by Liz White, UTI editor
Perstorp's long-awaited expansion in caprolactones at its Warrington, UK, site is coming on stream in the third quarter of this year.
The Swedish company expects the plant to start running towards the end of July, and to add regular commercial business in September, said Marten Olausson, manager of Perstorp's caprolactones business unit.
"Lead times are very long and inventory levels low, so it will take some time to build up the stock," said Olausson.
The extra capacity will be welcome news for caprolactone users: Olausson said the market has been tight since 2006 when Dow decided to close its US peroxymerics plant, and stop supplying caprolactones. "From that point the market has really been short," Olausson added.
Dow's exit left only three caprolactone suppliers: Solvay (the Capa business which is now Perstorp's); Japanese group Daicel: and German giant BASF.
Perstorp bought the Warrington business in 2008, after French group Solvay decided it was not a core business Now the caprolactones unit has a home with someone prepared to invest and grow the business, Olausson said.
For Perstorp, with major business in coatings materials and in isocyanates for the PU sector. The Capa business is a very good fit.
After signing the deal, Perstorp rapidly announced its intention to double capacity, keen to send the right message to the market: "Dow, the biggest player, had closed its operation, and the no 1 player in the market, Solvay had sold. Customers needed some reassurance that this was a product the manufacturer had confidence in," Olausson continued, in a 12 May telephone interview.
"We wanted to prevent any snowballing effect. Since it was obvious that there had been some substitution in the marketplace by other materials," Olausson added.
The plans suffered during the recession as all sectors saw a sharp fall in demand. But, Olausson emphasised, "We have seen a fantastic rebound. In 2010 our sales were higher than ever before."
Perstorp also debottlenecked the plant, "trying to keep the market satisfied," and that sold out very quickly, Olausson said.
Growth in the PU sector generally is probably at 5-6 percent: Perstorp's ambition to grow the Capa business faster than that, Olausson said.
Solvay's original caprolactones unit had 15 kilotonnes per annum capacity for monomer. "Clearly this has slightly improved, and we are now doubling it, but we don't want to give an exact figure out," Olausson added.
Olausson commented that with strong growth for caprolactones, "we foresee there is likely to be the need for more investment going forward." He also believes there is a case for broadening the manufacturing platform."
Any market needs a number of players to supply into it," the Perstorp executive added.
Olausson gave a market size for caprolactones of in excess of 50 kt/year ... "Production is somewhere in that range."
But it is hard, he noted, to give a figure for the size of the market because producers such as Perstorp make different products using the monomer. "We make various polymeric versions using the monomer and an initiator," so Perstorp sells into the market more than it makes as monomer.
According to Olausson, Europe is Perstorp's No l market, making up "perhaps 40-45 percent of the total market." North America forms around a third of the business and Asia is slightly smaller,” he added.
"We do see strong growth in Europe and a good growth in North America, with the Asian market the one growing fastest."
Olausson agreed that growth in TPUs and in Capa is high in China. "Demand for caprolactones is quite small still in the new tiger economies of SE Asia. Growth is stronger and demand higher in the more developed northern parts of Asia -Japan. China, Taiwan."
Some areas - South America, the Middle East and Africa "are still small markets for caprolactones," Olausson said, noting that Brazil has a relatively large market for TPUs and also for Perstorp's thermoplastic dial Capa TP used in footwear.
Capa TP is formed by converting the monomer into a high molecular weight molecule, "sold into the shoe industry around the world, as a hot-melt adhesive," he said.
Outlets for caprolactones
Olausson said roughly a quarter to a third of Perstorp's production is sold as monomer into the merchant market. "The rest we convert into polyol destined for PUs - mainly CASE (coatings. adhesives, sealants. elastomers)."
The thermoplastic materials go mainly into hot-melt adhesive uses, which exploit the low melting point of the material of 60°C - very low for a thermoplastic, Olausson pointed out.
The product lends itself to a lot of interesting chemistry: the lactone ring structure, "opens itself ... in the presence of a catalyst so you get poly-esterification of anything that you start with." From a dial, "you get a longer chain polyester, which is a dial. You increase the chain length, but still have the same functionality."
Also the reaction creates no water, because it is not a typical condensation reaction as, for example, with hexanediol and adipic acid.
Benefits of caprolactones include enhanced hydrolysis resistance, good abrasion resistance and high impact strength: "these are areas where you see advantages ... in your polyester poIyoI systems."
Another benefit is relatively low viscosity, giving better process eff iciency when using the TPU to make products. "Low viscosity also plays well in PU coatings, as less solvent is needed," contributing to better environmental acceptability, the Perstorp manager said.
Caprolactone polyols compete with adipate based polyester polyols and in some PTMEG (polytetramethylene ether glycol) outlets, Olausson said. "Because the Capa materials are polyester polyols, that's where we see most of the overlap," he added.
Perstorp's customers for caprolactones are the well-known specialist prepolymer formulators for cast elastomers, and the big players in the TPU and coatings sectors. "They are not using our products in every material but in those where Capas give them benefits, and add value," commented Olausson.
Caprolactone monomer is also sold into coatings for various uses, in acrylic automotive top coats, and electronics coatings where it is added to the resin for impact crack resistance.
Excluding those sales, roughly half Perstorp's Capa sales go into elastomers, with coatings at 30/35 percent and adhesives at 15/25 percent.
Perstorp has its roots in the coatings business. "We sell into the alkyd market and the polyester resin market for powder resins," Olausson said, so its materials are used in different types of resin technology. The Capa business is one leg for Perstorp there.
Urethane acrylates, which are powder coating reins, are made using Perstorp's neopentylglycol.
And it has the isocyanates business, selling more to the PU paint formulators, said Olausson. A lot of applications are for the user who wants to spend a little more to get something extra, said Olausson, noting one area of interesting growth - paint protection films for automotive top-coats
In medical uses, Olausson said Perstorp does not market the products for in-vivo applications, but noted that there are hundreds of patent where the thermoplastic materials used as tissue/bone scaffolding and it has outlets also in slow-release medical uses.
"In medical devices we sell the material for orthopaedic splinting," used currently to replace Plaster of Paris casts. Here the material is simply warmed and moulded to the relevant limb to keep it in position while the damage mends.
It is also used in radiology for cancer treatment, for example, again to immobilise the part of the body which needs irradiating.
COLD CAUSES FORCE MAJEURE
Perstorp announced two force majeures in caprolactones at Warrington last winter, both related to exceptionally cold weather. The first incident was directly caused by freezing, and Olausson said the most recent one was caused by an item of equipment which was affected then, but not detected at the time.
Perstorp has taken steps to prevent such failures recurring. "No one had expected the sort of temperatures the UK had this winter," with prolonged periods of sub-zero temperatures day and night, Olausson said. Those conditions are, "Not what this plant was designed for."
PRICES TOUGH
Caprolactones are part of the same value chain as hexanediol and adipic acid and other materials for PU, so essentially they use benzene, said Olausson. "I don't think I've ever seen a major commodity feedstock that is so volatile in pricing as benzene, so that of course is an issue for us," he commented.
While pricing stability is something the group has always tried to maintain, Olausson said that the "unprecedented spike" in prices in the last six months has caused Perstorp to raise price throughout the year - with more stability latterly.
