Prospects for the PU sector are good, amid concerns on pricing volatility and the Eurozone crisis
By Liz White
The polyurethanes industry is back on track as a highly technical, innovative sector, which has strong growth prospects as a result of its versatility and ability to offer customised solutions for problems.
That was the message from many exhibitors UTI spoke to at the UTECH Europe 2012 event, held in Maastricht, The Netherlands, 17-19 April.
"It's a wonderful material," and there is "always excitement to see what you can make with it," with strong prospects for rigid PU insulation as world demand for cutting energy use gets more and more crucial, Uwe Hartwig, senior vice president for BASF Polyurethanes, told UTI, in a 17 April interview at the meeting.
"I'm a strong believer that the future for PU is bright," as a result of its versatile nature, its solution-providing ability. "You can make things happen with urethanes ... If you have a problem, I can make the solution with PU," Hartwig said.
At Evonik Industries, Tammo Boinowitz, senior vice-president for the comfort and insulation business, referred to Hartwig's comment from his UTECH conference plenary presentation, that polyurethanes are "really chemistry at the customer site." Boinowitz said: "This is something that we all know, but it's good to have it pointed out clearly."
Polyurethane chemistry provides great versatility: "Having the PU value chain of raw material commodities, additive specialties, systems houses and foam processors, creates space for a lot of new ideas and tailored solutions," he said.
Meanwhile, Hartwig also observed negative pressures: "I think economy wise, the financial problems, the Euro crisis and the US economy's issues in the building sector and so on - that all affects PU for sure." The question here is "how long this goes on - and how quickly we can get innovations into real mass-use large-volume production," he said.
Commercialisation can be slow
While BASF and other players have "nice developments," Hartwig emphasised that they take time to get into the world, "four, five or six years or more to get to a certain volume." Here he quoted under-bonnet engine insulation as an example. The idea is to keep a vehicle's engine oil warm overnight, avoiding the high energy burden of warming an engine up from cold. The concept has been around for perhaps ten years, and is only now getting into series production, Hartwig commented.
Nevertheless, "I see no reason why the PU industry would not grow in the next ten years as it has the last ten years. Really I am very optimistic," the BASF executive said.
Meanwhile volatility in pricing and margins remain strong influences.
Thus challenges seen by Nick Webster, Huntsman's European vice president for polyurethanes, include pressure on margins, with volatility and extremes of raw material pricing "really tough to deal with."
Huntsman has to earn enough to pay back on investments, to reinvest, and the sector has to find a way to deal with this, to get the right earnings level, he emphasised.
For MDI (methylene dipheny diisocyanate), whose main raw material is benzene, prices used to be given quarterly, but it is now on monthly contracts or even bought on spot prices, of somewhere between a day and a month variation, Webster pointed out.
Customers are not used to such pricing structures. "We've grown in a world where things were slower paced," he said.
Hard to absorb huge swings
At Dow Polyurethanes, Jon Penrice, head of the European formulated systems business, agreed: "Prices swinging 1-2 percent is one thing, but swinging as they have been 30-40 percent, within a quarter ... that's a different thing for the speciality business, it's hard to absorb those huge swings."
And although for systems, pricing is based on value, "we do have to protect our margins," Penrice added.
Hartwig made similar comments: "I think 2006 was the last year when I remember a stable supply/demand and pricing level." After that we were "heavily over optimistic"- up to 2008 - then the crisis followed, and "now everyone is over-wary."
In crude oil, fuel, benzene, toluene, propylene, "raw material prices have risen 30 percent in a year. This makes all industry layers insecure," Hartwig commented.
In the crisis everyone also realised that and "our inventory levels were too high. ... So now, if the market goes up, all stock is used ... there is no material availability when demand rises."
The sector has seen this in the last weeks, he said, remarking on the extreme cold in the first week of March, when temperatures in Bulgaria fell to -38°C.
"And now, on 17 April, only five weeks away, ... everyone is producing like hell and demand in construction tremendous and we see tightness in MDI and TDI," Hartwig said.
Volumes have not been removed, just deferred, and demand is high again also for polyols, said Hartwig, adding that TDI issues during the cold weather for plants in France and Hungary mean that "TDI is suddenly short."
"The whole value chain is challenged by this volatility," which goes side-by-side with changes in contract lengths, he said.
BASF wants "intense dialogue with customers, because of the urgent need in daily business to discuss demand and material availability. ... Where once there were quarterly contracts, today, today a quarter is a long time," Hartwig commented.
