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CHEMICAL INDUSTRIESNEWSLETTER

A monthly compilation of SRIC report abstracts and news

December 2007

SRI Consulting ● Menlo Park, California 94025

CEH Marketing Research Report Abstract

ALKYD/POLYESTER SURFACE COATINGSBy

Eric Linak and Akihiro Kishi

Alkyd surface coatings continue to be one of the largest types of coating used in the world, despite the increasinguse of other film formers. The success of alkyd resin systems is a result of their relatively low cost, versatility andlong familiarity with users. They can be tailored to meet a variety of end-use requirements through the choice andratio of reactants and/or modifiers. Alkyds are used extensively in architectural coatings, product finishes andspecial-purpose coatings. Polyesters, also referred to as oil-free alkyds, are made in the same equipment as alkydsand use many of the same raw materials. Polyesters are used almost exclusively in industrial baking finishes.

Despite the continuing decline in the marketplace in North America, Western Europe and Japan, alkyds remainone of the leading types of coatings used in the industrial marketplace.

The following pie charts show world consumption of alkyd/polyester surface coatings.

World Consumption of Alkyd/Polyester Surface Coatings—2006

Alkyd Surface Coatings

WesternEurope

ChinaUnitedStates

Japan

EasternEurope

Brazil

OtherAsia

Rest of the World

Polyester Surface Coatings

WesternEurope

China

UnitedStates

Japan

Eastern Europe

OtherAsia

Rest of the World

In North America, Western Europe and Japan, consumption of alkyds has diminished over the last thirty years. Inthe architectural or decorative coatings market, solventborne alkyds have been replaced with waterborneemulsions due to lower odor, lower solvent content, easy cleanup and fast drying properties. However, theseemulsions do not display the same level of performance in leveling, adhesion, gloss and certain resistance

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December 2007 Chemical Industries Newsletter

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properties. These drawbacks have stalled the conversion from most solventborne gloss trim and lightmaintenance coatings, so solventborne alkyds still remain a sizable factor in the coatings industry. However,restrictions on the use of paints are becoming tighter in certain parts of the United States and in Europe, and willforbid the use of conventional low solids (i.e., high solvent containing) solventborne coatings. In the next fiveyears, the types of resins used in these regions in certain applications will change significantly.

Producers continue to develop new and improved systems for high-solids and waterborne formulations to meetincreasingly stringent air pollution regulations. The industry seems pessimistic on the use of higher-solids alkyds,but is optimistic that waterborne alkyds can be developed with properties comparable to solventborne systems.Generally, though, these environmentally friendly systems are considerably more expensive than theconventional systems, and have some technical drawbacks. Polyesters are offered in high-solids, waterborne andpowder coatings.

(For the complete marketing research report on ALKYD/POLYESTER SURFACE COATINGS, visit this report’s home page or see p. 592.6000

A of the Chemical Economics Handbook.)


BENZENEBy Sean Davis

Benzene is normally recovered from aromatic hydrocarbon streams that also contain toluene and mixed xylenes.Benzene is one of the largest-volume petrochemicals and is the largest of the aromatics.

Benzene demand throughout the world is dominated by the production of three derivatives: ethylbenzene,cumene and cyclohexane. These derivatives accounted for more than 85% of benzene consumed globally in 2006.

The following pie chart shows world consumption of benzene:

World Consumption of Benzene—2006

WesternEurope

China

UnitedStates

Other Asia

Japan

Central/Eastern Europe

Central/South America

Rep. of Korea

OtherCanada

TaiwanMiddle East

North American benzene consumption will increase slightly between 2006 and 2011. The fastest-growingderivatives will be cumene and nitrobenzene.

Central and South America will see increases in all derivative manufacturing through 2011. Ethylbenzene andnitrobenzene will exhibit rapid growth through the forecast period.

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Chemical Industries Newsletter December 2007

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Benzene demand in Western Europe is forecast to slightly decrease between 2006 and 2011. Despite declines,growth for cumene, cyclohexane and nitrobenzene will experience moderate average annual growth rates.

Japanese benzene demand is forecast to increase slightly between 2006 and 2011. The rest of Asia will continuestrong growth through 2011.

The largest anticipated demand for benzene will come from the Middle East, with a rapid average annual growthrate between 2006 and 2011. Strong demand for detergent alkylates and styrene in the global market will spur fastgrowth for alkylbenzenes and ethylbenzene in the region.

(For the complete marketing research report on BENZENE, visit this report’s home page or see p. 452.0000 A of the Chemical Economics

Handbook.)

CEH Product Review Abstract

CHLORINATED ISOCYANURATESBy Eric Linak with Hossein Janshekar and Chiyo Funada

Chlorinated isocyanurates are chlorine-containing derivatives of isocyanuric acid and are used as sanitizing,disinfecting and bleaching agents. Major end-use applications are in swimming pool sanitizers, machinedishwashing detergents, bleaches and scouring cleaners. The three commercially useful chlorinated isocyanuratesare trichloroisocyanuric acid (TCCA), sodium dichloroisocyanurate (anhydrous) and dihydrate (SDCC). TCCAhas limited solubility in water and is used mainly as a controlled-release sanitizer for swimming pools. Sodiumdichloroisocyanurates are much more soluble and are used mainly as primary sanitizers and shock treatments forswimming pools and as bleaching agents and stain removers in powdered dishwasher detergent formulations.Production of trichloroisocyanurate dominates, accounting for about two-thirds of the total.

The following pie chart shows world consumption of chlorinated isocyanurates:

World Consumption of Chlorinated Isocyanurates—2006

WesternEurope

China

UnitedStates

Japan

Other

The global supply/demand situation started changing in 2002 when China began exporting sizable quantities ofchlorinated isocyanurates. In the last few years, antidumping actions were imposed in the United States, theEuropean Union and Mexico against Chinese exporters.

The other major chlorinated isocyanurate consuming regions include the Asia Pacific region, Eastern Europe,Canada, Africa, the Middle East and the Caribbean region.

The U.S. market for chlorinated isocyanurates is by far the largest in the world, accounting for well over 50% ofglobal demand. Swimming pool applications account for about 95% of total demand. Most use in swimmingpools is by private pool owners, as municipal pools tend to use competing sanitizing liquids that are easier to






dispense. Consumption in the residential pool market grew strongly from 2001 to 2005 because of increasingswimming pool and spa construction resulting from the strong new housing market. Also, owners of existinghomes have tended to add upgrades such as swimming pools and spas to their property because of low interestrates and a tendency of families to spend vacations at home rather than traveling.

