International
Fibers thriving in developing countries them. All are experiencing severe losses. And all, including Enka itself, have been taking steps to rationalize fibers slumps in Western and restructure their operations, and Europe, Japan, and U.S., reduce the work force. Some, like Courtaulds, Imperial Chemical Inproduction in other countries dustries, and Rhone-Poulenc, have withdrawn from large segments of the is expanding sharply business. Nor have U.S. companies' European operations escaped the effects of William J. Storck, C&EN the fibers business downturn there. New York; Dermot A. Du Pont, for instance, last year closed O'Sullivan, C&EN London its acrylic fibers plant at Maydown, Northern Ireland. Following a similar Production of man-made fibers is move at Dordrecht, the Netherlands, going from strength to strength in in 1977, Du Pont no longer makes countries other than Japan, the U.S., these fibers in Europe, and Monsanto and those of Western Europe. Last has withdrawn completely from nylon year, despite a 2% fall in global out- 66 fiber production and texturizing. put, combined production of the Nevertheless, "further European other countries rose 6% from 1979 to capacity curtailments are imperative 12.3 billion lb, bringing these other to restore the equilibrium between countries' share of the world total to supply and demand," the Enka study almost 40%. concludes. "If no measures are The achievement marks another taken," it warns, "excess capacity for advance that stretches back in an synthetic textile and carpet fibers will unbroken record for more than a run up to 1.3 billion lb in 1985. Only decade. Between 1970 and 1980, if overcapacities are eliminated will it production in the developing be possible for the European mancountries grew by a spritely 11% made fiber industry to return to a balanced situation of normal ecoyearly average. The same can't be said for Japan, nomic competition adapted to the the U.S., or Western Europe, how- future market potential." ever, where man-made fibers—celOver the past 10 years, world outlulosics and noncellulosics (synthet- put of man-made fibers has grown an ics)—rsuffered a setback last year. In average of 5.4% a year, from 18.5 bilJapan, the slippage from 1979 was 1% lion lb in 1970 to 31.3 billion lb last to about 4.0 billion lb, in the U.S. it year. Development of synthetics far was 7% to 8.5 billion lb, and in Europe outpaced the cellulosics. Of the 31.3 it was 10% to 6.5 billion lb. billion lb production total in 1980, These figures emerge from the synthetics comprised 75% (23.3 bilmost recent annual evaluation by lion lb), cellulosics 25% (8.0 billion lb). Enka, the fibers arm of Akzo head- Ten years before, the split was closer quartered in Arnhem, the Nether- to 57% for synthetics (10.6 billion lb) lands. Although global in scope, it and 43% for cellulosics (7.9 billion lb). does emphasize how the shifting Synthetics production grew at an pattern of the world fibers scene af- average annual rate of 8.2% during fects West European business in that time span, whereas cellulosics remained essentially static. particular. For instance, the report classes The Enka study's geographic 1980 as "another crisis year for the breakdown of the global production man-made fiber industry" in Western pattern points up some significant Europe. And it predicts that "earn- changes that have occurred in the ings will be depressed for the next few 1970-80 period. A decade ago, the years." U.S. held pride of place as synthetic Contrary to the situation a decade fibers producer with 32% of the world or so ago, man-made fibers now hang total (3.4 billion lb). Western Europe as something of a financial millstone was a close second with 31% (3.3 bilaround the corporate necks of the lion lb), followed by Japan, 21% (2.2 West European companies that make billion lb), and other countries, 16%
While output of man-made
Fibers capacity has shifted mainly from Europe, Japan
Western Europe 32.4% / United States 29.5%
Others 8.8% Eastern Europe 14.1%
Japan 15.3%
1970 i i ^ i i i i i ^ p l k m lb
Western Europe 30.1%
Others 13.9%
United States 27.8%
Eastern Europe 14.6%
Japan 13.6%
1975 capacity * 30,7 bill ion lb
Western Europe 25.4%
United States 25.8%
Japan 11.6% Others 21.8%
Eastern Europe 15.4%
1980 ^ p § p ^ ^ p i k m tb Source: Wt^^^^H:
llllll
March 9, 1981 C&EN 9
