Evonik rushes to restart resins plant in Germany, pursues Asia expansion
SHANGHAI -- While Evonik Industries AG moves to mitigate the impact of a March 31 explosion at its resins plant in Marl, Germany, executives in Shanghai announced plans to build a resins plant in Asia.
Completion of that project remains years away, though, so it will not help automakers and suppliers who are working to deal with an expected shortage of nylon 12 materials used to make plastic auto parts.
For now, the company is pushing to start production again in Marl.
"There is quite a lot of damage" at the plant in Germany, said Gregor Hetzke, head of the company's performance polymers unit. "We are expecting it will take three to six months to get it back online."
Nylon 12 is used for fuel tanks, brake components and seat fabrics, and the shutdown will likely lead to production disruptions for many automakers.
The planned Asia plant will not come online for a few years, officials said.
"In the not-so-distant future we will decide on a location," said Dahai Yu, a member of the executive board of Evonik. "We are still dedicated to opening the plant in 2014."
Yu spoke at a news conference here during a trade show.
2011 was a record year for Evonik, with 14.5 billion euros ($18.9 billion) in sales globally. Some 3.1 billion euros ($4 billion) came from the company's plastics business and Asia comprised 20 percent of the company's overall sales.
Evonik aims to expand its business in Asia, with a goal of reaching 4 billion euros ($5.23 billion) in sales in the region by 2015, expanding Asia's share to 30 percent of global sales.
"We concluded a strategy project recently," Yu said, "and we want to double our sales in Asia."
To do this, Evonik is promising to invest 2 billion euros ($2.61 billion) in the region from 2010 to 2015. This will include hiring 2,000 employees over the next few years, the development of the nylon 12 plant and the expansion of the company's Shanghai research and development center.
"The supply chain has become increasingly important," said Yu. "We want to increase our sales by local production to 60 percent by 2015."
Switching from nylon 12
Evonik has said suppliers using nylon 12 can switch to its Vestamid Terra materials, which have "much the same" properties as nylon 12. Vestamid Terra consists of nylon 6/10, nylon 10/10 and nylon 10/12 polymers that are made partly or entirely from castor oil.
The Marl plant that was damaged on March 31 makes cyclododecatriene (CDT), which Evonik uses to make laurolactam, a monomer used to make nylon 12.
The plant outage impacts global nylon 12 supplies because the resin was already in short supply, and because Evonik also supplies laurolactam to Arkema SA.
Together, Evonik and Arkema account for about half the world's supply of nylon 12.
The blast killed two Evonik employees and shut down production at what is one of three plants that produce the majority of the world's nylon 12.