(For the complete product review on CHLORINATED ISOCYANURATES, visit this report’s home page or see p. 508.5000 A of the Chemical

Economics Handbook.)

CEH Product Review Abstract

EPICHLOROHYDRINBy Elvira O. Camara Greiner with Thomas Kälin and Issho K. Nakamura

Epichlorohydrin is a liquid epoxide most frequently manufactured by the chlorohydrination of allyl chloride. Theprincipal uses for epichlorohydrin are in the production of epoxy resins, synthetic glycerin, epichlorohydrinelastomers, specialty water treatment chemicals, wet-strength resins for paper production and surfactants.

The following pie chart shows consumption of epichlorohydrin by major region:

Consumption of Epichlorohydrin by Major Region—2006

WesternEurope


UnitedStates

Japan

OtherAsia


Total epichlorohydrin consumption is projected to increase. Most of this growth will be driven byepichlorohydrin consumption in Other Asia because of increased epoxy resin production in the region. In 2007,U.S. production of epichlorohydrin declined because of decreased exports, particularly to Asia, whereepichlorohydrin production has increased substantially for use in epoxy resins and wet-strength resins.

Epichlorohydrin and its role in the synthetic glycerin market have changed recently. Traditionally consumed forthe production of synthetic glycerin, epichlorohydrin is now being produced with glycerin as the raw material. Infact, with surplus glycerin available as a result of the growing worldwide production of biodiesel, severalcompanies have come up with glycerin-to-epichlorohydrin technologies.

(For the complete product review on EPICHLOROHYDRIN, visit this report’s home page or see p. 642.3000 A of the Chemical Economics

Handbook.)








EPOXY SURFACE COATINGSBy Eric Linak with Kazuaki Issho Nakamura

Epoxy surface coatings are among the most widely used industrial finishes, exceeded in volume only by alkydsand acrylics. Epoxies are often more expensive than other coatings, but provide superior adhesion, flexibility andcorrosion resistance when applied to metallic substrates. Because of their tendency to chalk or discolor uponexposure to sunlight, epoxy surface coatings are seldom used for architectural purposes.

In 2006, worldwide sales of epoxy resins for surface coatings were valued at several billion dollars. During the2000s, consumption has been flat in the United States, Western Europe and Japan. There has been significantgrowth, however, in China and in other nonindustrialized regions of the world.

The following pie chart shows world consumption of epoxy surface coatings:

World Consumption of Epoxy Surface Coatings—2006

WesternEurope

Rep. of Korea

UnitedStates

Japan

China

Other

In the United States, use of epoxy coatings in relatively mature markets (e.g., marine, industrial maintenance,transportation) will grow at a moderate rate. Consumption in metal beverage and food container coatings willremain stagnant. Powder coatings are projected to grow at rates slower than those experienced in the 1990s.

There is concern in Europe over leaching of bisphenol A, one of the precursors of epoxy resins, into the contentsof cans coated with epoxies. As a result, producers are offering epoxies with very low levels of leachables, and aredeveloping nonepoxy coatings as replacements. However, no large-scale replacement is imminent.

In Japan, there was a small increase in consumption in the automotive industry after years of decline, but futuregrowth should be minimal due to Japanese automakers’ continuing to move production offshore.

Consumption of epoxy resins for coatings has been growing rapidly in China. Use in powder coatings accountsfor almost half of total consumption. China is now the leading producer of powder coatings in the world.

The epoxy surface coatings industry consists of resin producers and coatings formulators. The number offormulators of epoxy coatings is considerable. In general, suppliers of product finishes (e.g., coatings for OEMautomotive, containers and coil) tend to be large international companies that target sales for particularindustries. Suppliers of maintenance and powder coatings tend to be much more numerous and local.

(For the complete marketing research report on EPOXY SURFACE COATINGS, visit this report’s home page or see p. 592.7000 A of the

Chemical Economics Handbook.)







INORGANIC POTASSIUM CHEMICALSBy Bala Suresh with Stefan Schlag and Chiyo Funada

This report covers supply and demand for a number of industrially important potassium chemicals: potassiummetal and potassium hydroxide, sulfate, nitrate, carbonate and bicarbonate. Industrial consumption of potassiumchloride is also included; producers and fertilizer markets for this chemical are covered in greater detail the CEHPotash marketing research report.

Potassium metal is used as a precursor to the production of potassium superoxide, KO2, which is used in self-contained breathing apparatuses. The second major market for potassium metal is as a component in sodium-potassium (NaK) alloys. It is also used in photoelectric cells.

Potassium chloride is the most commonly used and least expensive source of potassium for plant nutrition, andfertilizers constitute by far the dominant market for this chemical. This report mainly covers the nonfertilizermarket for potassium chemicals, which accounts for approximately 20% of total potassium chloride consumptionin the United States and 38% in Japan. The largest industrial market for potassium chloride is for potassiumhydroxide production. The rise in natural gas prices, coupled with weak agricultural demand and pricecompetition from imports, has resulted in consolidation of the industry.

Most potassium sulfate production is for fertilizer use for crops that are intolerant of the chloride ion. Capacity inCanada and the United States has increased since the mid-1990s. World demand for potassium sulfate has alsoincreased over the past decade, and further growth is expected, particularly for specialty crops in Asia Pacificcountries and for controlled-release fertilizers in the United States.

Potassium nitrate is the second-largest source of nonchloride potassium fertilizer. It is more soluble thanpotassium sulfate, and its use as a fully soluble fertilizer in applications such as fertigation (applying a solublefertilizer via the irrigation system) and interior landscaping is growing. Potassium nitrate’s major industrial use isas a component of specialty glasses, especially for cathode-ray tubes for television sets and computer monitors.

Potassium hydroxide is the largest-volume potassium chemical for nonfertilizer use. It is a stronger base thansodium hydroxide, and its salts are more soluble. Because it is more expensive to produce, use is largely limitedto applications where these attributes are particularly desirable or where a potassium cation is required.Consumption is primarily for the production of other potassium chemicals, particularly potassium carbonate andthe potassium phosphates.

