Issue Date: June 21, 2004
MAKING AN IMPACT
June has been filled with press conferences held by suppliers of polymers, additives, and support services in advance of the massive German plastics convention known as the "K" Show--for "Kunststoffe," German for plastics--held every three years in Dusseldorf.
This year, Ciba Specialty Chemicals kicked off the pre-K season. For Ciba, the plastics industry is an important market for two of its business segments: plastics additives, with products for plastics, fiber, rubber, and lubricants; and coating effects, which includes pigments, polymer-soluble dyes, and color concentrates. Together, the two segments accounted for 53% of the company's sales of $4.9 billion last year and 84% of its operating profit of $424 million.
Presentations by teams from these two businesses helped to underscore the intensifying trend throughout the specialty chemical industry of moving product offerings along the polymer value chain ever closer to the end user.
New products will also be on the company's stand at the show in Dusseldorf this October, of course. For example, there are new ultraviolet-light stabilizer systems that extend the life of flexible polyvinyl chloride in exterior applications and enhance the performance of transparent polyolefin food packaging. There will be a novel chain extender that allows polyethylene terephthalate to be recycled for the same uses--beverage bottles, for example--rather than into lower valued materials such as fleece fibers. And a new blue pigment has been designed for good color effects plus low warping during polymer processing.
Hermann Angerer, head of Ciba's coatings effects segment, said the firm is continuing to support its key chemistries for plastics. A case in point is diketopyrrolopyrrole (DPP), production of which is being expanded. Last month, the company opened a second production line in Monthey, Switzerland, for its DPP pigments, and it is currently expanding its pigment facilities in Newport, Va. Ciba is always shy about revealing production figures, but Angerer said the Newport expansion will boost capacity on "the order of 15%." He added that "the plants are running pretty full," thanks in particular to demand from the automotive industry.
As his colleague Brendan Cummins, head of the plastics additives segment, sees it, suppliers to the polymers industry operate on three levels within a pyramid. The pyramid's base is property retention, followed by a middle section for property extension, then a peak for functional enhancements of properties.
"We start with polymer properties retention," he said, with additives ensuring light stabilization and base-polymer stabilization. From there, polymer properties can be extended with additives such as flame retardants, clarifiers, and nucleators. Ciba focuses on end-use innovation, he said, and targets masterbatch companies and converters in particular.
At the top of the properties pyramid, Cummins said, materials such as growth promoters, oxygen scavengers, and biocides can help plastics move into new markets. One example the company is particularly proud of is its Smartlight technology, in which adding a 1% concentration of a photoselective agent to greenhouse film can enhance plant growth and quality.
The company will concentrate on half a dozen areas at the K Show: durability and protection, comfort and hygiene, functionality and performance, safety and environment, processing efficiency, and color and appeal. "Today, industry is driven by end-user demand for increasingly sophisticated effects in the products they buy," Cummins said.
DEMAND MAY VARY somewhat, he indicated, depending on where the company's customers are. Europe still is the largest single market for Ciba, accounting for 40% of its business, followed by the NAFTA region at 30% and Asia-Pacific at 22%. South America supplies 4% of business, a level matched by the sales region of "East Europe, Middle East, and Africa." However, according to Cummins, the Middle East is "becoming more important to deal with, because of the opening of markets such as Iran and Iraq."
The increasingly widespread geographic reach of the industry has implications for innovation, said Andreas Valet, head of innovation and technology in Ciba's plastic additives segment.
"Innovation is key for us--we are living and working in a very competitive environment, facing competition from all over the world," he noted. "We must find the right balance between short-term, incremental improvements and breakthrough products."
At present, Ciba as a whole is slightly below its target of one-third of annual sales derived from products less than five years old, said Olivier Pilet, business line head for polymer products. However, the level is creeping up and the plastic additives business already betters the target.
Cummins pointed out that Ciba's growth strategy is to "offer creative solutions for customers' success, and promote our solutions and services closer to consumers at the end of the value chain." Service "is a very important part of the chain," he said, conceding that "it is not an easy task making the transition to a full-solution provider."
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