SINGAPORE-Arkema anticipates only 70% of European mercury-based chlor-alkali plant capacity to be converted to the membrane-cell approach by 2020, Pascal Maureta, of the French-based petrochemical producer, claimed on Thursday.
European regulations need all plants to change to the much more power efficient membrane-cell method of manufacturing by 2020.
Nonetheless, Maureta, business manager for caustic soda at Arkema, claimed since the European caustic soft drink markets are fully grown and also the expense of conversion high, only 70% of mercury-based chlor-alkali plants will switch over to the new approach of manufacturing. Chlor-alkali plants produce caustic soft drink and also chlorine as co-products.
" Europe will most probably not convert 100%," Maureta said, speaking at the Globe Chlor-alkali Meeting in Singapore-- arranged by ICIS and Tecnon OrbiChem.
" It's a? bn-- 4bn ($ 2.86 bn-- 5.71 bn) investment [required to convert] in Europe, on markets which are fully grown. Most likely around 70% will transform," he added.
Maureta went on to claim the effect on European production would suggest material would be prioritised to the most lucrative end-use applications.
He likewise claimed European caustic soda exports were likely to continue to be uncompetitive in regions such as Asia due to high energy expenses, freight rates and also basic material costs compared with various other areas.
" biocide products is energy extensive, almost 50% of the [manufacturing] cost is power relevant," Maureta claimed.
" We require competitive raw materials. The expanding markets are abroad and also the range means there's no excellent opportunity for Europe to be effective in exports," he included.
European chlor-alkali manufacturers say the timing of the expensive conversion to membrane-cell innovation can not be worse.
Downstream polyvinyl chloride (PVC) margins, which represent the majority of European chlorine use, remain in unfavorable region complying with the 2008 economic slump, when demand for suspension PVC (SPVC) plunged by 25% from record 2007 degrees, and soaring feedstock costs pressed producers.
Little has transformed in the last few years and the majority of producers agree offtake remains 10-- 15% below 2007 degrees, as the crucial building and construction market, which makes up more than 70% of SPVC offtake, stays on shaky ground.
According to the latest Eurostat numbers, March 2011 building and construction outcome dropped by 4.9% in the eurozone compared to the previous year. Slovenia, Portugal and Bulgaria signed up the largest decreases.
Added coverage by Stephanie Wilson