The major market for potassium carbonate is the manufacture of specialty glasses for cathode-ray tubes. Demandfor potassium carbonate is expected to increase through 2008, with growth focused on increases in Asianelectronics production. Potassium bicarbonate, which is derived from potassium carbonate, is used primarily as afire extinguisher chemical, leavening agent and pharmaceutical ingredient.

(For the complete marketing research report on INORGANIC POTASSIUM CHEMICALS, visit this report’s home page or see p. 764.3000 A of

the Chemical Economics Handbook.)


POLYOLEFIN FIBERSBy Barbara Sesto and Vimala Francis and Tadahisa Sasano

Polyolefin fibers currently account for almost 16% of the worldwide synthetic fibers market, down from 17.4% in2002. Until 2000, polyolefin fibers had been one of the fastest-growing segments of the synthetic fiber industry,with growth rates of about 6%. This growth was due primarily to high growth in grassroots production capacityin developing countries around the globe; increasing use in carpets and rugs and in nonwoven fabrics in theindustrialized nations also boosted production levels. However, since 2000 the expansion of the polyolefin







business has progressively slowed. The decreasing trend was predominantly linked to the slump in carpet yarndemand as well as to an escalation in polypropylene resin’s price, which in turn, affected the price ofpolypropylene fibers. Correspondingly, worldwide polyolefin fibers production has stagnated during the lastcouple of years.

The eight largest (of the more than 200) producing companies account for about 30% of worldwide polyolefinfiber capacity. Major companies have been increasing their share through acquisitions and capacity additionsover the last five years.

In the past polyolefin carpet yarns have taken market share away from nylon carpet face yarns in tufted andwoven carpets and rugs. Advances in tufting and weaving technology have made it possible to quickly and easilyproduce highly complicated, eye-appealing polyolefin fiber tapestries in a variety of colors, yarn types, gaugesand pile heights, all of which will continue to create a demand in the market. Polyolefin fibers have successfullydisplaced jute as the primary and secondary backing substrate for tufted carpets in virtually all parts of the world.

More than half of the polyolefin fibers used in nonwoven fabrics are used in disposable consumer products.Nonwoven applications remain one of the fastest-growing markets for polyolefin fibers in all three regions.Nevertheless, this market has somewhat matured and robust demand is expected only for some applications suchas geotextiles and hygiene markets (mainly wipes and feminine care). In contrast, in developing regions, such asCentral and Eastern Europe and East Asia, nonwoven applications are still a low-volume, but fast-growingmarket. Disposable diapers, feminine hygiene products, medical apparel and wipes are some of the firstnonwoven products used in developing countries.

In Western Europe and Japan polyolefin demand should increase modestly, whereas in the United States it isexpected to show higher growth rates. Increases should be greatest in Central and Eastern Europe, Turkey andEast Asia (outside of Japan).

(For the complete marketing research report on POLYOLEFIN FIBERS, visit this report’s home page or see p. 542.2000 A of the Chemical

Economics Handbook.)


PYRIDINESBy Sebastian N. Bizzari with Thomas Kälin and Akihiro Kishi

Pyridine and beta-picoline accounted for 72% of world consumption of pyridines in 2007. Agricultural chemicals,mainly the nonselective contact herbicide paraquat, account for most consumption of pyridine; however, demandfor piperidine and 2-chloropyridine is growing well in some regions, albeit from a small base. beta-Picoline,which is used to produce niacinamide/niacin (vitamin B3 ), is forecast to grow as a result of strong demand forniacinamide/niacin in developing regions such as Asia, Africa, and Central and South America for use in animalfeed (mainly poultry and dairy cattle). 2-Methyl-5-ethylpyridine (MEP) is used nearly entirely to produce niacin.The largest market for alpha-picoline is 2-vinylpyridine (2-VP); most 2-VP is used as a component of styrene-butadiene-2-vinylpyridine terpolymer latexes (SBV latexes), which are used as tire cord adhesives and in otheradhesives for bonding textiles to elastomers.

The following pie chart shows world consumption of pyridines:






World Consumption of Pyridines—2007

WesternEurope

China

UnitedStates

India

Japan

Central/Eastern EuropeOther

Consumption of pyridine for paraquat declined substantially in the United States in late 2006, a result of thetermination of paraquat production at Bayport, Texas by Syngenta Crop Protection. Additionally, a ban onparaquat use in the European Union has dampened prospects for future consumption growth for pyridine inEurope; future consumption of pyridine for paraquat in Europe will be largely dependent on export demand.China will account for most growth in demand of pyridines for paraquat and other agricultural chemicals such aschlorpyrifos, which is derived from beta-picoline.

Growth in demand for pyridines varies by product and region. Growth in the Americas and Europe is forecast tobe moderate; of the large-volume applications, niacinamide/niacin has the best prospects. Other growth marketsin the United States include 2-chloropyridine (a precursor in the production of antimicrobial pyrithione salts) andpiperidine (largely for exports). Significant growth is expected in China, largely for increased production ofparaquat and other agricultural chemicals and niacinamide/niacin. Asian consumption of paraquat is expected togrow quickly, largely as a result of increased commercial agricultural activity and increased acreage of plants forrenewable biofuels, such as palm oil trees.

(For the complete marketing research report on PYRIDINES, visit this report’s home page or see p. 691.6000 A of the Chemical Economics

Handbook.)


STYRENE-BUTADIENE ELASTOMERS (SBR)By Emanuel V. Ormonde with Masahiro Yoneyama

SBR is a vulcanizable elastomer made by the copolymerization of butadiene and styrene. It is the workhorse ofthe rubber industry, even though some of its properties do not match those of natural rubber. What it lacks inelongation, hot tear strength, hysteresis, resilience and tensile strength, it makes up for in better processability,slightly better heat aging and better abrasion resistance than natural rubber. Probably the most important factorsin the commercial viability of SBR have been its domestic availability, low cost compared with those of all othersynthetic elastomers, ability to accept high filler levels, relatively stable price compared with that of naturalrubber and overall properties on a cost/performance basis. Principal applications are in tires and tire products,automotive parts and mechanical rubber goods.

