Synthetic Rubber Producers Focus on Maintenance in 2010

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Researched by Industrial Info Resources (Sugar Land, Texas)--Producers of synthetic rubber used in the manufacture of consumer goods such as tires and related products have witnessed a spending pullback larger than almost every segment of the North American Chemical Processing Industry (CPI) during the past two years. The slowed spending began in this segment ahead of many others, as consumer demand began to taper off in early 2008 ahead of the global recession. Prior to 2007, annual investments in this segment of the CPI would often total $200 million or more, with a majority of the spending designated for capital projects. In the approaching year, planned capital and maintenance projects total only $84 million so far.

Maintenance spending is where most rubber producers will focus their attention in the coming year, specifically targeting reliability projects where efficiency gains can be realized. The two largest planned maintenance turnarounds identified to date are both planned by Lanxess Corporation (Pittsburgh, Pennsylvania) for sites in Sarnia, Ontario, and Orange, Texas. At the Orange plant, Lanxess is planning a three- to four-week maintenance turnaround that will cost an estimated $6 million starting in May of next year. In Sarnia, Lanxess will begin an estimated four- to five-week turnaround costing an estimated $9 million in September.

American Synthetic Rubber Company LLC (Louisville, Kentucky), a subsidiary of Michelin Tire Corporation (Spartanburg, South Carolina), has completed several very large expansions and a retrofit of its site in Louisville during the past several years and has delayed plans for yet another expansion of the site until at least late 2010, or maybe longer. This project was to include expanding an area of the plant that provides feed for downstream rubber-processing areas of the plant, costing an estimated $50 million.

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