AKRON, OHIO—Dow Chemical Co. is looking to get a bigger piece of the 10 billion-pound-a-year global engineering compounds market by expanding capacity and reorganizing its business in that area.
``We've decided to participate further in that market segment,'' Dow's Ulf Buergel said in a May 4 interview in Akron. ``It's a major change that will allow us to focus on customer cost reduction and low-cost solutions.''
Buergel, a 14-year Dow veteran, became global business manager of the company's engineering compounds platform in late 1996. The platform, part of Dow Plastics' engineering plastics business, posted sales of about $200 million last year, half of which were in the automotive market.
Although the reorganization was approved by Dow brass in early 1997, it is getting its first big public boost this year. The move is intended to give Midland, Mich.-based Dow a broader base to market its Questra-brand crystalline polymers, Pulse polycarbonate/ABS blends and compounds based on the firm's Magnum ABS, Calibre PC and Inspire polypropylene.
The biggest physical change will be an expansion at Dow's DH Compounds joint venture plant, a partnership with Cleveland's M.A. Hanna Co. in Clinton, Tenn. The expansion, to be operating early next year, will boost capacity as much as 45 percent and will result in a 10 percent increase in manufacturing jobs at the site. Both of those increases are compared with 1996 totals, officials said.
Some production of tailor-made products, such as Pulse PC/ABS, also will be transferred to Clinton from Dow's Freeport, Texas, site.
A similar expansion is planned at the company's compounding facility in Terneuzen, Netherlands, later this year. In December, Dow announced plans for a new, 80 million-pound-per-year Questra plant in Schkopau, Germany.
Dow sees an opportunity to take advantage of its broad resin arsenal as well as its continuing consolidation in the North American compounding industry, according to Buergel.
Acquisitions and mergers of independent compounders have reduced their number to about 200 in North America, compared with about 400 in Europe and 600 in the Pacific region, Dow estimates. Buergel said the company expects this trend to continue.
PC/ABS blends are the platform's ``volume driver'' right now, until Dow's initial PP production starts in Schkopau later this year, and in Freeport in early 2000.
But Questra, a syndiotactic polystyrene made using Dow's Insite metallocene technology, will generate more sales at first, according to Scott Moore, the platform's senior product market manager.
Questra is finding uses in such products as connectors in under-the-hood automotive and electrical/electronic applications, as well as oven-related appliances and reusable medical items. The product received a major boost last summer when it was licensed by three major North American engineering resin compounders — LNP Engineering Plastics of Exton, Pa.; RTP Co. of Winona, Minn.; and Lati USA Inc. of Mount Pleasant, S.C.