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Kraton expanding offerings, adding line

By: Frank Esposito

October 16, 2013

DÜSSELDORF, GERMANY — Kraton Performance Polymers Inc. (Hall 6/C52) will be busy in 2014, opening a semi-works production line in the U.S. and commercializing three new grades of hydrogenated styrenic block copolymers.

The $40 million semi-works line will open at Kraton's plant in Belpre, Ohio. It will be used to make amounts of Kraton materials ranging from 100-500 tons. These smaller amounts will help customers shorten time to market by as much as six months, sales and marketing Vice President Holger Jung said in an Oct. 16 interview at K 2013. The new line will create 11 jobs at the site. Kraton had operated a similar line at a plant in Houston run by Shell Chemical Co., its founding firm.

"Scaling up from a coffee cup to larger amounts was tough before, but now it will be much easier," global advanced materials Vice President Michael Oberkirch added in the interview.

The three new HSBC grades will be aimed at automotive instrument panel skins, said technology Vice President Lothar Freund. The materials are being mar¬- keted as PVC replacements in the automotive market, as well as in medical tubing, IV bags and other medical products, he added.

In the last year, Kraton also has commercialized three new applications for its Nexar-brand SBC materials, including one in sports¬wear, where officials said the material can have "a cooling effect."

Looking ahead to early 2016, the firm plans to open a new specialty HSBC plant in Mailiao, Taiwan. The plant will have annual capacity of almost 70 million pounds and represents an investment of more than $200 million — Kraton's largest investment since being spun off from Shell.

Houston-based Kraton has strug-gled on the financial side recently, losing $16 million in 2012 and posting profit of only $81,000 in the first half of 2013. First-half sales fell 14 percent to $674 million compared with the 2012 period.

Volatility in butadiene feedstock prices played a role in the firm's struggles, as did colder-than-normal weather in Europe earlier this year. The cold weather prevented paving work from being done, and some Kraton grades are used as asphalt modifiers, Jung said.

Paving work has bounced back as the region's weather has improved. Butadiene prices also are expected to moderate as demand for the material in the tire market declines, he added.

In spite of the overall sales decline, Jung said sales of the firm's Cariflex-brand polyisoprene synthetic rubber are growing at a rate of 15 percent per year. Uses for Cariflex include surgical gloves, condoms and medical stoppers.