February marked the end of 13 years of anti-dumping duties on PET resin imports into to China from Europe, after the European Union (EU) terminated an expiry review. First imposed in 2004, the duties were extended by five years in 2010. China launched a complaint against the US and Europe last December and accused the two regions of not treating China as a market economy.
Meanwhile, China is expected to continue its dominance of the global petrochemical marketplace, both in terms of consumption and production, despite a slowing economy and high levels of debt. IHS Markit reported that Chinese demand growth for key chemicals will be slower for at least the next four years but the country will still drive growth.
It has been a strong month of investments and expansions, and China inevitably featured. BASF started work on a 42,000-tonne plastics additive plant in Shanghai, which is expected to be completed in 2019 with commercial production to start by 2020.
Fellow chemical giant ExxonMobil started work on the expansion of its Shanghai Technology Centre, which includes a new research and development facility and will be completed in early 2018.
Europe proved that it’s still a great place to do business with a number of investment projects since the turn of the year. Masterbatch producer Ampacet is increasing capacity at two of its European sites – Messancy (Belgium) and Dudelange (Luxembourg) – to reduce lead times and increase flexibility, while food packaging manufacturer Linpac has spent millions of dollars upgrading its Pontivy site in France for the production of multilayer top lidding films.
Also in Belgium, BOPP film maker Jindal Films Europe increased the extrusion capabilities at its Virton site with a new 10.5m-wide BOPP line providing an annual capacity of 50,000 tonnes.
Other projects include pharmaceutical and healthcare packaging manufacturer Gerr-esheimer’s expansion in Zaragoza, Spain, which includes a new ISO class 8 clean room, DS Smith Plastics’ installation of four new production lines at its injection moulding plant in Bilzen, Belgium, and Kautex Maschinenbau’s planned expansion at its Bonn, Germany headquarters.
Not forgetting North America, Lindal Group has acquired 15 acres in Indiana to build a 100,000sqft facility for aerosol products aimed at the domestic market. And ExxonMobil outlined investments of $20 billion over the next decade as it seeks to take advantage of the North American energy revolution.
Not yet on the confirmed list, shareholders at Borealis and ADNOC will be asked to approve the ‘Borouge 4’ project this year in what would represent the most ambitious and challenging petrochemicals project ever undertaken by the two companies. The project centres on the cracking of naphtha and perhaps other mixed feeds.
With all of these big-money investment projects making the headlines, Tetra Pak quietly started building a $26m plastics closures production plant for carton packaging. It will make more than three billion closures a year.
M&A activity centred on two deals that never were, as first Kraft Heinz and then PPG were rebuffed in their efforts to do business. Food and drinks giant Kraft Heinz abandoned plans to buy Anglo-Dutch rival Unilever after having a stellar $143bn offer rejected, while Dutch chemicals giant AkzoNobel refused a $22bn approach from US rival PPG.
In deals not quite in the same financial galaxy, Sonoco agreed to acquire Peninsula Packaging for $230m in order to double its thermoforming business, and Constantia Flexibles Group purchased dairy-lidding firm TR Alucap for an undisclosed sum. TR Alucap has sales of $21m.
Other deals saw ink manufacturer Siegwerk buy the Plastic Tubes and Laminates business unit of Lichtenstein-based Schekolin for an undisclosed sum, giving it access to speciality UV varnishes suitable for rigid plastics tubes, Ineos Styrolution completed the acquisition of the global K-Resin styrene-butadiene copolymers business from Chevron Phillips Chemical Company, and Australia’s Pact Group bought Pascoe’s Group for $A41m (US$31m) at its looks to extend its activities in specialised contract manufacturing.
A UK-based company that was named Company of the Year in the Derby Telegraph Business Awards less than two years ago has entered administration. Charapak, a packaging converter with sales of US$16m and a specialist in corrugated and coated packaging, expanded into digital label manufacture in 2016. The company was also chosen as fulfilment supplier for the packing and delivery of nearly 900,000 ceramic poppies that were displayed at the Tower of London in 2014 to commemorate the centenary of the outbreak of World War I. Unfortunately it’s now the eCommerce packaging supplier that is very much in the wars.