NEW YORK — Reinhart Katz probably won't be a big tipper by the end of the year 2000.
By that time, BASF Corp.'s plastics division, which Katz heads as group vice president, will have spent $1 billion on expanding and growing its polymers businesses, including polystyrene and engineering plastics.
``We're building an aggressive position in polyurethanes, polystyrene and engineering plastics,'' Katz said Dec. 1 at BASF Corp.'s year-end media briefing in New York. ``And plastics is showing a higher growth rate than the corporation average.''
Plastics currently ranks third in sales for Mount Olive, N.J.-based BASF Corp., which is a division of BASF AG, the global chemicals giant based in Ludwigshafen, Germany. The plastics unit rang up $1.4 billion in sales in 1996, a 21 percent share of overall sales, which trailed only consumer products and chemicals overall in the BASF mix.
The firm's Altamira, Mexico, PS plant recently began operating, and a styrenic copolymers plant that will produce ABS, acrylic styrene acrylonitrile, and styrene acrylonitrile is being built there as well. A smaller nylon capacity expansion recently was completed in Freeport, Texas. Expansions are also in the works for acetal and nylon PBT compounds by 2000.
These and other projects will allow BASF to build on what Katz described as ``the broadest product line in the engineering plastics industry,'' a line that offers a larger variety of products than such competitors as AlliedSignal Inc., Amoco Corp., Bayer Corp. and GE Plastics.
The only conservative note was struck when Katz admitted that recent economic downturns in some plastics areas have caused the delay of more-extended projects, such as an additional 70 million-pound nylon expansion in Freeport.
Katz declined to comment on rumors that BASF's 1998 growth may include the acquisition of Ticona, Hoechst Celanese Corp.'s technical polymers business. Parent company Hoechst AG has announced it is looking to sell off or enter into joint ventures in its plastics businesses, such as Ticona.
BASF and Ticona share several product platforms, including nylon and acetal.
``We're always looking at potential acquisitions, but if you look back to when we started in North America in the 1980s, we've primarily built from within,'' Katz said.
He specifically referred to BASF's 1996 decision not to buy Monsanto Co.'s ABS holdings, which eventually were acquired by Bayer.
``In that case, we made an evaluation of how much we would be able to pay based on expected returns, and in the end we didn't buy it,'' Katz said. ``We continued with our existing strategy and, shortly after, we decided to build our own ABS production, which would give us better economics.''
Recent product applications — on which BASF officials focused Dec. 1 — demonstrated the versatility of the company's nylon and ASA materials.
Nylon is continuing to grow in automotive applications such as an airbag housing used by a German automaker.
Stateside, a Big Three automaker is to announce at January's Detroit Auto Show that it will use BASF nylon in engine covers for a variety of its vehicles.
BASF officials declined to reveal the automaker or details of the project, but the product is a ``beauty cover'' that hides hoses and wires located under the hood, according to Ken Baraw, manager of applications development and computer analysis at BASF's applications center in Wyandotte, Mich.
``We're cutting across markets all over the place,'' said Baraw, who added that the ``metallic fleck'' appearance of the glass-filled nylon particularly was attractive to the automaker.
Baraw explained that BASF has modified its approach to applications in recent years.
``We're not spending time on material replacement — we're looking at things like an automotive module, an entire part,'' Baraw said. ``We're looking at systems integration and a blend of our portfolio into systems.''
Examples of this approach include merging noise-reduction equipment into air-intake manifolds and combining accelerator, brake and clutch pedals into a single unit.
Increased noise-reduction regulations could expand plastics' automotive market, Baraw said.
``It won't be just a noise issue, but more of a quality-of-sound issue,'' Baraw said.
In ASA, BASF is looking toward the spring, when a joint venture between Hunter Marine Corp. of St. Augustine, Fla., and JY Sailboats of East Lyme, Conn., will introduce a 21-foot sailboat with a hull and deck made of a thermoplastic structure that includes BASF's Luran S-brand ASA. The sailboat will be the longest built to date using ASA, eclipsing a 17-footer that recently was introduced by the joint venture.
ASA offers excellent impact resistance even after prolonged outdoor exposure in marine applications, according to Susan Ostrowski, BASF's styrenic copolymers business team leader.
The expanded hull and deck size now opens up about 25 percent of the sailboat market for BASF, Ostrowski said.
``We were limited by sheet size because of thermoforming equipment,'' Ostrowski said. ``This is a relatively small area for us, but it's significant because it shows the versatility of the product.''
Ostrowski added that ASA eventually could make its way into thermoplastic hulls for power boats.
