GUANGZHOU, CHINA — Royal DSM is spending Chinaplas rounding out its lineup of engineering plastics.
On May 21, the company's DSM Engineering Plastics unit added polyphenylene sulphide to its menu, thanks to a joint venture with Zhejing NHU Co. Ltd., a publicly traded specialty chemicals company based in Xinchang, China.
NHU will provide the venture with PPS polymer manufactured in Zhejiang, China, and DSM will take over NHU's PPS compounding operations there. The PPS compounds, with the trade name Xytron, will be available to DSM's global customers — the JV is not just focused on China.
Roelof Westerbeek, president DSM Engineering Plastics, said PPS compounds will complement DSM's existing lineup of engineering plastics, which include nylon 6 and 6/6, as well as heat-resistant Stanyl nylon 4/6.
“Polyamides and PPS have a very complementary performance portfolio,” with the materials used in the same end markets, like automotive and electronics, but with very little overlap, Westerbeek said in a news conference at Chinaplas.
He was particularly enthusiastic about growth opportunities for PPS in applications like electric-powered vehicles and miniaturization in electronics.
“PPS as a material, as a chemistry, has a growth rate that is well above the growth rate for other materials,” Westerbeek said in an interview with Plastics News after the announcement.
Financial terms of the deal were not disclosed, and the companies declined to disclose information on the capacity of the new venture. But DSM will own 60 percent of the venture, which is called DSM NHU Engineering Plastics (Zhejiang) Co. Ltd., and NHU holds 40 percent.
NHU started making PPS polymer in September 2013, with an initial capacity of 5,000 metric tons annually. By 2019, it expects to reach capacity of 30,000 tonnes annually. NHU officials noted that much of that capacity is currently aimed at fiber and extrusion end markets. The new joint venture will target higher-end applications, with injection molding grades for the automotive, electrical/electronics and industrial markets.
By working together, DSM and NHU expect to offer compounds to those key end markets faster than either one could have on its own. If DSM were to start a PPS business from scratch, it would take five to 10 years to get to the point where NHU is now, Westerbeek said.
Bai Shan Hu, CEO of NHU, said his company has not been able to enter the high-end PPS market yet, but he believes that the joint venture will quickly win customers in key sectors like automotive.
“We are very ambitious,” he said, but added that the venture has not set a market share goal.
The companies' parent firms have notable similarities — both are active in both advanced materials and life science products. Both companies are publicly traded — NHU was the first enterprise listed on the Small- and Medium-sized Enterprises Board in Shenzhen. The joint venture deal is subject to anti-trust and other approvals, and the companies expect the transaction to close within a few months.
Westerbeek called the JV “a very important step in the further development of both companies, and the further development of the engineering plastics portfolio of DSM.” He added that it was a “unique opportunity” to “combine the strength of a very high-quality respectable Chinese company with an international company.”
Hu said NHU sees DSM as a role model, adding: “We have a lot to learn from DSM. I think the two companies have a shared value that is focused on innovation.”
Delivering on a 2013 plan
Westerbeek noted that Singapore-based DSM Engineering Plastics said in 2013 that it had two goals: to strengthen its nylon portfolio and to broaden its specialty portfolio. At Chinaplas this week, it announced plans to do both.
In addition to the PPS joint venture, on May 20 DSM announced a global strategic alliance with Ascend Performance Materials Inc., under which Ascend will supply nylon 6/6 base polymer as raw material for DSM's Akulon-brand nylon 6/6 compounds. In addition, DSM will distribute Ascend's nylon 6/6 compounds sold under the brand name Vydyne.