Evonik pursues expansion in Asia after explosion

While Evonik Industries moves to mitigate the impact of a 31 March explosion at its plant in Marl, Germany, executives in Shanghai announced the continuation of an investment programme that will include construction of a nylon 12 plant in Asia.

Completion of that project remains years away, though, so it will not help automakers and suppliers who are working to deal with an expected shortage of nylon 12.

For now, the company is pushing to start production again in Marl.

“There is quite a lot of damage” at the plant in Germany, said Gregor Hetzke, head of the Performance Polymers business unit. “We are expecting it will take three to six months to get it back online.”

Nylon 12 is used for fuel tanks, brake components and seat fabrics, and the shutdown will likely lead to production disruptions for many automotive manufacturers.

The planned Asia plant will not come online for a few years, officials said.

“In the not-so-distant future we will decide on a location,” said Dahai Yu, a member of the executive board of Evonik. “We are still dedicated to opening the plant in 2014.”

Yu spoke at a news conference in Shanghai at the Chinaplas 2012 trade show.

2011 was a record year for Evonik, with €14.5bn in sales globally. Some €3.1bn came from the company’s plastics business and Asia comprised 20% of the company’s overall sales.

Evonik aims to expand its business in Asia, with a goal of reaching €4bn in sales in the region by 2015, expanding Asia’s share to 30%t of global sales.

“We concluded a strategy project recently,” Yu said, “and we want to double our sales in Asia.”

To do this, Evonik is promising to invest €2bn in the region from 2010 to 2015. This will include hiring 2,000 employees over the next few years, the development of the nylon 12 plant and the expansion of the company’s Shanghai research and development centre.

Last year, the company increased production capacity in China for polyetheretherketone (PEEK) and poly methyl methacrylate (PMMA) moulding compounds at production facilities in Changchun.

It also doubled production capacity for acrylic moulding compounds in Shanghai to 40,000 tonnes. In 2012, Evonik has scheduled the expansion of PMMA capacity in Taiwan to 85,000 tonnes.

“The supply chain has become increasingly important,” said Yu. “We want to increase our sales by local production to 60% by 2015.”

Bio-based polymers

Evonik’s investment schedule also includes the expansion of the company’s capacity for the bio-based Vestamid Terra polymers at the beginning of this year, including an additional compounding facility in Shanghai that will become operative in the third quarter of 2012.

The company also announced plans to expand its polymerization capacity in the region sometime in 2013.

Evonik has said suppliers using nylon 12 can switch to its Vestamid Terra materials, which have “much the same” properties as nylon 12. Vestamid Terra consists of nylon 6/10, nylon 10/10 and nylon 10/12 polymers that are made partly or entirely from castor oil.

The Marl plant that was damaged on March 31 makes cyclododecatriene (CDT), which Evonik uses to make laurolactam, a monomer used to make nylon 12.

The plant outage impacts global nylon 12 supplies because the resin was already in short supply, and because Evonik also supplies laurolactam to Arkema.

Together, Evonik and Arkema account for about half the world's supply of nylon 12.

Last month's blast killed two Evonik employees and shut down production at what is one of three plants that produce the majority of the world’s nylon 12.