Technological watch

The year 2019 may go on record as the hottest year in human history, helping to rekindle urgently needed climate actions across the globe and inspiring a host of cross-industry initiatives to tackle climate change.
 
For the plastics industry in particular, the year was more than ever about how to address the issue of excessive waste, increase recyclability and bring about sustainability.
 
The year started with a bang with the World Economic Forum’s Davos summit seeing the formation of a $1.5bn (€1.3bn) initiative – the Alliance to End Plastic Waste. (Read more)
 
The month of May also saw two significant regulatory moves both across the EU and globally.
 
Hoping to stem the leakage of plastic into the environment, the United Nations decided to include plastic waste in a treaty governing trade in hazardous waste 10 May (Read more), while later that month, the European Council adopted a directive proposed by the European Commission to ban 10 single-use plastic products (SUP) to address the issue of marine litter (Read more)
 
The policy-driven efforts carried on into September when more than 100 public and private partners covering the entire plastics value chain signed the declaration of the Circular Plastics Alliance in Brussels to develop a “well-functioning EU market in recycled plastics.” (Read more)
 
And then there was K
 
The sustainability trend was clearly evidenced by companies participating in this year’s K 2019 trade fair, the biggest rubber & plastics expo in the world held every three years in Düsseldorf, Germany.
 
"Never before has the industry put the sustainability and recycling at so high a priority and also to train the public how to use the plastics more responsibly," Werner Matthias Dornscheidt, president and CEO of Messe Düsseldorf GmbH, said at the opening news conference of K 2019 on 15 Oct. (Read more)
 
Major injection moulding machinery makers paraded smarter and more sustainable options at K, with advanced technology for processing recycled materials and solutions targeting enhanced energy consumption and efficiency. (Read more) 
 
Similarly, materials suppliers presented a variety of sustainable solutions, from recycled content plastics, to bio-based materials and “circular” polymers. Companies offering new recycling technologies were prominently present at the show, offering live demonstrations of multi-layer pouch recycling, bottle-to-bottle processing, odour free recycling solutions and much more.
 
At the Circonomic Centre exhibit of Austrian recycling machinery supplier Erema, for instance, some 20 tonnes of 14 different materials - all waste from the show - had been processed in total by the end of the 8-day fair, leading the company to declare K to have been a resounding success.
 

Sustainability highlights
 
Plastics recycling, and chemical recycling in particular, gained momentum this year, driven by high interest from materials suppliers and pledges regarding the use of  plastic packaging made with recycled content by international brands owners.
 
Having established the full chemical recyclability of polystyrene in September, Ineos Styrolution is currently pursuing two separate projects in the US and Europe aimed at driving the technology forward. (Read more) 
 
In France, a consortium of leading players from across the plastics packaging value chain was formed in December to promote eco-design, recycling and recovery projects for plastic in that country. (Read more)
 
US-based sustainable technology company Anellotech also unveiled a new technology which converts a wide range of plastic waste directly into processing chemicals, claiming that unlike pyrolysis oils, produced from the current chemical recycling technologies, its product will not need further refining. (Read more)
 
And technology developments did not stop at recycling. Having moved on from a break-up with BASF earlier in the year, Avantium NV secured a €25m funding to advance the construction of a 5-kilotonne pilot plant to produce furandicarboxylic acid (FDCA), the main chemical building block for the production of polyethylenefuranoate PEF. (Read more)
 
Finnish renewable and bio-packaging supplier Stora Enso Oyj is also investing €9m in a pilot facility to manufacture raw materials for the production of PEF, a plant-based alternative to PET. (Read more)

Borealis and Neste announced in October that they had established a strategic partnership which will enable Borealis to produce renewable polypropylene using Neste’s renewable propane by end of 2019.


Market decline
 
But sustainability was not the only highlight of the year, as an undercurrent of automotive downturn, China-US trade conflicts – which have seemingly come to rest (read more) – and slow demand impacted the industry.
 