The picture from Wanhua Industrial Group, chairman Jiangsheng Ding was similar. He said that MDI supply and demand seem now to be quite balanced, but agreed that in the first few months many players experienced maintenance issues.
Ding also commented that raw materials pricing issues are creating margin pressure for PU producers. Ding feels the "bulk of the price increases may be behind us," moving further into 2012. But he agreed that prices of raw materials are high, and he noted that supply chain destocking has been a strong influence.
At UTECH Europe, customers were being relatively optimistic, said Huntsman's Webster, noting that insulation demand is good, with new building and renovation big drivers. Also, some parts of the automotive sector, especially the German business, are still having a good run, he commented.
Huntsman is also doing an increasing proportion of business in Eastern Europe, Russia, the Middle East and India, Webster said.
"This year feels as if it is a re-run of last year," Webster said, with relatively mild winters. And he sees signs that Q2, 2012 will be good now that economic concerns from Q4, 2011 have been dealt with or ring-fenced.
Growth prospects good
BASF also sees "very positive prospects for 2012 for PU - with a lot of differentiation," Hartwig said. For example, it is no longer possible to say that the automotive industry in Europe is doing well, that would be an over-simplification, Hartwig said. German OEMs have high exports and are doing well. But the French and Italian auto sectors are not doing so well.
Also, Spanish construction is still completely down, and the country has very high unemployment, especially amongst young people. Hartwig has heard of smaller systems houses in Spain close to bankruptcy, because there is no market.
At Momentive Performance Materials, Tony Lanchak, head of the company's urethanes additives division, said he sees the emerging markets as having taken the biggest hit in the most recent downturn.
As others commented, last year was a tale of two halves, with a "really phenomenal first half," then a drop-off in the second half, "more significantly in India, China, Brazil, but they are now doing better," Lanchak said.
Lanchak sees North America as holding its own, although for Momentive it is tough to tell if the economy is doing better or whether "some of the new stuff we are doing has kicked in." He believes Momentive will see sequential growth through the year.
In the US, the automotive sector is doing well, while construction is more mixed, with the sale of second homes not doing so well. GM and Chrysler are selling strongly and the "new domestics," the Toyotas and Nissans, are also coming back, Lanchak said.
Like Hartwig, Lanchak sees a mixed picture in Europe, with Poland and Germany bullish, the UK reasonably so, while southern Europe is not so good - with France "poised to turn in either direction," said Lanchak.
Eastern Europe seems to be going fine, and Russia is doing well, Lanchak said. "We have grown our business well there from a very small base," he added.
At Dow, Penrice also sees Russia developing well. He claims Dow Polyurethanes is market leader here with the systems business it bought in Vladimir and expanded.
Dow also sees the Brazilian PU market as very positive, with the Middle East "an immediately target for growth, and longer term Africa will be a focus," Penrice said.
While Africa is a very small market today, "you only have to look at the number of people there," to see that GDP will grow, Penrice said.
Echoing this, Hartwig said he thinks increasing access to the internet means Africa, "will become much more demanding, and desire the consumer goods, mattresses to sleep on, refrigeration for food that its sees the developed regions having."
For the moment, the Arab Spring and the accompanying unrest has "not helped business," in the region, but he sees strong prospects longer term.
Most commentators made the point, as Hartwig did, that polyurethane suppliers must be well positioned in the emerging regions, including Eastern Europe, to take advantage of growth.
Evonik's Boinowitz also noted a big shift towards manufacturing in Eastern Europe, for example of one-component foams, with Poland also now Europe's biggest producer of flexible foam. "This creates some interesting dynamics within the industry," Boinowitz said.
Boinowitz said Evonik is "cautiously optimistic" for 2012, said He feels "Europe and North America are presently developing well," although like other commentators, he noted differences across Europe.
In developing the insulation business, clearly the EU is striving for higher energy efficiency levels, Hartwig said, although, "PU is not overly supported recognised in regulations." Hartwig noted that in 2019, the EU codes will be at PassivHaus levels and he feels there are striking arguments for PU use, and thus great opportunities for PU insulation in the building sector.
ISOPA is playing a role in this, with its PassivHaus project in Brussels, to demonstrate the properties of PU. "This is a very important step, to convince legislators, with visible evidence of PU's ability to offer a comprehensive solution." And it is in the right place, only a half-hour drive from the EU parliament, Hartwig stressed.