Styrene-butadiene elastomers are the largest-volume synthetic rubber, accounting for about 46% of worldconsumption of synthetic rubber in 2006 according to the International Institute of Synthetic Rubber Producers.Historically, this percentage had been steadily declining (it was 57% in 1976) because of the following majorreasons:






• The increasing popularity of radial tires, which use less SBR and more natural rubber (NR) than other tiredesigns (e.g., bias-belted tires)

• Faster growth of other synthetic rubbers as a substitute for SBR (e.g., EPDM, nitrile and polybutadienerubbers), especially in nontire applications

As a result, world SBR production and consumption showed little or no growth in the 1980s and 1990s, but haveshown steady growth since 2000 with consumption steadily increasing as a result of growing consumption inemerging regions (such as China, India, South America, Russia and Other Asia).

The following pie chart shows world consumption of SBR:

World Consumption of Styrene-Butadiene Elastomers—2006

WesternEurope

China

UnitedStates

Rep. of Korea

Japan



Mexico

Oceania

OtherAfrica

Middle East

TaiwanThailand

North America (United States and Canada) is the only region in the world that is expected to see a decrease inSBR consumption in the forecast period from 2006 through 2011. The decrease is due mainly to a decrease in tireproduction—closing/idling of tire plants and tire production moving offshore.

China is expected to drive much of the SBR demand and will be the fastest-growing market during the forecastperiod. Currently, China is adding and also studying new SBR production facilities in order to meet its currentand future demand. A sharp increase in production and consumption of SBR in India is also expected in the nearfuture.

(For the complete marketing research report on STYRENE-BUTADIENE ELASTOMERS [SBR], visit this report’s home page or see p.

525.3600 A of the Chemical Economics Handbook.)

PEP Report Abstract

ADVANCES IN BIODIESEL AND RENEWABLE DIESEL PRODUCTIONBy Ron Bray

(PEP Report 251A, December 2007)

The use of a renewable fuel such as vegetable oil in Rudolf Diesel’s compression ignition engine dates back to1900. These renewable fuels were replaced by the availability of cheap petroleum-based fuels in the 20th century.There has been a resurgence in the 21st century in the use of renewable fuels for diesel engines. One of the fastestgrowing petroleum-diesel alternatives is biodiesel. Biodiesel is the mono-alkyl ester of fatty acids (FAME) and isproduced by the reaction of an alcohol, usually methanol, in the presence of a catalyst with feedstocks such asvirgin vegetable oil, animal fats and used cooking oil. The resulting fatty acid methyl ester (FAME) can be



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blended with petroleum-based diesel or used as a complete replacement in diesel engines with minimal enginemodifications.

The global production capacity of biodiesel is growing exponentially with capacity projected to increase from 12.6million t/yr (3.8 billion gal/yr) in 2006 to over 80 million metric tons/yr (24 billion gal/yr) by 2010 (Biodiesel,Chemical Economics Handbook Program, 2006).

An emerging alternative to biodiesel is a renewable diesel. Renewable diesel is a long-chain hydrocarbon (C12-C22) produced by the hydrogenation over a catalyst of some of the same feedstocks that are used to producebiodiesel. Several companies had announced plans to construct renewable diesel production facilities. Theyinclude Neste Oil, PetroBras, and joint ventures Tyson Foods/ConocoPhilips, Tyson Foods/Syntroleum andUOP/Eni SpA.

There are multiple reasons for the use of fuels derived from renewable resources including improvement inenergy security; reduction in greenhouse gases; reduction in particulates, CO, and sulfur emissions; improvementin local economy; and the rising costs of petroleum and natural gas.

Legislation in the European Union, United States and Brazil has been enacted to encourage the production andconsumption of renewable fuels.

In this report, PEP examines the technologies and economics for the production of biodiesel (FAME) from refinedsoybean oil by a homogeneous alkaline catalyst process and a heterogeneous catalyst process recentlycommercialized by Axens.

We also examine the technologies and economics for the production of renewable diesel via hydrogenation ofsoybean oil. Both in-house hydrogen manufacture and purchase of hydrogen delivered via pipeline cases areevaluated.

This report will be of interest to producers and consumers of diesel fuel, producers of methanol and hydrogen,oleochemical manufacturers, producers of vegetable oils and animal fats, and catalyst manufacturers.

PEP Review Abstract

AMMONIA FROM NATURAL GAS BY KBR “KAAP” PROCESSBy Victor Wan

(PEP Review 2007-10, December 2007)

While the overall process layout of some well-proven ammonia processes has remained identical for the lastdecade, their performance has improved as a result of improvements in areas such as the recovery of thehydrogen and ammonia from the synthesis purge gas, the energy efficiency of carbon dioxide removal systems,the ammonia synthesis catalysts, synthesis loop equipment designs and the switch from electrically drivencompression to the use of waste-heat-generated steam-driven centrifugal compressors. In addition, new plantstend to be larger, with improved economies of scale.

This Review evaluates an SRIC design based on KBR Advanced Ammonia Process (KAAP) technologyincorporating features reflecting the above-mentioned improvements. The front-end synthesis gas generation isthrough natural gas reforming. Our analysis indicates that at a base case capacity of 1,448 million lb/yr (2,000metric tons per day), the total fixed capital is $597.5 million. The overall natural gas energy consumption (for feedand fuel) is 13,230 Btu/lb NH3 on LHV basis and CO2 emission is 1.52 lb/lb NH3. The base case product value(net production cost plus 25%/yr return on investment) is 28.4¢/lb when natural gas is priced at 674¢/MMBtu.


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PEP Review Abstract

COMPARISON OF POLYETHYLENE PROCESSESBy Susan L. Bell


Over the last few years, SRI Consulting has updated several polyethylene processes in separate PEP reviews orreports. In the current review, the capital costs and production costs of the different polyethylene processes arecompared based on production of a similar product. The processes compared are Univation’s UNIPOL™ gas-phase process, Basell’s Spherilene™ S gas-phase process, Chevron Phillip’s slurry loop process and Ineos’Innovene™ G gas-phase process. The production costs are based on the production of a homopolymer HDPE.

PEP Review Abstract

ETHYL ACETATE BY DIRECT ADDITION OFETHYLENE AND ACETIC ACID

By Marcos Nogueira César(PEP Review 2007-9, December 2007)

In regions where bio-derived ethanol is not readily available, ethyl acetate is produced from ethylene viaacetaldehyde (Tishchenko reaction) or via ethanol by ethylene hydration and esterification with acetic acid. Toeliminate the need for acetaldehyde or ethanol intermediates, BP Chemicals and Showa Denko independentlydeveloped technologies that produce ethyl acetate by direct addition of ethylene and acetic acid.

