A new report predicts the global speciality paper additives market will reach USD 8.26 billion by 2010

A report by Global Industry Analysts Inc predicts that the world speciality paper additives market will reach USD 8.26 billion by 2010. As with all reports of this kind, the definition of the market is critical and the small value given to the market in this report indicates that a narrow definition has been used.

PR News Now gives a summary of the report.

If you exclude commodities (eg bleaching chemicals, filler, pigments) our own estimate puts the speciality paper chemicals market already in 2007 at over EUR 8.5 billion (USD 13 billion).

Clariant Zhejiang Baihe JV announce expansion in organic pigments

Clariant International Ltd. and Zhejiang Baihe Chemical Holding Group have announced the expansion of the Hangzhou Baihe Clariant Pigments Co., Ltd. joint venture by investing in a new plant for the production of Quinacridone specialty organic pigments.

The new plant will be built at the existing joint venture facility located in Hang Zhou City, Zhejiang Province, China.

Clariant profit drops 50% on higher costs - unconvincing presentation of results raises questions

Swiss chemicals group Clariant met market expectations, despite reporting a 50% fall (to CHF41 million or USD 39 million) in first-quarter net profit, due to higher raw materials costs. In the stage-managed presentation of the 1Q08 results, the management failed to cover over the cracks and the short-term outlook for Clariant (and similarly Ciba) looks bleak.

The basic gap remains: 9% increase in raw materials with a 4% increase in customer selling prices.

Not much was reported on the paper business except that there was a 'high impact of raw material costs'. The 'focus on increased pricing' is only an option if the market allows it and in Clariant's key segments (Dyes and FWAs) there is quality competition, especially from China and India and any attempts to significantly raise prices will result in a loss of market share. There has been a positive move to try to decentralise the business away from Swiss (Muttenz) control.

Rumours of Clariant being a take-over target remain and the share price has drifted upwards since the 30th April and now hovers just below CHF 12.

Ciba's profits fall and they fail to meet forecasts - a tough 2008 is predicted

A combination of slowing demand and rising material costs have been blamed for the 51% fall in Ciba Specialty Chemical's profits. This result is well short of analysts forecasts.

Net income declined to CHF 37 million (USD 36 million) from CHF 76 million. Sales dropped 6 percent to CHF 1.56 billion. Seven analysts surveyed by Bloomberg predicted a profit of CHF 60 million.

Ciba has now predicted a 5% increase in operating income in 2008, compared with a previous estimate of 10%. Raw material costs gained 4.5% in the first quarter and they failed to increase selling prices to customers (reduced by 1% overall). Ciba SC is cutting a total 2,500 jobs to lower expenses by as much as 500 million francs by 2009 to compensate for rising costs.

As the Bloomberg article points out, Ciba is the second worst-performing stock in the Swiss Leader Index this year with a decrease of 30%, giving the company a market value of 2.5 billion francs. Missing the profit forecast will raise further questions regarding Ciba's management especially as we move further into 2008. Ciba's shares have not moved much since the 1Q08 results, hovering around CHF 35.

Hercules post reasonable 1Q08 results despite the challenges

Hercules Incorporated reported:

• Net income for the quarter ended March 31, 2008 of $32.4 million, compared to $80.3 million for the first quarter of 2007.
• Net income from ongoing operations for the first quarter of 2008 was $38.9 million, an increase of 13% compared to $35.7 million in the first quarter of 2007.
  
• Net sales in the first quarter of 2008 of $558.3 million, an increase of 11% from the same period last year.
  
• Volume increased of 7% and pricing increase of 1%
• Rates of exchange contributed to a sales increase of 5% for the quarter.
• Regionally they saw net sales increases vs previous year in: North America 6%, Latin America 25%, Europe 15% (3% if the impact of the Euro is discounted), and Asia Pacific 15%.
• Profit from operations in the first quarter of 2008 was $67.4 million, a decrease of 4%.
• Cash flow for the quarter was $29.7 million ($25.8 million for the same period last year).

The net sales of the Paper Technologies and Ventures Group for the first quarter 2008 increased by 7% and profit from ongoing operations also increased 7%. Paper Technologies sales increased 2%, benefiting from favourable exchange rates but loosing ground with price decreases and an unfavorable product mix.

Hercules remained optimistic about revenue, earnings and cash flow in 2008, but recognised the impact that higher raw material, freight and energy costs will have on the business.

