● NOVOZYMES INVESTS IN NEBRASKA Novozymes says it will double its investment, to $160 million-$200 million, on an enzyme facility currently under construction at Blair, NE (CW, July 14, p. 55). Startup is expected in 2011. Plant output will be used for corn-based and cellulosic ethanol.
● SILICON WAFER MARKET SHRINK S Silicon wafer shipments and revenue declined in 2008, says trade group Semiconductor Equipment and Materials (Semi; San Jose, CA). Shipments fell 6%, to 8,137 million sq inches, WAFER: Market expands in and revenue Asia, contracts in the U.S. declined 6%, to $11.4 billion. Separately, Wacker Chemie says current silicon wafer demand has declined to “around the post-dot.com trough levels of 2001.” Both production capacity and market size are falling in the U.S. but are growing in Asia, Wacker says.
● NANOGRAM, TEIJIN INK SILICON PACT NanoGram (Milpitas, CA) says it has entered into a technology development agreement with Teijin Ltd. (Osaka) to further develop NanoGram’s printed silicon ink. Financial terms were not disclosed. The companies will focus on extending NanoGram’s printed silicon ink technology for use with Teijin’s flexible substrates for printed electronics.
● CATALYSTS, ADDITIVES CENTERS OPEN BASF Catalysts says it has opened a mobile emissions catalyst manufacturing facility at Krasnogorsk, Russia to serve national automotive OEMs. These manufacturers face tighter regulations as Russia phases in European Union emission standards during the next few years, BASF says. Meanwhile, Momentive Performance Materials says it has opened an R&D and technical service laboratory for urethane additives at Leverkusen.
● HONEYWELL, ENSYN LAUNCH FUEL JV Honeywell’s UOP says it has launched a bio-based transportation fuel joint venture with bio-oil producer Ensyn (Wilmington, DE). The jv, Envergent Technologies, will offer technology and equipment for the conversion of biomass into pyrolysis oil for power generation, heating fuel, and conversion into transportation fuels. The two firms first announced their intention to form the jv last September (CW, Sept. 15, 2008, p. 7).
Some niche sectors of the battered $30-billion global adhesives and sealants market are showing resilience, and major players are clinging to these niches in the face of the persistent global downturn. Suppliers acknowledge that a 3.5% demand increase in the North American bookbinding market, for example, cannot begin to mitigate a 55% collapse in the continent’s automobile manufacturing sector. However, great variation in growth rates among end-use sectors shows that some opportunities remain, they say.
Manufacturers are moving to exploit such options. H.B. Fuller opened a regional technology center in Shanghai’s Zhangjiang Hi-Tech Park in late February that will focus on next-generation adhesives applications. The firm is being “careful and measured in our investment during difficult economic conditions,” says Kevin Gilligan, v.p./Asia-Pacific at Fuller. The center will focus on nonwovens, packaging, textiles, flooring and insulated glass.
“Over time, H.B. Fuller plans to make Asia/ Pacific a center for our textiles, footwear, and engineered wood flooring segments,” Gilligan says. Fuller says it is also pressing ahead with its grassroots plant in Nanjing. The plant, scheduled to be onstream early next year, will produce hot melt moisture cure and polyisobutylene adhesives.
Fuller also announced plans last week to acquire Nordic Adhesives (Buxtehude, Germany), a flexible packaging adhesives supplier. Nordic generated revenue of about $9 million last year and has a presence in northern Europe, Fuller says.
“This acquisition will complement our existing product line, enhances our applications knowledge, and will enable us to extend our reach in this highly attractive $1-billion segment of the adhesives industry,” says Michele Volpi, Fuller president and CEO.
3M has favored buying over building and has during the past few months rolled up six acquisitions in adhesives. This includes buying RPM’s Bondo business as well as purchases in France and Thailand. 3M’s most recent acquisition, Compac’s pressure sensitive adhesives unit, was made through its Venture Tape business.
Henkel says it is still digesting its acquisition of the former National Starch and Chemical’s adhesives businesses from
AkzoNobel and that it has no current appetite for further additions. “Following the rapid, acquisition-led expansion of our adhesives business over the last few years, our priority will be on profitable organic growth,” Henkel says.
Industry analysts say that consolidation will continue and could even accelerate the longer the recession lasts, because smaller and less-diversified companies may not be able to hold out. The caveat would be the smaller firms with low cost structures serving one of the sub-sectors that are managing to achieve modest growth, says Phil Phillips, president and managing partner of Chemark Consultants (Southern Pines, NC).
For example, the automotive aftermarket is counter-cyclical, Phillips says. “Automotive OEM demand is down 55%, which is a huge hit, but that also means that people are fixing their cars and hanging onto them. In North America the aftermarket is almost as big as the OEM market. In good economic times the aftermarket grows at about 1%; in bad times, we are seeing growth of 2.2%.”
Other sectors hanging tough are disposables and bookbinding, Phillips says. “People are staying home and reading more,” he says. Even among the sub-sectors that are contracting, the back story makes for a less discouraging picture. “Furniture manufacture demand is off 20%, but there is not really much of that left domestically,” he adds.
Phillips sees consolidation as a generally positive trend, starting with the big getting bigger. This includes Henkel’s snapping up the National Starch operations. “That does not bring a great unique product mix, but it does make for a very strong market and technology breadth,” he says. “Henkel feels that it can set the pace, and the challengers are happy with that,” like bicycle racers drafting off the leader. “If there is no leader, you have a disorganized market with disorganized pricing.”
The other trend to watch for is vertical integration, Phillips says. “Now that Dow is looking through the lens of Rohm & Haas, it may be moving into distribution. There is not always greater profit down the value chain, but that is the general expectation. We are starting to see that now, and will continue to over the next five years.”
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