PolymerLatex GmbH & Co. has launched a two-phase project aimed at significantly expanding its nitrile production both for the short and long term.
The synthetic latex producer plans to build a world-scale nitrile plant in Johor Baru, Malaysia, and add 20,000 metric tons of nitrile capacity to its existing facility in Filago, Italy.
Marl, Germany-based PolymerLatex is purchasing additional reactors at the Filago site to support the production boost, according to Soren Butz, business manager for protective gloves.
The added capacity is slated to be online in the first quarter of 2008 and will be a stepping point to the opening of the Malaysian facility, which will have initial nitrile capacity of 100,000 metric tons, he said at the International Latex Conference, held Aug 21-22 in Las Vegas.
The Malaysian operation-which will be named PolymerLatex Sdn. Bhd. and headed by CEO Vinny Bhalla, the firm's global sales manager for protective gloves-is expected to be completed by the third quarter of 2009, said Lars Wallstein, the company's director of marketing, sales and technical services. It will employ about 100.
He said the plant will have a full research, development and technical service operation and have the capability of adding more reactors if nitrile demand increases in 2010 and beyond.
The facility will become a key unit for PolymerLatex, the officials said. The firm plans to move some production from its European nitrile plants in Italy, Germany and England to the new site in 2009 and 2010 "to achieve high utilization from the very beginning," Wallstein said.
The additional R&D and technical services units will bolster an already strong operation that includes one of Europe's largest latex research centers, which it opened eight months ago at its Marl headquarters, Butz said. The center develops products and produces its own gloves for testing purposes.
The Malaysian center will "further intensify innovation in close cooperation with customers from the glove dipping industry in Malaysia and Southeast Asia," he said.
Although PolymerLatex has a worldwide customer base, "Southeast Asia has become the center of the global dipping industry within the last 10 years," Wallstein said.
Butz noted the company will have great flexibility at its facilities in Italy and Malaysia, adding that when some nitrile production is moved from the European plants to Malaysia, the new reactors will remain at the Filago site. "We'll keep some nitrile production in Europe and if there's demand for it we can increase capacity."
PolymerLatex will be able to add capacity at the Johor Baru plant at short notice without making a major investment, according to Wallstein.
The officials did not say what the two-phase project will cost, but said that it is a major investment," Butz said. "We're now very well positioned as a trendsetter in the industry."
A spin-off from Bayer A.G. and Degussa A.G. in 2003, the company is relatively young but has a strong base in the glove dipping industry, the two officials said.
On a fast track
Demand for nitrile has been growing rapidly and making the initial fast-track investment in its Italian site made sense to ensure the firm could fill its customers' needs, the officials said.
"PolymerLatex has been the fastest growing nitrile latex supplier to the glove dipping industry in recent years," said Wallstein, who has global responsibility for the firm's paint and construction, adhesives and sealants, and glove dipping businesses. "Our growth is based on the success of our customers, our superior products, our unique production and process technology" and the firm's innovativeness, he said.
As a primary synthetic latex supplier, he said PolymerLatex decided a year ago to cover the industry's global demand for polychloroprene, used to dip gloves, by "strategically signing a new long-term contract with Lanxess (A.G.), the world's largest CR producer," he said.
Now it wants to deal with the double-digit growth rates for nitrile, fueled by recent developments in the natural rubber industry as well as the superior properties of nitrile gloves, Wallstein claimed.
He said that NR pricing has reached historic highs and the outlook for the next few years isn't bright. On the other hand, he said the price of nitrile gloves in the future won't necessarily be much higher than rubber latex gloves, "especially not if you also refer to the performance of the device.
"Both feedstocks-NR and nitrile-are to a certain extent interdependent with the crude oil pricing," he said. "So there is an underlying upwards trend in either feedstock."
However, the dynamics are different, Wallstein maintained, because NR pricing is driven by a number of parameters, including crude oil and-indirectly-SBR pricing; narrow demand and supply fueled by the emerging economies and their appetite for NR/SBR; volatility driven by traders speculating heavily; climate change in Asia; currency influences; and political instability in rubber-growing countries.