DÜSSELDORF, GERMANY (Nov. 5, 2:55 p.m. EST) — The Masterbatches Division of Clariant International Ltd. is bolstering its research and production capabilities with a series of recent and planned moves in Canada, India, Singapore and Taiwan.
Additionally, the Muttenz, Switzerland, firm has introduced a new range of masterbatches for coloration of Novamont SpA's starch-based, biodegradable Mater-Bi resins, and is pushing its masterbatch technology to color CD-ROMs and digital versatile discs.
These moves come against a backdrop of lower third-quarter sales and profit for the Masterbatches Division, and warnings of continued softness in its financial performance for the balance of the year. A trio of senior Clariant Masterbatches executives spelled out the company's plans at K 2001, held Oct. 25-Nov. 1 in Dusseldorf.
Nico Gontha, the recently installed head of the division, said construction has begun on a color and additive masterbatches plant at a greenfield site in Etobicoke, Ontario. The site is just a few miles from an existing operation in Mississauga that will close when the new facility comes on stream late next summer.
Clariant is investing 10.8 million Swiss francs, or about $6 million, in the new, 72,000-square-foot venture. It will feature seven extrusion lines, four silos, five shipping bays and an 8,000-square-foot color-matching laboratory. The new facility will nearly double the capacity now available in Mississauga, where 70 employees work. Activities at an existing, 2-year-old plant in Lachine, Quebec, will be unaffected, he noted.
“We've seen much better growth in Canada than elsewhere,” Gontha said.
Though the Sept. 11 terrorist attacks in the United States have chilled business there, Canada and Mexico so far have been less affected, he said.
Meantime, Clariant recently added about 11 million pounds of specialty compounding capacity in Singapore, where it already had been making thermoplastic engineering-resin masterbatches. The new line will make compounds primarily for the business machine market. By the second quarter of 2002, the company said, it also plans to open technical design centers in Singapore and Taiwan.
And last January, the firm started new, previously undisclosed masterbatch production at an existing, 2,500-employee Clariant complex in Kolshet, India, near Mumbai. That plant, the company's first to produce masterbatches on the subcontinent, has annual capacity of about 33 million pounds, and started up with about 30 production workers.
Gontha said Clariant intends to add more capacity in France next year, but he did not elaborate.
Meantime, the firm's joint venture in South Korea is suffering.
“The market has almost collapsed in Korea,” said Gontha.
He also admitted that Clariant's efforts to use that operation as a springboard into the Japanese market has not been very fruitful.
“Japan has been tough to crack,” he admitted.
On the applications front, meanwhile, the Swiss firm's seven-year technical collaboration on starch-based, thermoplastic Mater-Bi resins with Italy's Novamont is forging ahead, according to Hans Muhlebach, Clariant Masterbatches' head of technology. The two companies have worked to develop white, black, green, pink and silver colors for the biodegradable, compostable resins that, due to their unusual chemical structure, are not compatible with most masterbatch formulations.
Clariant explained that Italy recently passed legislation banning the use of polypropylene in disposable items such as cotton swabs, due to environmental concerns. The new law will prompt manufacturers of such products to look to alternative materials, such as paper or biodegradable resins such as Mater-Bi. Clariant makes masterbatch formulations for Mater-Bi resins available under its Renol-BA trade name.
Separately, working in Taiwan — which produces 70 percent of the world's CD-ROMs — Clariant said it has developed a proprietary masterbatch color technology that allows usually off-white CD-ROM discs to be produced in vibrant jewel colors, without sacrificing performance qualities. A CD-ROM works by having a laser beam fire through a transparent resin and reflect off a metallic coated layer that has been applied to the disc. Very small amounts of impurity or related particulate in the polycarbonate disc can impair the laser beam's ability to read the data accurately.
Subsidiary company Clariant Taoyuan-Taiwan needed to develop formulations that would allow the passage of laser wavelengths of about 740-780 nanometers, and claims it has done so. It now is working on transferring that technology to DVD production. DVDs present even more of a technical challenge, since the laser beam must be able to read the data at 635 nanometers.
The company claims it is “well on its way to bringing color to DVD production.”
On the financial front, Clariant Masterbatches said strong sales in the Americas could not offset the strong Swiss franc and a weakening global economy that combined to push January-September 2001 divisional sales down 8 percent to SFr812 million ($498.2 million).
Parent Clariant International said that despite a weak third quarter, sales for 2001's first nine months, when measured in local currencies, were flat vs. the same period a year ago. The strength of the Swiss franc, however, pushed corporate sales down 4 percent, to SFr7.59 billion ($4.65 billion). Management said the corporation, which employs 31,500, expects its second-half operating margin to fall below that of the first half.
