The Woodlands, Texas -- Discussing potential grassroots expansion of its MDI (methylene diphenyl diisocyanate) capacity in the Far East, Peter Huntsman said that the company continues to work with the Chinese authorities on environmental and operating permits for a second 240 ktpa MDI plant to add to its existing joint-venture MDI facility in Caojing, on the edge of Shanghai.
"We would hope to cross … some crucial decision-making points later on, perhaps, in the middle of this year," he added, in a 17 Feb conference call with analysts after the group reported its 2010 results (see separate story).
The Huntsman chairman also noted that the group restarted its remaining 150 kilotonnes-per-annum (ktpa) of idled MDI capacity at its site in Geismar, Louisiana, in the fourth quarter of 2010, and will sell this material into the market as conditions warrant.
And he commented that "With our capacity in Asia, we are sold out," noting that most of the 150 kt of MDI it is restarting in North America is likely to "end up in Asia until we're able to expand capacity there."
In the US, the insulation market continues to rebound and if US residential housing starts get back to a level of only 1 million units a year, MDI going into OSB [oriented strand board] for plywood and construction board and into insulation, would more than double for Huntsman, Peter Huntsman said.
As a result, "We are going to be in a very tight situation in Asia … over two to three years," he stressed. Once the company has permission and the economic justification to build a new facility in China, it will take another two to three years for that facility to be up and going, Huntsman said.
The Huntsman chief also noted that a competitor has a grassroots facility coming along in China, in two years, but said that unit represent all the MDI capacity growth expected over the next two to three years.