Solvay Advanced Polymers LLC is throwing its hat into the high-end PEEK resin ring through a major expansion in India and a new commercial product.
``We're moving into battle on PEEK vs. the dominant player in Victrex,'' President and Chief Executive Officer Roger Kearns said at a recent event at the unit's headquarters in Alpharetta. ``500 tons is a significant investment in the PEEK market.''
The global polyetheretherketone market is dominated by Victrex plc of London. Degussa AG of Darmstadt, Germany, also began producing PEEK at a plant in China earlier this year.
SAP's 1.1 million-pound PEEK expansion is set for Panoli, India, where it bought a PEEK business from Gharda Chemicals Ltd. of Mumbai, India, earlier this year. Groundbreaking will occur by the end of 2006, with commercial production expected to begin in early 2008. In the meantime, SAP will supply customers with KetaSpire-brand PEEK from a semi-commercial operation in Alpharetta.
SAP officials said that the global PEEK market has been growing 15-20 percent per year, with the average PEEK customer using between 2,000 and 4,000 pounds annually. India was chosen as the expansion site because of the staff's familiarity with PEEK and because of the growing Asian market.
SAP also makes polysulfone resins in Panoli and is considering the addition of a new compounding site in China or elsewhere in Asia, Kearns said. An SAP sales office was opened in Mumbai in July.
Eight grades of KetaSpire - including glass-filled and carbon-filled - initially will be available. Modified grades of PEEK also will be sold under the AvaSpire trade name.
KetaSpire offers high crystallinity and oxidation resistance. The material can withstand high temperatures for long durations and also has outstanding chemical resistance, ease of melt fabrication and high purity, according to SAP senior research associate Jamal El-Hibri.
KetaSpire's ability to withstand harsh chemical environments should allow it to find uses in applications for chemical processing, medical sterilization and electronics. The product also has best-in-class fatigue resistance in compressor parts and weight reduction for metal replacement in aircraft and aerospace markets, according to El-Hibri.
The move into PEEK is the latest step in an evolution of the SAP business that began in late 2000 when parent firm Solvay SA of Brussels, Belgium, sent its polypropylene business to BP Amoco plc of London in exchange for BP Amoco's engineering polymers unit. BP had acquired the business when it merged with Amoco Corp. in 1998.
Placing the specialty plastics operations with Solvay also rejuvenated the SAP business, officials said, since BP had made it clear it had no long-term interests in that area.
At the time of the swap, Solvay and BP Amoco also merged their polyethylene businesses.
Solvay then sold its share of that business back to BP in early 2005, effectively removing itself from commodity polyolefins.
The move has paid off financially for Solvay's plastics unit, which generated total sales of 3.5 billion euros ($4.4 billion) in 2005. With polyolefins in its product mix, the unit averaged a 6 percent profit margin each year from 1996-2001. With polyolefins out of the picture, margins improved to 10 percent in 2002-05.
``The result of the shift in portfolio is a margin that is much higher, even with lower sales,'' said Vincenzo Morici, general manager of Solvay's Specialty Polymers unit, which includes SAP. ``We also have more stability, which was a goal of the major change.''
Morici added that PEEK ``will be the backbone'' of SAP's family of SolvaSpire ``ultraperformance'' plastics The SolvaSpire line also includes:
* PrimoSpire-brand self-reinforced polyphenylene, based on technology acquired from Mississippi Polymer technologies earlier this year.
* EpiSpire-brand high-temperature sulfone, a specialty plastic that will be commercialized in early 2007.
* Torlon-brand polyamide/imide, a longtime Amoco product that will introduce new wear-resistant grades early next year.
The target is double-digit growth,'' Morici said. ``We can use PEEK to leverage sales of other materials.''
Taking some time
Given the high-end nature of many applications for the SolvaSpire line, a little patience is needed.
``Longer development time is factored in to our expectations,'' Morici explained. ``Some applications can take 12-30 months to commercialize. It's a rule of the game.''
But at these higher altitudes - where materials are priced at $30-$60 or more per pound - the effect of raw materials is somewhat softened.
``We've got limited impact to fluctuation of feedstocks,'' Morici said. ``Our measured growth driver is replacement of standard materials and lower engineering solutions.''
``There's also limited impact to larger economic factors. For example, the automotive market is down, but our [auto market] is good because we offer more solutions to existing challenges.''
SAP classifies the SolvaSpire line as ``ultrapolymers'' that offer high strength, extreme hardness, chemical resistance, fire resistance and lubricity, according to ultraperformance polymers business director Chris Wilson.
``We're interested in replacing metal, ceramic and glass, not in replacing other plastics,'' Wilson said. ``We can offer the design and processability of plastics with lighter weight.''
A primo material
SAP officials also believe they're pushing the plastics envelope with PrimoSpire, which they describe as ``the world's stiffest unreinforced plastic.''
PrimoSpire has hardness and scratch resistance comparable to metal, combined with metal's processability, said David Thomas, a research and development chemist with SAP in Bay St. Louis, Miss.
The material is comparable to aluminum, carbon steel, stainless steel and magnesium, Thomas said, adding that it also has exceptional flame retardance without a flame-retardant additive.
PrimoSpire ``is self-extinguishing with no smoke, no dripping and minimal effect on the polymer,'' he said. ``It also can be machined with carbide tips without stickiness, which is comparable to metal.''
Potential uses for PrimoSpire include orthopedic devices, aerospace foams, and medical tubing and catheters.
Funding the future
Moving ahead, SAP also will benefit from Solvay's commitment to spend 6 percent of its sales total on R&D each year. SAP currently has 100 R&D employees worldwide.
``We've got a mandate to make more distinctive products with more performance,'' said George Corbin, the unit's vice president of technology. ``We want them to do things no other products in the world can do.''
SAP products outside of the SolvaSpire line include Amodel-brand high-temperature nylon, Xydar-brand liquid crystal polymers and sulfone-based polymers sold under the Udel, Radel, Acudel and Mindel trade names.
Recent applications include Amodel's use in welding helmets and auto air-intake manifolds, as well as polysulfones for auto reflector housings, cockpit parts on the Boeing 777 aircraft and in steam sterilization cases and trays for surgical instruments
SAP operates North American production sites in Augusta, Ga.; Greenville, S.C.; Marietta, Ohio; and Bay St. Louis. Globally, the firm makes its products in Oudenaarde, Belgium; Rheinberg, Germany; and Panoli.
Plastics - including SAP, Solvay Engineered Polymers, fluoropolymers, PVC and downstream joint ventures in plastic pipe and fuel systems - rang up first-half 2006 sales of 1.9 billion euros ($2.4 billion) for Solvay, representing a 10 percent increase vs. the year-ago period. The unit posted sales of 3.5 billion euros ($4.4 billion) in 2005, accounting for about 30 percent of Solvay's total sales.
Although separate totals for SAP are not reported, Specialty Polymers - including SAP - had sales of about 950 million euros ($1.2 billion) in 2006, making up 27 percent of Solvay's plastics revenue. The Specialty Polymers unit's largest end markets in 2005 were automotive and electrical/electronics, each with a 23 percent share. Market-share totals were unavailable for SAP, but officials said no individual end market has a share of more than 15 percent.
Half of SAP's sales come from North America. SAP's Kearns said the region ``still has a very nice growth rate.''