BP Chemical’s technology is trademarked as Avada (for A d v anced A cetates by D irect A ddition) and is based onthe vapor-phase reaction of ethylene and acetic acid in the presence of a heteropolyacid (HPA). In 2001, BPChemicals successfully brought on stream a 220,000 t/yr ethyl acetate plant at Hull, UK, using the Avadatechnology. BP claims that the Avada process is more energy efficient and environmentally friendly than otherroutes to ethyl acetate. Showa Denko developed a similar version of the direct addition process that is currently inoperation by Showa Esterindo at Merak, Indonesia. The plant came on stream in 1999 and has a capacity of 70,000t/yr of ethyl acetate.

In this Review, we present a technical and economic evaluation of the direct addition process, based on theproduction of 220 million lb/yr (100,000 t/yr) of ethyl acetate at a U.S. Gulf Coast location. Our analysis indicatesthat the investment and production costs of the direct addition process are significantly higher than those forconventional esterification of acetic acid and bio-derived ethanol. We conclude that the direct addition processcan be competitive only in geographic areas where ethylene is readily available from steam cracking and bio-derived ethanol is expensive to produce or import.

PEP Review Abstract

FEEDSTOCK PRICE ISSUES FOR BIO-DERIVED MATERIALSBy Gregory Bohlmann


With the tremendous growth of bio-derived materials such as biofuels and biopolymers, feedstock price issueshave developed. While renewable feedstocks are renewed every year, their supply is not unlimited. Risingfeedstock costs have had an effect on margins for bio-derived materials and also limited their ability to competewith fossil-based materials, even in an environment of rising oil prices. Production of bio-derived industrialproducts has also become competitive with human and animal food production. The food and energy economies,historically separate, are now beginning to merge. In this new economy, if the fuel value of a crop exceeds its food


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value, the market will move into the energy economy. This may be good for farmers, but it instills a food versusfuel debate among consumers and creates economic challenges for producers of industrial bioproducts.

Corn is an important crop in the United States that serves as a feedstock for producing fuel ethanol as well asbiopolymers. For nearly a ten year period through the late 1990s and early 2000s, corn prices were very stable,making it an attractive feedstock. Driven by ethanol production, corn prices jumped approximately 50% during2006 and continued to rise early in 2007. Driven by biodiesel production, natural oil prices, such as soybean oil,also experienced significant gains during the same time frame. The significant price increase of these agriculturalcommodities has raised concern over their viability as feedstocks for industrial products.

Two possible solutions are under development. One solution is the biorefinery concept utilizing biomass asfeedstock. Biomass includes a wide range of lignocellulosics including crop residues and wood wastes, which areall very difficult to process. Lignocellulosic conversion technology has been under development for years, but in2007 the U.S. Department of Energy helped fund six commercial-scale plants that should finally make biomassfeedstocks a commercial reality. A second, longer-term solution is using algae to produce biofuels and other bio-derived products. Microalgae can potentially be developed to make biocrude, the renewable equivalent ofpetroleum, and refined to make gasoline, diesel, jet fuel and chemical feedstocks. Also, the organisms are capableof producing much larger quantities of oil per unit of land than terrestrial crops.

PEP Review Abstract

FISCHER-TROPSCH REACTOR SYSTEM LOOPBy Syed Naqvi

(PEP Review 2007-2, November 2007)

This Review presents a discussion of major design considerations and process parameters that are important forthe design of a Fischer-Tropsch (F-T) reactor. Three types of reactor have been considered—fixed-bed, slurry-bed,and fixed fluidized bed. The main emphasis is on the first two types of reactors that are suitable for wax anddiesel production. Reactors in the third category are useful for gasoline and olefins production. All said reactorsare in commercial use today.

Crucial considerations in reactor selection and reactor design include the type of desired F-T products, functionalcharacteristics and scalability of reactors, source and composition of syngas, process conditions (temperature,pressure, gas space velocity, syngas composition, etc.), catalyst composition and physical characteristics, catalystdeactivation, catalyst loading, physical properties of the reaction medium (viscosity, density, thermalconductivity, surface tension, reactants diffusivity, mass- and heat-transfer coefficients, dispersion coefficients,etc.) and layout of the reactor internal components. The Review describes the effects of the above-mentionedreaction system variables on the parametric properties of reactor vessel (reactor height, reactor diameter, coolingcoil size, reactor loop configuration, etc.).

All cited values of parameters are extracted from the patents or technical articles. Values are given in numericterms, and complex computational formulae, which are normally presented in technical articles for estimative orpredictive purpose, have been avoided. Wherever necessary, a detailed description of the parameters is alsogiven.

PEP Report Abstract

HEAVY OIL HYDROTREATINGBy Richard Nielsen

(PEP Report 214A, December 2007)

Worldwide, the importance of hydrotreating heavy oils is growing in order to meet the demand for low-sulfur,improved-quality heavy fuel oils and feedstocks for fluid catalytic cracking (FCC), resid FCC and, lately,hydrocracking and coking. Increasing production of higher sulfur and gravity crude oils, increasingly stringent



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sulfur and other environmental regulations and increasing global demand for transportation fuels are factorsdriving the growth. Furthermore the production and refining of bitumens and other heavy alternate crude oils(syncrudes) is forecast to increase significantly in North America.

Heavy petroleum oils are characterized as boiling above about 650°F (343°C) and having relatively high specificgravity, low hydrogen-to-carbon ratios, and high carbon residue. They contain large amounts of asphaltenes,sulfur, nitrogen and metals, which increase hydrotreating difficulty. Feed properties are important in setting theprocess design and operating conditions.

Hydrotreating of heavy oils reacts them with hydrogen over a selective catalyst under high pressure andtemperature to cleave sulfur, nitrogen and metals from the oil and to partially saturate polynuclear aromatic ringsin order to reduce the carbon residue. Sulfur and nitrogen leave as H2S and NH3. As metals and coke accumulateon the catalyst, the reactor temperature is increased to compensate for reduced activity until the maximumoperating temperature is reached.

Advances in heavy oil hydrotreating are a combination of catalyst development and reactor development. Heavyoil hydrotreating is performed in a series of reactors, each containing catalyst optimized for a different purpose.The reactors in the hydrotreating unit may be fixed bed, moving bed, ebullated bed or a combination. A guardbed protects downstream catalyst from metals and contributes to sulfur removal.