Hydrogen peroxide market predicted to reach 4.3 million tonnes by 2012

A press release by RISI reports on a recent market review, "Hydrogen Peroxide: A Global Strategic Business Report" published by Global Industry Analysts, Inc.

The highlights are:

• Hydrogen peroxide (H2O2) demand is partly driven by elemental chlorine free (ECF) processes; the introduction of maximum achievable control technology (MACT) by the EPA in United States; and total chlorine free (TCF) processes mandate by the European Union [comment: there is still not much TCF pulp produced and some analysts do not see much future growth - at least in the next 10 years]
  
• The US hydrogen peroxide market in 2008 is estimated to be 705 thousand metric tons for 2008
• The Asia-Pacific is the fastest growing market, with a CAGR of 8% over the period 2001-2010.
  
• The pulp & paper industry is the largest market segment for hydrogen peroxide and this segment is expected to be around 2.11 million metric tons by 2010.
• European producers dominate the market in both Europe and North America.
  
• North American producers such as Dow Chemical and FMC also have a significant presence in the market.
  
• The market is fragmented in the Asia-Pacific region where there is a large number of small players.
• Players dominating the global hydrogen peroxide market include Arkema, BASF AG, Chang Chun Petrochemical Co, DC Chemicals, Dow Chemical, Eka Chemicals, Evonik Degussa, FMC Corporation, Guangdong Zhongcheng Chemicals, Hansol Chemicals, Kemira, Kingboard Chemical Holdings, Mitsubishi Gas Chemicals, Nippon Peroxide, PT Degussa Peroxide Indonesia and Solvay.

REACH - EU decide on charges for registration

The EU has given details of the fees and charges payable to the European Chemicals Agency (ECHA) for the registration of chemical substances (REACH) - the details are available in the wordy tome, the Official Journal of the European Union (Commission Regulation (EC) No 340/2008 of 16 April 2008).

The fees range from €1 600 for substances produced or imported in volumes below 10 tonnes, to €31 000 for those above 1 000 tonnes.

Help is offered to smaller businesses, with discounts of up to 90% for what is classed as a micro-enterprise; 60% for small-sized companies; and 30% for medium-sized firms (the definitions micro, small and medium are given in the EC regulation).

There is also a 25% reduction for companies which jointly regsiter.

REACH (Registration, Evaluation, Authorisation and Restriction of Chemical substances) requires that all substances manufactured or imported into the EU in quantities above one tonne per year be registered as from 1 June 2008.

For help with any aspect of REACH, especially for paper chemicals contact Canda International Ltd - importers into the EU or EU producers.

Kemira Expand Water Treament Chemical Production in China

Kemira will invest in its water treatment business in China, adding a new production line for polyaluminium chloride (polyaluminum hydroxychloride). It will increase its annual capacity at its Chongquing plant from the current 6,000 tons to 20,000 tons and expects to be operational in the first quarter of 2009.

The investment is being made by Kemira Water Solutions (Chongquing) Co Ltd, of which Kemira owns 80%.

The detailed announcement is available on Kemira's web site.

Akzo Nobel complete sale of National Starch to Henkel

Akzo Nobel has announced the completion of its sale of the acquired Natioanl Starch business to Henkel. This business was acquired recently in the acquisition of ICI by Akzo Nobel and details can be found in earlier blogs on this site. Details of the announcment are given on the Henkel web site.

Let us know if you see any positive or negative effects on the paper chemicals market.

Nalco become Exclusive Distributor of Evonik Goldschmidt's Tissue Chemicals in Central and South America

Nalco Company and Evonik's Goldschmidt Industrial Specialties announced that they will expand their co-operation and Nalco will now also be the exclusive distributor of Evonik's tissue additives in Central and South America. In July 2006, Nalco became the exclusive distributor of Evonik's tissue products in Europe and an agency agreement between the companies covering the United States, Canada and Mexico was finalised in February 2007.

Evonik's range includes products marketed under the following brands: AROSURF PA, VARISOFT, Z-QUAT, REWOQUAT and TEGOPREN and are complemented by Nalco's strong range of process chemicals and their excellent service model at paper mills. This further strengthens Nalco's position in tissue chemicals and further challenges Hercules' leadership position in this market segment.

California first to introduce a bill to ban the introduction of PFCs into food packaging - Why are they alone?

At last there has been a move somewhere in the world to challenge the lengthy, voluntary withdrawal of the use of fluorochemicals containing PFCs from use in applications such as food packaging. This topic has been covered before in this weblog and the question asked as to why there should be a voluntary agreement with the EPA to withdraw these products when there is clear evidence that they are harmful.

