SHANGHAI (April 18, 9:50 a.m. ET) — While Evonik Industries AG moves to mitigate the impact of a March 31 explosion at its plant in Marl, Germany, executives in Shanghai announced the continuation of an investment program that will include construction of a nylon 12 plant in Asia.
Completion of that project remains years away, though, so it will not help automakers and suppliers who are working to deal with an expected shortage of nylon 12.
For now, the company is pushing to start production again in Marl.
“We concluded a strategy project recently,” Yu said, “and we want to double our sales in Asia.”
To do this, Evonik is promising to invest 2 billion euros ($2.61 billion) in the region from 2010 to 2015. This will include hiring 2,000 employees over the next few years, the development of the nylon 12 plant and the expansion of the company's Shanghai research and development center.
Last year, the company increased production capacity in China for polyetheretherketone (PEEK) and poly methyl methacrylate (PMMA) molding compounds at production facilities in Changchun. It also doubled production capacity for acrylic molding compounds in Shanghai to 40,000 metric tons. In 2012, Evonik has scheduled the expansion of PMMA capacity in Taiwan to 85,000 metric tons.
“The supply chain has become increasingly important,” said Yu. “We want to increase our sales by local production to 60 percent by 2015.”
Evonik's investment schedule also includes the expansion of the company's capacity for the bio-based Vestamid Terra polymers at the beginning of this year, including an additional compounding facility in Shanghai that will become operative in the third quarter of 2012. The company also announced plans to expand its polymerization capacity in the region sometime in 2013.
Evonik has said suppliers using nylon 12 can switch to its Vestamid Terra materials, which have “much the same” properties as nylon 12. Vestamid Terra consists of nylon 6/10, nylon 10/10 and nylon 10/12 polymers that are made partly or entirely from castor oil.
The Marl plant that was damaged on March 31 makes cyclododecatriene (CDT), which Evonik uses to make laurolactam, a monomer used to make nylon 12.
The plant outage impacts global nylon 12 supplies because the resin was already in short supply, and because Evonik also supplies laurolactam to Arkema SA.
Together, Evonik and Arkema account for about half the world's supply of nylon 12.
The blast killed two Evonik employees and shut down production at what is one of three plants that produce the majority of the world's nylon 12.