Boinowitz said "If you walk around the fair here, you see many prototypes of panels, refrigerators, and pipes," that show the possibilities with polyurethanes and represent a way of moving the industry forward.
In terms of increasing demands for energy efficiency, Boinowitz said this results in demand for better performing insulation materials. "Not only does the demand for insulation materials rise, but the share of that insulation market shifts more toward better performing polyurethane foam," said the Evonik executive.
"For me, this demonstrates the room for innovation in the market and growth of the industry," Boinowitz said. Such growth results not just from consumer demand for more products - cars, appliances, houses - but also from demand for better performing products, "which creates an encouraging outlook for the industry as a whole."
China an important influence
Wanhua's chairman Ding gave his insights into China's continuing maturation, and the potential for China's huge domestic PU raw materials production to become an export hub, in a keynote presentation at UTECH Europe.
In a separate interview, Ding told UTI that when the financial crisis from 2008 reached China the government probably used too much stimulus, and has now pulled back on these packages. [In early June, however, reports indicated that China's government may reinstitute automotive incentives. - Ed].
Ding said as a result of the crisis, China's government strengthened its monetary policy, and cut back on easy access to credit, aiming to prevent a potential crisis involving an asset or housing bubble and local government debt.
Automotive growth in China has slowed, Ding commented, and this is partly because of the follow-on effect of the Government stimulus packages, which were "pre-harvesting future demand," the Wanhua executive thinks.
Meanwhile, Evonik's Boinowitz made a comment echoed by other commentators: that a slowdown in China is "only slower in the sense of reduced growth. We are still seeing good opportunities in this region for the polyurethane industry," he said.
One area destined for growth is insulation, where the marketplace in Asia generally is continuing to realise the economic value of increased insulation performance in buildings and appliances, Boinowitz said. Also it is showing growing recognition of the health and comfort of the consumer in automotive and furniture applications.
Concept products: a valuable route
BASF has been making concept products, including trainers and recently a refrigerator almost entirely from polyurethane - as highlighted at UTECH Europe.
Hartwig feels such practical steps are of great benefit to designers, who struggle to translate pictures in brochures into their own vision of the next generation of fridges, for example. "If you can show them a concept product, that makes a real impact," he said.
The idea is not to compete with BASF's downstream customers, but to "really enable designers" allowing them "to touch, feel, smell the product," Hartwig said.
Two years ago, BASF came up with the idea of making a concept fridge and worked with the Mr Shelf company, to try to replace all the other parts of the fridge, the metal, polystyrene and so on, with polyurethane parts.
"We wanted it to look different, to really attract people's attention," he added. Mr Shelf's concept was to make the fridge part of the new kitchen lifestyle, where the trend is to open up the kitchen;.
The Coolpure 1.0 model was the result. This large fridge has a freezer compartment that people can sit on - so the appliance becomes part of the furniture.
The project opens the eyes of designers. With steel-bodied fridges, painting the surfaces white has been the tradition, Hartwig noted.
"But today we have technologies where you can design your own surface, with a foil and then if after two years you don't like it you can change again," he explained.
Coolpure 1.0 shows the design freedom possible, making fridges more glamorous, according to BASF.
It uses Elastoskin for haptic properties - an effect which is now being more widely exploited in furniture.
The insulation includes vacuum panels with a novel way of fixing them in place. BASF also used a thermoplastic polyurethane (TPU) film for the outer skin, TPU for the shelves, and a foamed TPU for the gaskets.
"We see good revitalisation of spray foam," as an easy way of renovating building with polyurethane: "I think we have good opportunities here," Hartwig said.
BASF launched a new spray foam system last year, called Walltite, a technology which brings value to customers because of BASF's strict demands for applicators to adhere to codes and have accredited training.
With rigid foam, Hartwig said the PU sector has gone as far as it can in using traditional methods to reduce the cell size of closed cell foam to give better insulation.
"Even with all the best additives, we have come to an end of this development with normal foaming technology," he said.
The industry needs to think in a new direction, and use different techniques - vacuum panels and nano technology, he said.
New production processes will be needed, because "foam cell size will be so small, you cannot make it in traditional equipment."
"We believe this is not a small incremental change, it is a game changer," emphasised Hartwig, without revealing further details of BASF's technology. The development is at a laboratory scale now. "It will be two to three years before such nano-particle technology gets into production," he revealed.