This PEP Report provides an overview of heavy oil hydrotreating developments in chemistry, catalysts, processand hardware technology since PEP Report 214, Hydrotreating, issued in 1996. The report then develops theprocess economics for hydrotreating two heavy oil feedstocks—vacuum gas oil (VGO) and the heavieratmospheric residue (AR), each by a generic, conventional hydrotreating process. Additionally, the economics ofhydrotreating VGO by our concept of the new IsoTherming™ type process is evaluated.

PEP Report Abstract

METHANOL TO OLEFINSBy Victor Wan

(PEP Report 261, November 2007)

Ethylene and propylene are by far the two largest-volume chemicals produced by the petrochemicals industry. In2006 about 110 million metric tons of ethylene and 70 million metric tons of propylene were produced worldwide.Global demand for light olefins (ethylene and propylene) is expected to grow at an annual rate of 5% forpropylene and 4% for ethylene. Today the majority of light olefins are produced by the petrochemicals industryeither from pyrolysis (steam cracking) of naphtha or from fluid catalytic cracking (FCC) of naphtha. The recentdramatic increase in oil prices is reviving a strong interest in the production of light olefins from nonpetroleumsources among which low-cost methanol may play a significant role.

Because of the wide variety of feedstock sources and projected massive new capacity additions in the near future,methanol has promise as an economical, nonpetroleum source for the production of light olefins. At present, thetechnologies for producing light olefins from methanol appear ready for commercialization.

In this report, we evaluate one of the most promising new applications for low-cost methanol: the catalyticconversion of methanol to light olefins. We develop and present conceptual designs and preliminary economicsof the two processes currently available for license—the UOP/Hydro MTO (methanol-to-olefins) technologybased on the MTO-100 silicoaluminophosphate synthetic molecular sieve–based catalyst, and Lurgi’s MTP(methanol-to-propylene) process based on MTPROP, a proprietary ZSM-5 type of catalyst supplied by Süd-Chemie.


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PEP Review Abstract

REACH BRIEFING:A REVIEW OF EU CHEMICALS LICENSING

By Eric Johnson(PEP Review 2007-14, November 2007)

Over the coming fifteen years, the European Union (EU) will impose licensing on the some 30,000 chemicals thatcurrently are produced or imported in volumes of more than one metric ton per year. This licensing program iscalled REACH, for R egistration, E valuation, A uthorization and Restriction of Ch emicals. By the time REACH isfully in force, it will be illegal to produce in the European Union or import into the European Union unlicensedchemicals. It also will be illegal to use licensed chemicals in unlicensed applications.

Licenses are to be granted according to risk, defined conventionally as hazard exposure. Substances deemedtoo risky will be restricted. Those that also can be replaced by less risky substances and have low economic valueare likely to be banned. The conventional wisdom of both REACH supporters and opponents is that REACH willbring about the commercial demise of some 5,000 chemicals. Some will be banned, but most will simply bewithdrawn by producers or importers to avoid the cost of trying to license them.

This Review aims to brief chemical managers about REACH. It covers REACH’s legal and administrative basis,substances covered (and not), registration, evaluation, authorization, restriction, and obligations of downstreamusers. It also presents a glossary that explains the increasing mass of REACH jargon, and a list of companies thathelp chemical producers and importers to comply with REACH.

PEP Review Abstract

SPECULATIVE INCREMENTAL DESIGN IMPROVEMENT FORCAPROLACTAM VIA LIQUID PHASE AMMOXIMATION

AND VAPOR PHASE REARRANGEMENTBy P. D. Pavlechko


This Review is the continuation of a series of reviews studying the Enichem-Sumitomo joint venture to combinetheir respective technologies. PEP Report 7C first examined the Enichem liquid phase ammoximation technology,while PEP Review 1998-15 initiated the evaluation of the Sumitomo vapor phase rearrangement technology.Physical property limitations in the simulation databanks spawned several follow-up reviews (PEP Reviews 2001-2, 2004-1, and 2004-6) to address the gaps and provide the missing parameters. PEP Review 2004-7 updated theresults from the previous evaluations once all the property parameters were estimated, finally addressing theeconomic feasibility of one possible combination of the joint venture technologies. That Review concluded thatthe technology was infeasible, but that a number of design improvements were possible.

In this Review, additional physical property issues required still further approximation and parameter estimation,highlighting the speculative nature of these evaluations. However, if the liquid-liquid split in caprolactamrefining behaves as the patents imply, massive capital cost reductions and some operating cost improvementscould result. If valid, the process alteration appears to be more economical than competing technologies.Unfortunately, estimated market prices for caprolactam suggest that no process is truly economical. Severalvariables are noted as possible areas of economic improvement, but those concepts would need to bedemonstrated in additional patents or published literature before such designs could be considered. The resultsshown in this Review are also speculative, given the limited accuracy of property assumptions required tocomplete the design.



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PEP Review Abstract

SUCCINIC ACID FROM MALEIC ANHYDRIDEBy Ron G. Bray


Succinic acid is a useful C4 dicarboxylic acid. Succinic acid and its derivatives are used in polyester polyols,coatings and plasticizers (R0713001). It is a useful intermediate for the production of gamma–butyrolactone and1,4-butanediol. PEP Report 236, Chemicals from Renewable Resources, discusses a route under development for theproduction of succinic acid via fermentation. PEP Review 95-1-4R, Butanediol from n-Butane via Maleic AcidHydrogenation details a process for the production of 1,4-butanediol from maleic acid where succinic acid is anintermediate. Succinic acid is most commonly produced by hydrogenation of maleic anhydride or maleic acid orrecovered from a by-product stream in the production of adipic acid. Invista and Solutia are two examples ofadipic acid producers (R0713002, R0713003)

In this Review PEP analyzes the technology and economics for the production of succinic acid via hydrogenationof maleic anhydride for an 82.7 million lb/yr (37,500 t/yr) plant at a U.S. Gulf Coast location. This work is basedon Bayer patents for the hydrogenation technology.

This review should be of interest to producers of maleic anhydride, succinic anhydride, and succinic acid andtheir derivatives such as gamma-butyrolactone and 1,4 butanediol.

Safe & Sustainable Chemicals Report Abstract

GREEN BUILDING MATERIALSBy T. Adrian Gaitan with Eric Linak

For centuries, humans have impacted their environment in ways both large and small. Most of this environmentalimpact has stemmed from the basic human need for shelter. In creating shelter, mankind has had an effect on theenvironment—cutting trees, clearing land, and creating waste by-products, as well as bringing about otherunintentional environmental consequences. As technology has progressed, so has the environmental impact ofhumans constructing new buildings.

