Competitors big and small are coming out of the woodwork as Phillips Petroleum Co. works to restore its K-Resin styrene butadiene copolymer plant in Pasadena, Texas. The 370 million-pound-per-year plant has been out of commission since March 27, when an explosion in a storage tank killed one worker and injured 69 others.
Phillips personnel and the Occupational Safety and Health Administration are conducting separate investigations of the incident. Company officials said in April that the blast was caused by a chemical reaction involving leftover butadiene residue in the storage tank.
Phillips spokesman Fred Ramos said the Bartlesville, Okla.-based firm has no timetable to restart the K-Resin plant and is doing its best to meet customer demand through existing inventories and by working out supply arrangements with other producers.
"The only silver lining in this is that the incident happened when we had just completed an order cycle, meaning most customers had just received shipments," Ramos said.
Typical K-Resin order cycles last six to nine months, so Phillips customers may not feel a supply pinch until the fall.
But some recent announcements show that Phillips may have its work cut out for it in returning to the market.
BASF AG of Ludwigshafen, Germany, has announced plans to add more than 200 million pounds of styrene butadiene capacity in Germany, Belgium and Mexico by the end of 2003.
BASF, a leader in global chemicals and plastics markets, will build a 100 million-pound plant in Altamira, Mexico, and a 66 million-pound per-year plant in Antwerp, Belgium. The Altamira plant will open in 2003, while the Antwerp plant will begin operating in 2002.
An existing styrene butadiene plant in Antwerp will be expanded by 33 million pounds, while a similar facility in Ludwigshafen will be expanded by 11 million pounds. Both of those projects should be complete by mid-2001.
Industry contacts said BASF clearly had to make its expansion decisions well in advance of the Phillips explosion, although several contacts admitted the timing of the announcement makes BASF look somewhat opportunistic.
According to industry research, Phillips controls 75-80 percent of the North American market for high-styrene-content styrene butadiene, competing only with imported material brought in by BASF, Fina Oil and Chemical Co. and Asahi Chemical Co.
High-styrene-content styrene butadiene — used in medical components, toys, candy wrappers, food packaging, cups, clothes hangers and other applications — make up about one-third of the overall North American SBC market, which was estimated at 840 million pounds in 1999. The rest of the market is held by low-styrene-content materials such as Shell Chemical Co.'s Kraton styrene butadiene.
Meanwhile, Visual Polymer Technologies Inc., a small custom formulator based in Carmel, N.Y., has introduced a new grade of its Vistek line of styrenic-based compounds to compete with K-Resin, officials said.
Visual Polymer, founded in 1996, prepares custom resins formulas for processors and then has the materials produced by toll compounders. A good portion of its work has been done in point-of-display products and closures.
Visual Polymer President Greg Caldwell said his firm has received several calls from K-Resin users since the Phillips incident.
"Anyone who makes clear material ranging from polystyrene to polycarbonate has probably received similar calls," Caldwell said. "Processors don't like to change materials too often, especially in the medical market, because evaluations are lengthy, and there are a lot of checkpoints involved. But in this case, people have limited options."
Resin makers Network Polymers of Akron, Ohio, and Deltech Polymers Corp. of Troy, Ohio, also have introduced or increased their offerings of products that can replace or extend K-Resin. Officials at those companies said their decisions were somewhat affected by calls they had received from K-Resin users looking for alternate materials.
Phillips spokesman Ramos said he was not surprised by the flurry of activity from other firms in the wake of the explosion.
"Phillips has such a dominant market share that it's inevitable that more competitors would come in," he said.