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Released March 28, 2014 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--The "Polar Vortex" that bedeviled much of the U.S. this winter is a good thing for makers of polyurethanes and their component chemicals, as more homeowners replace roofing and insulation, according to Huntsman Corporation's (NYSE:HUN) (Houston, Texas) head of polyurethanes.
Speaking at the company's Investor Day event earlier this month, Tony Hankins, Huntsman's chief executive officer for the Asia-Pacific region, and president of the polyurethanes division, said: "The Polar Vortex is going to be good for the business. Roofs are being destroyed by this weather. People are going to get real in energy efficiency."
Hankins said Huntsman's fastest-growing business has been in North America, fuelled by the recovery of the housing industry. Huntsman's polyurethane sales grew 6% to 7% during the company's fiscal fourth quarter, he said.
The average house requires 2,500 pounds of methylene diphenyl di-isocyanate (MDI)-based urethane spray foam insulation, he said. Huntsman expects to sell $1.5 billion in MDI urethane this year, Hankins said, adding that he was confident the company's MDI business will grow 8% per year.
Hankins said he sees Huntsman's MDI production growing through plant expansions, such as those in the U.S. and China. Rubicon, a Huntsman joint venture with Chemtura (NYSE:CHMT) (Philadelphia, Pennsylvania), is working with contractor firms to increase the capacity of three MDI units at its Geismar facility in Louisiana by 12%, according to Industrial Info. The current capacity is 320,000 tons per year. Completion of the project, estimated to have a total investment value of $78 million, is tentatively scheduled for the first quarter of 2015.
While North America is seeing MDI growth, it is China that is the driving force behind global MDI demand. A new world-scale, 400,000-ton-per-year MDI unit could be built each year just to meet MDI demand, Hankins said, largely as a result of China. China has become the largest MDI market in the world, with demand estimated at more than 1.8 million tons per year.
China's growing appetite for automobiles, furniture and footwear is playing a big part in its demand for MDI. On top of being an insulator, MDI polyurethane is used in auto seats and as an acoustics modifier for automobiles, among other things.
"The automotive market in China is on fire," Hankins said, adding the country's MDI demand will double by the next decade.
Huntsman is working with front-end engineering and design (FEED) contractor Foster Wheeler AG (NYSE:FWLT) (Zug, Switzerland) to add a 240,000-metric-ton-per-year MDI unit, at an estimated cost of $157 million, to its Shanghai facility, according to Industrial Info. Hankins said the company's new Shanghai investment will be on stream in 2017.
Huntsman has two MDI-related joint ventures in Shanghai, including Huntsman Polyurethanes Shanghai Limited, a 160-metric-ton-per-year MDI finishing plant and a prepolymers plant built by Huntsman and Shanghai Chlor-Alkali Chemical Company Limited; and Shanghai Lianheng Isocyanate Company Limited, a 240,000-metric-ton-per-year crude MDI manufacturing plant that includes precursor chemical plants built by Huntsman, BASF and three China firms.
For related information, see February 13, 2013, article - Huntsman Sees Solid Growth in Polyurethane Demand in 2012, Expects $450 Million in CapEx in 2013.
View Plant Profile - 1018193 3009768
View Project Report - 300088027 300015672
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and nine international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
Speaking at the company's Investor Day event earlier this month, Tony Hankins, Huntsman's chief executive officer for the Asia-Pacific region, and president of the polyurethanes division, said: "The Polar Vortex is going to be good for the business. Roofs are being destroyed by this weather. People are going to get real in energy efficiency."
Hankins said Huntsman's fastest-growing business has been in North America, fuelled by the recovery of the housing industry. Huntsman's polyurethane sales grew 6% to 7% during the company's fiscal fourth quarter, he said.
The average house requires 2,500 pounds of methylene diphenyl di-isocyanate (MDI)-based urethane spray foam insulation, he said. Huntsman expects to sell $1.5 billion in MDI urethane this year, Hankins said, adding that he was confident the company's MDI business will grow 8% per year.
Hankins said he sees Huntsman's MDI production growing through plant expansions, such as those in the U.S. and China. Rubicon, a Huntsman joint venture with Chemtura (NYSE:CHMT) (Philadelphia, Pennsylvania), is working with contractor firms to increase the capacity of three MDI units at its Geismar facility in Louisiana by 12%, according to Industrial Info. The current capacity is 320,000 tons per year. Completion of the project, estimated to have a total investment value of $78 million, is tentatively scheduled for the first quarter of 2015.
While North America is seeing MDI growth, it is China that is the driving force behind global MDI demand. A new world-scale, 400,000-ton-per-year MDI unit could be built each year just to meet MDI demand, Hankins said, largely as a result of China. China has become the largest MDI market in the world, with demand estimated at more than 1.8 million tons per year.
China's growing appetite for automobiles, furniture and footwear is playing a big part in its demand for MDI. On top of being an insulator, MDI polyurethane is used in auto seats and as an acoustics modifier for automobiles, among other things.
"The automotive market in China is on fire," Hankins said, adding the country's MDI demand will double by the next decade.
Huntsman is working with front-end engineering and design (FEED) contractor Foster Wheeler AG (NYSE:FWLT) (Zug, Switzerland) to add a 240,000-metric-ton-per-year MDI unit, at an estimated cost of $157 million, to its Shanghai facility, according to Industrial Info. Hankins said the company's new Shanghai investment will be on stream in 2017.
Huntsman has two MDI-related joint ventures in Shanghai, including Huntsman Polyurethanes Shanghai Limited, a 160-metric-ton-per-year MDI finishing plant and a prepolymers plant built by Huntsman and Shanghai Chlor-Alkali Chemical Company Limited; and Shanghai Lianheng Isocyanate Company Limited, a 240,000-metric-ton-per-year crude MDI manufacturing plant that includes precursor chemical plants built by Huntsman, BASF and three China firms.
For related information, see February 13, 2013, article - Huntsman Sees Solid Growth in Polyurethane Demand in 2012, Expects $450 Million in CapEx in 2013.
View Plant Profile - 1018193 3009768
View Project Report - 300088027 300015672
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and nine international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
