ExxonMobil Chemical Co. and its various plastic offshoots are enjoying a successful 2004, and they have products in the pipeline that officials hope will extend growth into 2005.
``The rest of the world started to pick up earlier than the U.S., with the most prominent increases coming from China,'' global polyethylene sales director Irwin Levowitz said in an Oct. 21 interview at K 2004 in Dusseldorf. ``But in the last three months, we've seen our first real [U.S.] growth since '99.''
Houston-based ExxonMobil is one of the world's largest PE makers, so that growth - eight-month U.S./Canadian sales gains of 12 percent in high density PE and 8 percent each in low and linear low density PE - has been welcome. But Levowitz, a 40-year ExxonMobil veteran, pointed out that some key industry dynamics have changed.
``Feedstocks are at record highs around the world,'' he said. ``The U.S. and Canada had been advantaged because of natural gas, but now we're at best at parity with feedstocks around the world.
``What happened was that the [PE] industry had grown on average 5 percent a year through 1999, then we had negative growth in 2000 and 2001 and only slight growth in 2002. That was unprecedented in the industry. At the same time, a lot of new capacity came on, based on that 5 percent growth rate. That changed the supply/demand picture, which now is tightening.''
ExxonMobil is addressing PE capacity issues by partnering with the Chinese government and Saudi Aramco - Saudi Arabia's national oil company - to expand a refinery in Fujian, China. That expansion will include new PE and polypropylene plants and is to be completed in 2008.
An expansion of PE assets at Al-Jubail Petrochemical Co. (Kemya) - the Saudi Arabian firm that ExxonMobil operates as a 50-50 joint venture with state-owned Saudi Basic Industries Corp. (Sabic) - also is under way. ExxonMobil also recently bought out partner Basell Polyolefins' share of an LLDPE plant in France. Longer-term, ExxonMobil recently announced a feasibility study with state-owned Qatar Petroleum for an ethane cracker and derivatives plant in that country.
The North American film market - a major consumer of PE - is recovering along with the economy, but remains in flux to a degree, Levowitz added.
``There's been improvement in demand in those parts of the film market where innovative packaging and new technology do well,'' he said. ``But the whole chain is being challenged by the higher costs of raw materials.
``I think we'll see more down-gauging and more new film constructions as producers look to save on raw material and energy costs.''
ExxonMobil is addressing part of that future need with a new grade of its HTA line of HDPE that's designed to offer better stiffness, barrier properties and processability in PE blends, according to product manager Nicholas McKee.
The new HDPE can be used in high-clarity coextrusion film, conventional coextrusion film and monolayer film.
ExxonMobil also has seen early success with its Nexxstar-brand resin structures for stretch hood packaging. The structures are formulations for combining the firm's Exceed-brand metallocene LLDPE with its Escorene-brand ethylene vinyl acetate copolymer to create a coextruded film that outperforms cardboard as well as resins used in stretch hoods.
Stretch hoods are placed over pallet loads for protection during shipping. Most of the global market still uses cardboard, but the plastic segment consumes about 210 million pounds of resin annually and is growing at a 20-25 percent rate.
Elsewhere, ExxonMobil's Vistamaxx-brand ethylene elastomer unit - which only began production in February in Baton Rouge, La. - will be launching a new grade by the end of the year aimed at melt-blown fiber, market development manager George Racine said.
The new material is expected to find a home in personal-hygiene markets for products such as diaper film.
``There's a lot of pent-up need for elasticity in disposables,'' Racine said.
ExxonMobil's Advanced Elastomers Systems unit also has seen double-digit growth for its Santoprene-brand thermoplastic vulcanizate resin this year, according to global automotive marketing manager Zev Gurion.
Integrating Akron, Ohio-based AES into ExxonMobil - after ExxonMobil bought out partner Solutia Inc. in 2002 - has created cross-marketing opportunities for Santoprene by working with ExxonMobil's existing ethylene propylene diene monomer business, Gurion said.
``We've been able to coordinate our appeal to automotive weather seals and other markets,'' he explained.
New automotive Santoprene grades are in the works, as well as grades designed to improve the material's performance vs. styrenic block copolymers in grips and other soft-touch applications.
Total ExxonMobil Chemical sales were up 33 percent to $25 billion in the first nine months of 2004, representing 12 percent of total sales for parent Exxon Mobil Corp. in Irving, Texas. The chemical unit's profit also more than doubled to $2.2 billion when compared with the same period in 2003, equating to 13 percent of the parent firm's total profit.