Basell reduces polyolefin capacity; also kills Hivalloy (October 26, 2001)

The world’s number one manufacturer of polyproplyene, Basell Polyolefins, is addressing the over-capacity situation that has plagued the resin supply business for much of the past year by implementing a number of rationalization and scrap-and-build projects. It is also planning to introduce a “breakthrough polypropylene technology” to the market by the middle of next year, company officials said at a press conference held during the K Show.
In addition to 300 KT of total polypropylene capacity temporarily shut down between facilities in Wesseling, Germany and Bayport, TX earlier this year, the company will be closing its Wilton PP manufacturing and compounding plant in the United Kingdom. As well, it will be rationalizing some PP capacity at its facility in Tarragona, Spain. These actions will be completed by mid-2002, according to Volker Trautz, president and CEO of Basell.
Trautz says the over-capacity was partly created by the boom in business between 1997 and 1999 when the worldwide polyolefin market grew between six to 10 percent per year. To meet this demand, many new expansion projects were approved and completed which, in the current economic slow down, has caused a glut of polyolefin capacity. Trautz says polyolefin growth is already rebounding in Europe and he expects the North American market, where the over-capacity was greatest, to soon follow suit. Accordingly, Basell announced a number of new upgrades to existing facilities, including an investment in a new “breakthrough” polypropylene polymerization technology scheduled to be commercialized by mid-2002.
Basell also announced that its Hivalloy lines of polypropylene resins will be phased out at the end of the year. Hivalloy is used by processors in a wide range of applications, from automotive to consumer goods. Company officials declined to elaborate on the reasons for the decision.