Potential North American growth is prompting global polypropylene leader Basell Polyolefins to restart almost 500 million pounds of idled PP capacity next year in Bayport, Texas.
Elkton, Md.-based Basell already operates two PP plants in Bayport, with total capacity of almost 1.2 billion pounds. A third plant, which hasn't been operating since 2001, will resume activity.
``Restarting the Bayport plant is an extremely cost-effective way to add capacity,'' Basell Polyolefins North America President Michael Mulrooney said in an April 24 news release. ``Operating multiple production lines at the same site will reduce unit fixed costs for all three lines and improve our overall cost position.
``While the North American market has experienced little or no growth over the last two years, Basell is currently in a sold-out position and our plants are now fully loaded,'' Mulrooney added.
The Bayport line originally was shut down because of global overcapacity. In North America alone, 3 billion pounds of PP capacity were added between 1998 and 2000. Basell also operates North American PP production sites in Lake Charles, La.; Sarnia, Ontario; and Varennes, Quebec.
Earlier this year, Mulrooney said imports of finished PP products, such as auto parts, toys and film, have resulted in slower North American PP sales. Also, thin-wall injection molding has reduced the amount of PP used per part, he said.
Basell already had announced plans to boost North American capacity in 2008. The firm's Indelpro SA joint venture will open a new 770 million-pound-capacity plant in Altam¡ra, Mexico.
In March, industry analyst Esteban Sagel predicted North American PP consumption will grow, on average, 3.5 percent annually between 2005 and 2011. North American PP capacity will expand at an annual rate of less than 3 percent in that period, said Sagel, who's with Chemical Market Associates Inc. in Houston.
Basell ranks as the world's largest PP maker with total capacity, including joint ventures, of almost 17 billion pounds. It also ranks among the 10 largest polyethylene makers, with annual capacity of 5.5 billion pounds.
Basell employs almost 7,000 worldwide and posted sales of about $14.3 billion in 2006.