China TDI unit on hold
While Wanhua Industrial Group is pushing ahead with its MDI expansion plans in China, it has put plans to set up a 300 ktpa TDI plant on hold.
Yantai Wanhua has permission to build a 300 ktpa TDI plant at its new Yantai complex. But Jiansheng Ding, chairman of Wanhua, told UTI in a 17 April interview at UTECH Europe in Maastricht, The Netherlands, that the company wants to be a responsible supplier to the polyurethanes industry. "We have to look at market demand as a key indicator: market demand is such that there is overcapacity still. Today more TDI capacity is not needed," Ding told UTI.
The group's MDI plant at Ningbo is now running at 800 ktpa capacity, while the Yantai plant is at 220 ktpa. Wanhua plans to raise capacity at Ningbo to 1.2 million tonnes, by debottlenecking, said Ding.
At the new complex being built to replace the one in Yantai, MDI capacity is planned at 600 ktpa.
The Wanhua BorsodChem facility in Hungary has MDI capacity of 240 ktpa, and total TDI capacity of 250 ktpa, although it is currently only operating its second, newer, TDI unit of 160 ktpa, which started up at the end of last year. BorsodChem can raise capacity of this plant to 200 ktpa if needed.
Ding said that Yantai Wanhua reserves the right to restart the older facility, noting that, "such decisions are all market driven."
Wanhua also started a 15 ktpa plant for hexamethylene diisocyanate (HDI) monomer in March. This plant, using gas-phase technology, produces "exceptional quality" material, Ding claims.
Aliphatic isocyanates are critical ingredients for future downstream water-based coatings - an area Wanhua is focussing on, said Ding.
In propylene oxide (PO) Wanhua has licensed PO/MTBE technology from Huntsman Corp., and Ding said a 240 ktpa plant is under construction now, with start-up planned for the end of 2014.
This will help Wanhua - it will be "the other 50 percent of the PU cake," to allow it to serve its customers with a full range of products. Wanhua already has a polyol plant in Ningbo and will make more, in line with this new PO capacity, said Ding.
UTECH success confirmed
Exhibitors, visitors and conference delegates at the 11th UTECH Europe exhibition, held in Maastricht, The Netherlands 17 -19 April, all confirmed the success of the event.
Held in the year the industry celebrates 75 years since Otto Bayer's initial patent marking the advent of polyurethanes chemistry, UTECH Europe 2012 attracted 160 exhibiting companies, a 14-percent increase from the previous event in 2009.
Visitor numbers were also up by about a third at 3561 for 2012, confirming UTECH Europe's premier position in the calendar of global polyurethane events. These visitors came 86 countries, highlighting the global reach of the polyurethanes industry. The UTECH Europe conference welcomed 519 delegates this year, an increase of 27 percent from 2009.
BASF: low cost TDI process
BASF's recently announced project to build a new 300-kilotonnes-per-annum plant for TDI (toluene diisocyanate) in Europe "was well thought through," said Hartwig.
And while BASF and BMS are both building 300 ktpa facilities, they are also consolidating capacity and replacing old plants, so the total added capacity from both projects is perhaps 400 ktpa.
"BASF has a target to be very competitive in production," said Hartwig, pointing out that its current European TDI plant in Schwarzheide "goes back to East German times." It was a 40 ktpa plant, reshaped to 80 ktpa, and "the cost structure of that is different to that of a new world-scale TDI plant."
"If you want to be successful in good times you have to be competitive in bad times," Hartwig said, noting that some players in TDI suffer high production costs, but BASF in Europe will be in "an excellent position in terms of cost structure."
It is also important to remember that, "Europe does not disappear from the PU market - despite an apparent focus on Asia and China."
Growth in PU is still expected in Western and Eastern Europe, in the Middle East and Africa, Hartwig said. In Eastern Europe, BASF has recently added systems houses in Slovakia and Poland, and in the Middle East, it has just set up a systems house in Dubai, to handle the growth there.
Hartwig believes the impetus for change is "much quicker in, say, Africa than it was in previous generations, as the internet reaches all parts of the continent," and people see how other parts of the world live. PU foam mattresses will help meet the basic needs of people in those regions, he said.
As a result, he is a "strong believer that the added TDI capacity will be quickly taken up."
