BASF
European strategy with ICI PP / 600,000 tpa capacity / Strong entrée to the UK market
BASF (HQ: D-67056 Ludwigshafen) is looking to a flexible and comprehensive European strategy in PP, following the official takeover (from March 1) of the polypropylene business of ICI, involving two plants of about 150,000 tpa capacity each, at Wilton/UK and Rozenburg/Netherlands, selling under the name "Propathene". An important "plus" is a 30,000 tpa capacity compounding plant at Wilton (under the name "Procom"). Added is its existing PP capacity ("Novolen" brand), the new acquisition gives BASF some 600,000 tpa of PP, making it one of the market leaders in Europe.
Flexibility, geographical spread and comprehensive coverage of market demand are the key features emerging from the new set-up. As explained by Robert Genin, BASF director for PP worldwide, to journalists visiting the UK plant on the inauguration day, the ICI acquisition gives BASF a strong and immediate entrée to the UK market (a "Quantum Leap" for BASF / UK), and a range of grades which is largely complementary to that offered by the German group. While BASF is particularly strong in injection moulding grades (with more than 50% of its business in that sector) and in cast film (nearly 25%), the ICI business is more evenly spread between injection, fibres, raffia and OPP.
From a geographical viewpoint, BASF is now very well-placed in Europe, with its existing plants, at Wesseling/Germany and Tarragona/Spain, matching the new acquisitions, and all using BASF gas-phase technology. Over the past few years, ICI had maintained investment at both its plants, keeping them well to the front in the state-of-the-art, and BASF managers are particularly pleased with the flexibility which they offer. De-bottlenecking could add up to 10% more capacity and the Wilton site is suitable for further expansion, when the occasion arose. The two PP polymerisation units are supplied with feedstock from the giant Olefins 6 complex, located alongside and operated jointly by ICI and BP, said to be the largest plant of its type in the world.
Investment might be seen sooner on the compounding side, however, where the Wilton facility includes the Procom plant, with six lines producing engineering grades of PP (with modern Werner & Pfleiderer machines) – which certainly interests BASF. BASF also stands in a very strong technological position, with 13 licensees worldwide producing some 1.7m t of PP using its gas phase process (plus, now, 600,000 t under its own direct control).
On the PP business situation generally, Genin felt that 1994 would be "basically different" from the recent years. There were distinct signs of an upturn in Europe, not just in UK but also in France and Benelux. Despite the recession, growth of PP had been a steady 10%/year, he said. But, while 25% of the growth came from growth of GNP, BASF estimates that 75% comes from replacement of other materials (more than half of which is at the expense of other plastics, such as ABS, PS and PVC).
Nevertheless, Genin agreed that the world PP situation was still not stabilised. Prices were beginning to recover, and he detected a general upturn, especially on the Continent. More mergers could well be expected in the industry (in addition to the Neste/Statoil and Shell/Himont projects) – perhaps two or three in the next 18 months – and BASF itself was "not uninterested" in discussions or contacts. The first priority, however, was to ensure success of the integration of the ICI PP business.
BASF currently has sales of about £ 700m in the UK, employing nearly 2000 people and manufacturing at five of 12 sites. The former ICI plant is its first plastics manufacturing operation in the UK, but it already has a strong presence in the Teesside area, producing intermediates for engineering plastics, elastomers and fibres at nearby Seal Sands, where it is a major exporter.
Also at the Wilton site, BASF manufactures the titanium catalysts for its PP business. Other businesses on the site (which might become the prototype for the new multi-owned petrochemicals site on the future) include BP Chemicals (PE) and DuPont (PA).
READER SERVICE: BASF graphs and tables concerning the PP business and the European PP market: PIE-No. 35642.
Flexibility, geographical spread and comprehensive coverage of market demand are the key features emerging from the new set-up. As explained by Robert Genin, BASF director for PP worldwide, to journalists visiting the UK plant on the inauguration day, the ICI acquisition gives BASF a strong and immediate entrée to the UK market (a "Quantum Leap" for BASF / UK), and a range of grades which is largely complementary to that offered by the German group. While BASF is particularly strong in injection moulding grades (with more than 50% of its business in that sector) and in cast film (nearly 25%), the ICI business is more evenly spread between injection, fibres, raffia and OPP.
From a geographical viewpoint, BASF is now very well-placed in Europe, with its existing plants, at Wesseling/Germany and Tarragona/Spain, matching the new acquisitions, and all using BASF gas-phase technology. Over the past few years, ICI had maintained investment at both its plants, keeping them well to the front in the state-of-the-art, and BASF managers are particularly pleased with the flexibility which they offer. De-bottlenecking could add up to 10% more capacity and the Wilton site is suitable for further expansion, when the occasion arose. The two PP polymerisation units are supplied with feedstock from the giant Olefins 6 complex, located alongside and operated jointly by ICI and BP, said to be the largest plant of its type in the world.
Investment might be seen sooner on the compounding side, however, where the Wilton facility includes the Procom plant, with six lines producing engineering grades of PP (with modern Werner & Pfleiderer machines) – which certainly interests BASF. BASF also stands in a very strong technological position, with 13 licensees worldwide producing some 1.7m t of PP using its gas phase process (plus, now, 600,000 t under its own direct control).
On the PP business situation generally, Genin felt that 1994 would be "basically different" from the recent years. There were distinct signs of an upturn in Europe, not just in UK but also in France and Benelux. Despite the recession, growth of PP had been a steady 10%/year, he said. But, while 25% of the growth came from growth of GNP, BASF estimates that 75% comes from replacement of other materials (more than half of which is at the expense of other plastics, such as ABS, PS and PVC).
Nevertheless, Genin agreed that the world PP situation was still not stabilised. Prices were beginning to recover, and he detected a general upturn, especially on the Continent. More mergers could well be expected in the industry (in addition to the Neste/Statoil and Shell/Himont projects) – perhaps two or three in the next 18 months – and BASF itself was "not uninterested" in discussions or contacts. The first priority, however, was to ensure success of the integration of the ICI PP business.
BASF currently has sales of about £ 700m in the UK, employing nearly 2000 people and manufacturing at five of 12 sites. The former ICI plant is its first plastics manufacturing operation in the UK, but it already has a strong presence in the Teesside area, producing intermediates for engineering plastics, elastomers and fibres at nearby Seal Sands, where it is a major exporter.
Also at the Wilton site, BASF manufactures the titanium catalysts for its PP business. Other businesses on the site (which might become the prototype for the new multi-owned petrochemicals site on the future) include BP Chemicals (PE) and DuPont (PA).
READER SERVICE: BASF graphs and tables concerning the PP business and the European PP market: PIE-No. 35642.
31.03.1994 Plasteurope.com [21506]
Published on 31.03.1994