Today, in the United States alone, buildings account for approximately 49% of the total energy used.

U.S. Energy Usage by Sector—2005

NonbuildingIndustry

ResidentialBuildings

CommercialBuildings

Cars

Light Trucks, SUVs

Embodied Energyin Materials

Industrial Buildings

OtherTransportation



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However, most people today do not immediately think of their buildings or homes when considering ways toreduce their individual carbon footprint (the impact of an individual on the environment in everyday life).Instead, people have focused on how they can reduce their carbon footprint through their use of transportation. Acommon argument for this is that transportation accounts for a large portion of oil usage, as shown in thefollowing pie chart:

U.S. Oil Consumption by Sector—2005

PassengerCars

PassengerLight Trucks

IndustrialFuel

CommercialTrucks

IndustrialFeedstocks

Buildings

OtherTransportation

Source: U.S. Department of Energy.

While it is true that buildings themselves account for a small percentage of domestic oil usage in the UnitedStates, the environmental impact of buildings comes in several different forms, including

• Lack of energy efficiency

• Substantial energy usage (from nonpetroleum sources)

• Construction material degradation

• Construction material energy usage

• Intentional and unintentional habitat loss

• Water consumption

• Air quality depreciation

A number of countries (many in Europe, also Brazil), do not rely on petroleum as much as the United States does.In their attempts to reduce carbon emissions, they have chosen to focus on buildings and how they affect theenvironment. Builders have begun to look for ways to improve the environment that have not been done before.In addition to new construction methods, they have begun to look at new construction materials that are not onlyfriendly to human health, but also to the environment. This has resulted in a new push for green materials inconstruction.

In this report, green materials, sometimes referred to as sustainable materials, are those that follow certaincriteria, including whether or not they are made by an energy-efficient process, whether their purpose is energyefficient, whether their impact upon the environment is minimized, and whether their health benefits are betterthan those of traditional building materials.

The market for green buildings has continued to grow for several years globally, especially in China and theUnited States, where there is a high rate of building construction. As of January 2007, over 400 separate projectswere pending approval by the U.S. Green Building Council under its Leadership in Energy and EnvironmentalDesign (LEED) program, amounting to just under 200 million square feet of new buildings. The trend has not




only applied to commercial buildings, but also residential buildings. Building owners are just starting to becomemore conscious of how their buildings affect the environment, and homeowners have begun to apply thepractices of their employers to their own homes.

(See our website at http://www.sriconsulting.com/SSC/ for more information or to purchase this report.)

SCUP Report Abstract

CATALYSTS: EMISSION CONTROL CATALYSTSBy Masahiro Yoneyama with Uwe Fink, Fred Hajduk, and Wei Yang

The previous Specialty Chemicals Update Program Catalysts report included both process and emission controlcatalysts. The growth and business divergence of these catalyst areas is such that it has become more effective toprepare two reports, each addressing only one area. This report focuses on emission control catalysts. See theSCUP Catalysts: Petroleum and Chemical Process report for information on that area.

Environmental catalysts for emission control constituted a multibillion dollar per year market worldwide in 2006.The importance of emission control catalysts has been increasing as environmental concerns increase globally.Emission control catalysts are divided into two types according to the source of emission—emission controlcatalysts for mobile sources (such as automobile catalysts) and for stationary sources (such as boilers andfurnaces).

Emission control catalysts for both mobile sources and stationary sources are expected to grow strongly all overthe world through 2011. In automobile catalysts, growth is expected in both developed regions and developingregions during the next five years. Growth in developing regions, such as North America, Western Europe andJapan, results mainly from more-stringent emission control legislation, while that of developing countries, such asChina, is due mainly to increases in automobile production. On the other hand, catalysts for stationary sourcesare expected to grow mainly in developed regions in the next five years because of the more-stringent legislationenforced in these regions. In the developing regions, demand increases are expected over the longer term becauseit will take more time to enforce emission control legislation equivalent to that in developed regions. Legislationthat drives growth in catalyst consumption in North America, Europe, Japan and China is discussed in detail inthis report.

Emission control catalysts for mobile sources are based on platinum group metals (PGM) that convert vaporemissions into carbon dioxide, nitrogen and water. Global automotive vehicle production has increased duringthe last three years; automobile production shrank in the United States and Western Europe, while theautomobile market grew robustly in Asian countries, especially China. Catalysts for automobile emission controlexcluding PGMs grew more moderately. The faster growth of autocatalysts than of automobile production wascaused by ever-stricter regulations toward zero-emissions vehicles and by an increased number of catalyst bricksin the car. Autocatalysts are fitted to more than 90% of all new cars and light-duty vehicles sold worldwide, eachcar model requiring a specifically designed catalyst. In all major vehicle manufacturing regions, there is a shiftfrom platinum to lower-cost palladium in autocatalyst systems, along with a strong trend toward lower PGMcontents.

Emissions from industrial process streams and stationary engine exhaust have received increased attention byregulators and by the public, and operating companies have been required to meet ever-more-stringentenvironmental regulations. Emissions from stationary sources can contain various toxic gases (e.g., NOx, SOx, CO,hydrocarbons and other volatile organic compounds) and particulate matter which, if uncontrolled, can causehealth problems and contribute significantly to climate change and environmental pollution.

NOx emissions have been associated with both ozone formation and acid rain. Removal of NOx from effluent gasstreams is the largest market for catalysts in industrial emission control. These streams include flue gases fromgas turbine engines and diesel engines used in electrical power and cogeneration plants; refineries and chemicalplants; and furnaces, boilers and incinerators.

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(For the complete December 2007 report on CATALYSTS: EMISSION CONTROL CATALYSTS, visit this report’s home page or see vol. 5 of

Specialty Chemicals—Strategies for Success.)


CATALYSTS: PETROLEUM AND CHEMICAL PROCESSBy Masahiro Yoneyama with Uwe Fink, Fred Hajduk, and Wei Yang

This report focuses on petroleum and chemical process catalysts. See the SCUP Catalysts: Emission ControlCatalysts report for information on that area.

