Capital Spending Remains Limited Among Domestic Pigment Producers for 2006

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Researched by Industrialinfo.com (Industrial Info Resources; Houston, Texas). Capital spending for North American producers of inorganic and organic pigments has been relatively slim for several years with only a slight improvement expected in 2006. Currently, Industrialinfo.com is tracking more than $47 million in planned project activity within this industry segment of the Chemical Processing industry (CPI) proposed to begin construction in 2006. Despite the minimal amount of spending, this is still a substantial increase over total spending for the previous year of 2005 at an estimated $32.8 million.

Although the total spending is forecast to increase by almost 30% in 2006, the number of actual projects remains constant at thirteen. The increase in spending is partly due to plans for at least one grassroot plant planned by Accurate Dispersions (South Holland, Illinois) to be located in Homewood, Illinois. Another significant investment within this industry segment is the expansion of Lyondell Chemical Company’s (Houston, Texas) No. 2 titanium dioxide unit located in Ashtabula, Ohio and a debottleneck of their titanium dioxide plant located in Baltimore, Maryland.

This segment of the CPI is made up of nearly 90 plants, that on average employ less than 150 people, producing zinc or lead pigments, inorganic metallic and paint pigments serving one of several niche markets. The capital and maintenance budgets within these plants are often equally as small. Producers of titanium pigments, like titanium dioxide, generally represent the largest spending opportunities for equipment and service vendors as these plants are much larger and operate much more sophisticated technology in many cases. QIT-Fer & Titane, Incorporated (Sorel-Tracy, Quebec) is a good example of a producer with a history of large investments in titanium dioxide capacity. QIT-Fer & Titane has consistently invested in capacity expansions at their Sorel-Tracy plant site and began construction late last year for a $100 million first phase of a multi-part project. The next major piece of this project is planned to begin construction early next year and again exceed $100 million in total spending.

Although the improvements in spending for this industry segment are slight, the continued strength across most major segments of the CPI, such as plastics and resins, will continue to provide room for growth. Consumer markets continue to thrive and equal one of the largest downstream markets for pigment producers. Today’s consumer increasingly demands products that meet a large variety of color options for their cell phones, personal computers and like devices.

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