BUSINESS HARD HEADED A tour of the Antwerp site preceded groundbreaking for Degussa's largest methionine plant.
DEGUSSA LOOKS TO NUTRITION Fourth methionine plant to support fast-growing market for the animal feed additive PATRICIA L. SHORT, C&EN LONDON
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N A GALA CEREMONY GRACED BY BEL-
gian government officials, customers, and the press, ground was broken late last month in Antwerp for what Degussa claims will be the largest methionine plant in the world. The plant, with capacity of 150,000 metric tons per year, is scheduled to come onstream in 2005. The company has earmarked 350 million euros —roughly $420 million—for projects to include the new methionine plant and supporting facilities. The company already has one methionine plant in Antwerp and others in Wesseling, Germany, and Mobile, Ala. In this investment, besides methionine, Degussa will build plants for raw materials acrolein and methyl mercaptan and expand hydrocyanic acid production at the site. The new investment is a measure of the company's commitment to nutrition-oriented feed additives. The company boasts that it is the world's only manufacturer of all three of the most important animal feed amino acids: DL-methionine, L-lysine, and L-threonine. In addition to its investment in methionine, for example, Degussa recently acquired Cargill's shares in the Blair, Neb.based lysine producer Midwest Lysine, which is newly expanded, and it has tentative plans to build a 30,000-metric-ton threonine plant by 2005. 14
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Sales at the company's feed additives business, part of its fine and industrial chemicals division, were nearly $680 million last year at current exchange rates. Moreover, according to Hubert Wennemer, head of the feed additives business, sales have doubled in the past six years. The new plant will bring the company's methionine capacity to almost 400,000 metric tons annually within the next few years. That's a substantial amount, when estimates peg current world demand at 450,000 to 5 0 0 , 0 0 0 metric tons per year. And other producers aren't sitting still: Witness Sumitomo's new plant injapan, now under construction, that will bring its capacity to 90,000 metric tons per year (C&EN, June 9, page 13). "This is a world-scale plant," Wennemer emphasized. "We're not expecting full utilization within the first year, but we're not talking about five years either. Our world market share is about 30%, so there are growth opportunities, but we can't ignore our competitors." And although there is the potential for overcapacity, Wennemer added that Degussa is projecting worldwide growth of more than 5% per year. "There will be some
free capacity for a while; we know that and it is within our plans," he said. Nutritive feed additives are a core business for Degussa, with a focus on amino acids, Wennemer said. Such additives promote efficient production of lean poultry and pork. And, as is the case for the enzyme phytase, feed additives can also help animals' digestive processes to cut waste, an environmental concern in many regions. "We are open to other feed additives, but with two conditions," he said. "They must be nutritive, and we must have a chance to play number one or number two role worldwide. That's why we {got out of] vitamins—it is a good business, but we had no chance to play a leading role in the world markets. We were in the second league." According to Wennemer, the growth markets for nutritional feed additives "are clearly Asia, Latin America, and Eastern Europe, in that order." THAT REALITY caused serious internal debate about where the new plant should be located. One factor that swung the decision, company executives say, was the location's logistical advantage in a major petrochemical and chemical area second in the world only to the Houston region in the U.S. But even more important was the know-how that had accumulated for the manufacturing process in Antwerp. Because of the infrastructure and supporting facilities required for a new methionine plant, building the project in Singapore would have cost about 5% more, said Degussa Chairman Utz-Hellmuth Felcht, although incentives from the Singapore government would have made it less expensive overall. "But to go to a completely new site with this difficult technology would have run the risk of delayed start-ups and other problems," Felcht said. "If the investment had been only 35 million euros," he added, "I would have insisted it be built in China. However, we will continue to serve the Asia market from Belgium. The biggest cost of supplying the market there is the distrib u t i o n within Asia, and t h a t is true whether supplying from China or from Northern Europe." •
Sales at the company's feed additives business were nearly $680 million last year.
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