Dow: Saudi unit strategic
Dow's new systems house in Saudi Arabia with Juffali Chemical Products Co. is in "a strategic market for us because of our big investment there," said Penrice, referring to Dow's huge Sadara joint venture with Saudi Aramco, part of which will make MDI, TDI, propylene oxide and polyols for the PU market. "We really wanted to establish a systems house before Sadara was in place," said Penrice, noting that Saudi Arabia is "a really fast growing market."
Dow's existing systems house in the region, in Egypt, serves the Lebanon, Syria and North Africa, while the new one is for the Gulf region.
Penrice said "All these places are struggling a bit after the unrest of the Arab Spring, so last year was tough in North Africa." But these countries are now starting to show signs of recovery. Even Libya is starting to grow again, he said.
As these countries develop, they start needing some of the systems from Western Europe, particularly in insulation.
"On the innovation side, we've opened a centre in Spain, cedepa," to develop panel systems (in 2011). Dow also added a major R&D facility in Corregio, Italy, in late 2011, Penrice said.
In April 2012, Dow also opened a new laboratory for Hyperlast's engineering and spray elastomers, at Birch Vale in the UK, with the intent to grow that market, Penrice said. "Innovation has always been a strength of the Hyperlast business and we aim to grow the segment further."
Perstorp debottlenecking HDI in France, adding in Asia
Perstorp's isocyanates business, now renamed Vencorex is debottlenecking its HDI (hexamethylene diisocyanate) facility in Pont de Claix, France. The move will add 4000 kg capacity for the trimer, "a significant increase," said Damien Baes, who is responsible for HDI and derivatives.
The business also has trimer capacity at Freeport, Texas, in the US, he said, pointing out the global nature of this business. At Pont de Claix, the company makes both aromatic (TDI, toluene diisocyanate) and aliphatic isocyanates (ADIs).
In HDI, growth is a healthy 5-6 percent a year, and the group aims to participate in this growth.
It is also planning to set up a derivatives plant for the aliphatic materials, of some 12 ktpa capacity, in South-east Asia, probably in Thailand, with HDI supplied from France, Baes revealed.
The higher capacity will allow the company to support growth in demand for the aliphatic products, Baes indicated. Fast growing uses for HDI include car refinish coatings, as well as OEM top-coats, plastics and wood coatings, and coil coatings for metal, Baes said, while adhesive uses have also grown well.
Other applications include leather finishing and marine coatings, and very high performance coatings based on aliphatic diisocyanates are substituting for other technologies, Baes commented.
In derivatives, IPDI is used for PU dispersions, as well as for UV curable coatings, Baes said, noting that IPDI is a monomer, whereas HDI is made into dimers, biurets, and the low-viscosity trimers, where demand is high.
Huntsman's new ventures
This year has been busy for Huntsman's EMEAI unit: it has just started commissioning its new Pune systems house in India, and will be progressively transferring the systems operation from Thane, near Mumbai, to Pune, said Nick Webster, European vice president of Huntsman Polyurethanes. This will be finished by the middle of the year, and marks "the transformation to Pune being a significant systems house in our portfolio," said Webster.
Earlier this year Huntsman bought Turkish systems house, EMA, an addition which Webster is very pleased with.
Huntsman has also set up a technical centre in Warsaw to serve the Polish market. "I really think the key thing that customers want is ... a local competent response," to help them produce what they need, said Webster.
In Hungary, Huntsman has a joint venture with local group Polinvent on hybrid epoxy and amine adducts for coatings. And the group has also started a venture with machinery systems expert Frimo Group on developing resin transfer moulding systems for automotive PU composites.
Spray coating raises fire resistance of rigid panels
At UTECH Europe 2012, Lanxess highlighted its new Bayfomox sprayable system for raising the fire resistance of rigid foam boards, an extension of the material's original use in moulded foams.
Lanxess has worked with Fluid Systems, part of Graco, using its standard spray equipment, which is important because the product is a dispersion and contains particles, said Dr Heiko Tebbe, head of technical service and development in phosphorus chemicals for Lanxess.
As a result, the materials are not easy to process: the solids content is a challenge. Users must be able to process the materials on standard spray equipment, added Tebbe, pictured.
Bayfomox FR forms an intumescent coating, which is means the whole part resists fire, Tebbe said.
Standard construction PU insulation panels can be fire retardant but not flame resistant, so where buildings need fire resistance, the customer can now "spray our materials on the surface of the panels and make them fire resistant."
Tebbe said the coating can be used with or without facings. "We have done it on pure foams and on foams with paper facings. We are now working on metal-facings - which is a little more difficult," he added. Metal-faced panels have only a thin metal coating, Tebbe pointed out, so their fire resistance is limited.
