HOUSTON (Oct. 14, 9 a.m. EDT) — The K-Resin business of ChevronPhillips Chemical Co. has worked harder than ever during 2002 — its 30th anniversary year — to keep most of its business intact in spite of a pair of fatal accidents that struck its Pasadena, Texas, plant less than a year apart.
A June 1999 explosion left two dead and three injured in Pasadena, while a March 2000 explosion resulted in another fatality and 69 more injuries. For many in the plastics industry, the accidents stirred up painful memories of the 1989 explosion that destroyed a Phillips Petroleum Co. high density polyethylene site in Pasadena, killing 23 and injuring 314.
Today, just two years after the second incident, the plant is operating at 75 percent of its nameplate annual capacity of 370 million pounds and can be ramped up to full capacity to meet market demand, David Morgan, K-Resin general manager, said during a recent interview in Houston.
Through the outage, Morgan said ChevronPhillips was able to retain more than 90 percent of its customer base through various strategies, although some industry contacts question that claim.
After the second blast, K-Resin staff spoke with customers about extending their existing supplies of the styrene butadiene copolymer by mixing the material with specialty polystyrenes and by using impact modifiers, as well as using K-Resin from a 115 million-pound plant operated by a licensee in South Korea.
“We really worked with our customers to meet their needs,” Morgan said. “Now they're telling us they're glad to have us back.”
ChevronPhillips also worked to rebuild customer confidence by bringing customers to Pasadena for frequent plant tours throughout the rebuilding process.
But industry analyst Vipool Bhatt of Chemical Market Resources Inc. in Houston, remains skeptical of ChevronPhillips' claim that it hung on to its K-Resin base during the outage. Increased competition from new rivals like BASF Corp., Atofina Petrochemicals Inc. and Kraton Polymers LLC resulted in the loss of as much as 40 percent of K-Resin's previous customer list, he said.
“[K-Resin's] customers were looking for other alternatives ranging from PET to polypropylene,” Bhatt said. “In applications like disposable cups, the clarity offered by K-Resin isn't crucial. It will take some time for those customers to come back.”
Morgan counters that his firm's product has performance advantages over competing materials, and that those advantages have prevented competitors from making serious inroads vs. K-Resin.
ChevronPhillips also kept its research and development pipe-line for K-Resin humming during the outage. The result was at least eight new grades of the material for applications ranging from film extrusion to injection molding to thermoforming in the past two years, Morgan added.
In late 2002, Morgan and other K-resin officials are looking ahead to new market opportunities for K-Resin, including aseptic packaging for shelf-stable food and medical products, as well as flexible packaging for photo film.
The merger with Chevron also has increased K-Resin's integration in the styrenics chain through Chevron's styrene monomer production, Morgan said.
In spite of those efforts on the business side, there were other issues to address in the wake of the two incidents. Phillips Petroleum Co., which operated the K-Resin business before merging its chemicals businesses with those of Chevron Corp., was fined more than $2 million by the Occupational Safety and Health Administration for safety violations that led to the accidents. Many of the violations centered around failure to train workers properly.
ChevronPhillips has responded by implementing stringent new safety and training standards, according to Morgan.
“We reviewed the whole process, instead of just grabbing the parts that were directly involved in the accidents,” he said. The new systems include testing and retesting equipment that measures reactor pressure, temperature levels and other crucial factors.
Personnel also were affected by the new measures.
“We made everyone go through recertification and testing on everything from A-Z, even if they had been here for 20 years,” said Morgan. “And some [employees] didn't make it through.”
Morgan declined to specify how many employees were let go after retesting, but he added that external safety consultants and resources were brought in to make sure that safety in the plant was up to the highest industry standards.
For its part, OSHA seems satisfied with ChevronPhillips' safety efforts.
After the accidents, the K-Resin business “changed its culture a lot and involved the labor union more to improve communication,” said John Miles, regional administrator for OSHA Region 6, which includes Texas, Louisiana, Oklahoma, Arkansas and New Mexico.
ChevronPhillips has hired a “safety czar” for Pasadena — a full-time employee who attends to safety details — and the firm also stays in frequent contact with OSHA, according to Miles.
Part of the problem with the K-Resin unit was a lack of communication, Miles said in a recent telephone interview. For example, he said that although the site's engineers knew that a “pinging” sound from a storage tank was an indicator that a potentially hazardous chemical reaction was taking place, the engineers had not shared that information with plant operators.
But things are changing for the better.
“We've recognized other Chevron-Phillips sites for management and worker involvement and for having injury rates below the national average,” Miles said.
“The Pasadena site isn't there yet, but with these new improvements, they may be getting up there with the best in the business,” he added.