INTERNATIONAL BUSINESS
Arco Increasing Chemicals Stake In Western Europe With addition of French unit, Arco Chemical Europe will be major supplier of propylene oxide and gasoline octane enhancer terf-butyl alcohol Dermot A. O'Sullivan, C&EN London
Arco Chemical Europe, a subsidiary of Atlantic Richfield's Arco Chemical Co., is in an expansionary mood. It has just revealed plans to build a plant in France to make propylene oxide and tert -butyl alcohol, and a unit in the Netherlands for making hydroxy-terminated polybutadiene (C&EN, March 11, page 9). The French plant will be located at Fos near Marseilles, site of a number of oil refineries and petrochemical operations. When completed in 1988 at a cost of about $250 million, it will have an annual design capacity of up to 396 million lb of propylene oxide and 946 million lb of tert -butyl alcohol. This will be Arco's second such operation in Europe. Its first, at Botlek near Rotterdam, came on stream in 1972. That operation since has gone through several expansions to the current output level of 506 million lb of propylene oxide and 1.21 billion lb of the alcohol yearly. (Propylene oxide also is made in a 99 million lb-a-year plant, together with coproduct styrene, at Puertollano, south of Madrid, in a joint venture with Spain's Empresa Nacional del Petroleo, called Montoro.) With the Fos facility in place, Arco will be an even more significant supplier of propylene oxide in Western Europe. Its 1 billion lb or so overall yearly capacity will rank with current levels of the other ma10
March 18, 1985 C&EN
jor producers—Dow Chemical, Erdolchemie, and Shell. Some 65% of the oxide goes to make polyols, in turn used for making flexible, semirigid, and rigid polyurethane foams. Of the balance, about 25% is converted to propylene glycol, a component of polyester resins. The remainder has outlets in cosmetics, surfactants, and other products. Since late 1983, Arco has been supplying its European polyols customers with product made locally. In a shrewd move, it acquired the polyols businesses of France's former Chloe Chimie and Produits Chimiques Ugine Kuhlmann during the height of the major reshuffle of the French chemical industry (C&EN, April 2, 1984, page 22). The two plants, near Fos and near Ghent, Belgium, have a combined capacity of 209 million lb annually.
No less important to Arco's chemical strategy in Europe are the coproducts made with propylene oxide. tert-Butyl alcohol, usually referred to as gasoline-grade TBA, or simply GTBA, results when propylene and isobutane interact in the presence of oxygen. GTBA has a rosy future because of the current move to reduce the level of lead use in gasoline, and ultimately eliminate it entirely. Initially, this move stemmed from concern over what many maintain to be the deleterious effect on human health of lead levels in the air. More recently, g e n e r a l alarm about damage to European forests and lakes by acid rain (C&EN, Jan. 28, page 12) is hastening moves to cut emissions of hydrocarbons and nitrogen oxides in automobile exhaust gas through use of catalytic converters. Because lead poisons the
Propylene oxide is coproduct of two reactions, one yielding fe/f-butyl alcohol...