Lanxess has done extensive testing, and the new spray coating achieved good ratings with a thickness of 10mm, Tebbe said.
Bayfomox is made of standard polymeric MDI and a fully formulated specialised polyether polyol, containing all the reactive solid flame-resistant material.
This system gives a foam density of 200 kg/m³. Users can add water to adjust the foam density, Tebbe said. "We can also play with the index a little to give a more flexible surface," which also helps with sound absorption, he added. Customers are currently evaluating the system, according to Tebbe.
The Lanxess specialist said the protection would be valuable in "places in construction where you have panels adjoining floor or abutting different materials." Some of the need will depend on what building code applies, he said.
Momentive ready with new capacity globally
Momentive is very bullish about 2012, for a couple of reasons, said Tony Lanchak, head of Momentive's urethane additives business. "We have heavily invested in the business in the last 12 months, we have significant new products coming on stream," he said. "We've had record years in 2010 and 2011, and while that sounds good, we could have done even better had we had more capacity," Lanchak said.
"So now we are much more prepared to do battle, so to speak, in this rather dynamic environment," the Momentive executive added.
Momentive has put capacity into Itatiba, in Brazil, into India, in Chennai, added capacity in Nantong, China, both for finished goods and raw ingredients. It has debottlenecked facilities in Europe and "we are ready and able to drive growth," Lanchak said.
It's one thing to have capacity, and another to optimise it to give almost guaranteed service, Lanchak said, following this with a confession: "I am embarrassed to say we have not been the most on-time supplier in the last 18-24 months."
He sees Momentive as "a major global player, a leader in many segments, with 50 percent of our business in emerging areas, which are the ones that have driven growth in 10/11. ... It's been awfully difficult to keep up with everything that we do across the sectors and geographies."
The polyurethanes industry is growing, he said, probably in the 4-5 percent a year range, and Momentive intends to grow at multiples of that, as it has done over the past 10-12 years, Lanchak said.
"We don't have the highest share across all applications, so we have a focus on those areas where our share is lower ... rigids and automotive," he said. Momentive will also, "stay the course in flexible slabstock, especially in the emerging areas," where it performs well, Lanchak said.
"We look at macroeconomic trends across the regions and estimate how those in one area will play out in the rest of the world," Lanchak said. As is common knowledge, while China is growing its domestic market it still has a big export segment and has to comply with regulations in developed countries," he added.
"I won't say all but most of the VOC, emission-free and green trends in China are for products for the export business," he concluded
In developing new additives, Momentive's focus is on green, and on lowering emissions, whether in silicones or catalysts, said Lanchak's colleague and head of technology, Dr Paul Austin.
New Niax L-537 XF is a "great all-purpose silicone stabiliser," for polyester foam, and contains no nonylphenol ethoxylates - ingredients which the US Environmental Protection Agency says present potential environmental concerns.
With 537 XF, "one thing you need to understand is the productivity," said Lanchak. "Ester foamers can make more foam with same amount of raw material, less scrap, much better density distribution, without giving up any physical properties," he added.
Niax CS26 LF is an amine-free colour stabiliser - a flame-lamination additive for non-yellowing products, with increased bonding ability.
Silicone surfactant Niax L-595 allows flexible foamers better productivity. They can cut manufacturing costs while improving mechanical properties, such as foam density and air flow.
Lanchak agreed that there are a lot of new products: "one every 5 minutes," with 30 percent of sales from products developed in the last five years. It is all about "growth through innovation," he said.
Momentive is seeing "very good sales of these products, especially the 595."
For high-resilience slabstock, a key new silicone stabiliser L-2106 offers low-emissions and "gives great HR slab with constant density distribution, and low VOC characteristics," Austin said.
In rigid foam the focus is on lambda values and specifically aged lambda, "that's the new buzzword," said Lanchak.
"One last thing is that we are always trying to build additional fire resistance (FR) into what we do, and this is certainly important on the rigids side," Lanchak said. "One of the challenges for PU and PIR is trying to improve the foam's FR," he said.
DOW: low cost core materials, value-added systems
Many of those UTI spoke to at UTECH referred to the "customer intimacy" that is part of the urethanes business. This is inevitable given that users need input and expertise from all parts of the supply chain.
But Dow Chemical Co. has now coined a new buzzword for its role in this relationship: 'Solutionism.'