See the weblog on the EPA announcement that the big manufacturers are on track, or that on the recent DuPont study to produce evidence as to the fate of fluorochemicals in the environment.

The question remains, why wait until 2015? In many papermaking applications there are alternatives, but if there are not, then increased pressure will generate innovation.

Enviroblog covers this topic well and highlights the recent bill filed by California State Senator Ellen M. Corbett which would make California the first state to ban some PFCs in food packaging. The bill, sponsored by EWG, would prohibit more than trace amounts of two PFCs called PFOS and PFOA in any material used to package food, beginning in 2010.

The big producers working with the EPA include Arkema, Asahi, Ciba, Clariant, Daikin, DuPont, 3M/Dyneon and Solvay Solexis.

2007 Sees a record number of patent filings - East Asia continues to show fastest growth

Which countries file patents? In an interesting review for 2007 it is shown that there has been a record number (156,100) of filings under the World Intellectual Property Organization (WIPO) Patent Cooperation Treaty (PCT). The country ranking is as follows:
1st USA
2nd Japan
3rd Germany - where the individual inventors are rewarded
4th Korea
5th France
6th UK
7th China

The review states that, 'For the fourth year running, the most notable growth rates came from countries in north east Asia which accounted for over a quarter (25.8%) of all international applications under the PCT.'

It is clear that in high-tech areas patents can often be policed and the risk of violation are high. In paper chemicals it remains questionable as to the value of patents and the ability of companies to police their 'inventions'. There are exceptions but the legal protection of patents in certain countries remains weak.

A perspective on the Indian and Chinese Colourants Market - Dyes and Pigments

An interesting perspective on the Indian and Chinese colourants market.

Higher whiteness multi-purpose papers in the USA drives growth in FWA market

Nalco's Chris Smith has written about the recent move by International Paper to increase the brightness of North American office paper (copier paper) and set a new industry standard for the USA. There is a disparity between the brightness (whiteness) of standard office papers supplied to the markets in Europe (and Asia) and those in the USA and Japan - the European and Asian markets demand significantly higher whiteness. Therefore, there was scope for International Paper to increase whiteness in the USA and to produce papers which could be competitively exported to Europe and Asia.

Producing paper at higher whiteness requires the use of more fluorescent whitening agent (FWA or OBA) and/or higher levels of bleaching, changes which can also impact on process efficiency. So, initially there were significant increases in costs, only some of which could be reduced by changes to raw materials and processes.

The effects of this move by International Paper have been:

• To set a new standard for whiteness in the USA for standard office papers (white, copier paper)
  
• To increase the consumption (market) of FWAs (OBAs) in the USA

The article gives a good account of the change to higher whiteness and case studies highlight the key issues.

ColorLok - the new Standard for ink-jet papers?

Hewlett Packard has forged ahead with the branding of a new standard for ink-jet papers. After developing and patenting an approach for improving the ink-jet printability of paper, they worked with International Paper to prove the process and subsequently established a standard, ColorLok (www.colorlok.com).

Using a combination of materials which are readily available - a cationic polymer (eg a dye fixative such as a dicyandiamide-formaldehyde condensate) and a divalent metal ion solution (calcium chloride is often quoted in the patents) - in a size press application (surface coating of the paper) the surface of the paper is improved to fix the ink at the surface and give improvements in ink-jet printability (not forgetting the other requirements of these multi-purpose papers eg laser printing using toners):

• Improved water-fastness
• More vivid print colours - improved print density
• Improved print resolution - less wicking and colour-to-colour bleed
• faster drying of the ink - less smearing and faster handling time

There has been some co-ordination of the development of the ColorLok papers and HP Vivera inks and HP ColorSphere toner, described by HP as, ‘Optimally co-ordinated innovations that make it possible to create professional-quality printed documents’.

If paper companies are interested in adopting the standard they need to be accredited and the Rochester Institute of Technology has been selected to do the testing etc. The paper company can either use its own approaches to meeting the standard or the application know-how can be purchased from Hewlett Packard.

A number of paper companies (eg IP, April, Domtar, Mondi, M-real and Suzano) have signed up to using the ColorLok brand and it will be interesting to see how this marketing venture develops.


Additional information is given in the following articles:
printweek.com
Hewlett-Packard's web site
www.colorlok.com
Office World News