PITTSBURGH — Polyurethanes now are traveling a separate path from other plastics at Bayer Corp. of Pittsburgh, but company officials believe each unit has what it takes to exceed expectations in 1999.
The units had been combined in the firm's polymers division until a Jan. 1 split. Bayer Corp. is the North American arm of Bayer AG, the global chemical giant based in Leverkusen, Germany.
Bayer's global sales for plastics totaled 4.9 billion deutsche marks ($2.8 billion) in 1998, while PU sales reached DM4.1 billion ($2.3 billion). Plastics were up almost 6 percent, while PU climbed less than 1 percent.
Combined, plastics and PU accounted for about 16 percent of Bayer's overall global sales of DM54.9 billion ($31.2 billion). About 26 percent of the company's sales come from North America.
Bayer's plastics division is focused on polycarbonate and ABS. For both chemicals, the company ranks second in North American production, behind GE Plastics .
Bayer is relocating ABS production from Muscatine, Iowa, to Addyston, Ohio. The move, to be completed in mid-2000, will add 150 million pounds of production to the Addyston site and make the overall business more efficient, according to Peter Mueller, senior vice president of plastics.
Mueller and other Bayer officials spoke in recent interviews in Pittsburgh.
The company also is reducing the number of grades it offers to avoid overlap, ABS product manager Bruce Kleinert said.
For example, the company now offers very little colored ABS, leaving that work to outside color compounders, Kleinert said.
Mueller and Kleinert said Bayer's ABS business is on track to equal or better the 2-3 percent growth rate it saw in 1998. Supply and demand still will be concerns, however, particularly in light of the 150 million pounds of capacity BASF Corp. will add in Altamira, Mexico, later this year.
ABS pricing has been soft for several years because of market oversupply and intense competition from other materials such as polypropylene. Since early 1997, prices for commodity-grade ABS have dropped an average of 26 percent.
The PC market has been kinder to Bayer, which expects to see 6-8 percent growth in 1999, allowing the company to market the 110 million pounds of PC capacity it added in Baytown, Texas, late last year.
Sales into compact disc and digital versatile disc markets have grown much stronger than the company had anticipated, allowing Bayer to install a new 800-ton injection molding machine at its Pittsburgh CD lab recently and to develop a new DVD testing facility.
Mueller also downplayed recent concerns raised by Consumer Reports magazine about the safety of PC baby bottles. The magazine's May issue said a study it conducted found the PC ingredient bisphenol-A can leach out of baby bottles at 40 times infant-safety levels.
Plastics industry officials have countered that BPA is safe in normal use and that the magazine does not understand toxicology and risk assessment.
``We fully believe polycarbonate is safe for internal use,'' Mueller said. ``It's been used in those applications since the 1960s. There's a very solid, long-term history of scientific proof of the safety of polycarbonate.''
In PU, drops in export business held the industry to 3.5-4 percent growth in 1998. Under normal conditions, the market would have grown 5-6 percent, said Robert Kirk, PU senior vice president.
Pricing erosion in PU raw materials toluene diisocyanate and methylene diphenyl diisocyanate also affected growth. Kirk said he expects 4-5 percent growth this year as Bayer works to market MDI from a late-1998 capacity expansion in Baytown and continues work on a 300 million-pound TDI expansion that should be wrapped up in Bayport by the second half of 2000.
Kirk sees growth opportunities in sporting goods such as snowshoe encapsulations and water- ski ropes.
PU still can replace metal to some degree in markets such as electronic housing parts, Kirk said.
The PU unit also is keeping up with technology. It invested $250,000 in its Pittsburgh lab last year and increased staffing there.