“We are definitely in the right region and in the right industry,” added Pan, highlighting both the potential in Asia-Pacific for growth and the potential for polyurethanes to meet the needs of that growth.
Pan suggested that the change of government has had an impact on the economy. He noted that the old government was focused on the quantity of GDP, whereas the new government is focusing on the quality of growth. This, therefore, includes sustainable and lasting expansion, as well as developments that benefit the environment, Pan said. He added that the polyurethanes industry can fundamentally help the government to achieve these aims in two key areas: insulation and automotive.
“Insulation helps energy conservation and that’s really the true quality of GDP growth,” Pan said. In the next ten years, opportunities in insulation will be the “key driving force” for the PU industry, the Huntsman executive added.
In automotive, Pan noted that China is “already the number one car manufacturer in the world” but currently production is mainly for the domestic market. However, Pan predicts that in the next 10 years, China will become an important exporter of vehicles.
“With these two as good examples, this is why I say polyurethanes will perform even better than the GDP,” Pan said.
Teamwork gets results
At PU China, Huntsman focused on two main themes: partnership and innovation. In terms of partnership, the company was joined at its stand by two of its joint venture partners – Sinopec Jingling and Ningwu. “We are very happy to be part of a joint venture,” Pan noted.
As well its work with its co-exhibitors, Huntsman also highlighted the work of its MDI joint venture called Huntsman Polyurethanes Shanghai Ltd (HPS) with Shanghai Chlor-Akali Co. The JV, of which Huntsman has the majority 70% share, is based in the Shanghai Chemical Industry Park in Caojing, about 50 km south of Shanghai. HPS manufactures MDI products such as polymeric and pure MDI, as well as prepolymers, primarily for the China and Asia Pacific markets. Huntsman promoted this partnership as part of its stand at the event.
BASF also partners with Huntsman in MDI in China. Originally, capacity was 240 kt/year, Pan said, with Huntsman having half and BASF the other half. Over the years, this has increased to 320 kt/year, he noted.
Pan added that the company is “very close” to making a final decision on a further MDI investment in the region, though he did not specify any further.
Huntsman also recently acquired a 20% stake in Japanese spray polyurethane foam insulation company, Nippon Aqua Co. Ltd.
Together with Sinopec Jingling – a subsidiary of China Petrochemicals Corp., otherwise known as Sinopec – Huntsman has set up a joint venture company called Nanjing Jinling Huntsman New Materials, which will build and operate a world-scale propylene oxide (PO) and methyl tertiary butyl ether (MTBE) facility in Nanjing, China. The facility, which will use Huntsman’s PO/MTBE technology, is expected to be onstream in the first quarter of 2015.
Pan noted that the facility will have a capacity of 240 kt per year of PO and 700 kt per year of MTBE. A notice board on the Huntsman stand at PU China, said the total investment in the project is 4.7 billion yuan ($770m) and the anticipated annual output value is 8.5 billion yuan.
PO is used in a variety of industries, including the production of polyether polyols for polyurethanes. MTBE is a clean-burning fuel additive that can be used to improve petrol engine performance, which will contribute to improving environmental conditions in China, Pan said.
Huntsman and partner Jurong Ningwu Chemical Co. Ltd presented its polyether polyols joint-venture company Jurong New Ningwu Chemical Co. Ltd. Huntsman has a 30% share in this company, while Ningwu holds the 70% majority stake.
Pan went on to mention that Huntsman is content to showcase its efforts with other companies. “Another thing that is even more unique is that sometimes we are happy to stay as the minority,” he added.
“A local partner has their strengths and we don’t want to take over the whole operations,” Pan said. “We just want to contribute our part.” In fact, Huntsman is Ningwu’s biggest customer with downstream applications for the polyols produced, Pan said, which is why the company is happy to stay as a minority partner.
“We’re always looking for partnerships, especially in China,” Pan said, adding that Huntman is now looking for partnerships in downstream applications.
Huntsman is also making an investment in thermoplastic polyurethanes and the company would commission a TPU plant in Shanghai in the first quarter of 2014. Capacity will be about 6 kt/year, Pan said.
Investment in technology
In terms of innovation, Pan highlighted the opening of the new Asia-Pacific technology centre (ATC), Huntman’s third such specialised research and development site, along with existing technology centres in The Woodlands, US, and Brussels, Belgium. The development of the $40 million facility reinforces Huntsman’s “commitment to China”, Pan said.
“Technology is so important to us,” the executive explained. “You cannot sit in Detroit and wonder what a car should be like in China. You need to get closer to the market, then you know what the customers’ requirements are.”
Pan noted that currently there is an “outside-in” approach, where technology is coming into China. But Huntsman expects that in the future there will be an “inside-out” approach, where other countries will use technologies developed in China. The ATC is a step on the way towards this movement, he said
The ATC has a 400-person technical capacity and currently more than 200 people are employed there. Some 97% of the workforce are local people, Pan said, adding that it is important to have local knowledge and capability “who understand not only the market but who are educated with the appropriate technology.”
The new ATC is 1.5 times larger than the previous technology site in China, Huntsman said.
Pan also emphasised that the technology centre is an Asia-Pacific initiative, not just for China, and he added that half of the requests that Huntsman Asia-Pacific receives come from greater Asia. “We need to listen to their voices and take their requirements into consideration,” he said.
Huntsman Asia Pacific redefines ASEAN region
Nanjing, China -- Huntsman has separated the ASEAN (Association of Southeast Asian Nations) market into two in order to better focus its efforts at driving growth in the region, according to Huntsman’s vice president Polyurethanes, Asia Pacific, Kenny Pan.
Speaking to Urethanes Technology International at PU China in Nanjing, Pan said that the company has decided to look at the region in two parts, the north ASEAN area and the south ASEAN area, to allow it to deal more efficiently with the variations among the countries in the south-east Asian region.
The north ASEAN region includes Vietnam, Laos and Cambodia, while the south ASEAN region includes Singapore, Malaysia and Indonesia, where Huntsman commissioned a systems house in July 2012.
Pan emphasised that Huntsman is committed not only to the Chinese market but to what he describes as the Greater Asia region, which also offers huge potential to the company.
Greater Asia is very important to Huntsman, Pan highlighted. “It evidently a very important part in the future. We see that the growth and momentum could sometimes be even better than China,” he said. But this is partly because industry here is still quite small and therefore growth will appear more marked.
Huntsman has a system house in Taiwan, which supplies the region that Huntsman calls Northeast Asia – China, South Korea, Japan.
The company also has a prepolymer plant and system house in Australia, where Huntsman sees “some good downstream opportunities” in adhesives and coatings for applications such as sports fields.
Huntman has had a systems house in Thailand for some years. In July 2012, the country commissioned a further systems house in Indonesia. These systems houses supply the south-east Asian regions where, in Vietnam for example, footwear is a major application, and in Thailand, the automotive market is very important. “Bangkok is the Detroit of Asia-Pacific,” Pan said.
Referring to the investment, Pan noted: “This shows our commitment outside of China. We don’t only focus on China. We make investments outside of the country.”