Page 140 - CW E-Magazine (19-11-2024)

Point of View

company cited the hyper-competitive environment for the speciality-turned-commodity thermoplastic, following the overbuild in Asia (read China),
and the substantial investment needed to continue operations with profitable cost competitiveness.

Ineos Styrolution has also confirmed it will not restart its styrene monomer production site in Sarnia, Ontario (Canada), which has been
shut since April 2024. In June the company shared its decision to permanently close the Sarnia site by June 2026 (operations were shut in
April 2024 due to regulatory orders).

US-based Trinseo has also decided to stop polycarbonate (PC) resin production at Stade (Germany) by January 2025, and purchase its
requirement of resin (for PC compounds) from external suppliers.

Reorganisation in Japan
Declining and ageing population, and weak economic growth has resulted in virtually no demand growth for basic petrochemicals in Japan,
and industry watchers recognise that the country has more crackers than needed (and sub-optimally sized ones at that). A downsizing has
been ongoing for some time now, but more seem to be needed.

Just recently, Idemitsu Kosan and Mitsui Chemicals moved ahead on consolidation of their Chiba ethylene complexes into a single unit at
Mitsui’s current facility and expect to complete the consolidation by fiscal 2027.

Sumitomo Chemical, for another, has decided to suspend operations of a portion of its low-density polyethylene (LDPE) manufacturing
facilities at its Chiba Works by the end of fiscal 2024, slashing its LDPE capacity of 20-ktpa. It has also closed two of three production lines
for methyl methacrylate (MMA) and polymethyl methacrylate (PMMA) at its Singapore subsidiary in September 2024. This will result in an
approximately 80% reduction in MMA capacity and an approximately 70% reduction in PMMA capacity at the location. Following these measures,
Sumitomo Chemical will focus on speciality and high-value-added PMMA products. At a broader level, the company also announced a business
reorganisation effective October 1, 2024, under which the focus will be on four new sectors – food, ICT, healthcare, and the environment.

Speciality chemicals
Even the business of speciality chemicals and materials has not been immune to the rationalisation.

SI Group, the US-based manufacturer, has announced plans to close its alkylphenol facility in Singapore in the second half of 2025. The company
cited the substantial changes in the antioxidant value chain in the region in recent years, paired with high costs in Singapore, as reasons.

Honeywell, which has a diversified speciality materials business with leading positions across fluorine products, electronic materials,
industrial grade fibres, and healthcare packaging solutions, has announced plans to spin off its Advanced Materials Businessinto an independent,
US publicly traded company, by the end of 2025 or early 2026.

American coatings major, PPG, has announced the sale of its architectural coatings business in the US and Canada to buyout firm American
Industrial Partners for about $550-mn, while staying focussed on Latin America, Europe and Asia Pacific, where it holds strong positions in
a number of key countries. In August 2024, PPG said it would sell its silica products business, including precipitated silica manufacturing
facilities in Lake Charles, Louisiana, and Delfzijl, The Netherlands to Qemetica, a Poland-based manufacturer of soda ash, silicates and other
speciality chemicals, for $310-mn. The business represented 1-2% of PPG’s total net sales in 2023, and the sale is expected to close in the
last quarter of 2024.
In another development, AkzoNobel said it plans to cut about 2,000 jobs globally (more than 5% of its workforce) by the end of 2025, as part of
its efforts to reduce costs and enhance efficiencies. The owner of the famed Dulux brand also plans to exit its India architectural paints business
after 70 years, amidst increasing competition in the domestic market with the entry of two new players with considerable financial muscle.

How far down the road is the recovery?
There is consensus amongst global chemical industry leaders that the industry is in a long-term and structural slowdown, with China the
hub of the crises, though not the only determinant. There is less agreement on how far the recovery is ahead – optimists put it at three years,
pessimists as much as nine. None of the two views offer any comfort!

India is expected to be amongst the fastest growing markets for chemicals, in general, and petrochemicals, in particular, but producers
here will not be immune to the pricing pressures that the global markets will unleash.
Ravi Raghavan

140 Chemical Weekly November 19, 2024

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