PITTSBURGH — Bayer Corp. officials almost sound like parents when talking about their polymers products.
In their family, polycarbonate and polyurethane are the golden boys, bringing in good grades and healthy sales. ABS, however, is the problem child for the moment. The Bayer folks are just as proud of it, but it's been misbehaving a bit.
Executives with the Pittsburgh-based firm, the North American arm of German chemicals giant Bayer AG, took some time to review their polymeric offspring at the company's annual Chemical Day event May 5. PU makes up about half of the company's polymers business, with PC and ABS making up the other half.
Polycarbonate saw double-digit growth in 1997 both at Bayer and throughout the industry. It should get a boost again this year, in part thanks to increasing consumer acceptance of digital versatile discs. The cost of DVD players should fall from near the $1,000 mark to a more affordable $300-$400, said Peter Mueller, Bayer Corp.'s senior vice president of polymers.
Film insert molding and auto taillights should also be up-and-coming PC markets in 1998. Bayer, the No. 2 PC maker in North America, is adding 120 million pounds of annual capacity later this year in Baytown, Texas, to meet this growing market.
Bayer's joint venture with GE Plastics to develop PC for auto window glazing also is progressing in Wixom, Mich., where the joint venture is building a facility. Mueller expects the agreement to be producing commercial material in two to three years.
Current tightness of PC supply is further proof of the market's health, Mueller said.
``Who would have thought polycarbonate would be tight again?'' he asked. ``It was tight not too long ago, and after a year of expansions and debottlenecks, it's tight again.''
Along with other PC makers, Bayer currently is attempting to increase PC prices to support reinvestment needs.
In polyurethanes, Bayer benfited from a sixth consecutive year of growth in the North American PU industry, according to PU Senior Vice President G. Thomas Harrick.
The industry's 5.4 percent jump went ``far beyond expectations'' at Bayer, which anticipated a growth rate closer to 3.8 percent — the growth rate of the gross national product, Harrick said.
A 7.7 percent upswing in furnishings led the way, as home furnishings, bedding and carpet underlay all sold well. Furnishings made up 25 percent of the 4.3 billion-pound market, second only to the 28 percent share held by the construction market.
Automotive uses for PU lagged the pace, however, showing a mere 1 percent increase. Harrick chalked up the slowdown to losing market share to thermoplastic polyolefins in reaction injection molding uses such as front and rear fascias and other external parts.
Bayer, one of the top three North American PU makers, is securing its PU supply chain with a major expansion of PU chemical ingredients toluene diisocyanate and methylene diisocyanate at Baytown. Almost $300 million is being spent on those capacity expansions, which will come on stream late this year.
The ABS road has been a hazardous one since Bayer bought the business from Monsanto Co. in 1995. North American ABS sales dropped 5 percent last year and production dipped 7 percent, according to the Society of the Plastics Industry Inc. in Washington. Competition from materials such as polypropylene has taken its toll.
``You might ask `Are we still happy with the [ABS] business?''' Mueller said. ``I think we made the right decision here. Long-term, it was a fairly strategic decision that fits nicely into our overall line of products.''
But Mueller predicted it would be another two or three years before Bayer's ABS business, which ranks second in North American production, ``is at a reasonable point where we can enjoy the business.''
Reductions in the product line will be a necessary part of this turnaround, Mueller said.
``We can't live with this high complexity of products,'' he said. ``I'm not blaming anything on Monsanto, but they had a wide spectrum of products which we have to streamline to some degree.''
The move will help reduce costs, but also will allow more-advanced ABS grades to replace older grades, according to ABS product manager Bruce Kleinert.
``We have to ask if we have a product that may have leapfrogged another product,'' Kleinert said.
ABS already is regaining some ground, as evidenced by its use in door panels and instrument panels for Volkswagen's 1998 Beetle and A4 vehicles. Those parts previously were made of PP, Mueller said.
Chrysler is looking at a PC/ABS blend for side air bags in some of its vehicles.