Nova Chemicals Corp. is working to build its business in the building business.
Since late 2005, Pittsburgh-based Nova has formed two construction-related joint ventures and introduced several new expandable polystyrene grades for the building and construction market.
``Building and construction is a high-growth market with plenty of room for new technology in both the short-term and long-term,'' Nova building and construction Vice President Tony Torres said in a recent telephone interview.
``Between 2000 and 2030, North America is going to need 213 million square feet of new office space. At $100 per foot, that's a $20 trillion market and $800 million per year,'' Torres added. ``What's important to us is not just looking at the market as an EPS producer, but finding ways to redesign how we can profit from technology.''
The first joint venture - Novidesa SA de CV - is a 50-50 effort between Nova and materials firm Grupo Idesa SA de CV of Mexico City. Novidesa is converting solid PS to EPS at a site in Apizaco, Mexico. Most of the venture's output is being sold into construction and packaging markets.
The second venture involves Dietrich Metal Framing, a maker of light-gauge metal framing also based in Pittsburgh. The 50-50 deal aims to develop and manufacture durable, energy-saving composite construction products and systems using both steel and EPS. A production site for the new products will be named in early 2007, Torres said. Dietrich operates 26 plants in the U.S. and Canada and is a unit of Worthington Industries of Columbus, Ohio.
In March, Nova also commercialized new grades of EPS with low pentane levels. The Ultra Low product line is aimed at a number of construction products including geofoam, roofing, insulation and structural insulated panels.
Nova followed up in July by launching enhanced EPS grades for insulating concrete form applications. The new grades have improved dimensional stability and flexural strength, officials said.
``The cohesive strength of the EPS bead is higher'' for construction uses, Torres said. ``EPS has lower density and thickness and lighter weight, whereas concrete can blow out at the bottom of a larger, thicker form.''
Nova also has invested in downstream machinery innovation, where it's working with partners to develop machinery systems that showcase uses for its resins in construction and other markets.
``A lot of converters and mid- to small-sized companies can't design a new machine,'' Torres said. ``So we've introduced machines into the market that didn't exist before.''
``It's a strategy undertaken based on the fact that machinery companies used to do a lot of research, but as they got squeezed, they passed the cost upstream. Converters couldn't afford it, so machinery has become a commodity with little change,'' Torres said.
Even if the housing market continues to slow, as some market watchers expect it to, he said contractors and developers still will be interested in new technology.
``In a slow market, developers have the available capacity to try new things because they're underbooked,'' he said. ``A slowdown is better for our new technology than worse. Customers can shift to new products so they'll have better products when the market ramps back up.''
Nova ranks as one of North America's largest makers of PS, EPS and polyethylene. It posted sales of $5.6 billion in 2005.