M&G Pushing North American PET Envelope with 800,000-Ton Plant

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Researched by Industrial Info Resources (Sugar Land, Texas) – Italy’s M&G Group (Mossi & Ghisolfi), the world’s largest polyethylene terephthalate (PET) resin producer for packaging applications, is planning a new world scale plant in the U.S. Final agreements and details for the site are currently being drawn up and will be announced in a few weeks. The first phase of the project is scheduled to come on-stream in the first half of 2009, with a production capacity of 650,000 tons per annum (tpa) and a further 150,000 tpa capacity will be added according to market requirements, bringing total capacity to 800,000 tpa.

M&G’s operations in the U.S. and Mexico will be debottlenecked under a plan to add up to 1 million tpa of extra to North American capacity from the privately held producer. Combined capacity at Apple Grove, West Virginia and Altamira (Mexico) will be raised by 200,000 tpa in the period 2007/08. The new U.S. plant will utilize the same proprietary technology (solid-state EasyUp SSP) as the company’s 450,000 tpa plant at Suape in Brazil, which came onstream in the first quarter of 2007, and which has been running successfully at full nominal capacity. The feedstock and investment program to support the company’s North American drive has already been secured.

Marco Ghisolfi, CEO of M&G’s polymers business unit, said the U.S. plant will be twice the size of the largest ‘off-the-shelf’ units currently available and four times the industry average. “The company is taking on the responsibility to bridge the expected capacity gap,” he said. This is in spite of the acknowledged depressed PET industry margins when compared with similar industries. In 2006, the company posted EBITA (earnings before deduction of interest, tax and amortization expenses) of $140 million from its existing 1.6 million tpa PET capacity. Current U.S. capacity for PET is estimated at some 4.5 million tpa and the trend to larger units is clearly established as Eastman is increasing the scale of its new plants.

When the new North American projects come onstream M&G will have a global PET capacity in excess of 2.5 million tpa. A number of factors will combine to create a PET capacity shortage in the U.S. by 2009 including strong PET demand growth, partial execution and delays in M&G’s competitors previously announced investment programs and increasingly constrained and costly imports.

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