For 2019, uncertainty became the new normal for suppliers of injection moulding machines as they adapted to the unknown, prepared for the unexpected and struggled to convert interest into hard sales. (Read more)
 
According to European and German plastics and rubber machinery industry trade associations global machinery industry sales are projected to drop 10% this year and 5% in 2020. (Read more)
 
The Italian plastics & rubber machinery sector also registered declines in both exports and imports, according to the half-year figures released by the Italian statistics institute ISTAT. (Read more)
 
The impact of the slow markets, particularly in China, combined on occasions with the uncertainty brought by the ongoing Brexit saga, was also reflected by the results reported by major materials suppliers such as BASF, Covestro, Evonik and Borealis.
 
Covestro, for instance, reported a 50% decline in earnings over the first nine months of the year, due mainly to lower prices and weaker demand from the automotive segment. (Read more)
 
Automotive parts suppliers were particularly hit by the industry downturn, with many reporting a “challenging environment” throughout the year.
 
Most significantly, US-based Cooper Standard announced plans to close 10 manufacturing facility across Europe, Asia and North America in response to the global slowdown. (Read more)
 
Others were struggling as well: for example, German automotive cable and wiring company Leoni was in the red throughout the first nine months of the year, reporting a net income loss of €264m in the nine months to end of September. (Read more)
 
Components manufacturer Trelleborg AB also disclosed early December that it was launching a major restructuring programme to further strengthen “already well-performing and well-positioned business areas” while highlighting areas where profitability was weak. (Read more)
 
Germany’s Continental Corp., which announced a major restructuring in 2018, also plans to cut 20,000 jobs over a 10-year period as part of a strategy shift aimed at adjusting to new mobility requirements.
 
Also reporting a decline in sales was Spain’s automotive supplier Grupo Antolin, which signalled a new strategy to target future mobility. (Read more)
 
Mergers & Acquisitions
 
Amongst non-packaging acquisitions,  a late-December €1.4bn deal for the sales of Clariant AG’s Masterbatch unit to PolyOne stood out (read more), rounding up the year for Ohio-based PolyOne which sold its Performance Products & Solutions unit to New York private equity firm SK Capital Partners for €700m earlier in August. (Read more).
 
And in the UK, Lotte Chemical from PET manufacturing in Europe with the sale of LotteChemical UK Ltd to Mexican petrochemicals giant Alpek in December. (Read more)
 
In the biggest packaging M&A deal of the year, Indiana-based Berry Global Group acquired UK’s RPC Group for €3.8bn. The deal, cleared by the EU in April, has helped Berry create a global platform with the addition of Berry’s 153 manufacturing sites. (Read more) 
 
Some other key M&A activities in Europe included Lindsay Goldberg’s acquisition of major Swiss pharma packaging firm Bilcare Research in November (read more) and Swedish Trioplast Group’s purchase of Dutch Apeldoorn Flexible Packaging (AFP), a specialist in load stability and food packaging (read more).
 
Spanish beauty packaging specialist Quadpack also continued to grow, acquiring in October the German industrial cosmetics packaging company Louvrette, a move expected to propel the company to a position among the Top 10  in Europe. The purchase came just a few months after the acquisition of the cosmetics packaging business of Germany-based plastics processor Inotech Group. (Read more)
 
Later that month, Chicago-based Berlin Packaging acquired Dutch rigid packaging major Novio Packaging Group in a bid to create Europe’s first packaging supplier for all markets and substrates. (Read more)
 
Amongst non-packaging acquisitions, the purchase of Lotte Chemical UK Ltd by Mexican petrochemicals giant Alpek in December stood out. (Read more)
 
And after months of speculation, Nissei Plastic Industrial Co. Ltd. announced in November that it was buying Italian machinery maker Negri Bossi SpA – a move that will add large-tonnage injection moulding machines and a greater geographic reach to the Japanese machinery supplier’s product line. (Read more)
 
Also in November, the European Commission approved the proposed €300m acquisition of Solvay's polyamide (PA) business assets by Domo Chemicals GmbH, paving the way for the planned €1.6bn sale of Solvay’s larger overall polyamide unit to BASF SE. (Read more)
 
And 12 weeks after being acquired by two private equity firms, former Milacron blow moulding unit Uniloy Inc. restarted operations in Magenta, Italy, in October. (Read more)
 
SK Global Chemical also made advances in the M&A world in 2019, with the October acquisition of Arkema SA’s functional polyolefins business (read more) while BASF sold its global pigments business, BASF Color & Effects (BCE) to Japan’s DIC in a €1.15bn deal in August.