informed earlier, INVISTA Textiles (U.K.) Limited’s technology and licensing business, INVISTA Performance Technologies (IPT), and Jiangsu Jiatong Energy Co., Ltd, a subsidiary of Tongkun Group (Tongkun), have reached agreement to license INVISTA’s latest P8 PTA technology for two PTA lines. These two lines will be installed in Rudong, Nantong City, Jiangsu province, China. Both lines deploy INVISTA’s largest twin stream design respectively, utilising INVISTA’s latest P8++ PTA technology.

PTA is used to produce polyethylene terephthalate (PET), which is used in the manufacturing of plastic bottles, films, packaging containers, in the textile and food industries.

According to MRC's ScanPlast report, Russia's estimated PET consumption totalled 367,720 tonnes in the first six months of 2020, up by 19% year on year. Russian companies processed 62,910 tonnes in June.

COVID-19 - News digest as of 08.09.2020

1. LG Chem targets zero major environmental, safety accidents from 2021

MOSCOW (MRC) -- LG Chem says it will establish a "global standard" for environmental safety and expand it to the company's business sites worldwide. LG Chem has also announced that it will reestablish its environmental safety standards for all its business sites globally and considerably strengthen its management system, said Chemweek. LG Chem says that it is currently activating its M-Project, a large-scale safety initiative involving in-company environmental safety and process technology experts, as well as external agencies specialized in related fields, with the goal of achieving zero major environmental and safety accidents from 2021. The decision to execute the project followed the company's announcement in May that it would carry out safety inspections at all its sites worldwide following recent accidents in India and South Korea.


Axens forms partnership to develop, commercialize chemical recycling of PET

MOSCOW (MRC) -- Axens, IFP Energies nouvelles (IFPEN; both Rueil-Malmaison, France) and Jeplan, Inc. (Tokyo, Japan) have recently signed a joint development and commercialization agreement in order to develop, demonstrate and commercialize an innovative polyethylene terephthalate (PET) monomer recycling process for all types of waste PET-based materials, including bottles, films, trays or textile (polyester), said Chemengonline.

This new process, called Rewind PET, involves an optimized, glycolysis-based PET depolymerization combined with specific purification steps aiming at removing all organic and inorganic compounds present in waste PET. The product is a purified BHET (bis(2-hydroxyethyl) terephthalate) monomer, ready to be used in a PET plant and produce again any type of PET, from fibers to food grade resins.

The partners can demonstrate a strong track-record in the field: Jeplan has operated the first ever industrial PET bottles chemical recycling plant, called Pet Refine Technology (PRT: 22,000 ton/yr), in Japan. In 2018 Jeplan also started-up a 2,000 ton/yr demonstration plant, called Kitakyushu Hibikinada Plant (KHP) in Japan, aiming at textile to textile recycling. While in the past 6 years, IFPEN and Axens have developed a process able to recycle and upgrade colored and opaque PET bottles into clear food grade PET.

Now, Jeplan, Axens and IFPEN are putting together their operating, engineering and technological background and will leverage the 2,000-ton/yr demonstration plant of Jeplan in order to accelerate the development and demonstration of their joint flexible process. With the support of the work at IFPEN facilities in France and the demonstration unit, the partners target to be ready for the worldwide licensing by Axens of the Rewind PET process within the end of 2022.

In the meantime, the three partners will continue to closely work with the actors of PET packaging and textile industries to validate the quality of the recycled PET, ensuring that the full process and logistics chain are safe, robust and economically viable, and set up the first industrial projects.

According to Pierre-Franck Chevet, chairman and CEO of IFPEN, “This reflects IFPEN’s commitment to address society’s growing expectations in terms of reducing plastics waste in line with public policies and plastics industry commitment. IFPEN strategic approach combine plastics waste recycling with sustainable solutions to maximize renewable bio-based chemical in order to achieve long term target of GHG emissions reduction in the downstream sector."

Masaki Takao, CEO of Jeplan, declares “Jeplan will continue to enhance the delivery of sustainable recycled finished products through its BRING Technology, with the involvement of consumers. Jeplan will also leverage its operational experience at KHP and PRT plants to support the adopters of the Rewind PET process and the development of new industrial project. This French/Japanese partnership between our three companies will symbolize an important achievement of our two countries in the field of circular economy."

Jean Sentenac, CEO of Axens, is convinced that “this flexible, high-performance process will answer the PET packaging and textile industries needs to reach their ambitious recycling targets at the 2025–2030 horizon. Beyond licensing, Axens will propose to Rewind PET customers a global offer, from the delivery of turn-key modular units to a full support for the operation of this new process. Axens is strongly committed to develop efficient solutions for the circular economy."

According to MRC's ScanPlast report, Russia's estimated PET consumption totalled 367,720 tonnes in the first six months of 2020, up by 19% year on year. Russian companies processed 62,910 tonnes in June. Russian plants reduced their PET output in January-June 2020 by 25% year on year. Overall PET chips production at four Russian plants reached 281,100 tonnes in January-June 2020.

Ineos, Saica Natur partner for post-consumer recyclate supply in flexible packaging

MOSCOW (MRC) -- Ineos has partnered with waste management company Saica Natur (Zaragoza, Spain) in a supply agreement for recycled low-density polyethylene (LDPE) and linear low-density polyethylene (LLDPE), said Chemweek.

The long-term agreement will help Ineos’ olefins and polymers (O&P) Europe business serve growing demand for increased levels of recycled product in sustainable, virgin polymer-quality flexible packaging, Ineos says. The company is expanding its Recycl-IN range of polymers to include flexible packaging solutions with more than 60% post-consumer recyclate (PCR), it says.

The partnership has enabled Ineos O&P to develop high-performance recycled PE resins to help meet the needs of converters, brand owners, and retailers to use more than 60% recycled plastics in applications such as stretch and lamination films, according to Ineos.

According to MRC's ScanPlast report, June estimated LDPE consumption in Russia grew to 55,260 tonnes from 45,490 tonnes a month earlier. Kazanorgsintez raised its PE output after a spring shutdown for a scheduled turnaround. Russia's estimated LDPE consumption rose to 291,270 tonnes in January-June 2020, up by 5% year on year. Russian producers raised their production, and LDPE imports also increased. June LLDPE shipments to the Russian market rose to 38,600 tonnes from 31,290 tonnes a month earlier, production increased. Russia;s overall LLDPE shipments totalled 191,700 tonnes in the first six months of 2020, down by 7% year on year. Production increased by 89% year on year, whereas exports grew by several times.