fort-Butyl alcohol
Itobutane
Propyl*!* oxicto
tort-Butyl hydroperoxide
. . . and the other styrene
Ethylbenzene
Mothylbonzyl alcohol EthylbtniMie hvdroofoxkto
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Propylene oxide
catalysts, there now is an added incentive to get rid of it. Addition of methanol to gasoline is becoming the favored means of retaining the required octane rating of the fuel as use of lead alkyl additives is legislated out. Methanol alone, however, tends to undergo phase separation from the mixture. This is where GTBA comes in, because it is an excellent solubilizer for methanol in gasoline. Besides, GTBA itself is an octane enhancer. Arco, the sole GTBA producer in Europe, is marketing mixtures of methanol and GTBA, tradenamed Oxinol. The more usual is a 50-50 blend, upward to 5% of which is being used in gasoline sold in Austria, Belgium, West Germany, the Netherlands, and Switzerland. The trend is likely to spread soon to France and elsewhere. "We have gotten in on the ground floor with this product," notes Alan R. Hirsig, chairman of Arco Chemical Europe. "As the price of methanol has softened very considerably, and because we foresee it softening further as more methanol plants come on stream, we expect Oxinol to become more widely used." Hirsig doesn't have any concern about the long-term availability and price of his propylene and isobutane feedstocks, both of which are purchased. "The way we see it, as cjude oil prices soften, we fully expect propylene price to come down also," he says. Compared to the propylene oxide, polyols, and TBA businesses, Arco's involvement in styrene and its derivatives in Europe is fairly modest. But chances are this will change. As is the case with TBA, styrene is made as a coproduct with propylene oxide simply by replacing the isobutane feedstock with ethylbenzene. Through its partnership in Montoro in Spain, Arco has access to the 220 million lb a year of styrene produced in Puertollano. And last year, Arco acquired Arrahona with its 110 million lb-a-year polystyrene plant in Barcelona. The firm, since r e n a m e d Arco Chemicals Iberica, also is a significant producer of acrylonitrile-butadiene-styrene resins with an annual capacity of about 20 million lb.
| number of European auto compa| nies toward use of these products/' IS? Hirsig remarks. "The degree of in§ terest is such that we fully expect to be able to justify a Dylark plant over here before long. "This is the basis of our international expansion strategy/' Hirsig explains. "New products are developed in our R&D labs in suburban Philadelphia. Typically, we justify a base production unit in the U.S., build markets worldwide, and as these markets get to a critical mass, we then justify local manufacture, and spin off the business to local control." The decision to put in a worldscale unit in Rotterdam making hydroxy-terminated polybutadiene, the only one of its kind in Europe, is the most recent example of this Hirsig: $1 billion in 1990 strategic approach. The material, The Barcelona facility is expected which Arco has been making for to provide a natural launching point some years at Channelview, Tex., is for Arco's range of proprietary a liquid resin with a range of mostyrene-maleic anhydride copoly- lecular weights depending on the mers, which the company currently grades required. Poly bd, as Arco tradenames it, makes and sells in the U.S. as Dylark. A foamed version is trade- is a straight-chain homopolymer named Dytherm. These are being capped with hydroxyl groups, and offered for engineering applications is used to provide flexibility to adlargely because of their excellent hesives, caulks, and other similar stability to high temperatures as well products. Because it is rubbery, reas their good impact strength and silient, impervious to water, has processability. Foamed laminates, for good resistance to sunlight, and has example, molded to the desired excellent low-temperature propershapes can be used for making in- ties, the material is a component of gaskets and sealants that are exstrument panels and the like. "We are working actively with a posed to moderately hostile environments. Arco Chemical has grown conArco Chemical Europe now siderably following Atlantic Richfield's 1980 purchase of its half share has plants in four countries in Oxirane, a company formed with Capacity Country Product (mWlontot •>) Halcon in 1966 to exploit both partners' peroxidation technology. Sales Belgium Polyols 132 worldwide last year exceeded $3.14 Franco tert-Butyl alcohol 946* billion, almost 13% of the $24.7 bilPolyols 77 lion Atlantic Richfield total. Propylene oxide 396* The European subsidiary, headNether- (erf-Butyl alcohol 1210 toncte quartered in Eton near London, likeHydroxy-terminated na ly will achieve sales this year of polybutadiene Propylene oxide 506 some $400 million, approaching 15% Spain Acrykxiitrile-buta20 of Arco Chemical's sales. That's diene-styrene about double the 1980 level. "I'd Polystyrene 110 like to see us in the $1 billion to Propylene oxkteb 99 $1.2 billion range in 1990," Hirsig Styrene* 220 concedes. Judging from the drive • Planned, b Produced by Montoro, a joint venture of and enthusiasm of him and his colArco Chemical Europe and Empresa Nactonal del leagues, chances are good this goal Petroleo. na • not available. will be achieved. • March 18, 1985 C&EN
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