New SABIC Executive Discusses Bold Moves At NPE2012

It’s becoming increasingly clear that SABIC’s acquisition of the GE Plastics business five years ago for $11.6 billion was a positive development for the American plastics industry. At the time, it seemed sketchy. GE Plastics was iconic. It was one of the original plastics companies in the world. Jack Welch and Jeff Immelt cut their teeth there. GE Plastics played a major role in developing leading-edge automotive applications for plastics, including instrument panels, and gave the somewhat-staid American plastics industry a little panache.

That GE wanted to sell a foundation business was a sign of the tough times arriving for the plastics industry.  Meanwhile, there has been a major turnover in talent at the company, now called Sabic Innovative Plastics.

The new head of the business, Executive Vice President Keith Smith, led  SABIC’s press conference on the opening day of NPE2012 in Orlando, FL today. It is his 124th day on the job after 31 years at DuPont, most recently at Chief Procurement Officer. The idea of a DuPont veteran taking over the plastics business would have been a sacrilege at GE Plastics. That job was where GE sent its best and brightest internal talent.

The recruitment of Smith shows that SABIC is taking a very different, very open-minded approach to the business.

And Smith is clearly a quick study. He had plenty to say:

  1. SABIC intends to be a global leader in the thermoset polyurethanes business. Yes. Thermoset polyurethane. SABIC entered the plastics business 20-some years ago with polyolefin and polystyrene plants near the Kuwait border that used natural gas feedstock that had previously been flared.  I was one of the first foreign reporters to tour the sites, and they were all first class. Several subsequent moves, such as the GE Plastics acquisition, showed SABIC’s ambitions. And PUR is another big step. SABIC signed a TDI and MDI technology license agreement with Mitsui Chemicals for joint development .The agreement was signed by Mohamed Al-Mady, SABIC vice chairman and CEO who has often represented SABIC in the US, and Toshikazu Tanaka, Mitsui Chemicals president and CEO, at SABIC’s headquarters in Riyadh.
  2. SABIC has opened a pilot plant in Mt. Vernon, IN to look at how the backbone of polyetherimide can be modified to boost properties. In response to questions I asked Smith today, he said researchers will investigate how to boost thermal properties and other areas of interest to unnamed industry partners.  Electronics is an obvious target, as is automotive. This is a move that harkens back to the company’s roots in basic polymer research. It’s a throwback to the Dan Fox days. It’s an element that was missing in the unit’s last years at GE Plastics when emphasis seemed to be on marketing and pizzazz.
  3. SABIC is also entering the acrylics business with a very big bang. It is building the world’s biggest methyl methacrylate (MMA) plant (250,000-metric- tons per year)  in a JV with Mitsubishi Rayon in Jubail, Saudi Arabia.   The plan also includes backward integration with a 25,000 metric tons per year plant  to produce poly methyl methacrylate (PMMA).
  4. Smith also said that SABIC will play a major role in the development of thermoplastic and thermoset carbon fiber reinforced plastics. Why not? It’s the next big thing in automotive for sure. The technology partner is Montefibre S.p.A, and the first plant will be built in Saudi Arabia with a capacity of 3,000 metric tons per year. The companies are looking at the feasibility of a new carbon fiber production plant in Spain to be integrated into Montefibre’s existing acrylic fiber production site—and thus allowing SABIC to accelerate product development and material qualification activities with customers and end-users.
  5. Ticona and SABIC are building a 50,000 tons per year polyacetal plant in Jubail, Saudia Arabia, a move that gets Smith back a bit to his DuPont roots. Like the original plastics facilities in Jubail, the polyacetal plant will have an advantaged feedstock position.

What’s next? I have no idea, but the potential for SABIC’s American assets is impressive.

About Doug Smock

Former Chief Editor at Plastics World and Senior Technical Editor Design News

Africa/MidEast, Aircraft, Asia, Automotive, Carbon Composites, Carbon Composites, Carbon Fiber, Electronics, Engineering Thermoplastics, Europe, North America, Polyacetal, Polyurethane foam

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