Jon Penrice, vice-president and general manager for Dow's formulated systems business in Europe, said this new corporate campaign "really fits with our strategy.... Instead of selling products, we're offering solutions. We are highlighting that in green roofs, the wind industry, refrigeration applications, we've gone beyond a product and are providing a full system for the customer."
Dow has multiple products and solutions that can be drawn together to provide such solutions, and because Dow Chemical is so huge, it can offer a lot of this: "It's going to become a bigger part of our thinking," Penrice said.
Penrice said making high-quality materials well is essential, but "the winners in the end will be those who offer solutions."
As a result, Dow Polyurethanes makes a strong distinction between its formulated systems business, and its raw materials side. "The commodity side is all around cost, while we are all around innovation and differentiation, at finding better, more differentiated ways of using PU," said Penrice.
A further difference is geographical. The systems house model relies on local service via Dow's network of 30 systems houses. These allow it to "offer local solutions and local service via local people within a 100-mile radius, because PU systems don't travel well," Penrice noted.
Penrice went on to note the difference in pricing: in systems, "pricing is through value," while for systems, Dow unashamedly asks for high prices. "If it is not of value, the customer will not pay."
With the core raw materials, low-cost production is the only option, and here Penrice feels strongly that manufacturers cannot ask customers to pay for inefficiency.
In Penrice's view, there is a huge debate within the PU industry on whether to aim for differentiation or to be a low-cost producer, but this is looking at the wrong question: "It should be both - and that's where Dow's going."
He cited as examples Dow's huge investment in petrochemicals in Sadara in Saudi Arabia, and in shale gas to ethylene projects, while at same time spending $1.6 billion a year on R&D.
"Those two are entirely compatible, because you have to have the low-cost position and you have to differentiate."
"A lot of speciality chemicals companies are trying to cherry-pick the top end, without the low-cost position," said Penrice, noting that those companies are gradually disappearing.
"At the other end, you get the very large companies who don't have differentiation, who have very low return on capital." These are not disappearing, but are slipping into the state-sponsored economies in various countries where government cash is available.
Penrice, with a background in businesses with differentiation, feels that the PU business was the forerunner of the 'Solutionism' approach which Dow has now adopted wholesale.
Innovation vital for added value
Discussing price volatility, Herman Motmans, Dow Polyurethanes global marketing manager, said, "This is why innovation is so important ... If we can bring added value we can withstand those swings." Dow feels the innovation pipeline is the backbone of its business, and "that's really Herman's role," Penrice said.
Motmans took up the tale: "The strength of the systems houses is ... we are really very customer intimate, very agile, and can develop new products quickly, as well as build on long-term R&D capabilities - all with the bigger Dow behind us."
Motmans pointed out innovations Dow was highlighting at UTECH: new Voralux flexible moulded viscoelastic foam developments, new mercury-free Diprane from Hyperlast, REACH-compliant Monothane, "a very important driver for us." He also singled out Voratherm polyisocyanurate (PIR) insulation foam for energy efficiency, to allow insulation makers to meet fire regulations, with very good processability. "This is typically much more difficult for PIR formulations," Motmans said.
Market pull for products
Penrice said the impetus behind product development is "really market pull, although some aspects are regulatory driven," with mercury-free and low-emission products good examples here.
Penrice said the other really big driver is energy efficiency, which is being implemented differently in different countries/regions. "We are seeing that demand grow."
Discussing Dow's new Pascal high performance technology for refrigerator insulation, developed with Cannon Group, Penrice said Dow is very happy with this development - and it keeps developing in such areas: "We don't stand still."
Motmans also highlighted Dow's just-launched Voralast R range for footwear, based on renewable raw materials - in this case animal fats. This is a second generation material, and Dow is optimistic that the brand owners will be interested in these.
Penrice stressed that "We're taking a much more focused approach to green, the performance really has to be there." As Motmans commented, "People don't pay more for green, so you have to match the performance at the same price."
Car insulation innovation
As well as the concept of insulating car engines, described earlier, for the next generation of electric vehicles, designers will have to find a different way to heat/cool the interior.
Insulation has a role to play here, in the doors, for example, where PU is valuable because it can flow into complex shapes, said BASF's Hartwig.
PU has traditionally been used in the body for noise reduction: "We now have an additional task of thermal insulation," said Hartwig. BASF presented such a project in the 'smartforvision' concept car with door insulation, at last year's Frankfurt automotive show.