Wellman Inc. apparently is confident that PET resin will rebound from its pricing slump, as the Shrewsbury, N.J.-based firm has announced plans to add 250 million pounds of PET capacity through debottleneckings in South Carolina and Mississippi by 2001.
``We're confident in our competitive position on pricing and we're optimistic about market demand,'' investor relations manager Jill Bongiovanni said in a Dec. 17 telephone interview.
``The soft drink market, driven by single-serve bottles, is still growing very well, and health and beauty and nonfood packaging growth rates are high as well,'' she said.
PET producers and analysts expect growth rates to remain at 10-15 percent in 1998, but the industry has struggled to regain price levels lost in the disastrous 1996 season, when sinking raw material costs drove PET bottle resin prices from 76 cents per pound all the way down to 44 cents. Current bottle resin prices average 52 cents per pound.
Improvements to technology at existing Wellman PET works in Darlington, S.C., and a plant still under construction in Port Bienville, Miss., will debottleneck 150 million pounds of combined capacity by the second quarter of 2000, company officials said.
The technology needed for those debottleneckings is expected to cost less than $50 million.
A second round of debottleneckings will add 100 million pounds of PET capacity at those sites by 2001. The expected cost of the second debottlenecking was described only as ``a modest capital expenditure.''
About 60 percent of the debottlenecked capacity is slotted for Darlington.
The Port Bienville plant, which will employ 250, is scheduled to open its first PET line in the fourth quarter of 1998, with a second line going into operation in the first quarter of 1999. The plant will have total capacity for 470 million pounds of PET, plus capacity for 230 million pounds of polyester fibers.
Wellman's current U.S. PET capacity is 500 million pounds, all of which is in Darlington.
The company ranks fourth in U.S. PET production, with about 9 percent of the market, trailing Eastman Chemical Co., Hoechst Celanese Corp.'s Trevira unit and Shell Chemical Co.
Wellman also operates a PET plant in Emmen, the Netherlands.