International (1.7 billion lb). By 1980, the U.S. share still was 32% (7.3 billion lb). But Western Europe's slipped to 20% of the total (4.7 billion lb), and Japan's to 13% (3.0 billion lb), while the share held by the other countries moved up to 35% (8.3 billion lb). The 10-year average annual growth rates reflect the shift. For the U.S. it was 7.9%, for Western Europe 3.5%, for Japan 3.3%, and for the others 17.5%. Even last year, which was a generally poor one for the synthetic business with worldwide production down 3% from 1979 to 23.3 billion lb, the other countries showed up strong with a 7% output increase. On the other hand, volume fell 7% in the U.S., 11% in Europe, and 1% in Japan. Even in the pedestrian cellulosics area, the other countries as a group have shown growth. Between 1970 and 1980, their share of total output advanced from 34.6% (2.7 billion lb), to just under 51% (4.1 billion lb), an overall average annual growth of 4%. The U.S., Western Europe, and Japan, however, experienced a shrinkage and negative growth rates, from 19.7% (1.6 billion lb) to 15% (1.2 billion lb) in the U.S.; from 31.5% (2.5 billion lb) to 22.3% (1.8 billion lb) in Europe; and from 14.2% (1.1 billion lb) to 11.8% (900 million lb) in Japan. Among the synthetics, the polyesters have undergone the fastest rate of growth worldwide, almost 12% annually from 3.6 billion lb in 1970 to 11.1 billion lb last year. Acrylics came next, growing more than 7% per year from 2.2 billion lb to 4.5 billion lb, followed by polyamides, about 5% per year from 4.2 billion lb to 6.8 billion lb. Other fibers—polypropylene, elastomerics, and the like—though still low-volume by comparison, grew at a rate of 4% annually from around 600 million lb to 900 million lb. Here again, there are distinct regional differences. For example, output of polyester fibers in the U.S. advanced 11% annually (from 1.4 billion lb in 1970 to 4.0 billion lb in 1980). In Europe, the rate was closer to 5% per year (from 1.0 billion lb to 1.6 billion lb), and for Japan 7% (from 680 million lb to 1.3 billion lb). Elsewhere in the world, the growth rate neared 25% annually, from 470 million lb to 4.2 billion lb. Similar discrepancies in production pattern changes took place for the other fiber types. In the case of the polyamides, the growth rate was 6% in the U.S. to 2.4 billion lb in 1980,0.2% in Western Europe to 1.4 billion lb, while the 680 million lb made in 10
C&ENMarch9, 1981
U.S. still leads in production of noncellulosics Western Europe
U.S.
Billions of lb
Billions of lb
8
8
6
6
4
4
2
2 0
0 1970
1975
1970
1980
1975
1980
Other countries
Japan Billions of lb
Billions of lb
8
8
6
6
4
4
2
2
0,
0 1980
1970
•
Polyamide
ffl
Polyester
@ Acrylics
| | Others a
a Others = polypropylene, elastomerics, etc. Source: Enka
Japan last year matched output there in 1970. Growth in the other countries amounted to 11% per year, from 830 million lb to 2.4 billion lb. Likewise, for acrylic fibers, average annual growth in the U.S. and Europe was about 5%, to 800 million lb and 1.5 billion lb, respectively. In Japan, it was lower at 3%, to 760 million lb. But in the other countries, the annual growth rate approached 19%, to 1.4 billion lb last year. An interesting development appears to have taken place for the other fibers. According to Enka's analysis, U.S. output between 1970 and 1980 fell 21% to 150 million lb, in Europe rose 262% to 290 million lb, and in Japan remained essentially unchanged at 260 million lb. For the other countries, there was a 155% increase to 230 million lb. The shift of fibers to the developing countries is confirmed by changes in production capacity locations. In 1970, according to Textile Organon, published by the New York Citybased Textile Economics Bureau, 77.2% of the worldwide man-made fiber producing capacity was located in Western Europe, Japan, and the U.S. Another 14.1% was located in
Eastern European countries, with the remaining 8.7% in the rest of the world. By 1980, West Europe, Japan, and the U.S. each had lost ground, making up a combined share of worldwide capacity of 62.8%. Eastern Europe's share of capacity had risen slightly to 15.4% of the world total, and the rest of the world's share had swelled to 21.8%. Probably nowhere is the shift in
1980 European fiber sales lowest since mid-decade Millions of lba 400 350 300 250 200 0 1971 72 73 74 75 76 77 78 79 80 a Seasonally adjusted. Source: Enka
capacity more pointed than that for cellulosics. Worldwide production capacity for rayon and acetate has declined 6.5% to 8.5 billion lb in 1980 from 9.1 billion lb in 1970. However, capacity outside West Europe, Japan, and the U.S. has increased 43% to 4.4 billion lb in 1980. Whereas at the beginning of the 1970's these countries accounted for 33.7% of worldwide rayon and acetate capacity, by 1980 they accounted for 51.8%. Eastern Europe has seen the biggest surge in capacity. There cellulosic fiber capacity has increased 33.6% in the 10 years to 2.8 billion lb, making up 33% of the world total. In 1970 annual capacity in Eastern Europe was 2.1 billion lb, just 23% of the total worldwide capacity, according to Textile Organon figures. Most of the building in cellulosics in the East bloc is outside the U.S.S.R., according to Robert M. Dillon, marketing general manager for Chemtex, a New York City-based company that designs and builds fiber plants in countries outside the U.S. Although the Soviet Union is very stable in rayon capacity, he says, the other East bloc countries are increasing capacity at a good clip. This
