Dallas, Texas -- Huntsman will take MDI to the world from its Geismar, Louisiana plant and is actively looking to buy systems houses and other downstream businesses, said Tony Hankins, president polyurethanes, on the sidelines of the CPI 2014 meeting.
Hankings told UTECH-polyurethane.com exclusively that the strong cost advantage of the Geismar site, coupled with Huntsman’s MDI splitting technology, offers the firm the ability to ship precursorMDI around the world and tailor it to local requirements.
Hankins said Geismar “is one of the largest, lowest cost facilities in the world and it's the largest MDI unit in the United States.
"We intend to continue to invest strongly in the advantages we have at the Geismar facility," he said.
Geismar will have 500kT/year capacity when the current expansion is complete in 2015, he added.
“We really need to have that facility expanded by 2019 to meet our growth forecast,” Hankins said. Building will have to start in 2016 for that time-frame to be met and it would need a new integrated train."
Regional manufacturing centres such as Shanghai and Rotterdam are still important and are receiving investment. Shanghai will see 240kT/year coming on stream in 2017.
Huntsman’s business model is changing with US shale gas with Geismar being key to that change.
The concept would be low-cost precursor shipped round the world and derivatise [turned into derivatives] as close to the customer as we can using the splitting technology we have introduced at Rotterdam," said Hankins.
Huntsman sees this, and its specialty polyol purchase Oxid which UTECH-polyurethane.com reported previously, giving it the ability to produce formulated isocyanate and polyol formulations that can be tailored to customers’ needs in regional centres supplied by splitters.
"It's not a new business model," said Hankins. "But what is different is that the shale gas position in North America has really made that possible, and the very focused down-stream acquisitions we're making give us that end-market capability so we can bring it all together."
"The secret is that customers want security of supply. The secret here is to derivatise as close as you can to the customer, its effective local production with the cost-benefit of the material coming from shale gas," Hankins said.
This cost advantage is large enough for his product from Geismar to compete with Middle East-produced MDI in the Indian market, Hankins said.
Huntsman is interested in buying or venturing with systems houses.
"Think of it in terms of geography, in application, in route to market. If they have got a specialty focus that is going to help us then that is something we're interested in acquiring,” Hankins said, adding that the company is interested in systems houses and other downstream businesses in all application areas.
"Where we see high growth and high value, that's where we're going to focus," he said.
