SABIC Completes Reorganization

The SABIC plastics reorganization was completed Jan.1, leaving a strong commodity business, a beefed-up Detroit focus, and major questions surrounding the Specialties plastics products—basically the former GE Plastics portfolio, which seems a bit like an orphan at SABIC.

The commodity products of the former SABIC Innovative Plastics Strategic Business Unit (SBU) will now be housed in the Chemicals and Polymers SBUs. Plastics in this group include polyolefins, polystyrene, polyvinyl chloride, and polyethylene terephthalate (PET).

The path forward for this group is clear. SABIC intends to expand investment in US shale gas projects and has signed an agreement with Enterprise Products Partners of Houston to obtain shale gas. Feedstock may be used in the U.S. or exported to the UK, where crackers have already been converted to use shale gas.

The Specialties plastics business will not be located in any particular place. “The Specialties space is considered a portfolio vs a business,” a spokesperson told The Molding Blog. “It is global in nature and scope and is not geographically headquartered.” The business had previously been based in Pittsfield, Massachusetts, its longtime home under GE.

One exception to the planned separation of commodities and engineering plastics will be the combination of the two in a strengthened Detroit-area operation focused on the automotive industry. “The automotive materials business will represent all SABIC products, in addition to its already broad portfolio of engineering thermoplastics and polypropylene. Development continues to be driven from SABIC’s technology and innovation centers around the world. Local application and technical development resources are also available.” The operations includes a significant polycarbonate glazing development and pre-production department. The Technical Glazing Department will remain in Michigan, while other specialty plastics R&D will move from Pennsylvania and Massachusetts to New York.

Engineering plastics in the Specialties business include polycarbonate, ABS, Noryl modified PPE resins, Ultem amorphous thermoplastic polyetherimide (PEI), Xenoy blend of semi-crystalline polyester and LNP compounds. According to a statement from SABIC: “Specialty products face challenges such as the need to seek out technology acquisitions and partnerships or joint ventures that can enrich the company’s existing portfolio.”

It will be interesting to see if the new operators of the materials’ business in the proposed combination of Dow and DuPont see any matches with SABIC. Each company will have a strong commodities (especially polyethylene and polypropylene) business with a significant investment (or at least interest) in shale gas and a companion engineering plastics portfolio that operates on very different principles (a development versus cost focus).

I’m keeping on eye on the potential mating of DuPont’s semi-crystalline polyamides business with the amorphous engineering plastics sold by SABIC. They would be a very good fit. GE Plastics and DuPont were fierce competitors, particularly in the auto market, but GE secretly bought polyamide from DuPont for blending in compounds for the packaging market.

In a separate SABIC note, there will be a reduction of approximately 140 full-time equivalent positions over the next three years (until end 2017) positions for Europe as part of the reorganization.


About Doug Smock

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

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