Charlie Crew is heading to the K show for the seventh time in his career. And it's just as important to him this year as it was the first time he attended.
The K show is the biggest and most technologically advanced display for our industry, said Crew, president and CEO of engineering resins leader Sabic Innovative Plastics US LLC. We want to show the confidence that we have in the industry and that we're committed to it.
In a recent phone interview, Crew said that his Pittsfield, Mass.-based firm will emphasize sustainable products at the international trade show, which opens Oct. 27 in Dusseldorf, Germany.
We've done a lot of work in that area and there are more opportunities for sustainability occurring across several industries, he said. Consumer companies are trying to market sustainable products. It's a good marriage and we're committed to it.
Khaled Al-Mana vice president of polymers with Sabic IP's parent firm, Saudi Basic Industries Corp. of Riyadh, Saudi Arabia agreed that the K show is a good platform for [Sabic] to emphasize our strengths, and an opportunity to communicate with our customers what we've achieved so far.
In a pre-K conversation, Al-Mana and Crew each provided updates on their businesses and where they see the broader market heading.
Sabic already ranks as one of the world's largest polyolefins makers and has continued to grow in 2010. The firm has taken advantage of its low-cost position with natural gas feedstock to add more than 3.5 billion pounds of polyethylene capacity this year at a pair of joint ventures within Saudi Arabia.
Sabic's Saudi Kayan joint venture also has added almost 800 million pounds of polypropylene capacity this year, and will add almost 900 million pounds of high density PE capacity next year and almost 700 million pounds of linear low density PE capacity in 2012.
The firm also is increasing capacity in Europe, adding almost 600 million pounds of HDPE capacity at a plant in Germany and almost 900 million at a plant in the United Kingdom. In China, Sabic is adding more than 2 billion pounds of polymer capacity and almost 7 billion pounds of capacity for related products through its venture with Sinopec.
Polymers is a global business, and China consumes more plastic than any other country in the world, Al-Mana said by phone.
Southeast Asia also is a big market and Europe is a key market for us, he added. There's long-term growth for central and Eastern Europe, which are emerging markets. Russia and Poland are new markets where we've made significant inroads.
Al-Mana, a 17-year Sabic veteran, described North America as an increasingly important market for Sabic where some of its materials are available through direct sales or through e-commerce.
New materials from Sabic's polymers unit include PP grades for thermoforming that can create products that are 10-15 percent lighter, and eco-friendly HDPE that incorporates recycled material but still can be used in food packaging with no changes in taste, according to the company.
On the growth front, Al-Mana said Sabic which bought a polyolefins unit from DSM NV in 2002, and bought GE Plastics [the current Sabic IP] in 2007 is looking for any opportunity that makes sense for us, but growth doesn't have to be through acquisition.
We've seen success and results through cutting-edge technology and the global growth of the packaging market, he said. The future looks even brighter. We'll continue to innovate.
Crew, who joined GE Plastics in 1977, said the North American engineering resins market is better in 2010 than it was last year.
I think now what we're seeing is true demand instead of inventory replenishment, he said. But even there you've got to be careful about how you look at it, because customers are carrying lower levels of inventory.
Crew added that he expects the North American auto market to be strong through the balance of 2010, with production of 11.5 million vehicles within reach. Sabic IP has been somewhat surprised by a recent boost in demand for parts and materials used in larger vehicles such as pickup trucks and SUVs.
Transportation in general has been pretty good for us this year, Crew said. We've even seen improvement in the rail market and growth in environmental markets like solar, where our materials are used in junction boxes and frames.
In aerospace, we're also seeing market growth in internal cabinets and other parts where customers are looking for weight and costs savings.
The medical field remains a sizable growth market for Sabic IP, Crew said, thanks to products such as home health-care devices, where the firm has seen more opportunities to work with major medical-device makers.
But he admitted that the North American building and construction market has been a bit of a disappointment in 2010 and that the sector has yet to rebound.
Crew described global supply and demand for polycarbonate and other engineering resins as balanced, although some pockets remain where commodity and engineering resins are in tight supply because of raw material supply. For Sabic IP, short supplies of butadiene and fiberglass created challenges earlier in 2010, but the situation in both of those materials is better now.
Sabic IP has been careful to keep its production in line with customers' needs in 2010. The firm recently expanded compounding capacity in Nansha, China, by 30 percent and expects to put more there according to Crew, because of strong demand for Chinese-made consumer products and goods.
Crew declined to comment on rumors that Sabic might be looking to acquire Ashland Distribution, a major North American resin distributor. Sabic IP and Ashland entered into a distribution deal in early 2009 marking the first time Sabic IP worked with an outside distributor in North America.
Ashland is a key distributor for us, and we look for that to last a long while, Crew said. They've got a world-class network.