Fibers production increased in 1980 due to cellulosics Billions of lb 35 30 Total fibers
25 20 15 Noncellulosics 10 5 0 1970 71 72 73 74 75 76 77 78 79 80 Sources: Textile Organon, C&EN estimates
is essentially because of their dependence on the U.S.S.R. for cotton and petroleum. They, therefore, substitute rayon for both natural and noncellulosic fibers. Dillon indicates that there is a dividing line that indicates if a country will emphasize cellulosic or noncellulosic production. In countries where there is a good cotton crop, such as
Canadian petrochemical capacity growing fast A new wave of political problems could dull Canada's petrochemical development, especially in olefins and derivatives. But for now, construction is going full tilt, especially in the ethylene product chain. Nameplate plant capacities are expected to grow an average 10% per year in ethylene and 12% in ethylene derivatives through 1985. That means more than 60% capacity growth in half a decade. Most of this construction is centered in Alberta, although new plants also are planned in the East. The spur to western expansion continues to be the abundance of relatively low-cost liquid hydrocarbon raw materials extracted from natural gas. These allow the use of relatively simple, conventional cracking technology to obtain ethylene. The 10%-per-year growth for ethylene during the first half of the 1980's will bring total ethylene capacity in Canada to 5.6 billion lb in 1985, up from 3.5 billion lb in 1980, according to Teresa Acosta of DeWitt & Co. of Houston. Speaking in Houston at a regional technical con-
ference of the Society of Plastics Engineers, Acosta said that all the new capacity in Alberta will use natural gas liquids (NGL), especially ethane, as feedstock. When these expansions are operating, NGL will account for 48% of total feedstock for Canadian ethylene production, she says. In 1980, NGL's portion was 35%. Ethylene derivatives capacity in Canada may expand even faster than that for ethylene. Acosta puts the rate at an average 12.2% annually through 1985, if all announced projects come on stream on schedule. Many of these new plants also will be in Alberta. One problem facing present ethylene consumers in Canada is that most derivatives plants are located in eastern Canada, although the increase in ethylene supply will come largely from the West. Part of the solution is to pipe ethylene from Alberta by the Cochin pipeline, owned by Dow Chemical, Dome Petroleum, Phillips Petroleum, and Alberta Gas Trunk Line. The pipeline goes through the U.S. via Chicago and Midland, Mich., then back into Canada at Sarnia, Ont.
Egypt, the emphasis is on noncellulosics—usually polyester for blending. However, where there is little or no cotton, rayon plants are more likely to be built because of the fiber's cottonlike qualities. However, he says, polyester is becoming the "universal fiber," with plants in all parts of the world. And he feels that in spite of the growth of rayon, polyester will begin to eat up some rayon as well as cotton markets, because of its lower price. The Enka report stresses that the relatively higher cost of labor in Western Europe, Japan, and the U.S. looms large in sharpening the competitive edge of other countries in the production of man-made fibers and of the textiles and products made from them. Meanwhile, of course, energy and feedstock costs continue to rise. What advantage U.S. companies have had in its regard soon will dwindle following President Reagan's move to deregulate the price of U.S. oil more quickly. To some extent this will lessen the burden on the Europeans who have been complaining loudly about what they term as "the flood" of U.S.-made fibers and fiber-based materials onto their markets at prices Europeans can't match, damaging their industry. • How much more ethylene will move east remains open to question. A second ethane cracker scheduled for Alberta is saddled with the requirement that no ethylene leave Alberta except in the form of derivatives. In this way, the provincial government hopes to gain the income benefits of the high value-added products and to encourage more investment in the province, Acosta says. The outlook for the second largest volume olefin, propylene, has changed because of the feedstock switch toward ethane in making coproduct ethylene. Production of propylene from ethane will be little or nothing. So the main propylene-producing area in Canada will remain in the East from refineries and naphtha-fed steam crackers. Even so, very little capacity expansion for propylene in any grade will occur before 1985 because of the present overcapacity, Acosta predicts. This overcapacity, by affording relatively low raw material costs to customers, has encouraged demand growth in derivatives, 18% per year on average between 1974 and 1979. The growth rate is slowing to 5.6% in the early 1980's because the base has become much larger. March 9, 1981 C&EN
11