Process catalysts, a multibillion-dollar-per-year business worldwide, play a vital role in the economy. The valueof products dependent on process catalysts, including petroleum products, chemicals, pharmaceuticals, syntheticrubber and plastics, and many others, is said to be in the hundreds of billions of dollars per year. About 90% ofchemical manufacturing processes and more than 20% of all industrial products employ underlying catalyticsteps. Petroleum refining, for example, which is the source of by far the largest share of industrial products,consists almost entirely of catalytic processes.

For a number of catalysts, the strongest growth in demand through 2011 will occur in regions other than NorthAmerica, Western Europe and Japan. Assuming no new economic crises prior to 2011, industrialized anddeveloping countries in the Asia Pacific region and Latin America will become important markets for processcatalysts. Rising incomes will drive demand for motor vehicles and transportation fuels in Asia and LatinAmerica. Industrial chemical production, particularly of petrochemicals, is growing faster in Asia and the MiddleEast than in North America and Europe. This growth will be reflected in increased demand for a number ofcatalysts in the refinery segment (such as for hydroprocessing), for polymerization, and for hydrogen production.Low-sulfur mandates are also becoming more widespread in these regions.

Legislation is driving growth in catalyst consumption in the developed countries in North America, Europe andJapan, while economic growth is the major driving force for developing countries of Asia. These regions arecovered in detail in this report. More-stringent vehicle emissions standards are resulting in the development ofadvanced automotive catalysts that require low-sulfur fuel, thus driving demand for hydroprocessing catalysts(and refinery hydrogen). Increased use of hydroprocessing catalysts is also forecast for Western Europe. Overallcatalyst demand growth in Japan will be more modest because of the continued shift of the manufacturing baseoverseas to other Asian countries. Catalyst consumption in both petroleum refining and chemical processing willgrow fast reflecting high GDP growth in China.

As the global refining industry moves to cleaner fuels, refiners are being squeezed on hydrogen availability andoctane requirements. Gasoline desulfurization technology has advanced to limit hydrogen consumption andoctane loss, but globally, the octane-barrel position of refiners will deteriorate. On the diesel side of the clean fuelschallenge, a significant increase in hydrogen consumption is forecast to attain ultra-low-sulfur diesel (ULSD)from straight-run and cracked stocks containing refractory sulfur species. Increasingly, isomerization of lightnaphtha will be one of the preferred solutions to add octane to the gasoline pool, triggered by new catalystformulations and optimized processes. Catalytic reforming is the technology of choice for the production of high-octane gasoline and is usually the main source of refinery hydrogen. Catalytic reforming and isomerizationcontinue to grow because of their role in removing lead from gasoline in the developing world. Hydroprocessingis probably growing the most, in response to lower sulfur levels in gasoline and diesel.

Major market segments for polymerization catalysts include polyethylene, polypropylene, polyethyleneterephthalate, polyvinyl chloride and polystyrene. Polyolefin catalysts are the largest single market sector.Polyolefin catalyst consumption is nearly flat. Growth in polyolefin production is compensated mostly by thedevelopment and use of higher-efficiency catalysts.

Technical improvements have reduced the cost of metallocene-produced polymers to levels more competitivewith those produced with conventional Ziegler-Natta polymerization catalysts. Polymers based on single-sitecatalysts have unique properties and are expected to create substantial new markets; however, they will not


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displace conventional commodity polymers in existing markets. The initial slow growth of SSCs can also beattributed to intellectual property barriers.

Advanced Ziegler-Natta catalysts have been developed that reportedly can produce polyolefins with propertiessimilar to those produced by metallocenes, thereby resisting replacement. It is expected that Ziegler-Nattacatalysts will remain the dominating technology because of its cost benefits.

(For the complete December 2007 report on CATALYSTS: PETROLEUM AND CHEMICAL PROCESS, visit this report’s home page or see

vol. 5 of Specialty Chemicals—Strategies for Success.)


CONSTRUCTION CHEMICALSBy Stefan Müller with Xiamong Ma and Yosuke Ishikawa

In this report construction chemicals are defined as chemical compounds that are added as such or informulations to or on construction materials at the construction site in order to improve workability, enhanceperformance, add functionality or protect the construction material or the finished structure made out of it. Theyundergo chemical reactions (e.g., cross-linking) or physical changes (e.g., solidification from melt) during theirapplication. The following groups of chemicals will be discussed:

• Concrete admixtures

• Asphalt additives

• Adhesives and sealants

• Protective coatings

Worldwide, the construction industry contributes significantly to the global GDP, and is one of the mostimportant elements of every economy. Today’s demands on buildings, roads, bridges, tunnels and dams couldnot be met without construction chemicals. The strength of concrete has risen dramatically due to thedevelopment of construction chemicals. The diameter of a pillar needed to carry 100 tons was reduced from 100cm to 10 cm between 1920 and 2004. The cross section of such a pillar is one-hundredth of what was needed in1920. High-rise buildings must provide maximum space on minimum ground.

The raw materials needed for the production of construction chemicals are manufactured by the large chemicalproducers. Polymers are the most important group of raw materials and are found in virtually every constructionchemical formulation ranging from adhesives to waterproofing treatments. The development of new constructionchemicals in many cases requires interaction of the chemical producer, construction chemical manufacturer andend user.

Protective coatings are the most important group of construction chemicals, followed by adhesives and sealants,concrete admixtures and asphalt additives.

Construction chemicals will certainly gain importance in the future. While in some regions, the construction ofnew buildings will predominate, the focus will shift to renovation in the older economies. This will directlyinfluence the usage patterns—concrete admixtures are predominately used for new buildings while moreadhesives and sealants are consumed during renovation.

(For the complete December 2007 report on CONSTRUCTION CHEMICALS, visit this report’s home page or see vol. 6 of Specialty

Chemicals—Strategies for Success.)


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ELECTRONIC CHEMICALS: PART 2PRINTED CIRCUIT BOARD (PCB) CHEMICALS

AND SEMICONDUCTOR PACKAGING MATERIALSBy Yoshio Inoguchi, Larisa Dorfman, Vivien Yang and Yosuke Ishikawa

Specialty as well as commodity chemicals are used in virtually every step of the manufacture of printed circuitboards (PCB) and semiconductor packaging materials. This report covers the major chemicals that are consumedin the production of these PCB and semiconductor packaging.

This study presents an overview of the PCB chemical and semiconductor packaging material markets worldwidewith regional coverage and a focus on regions with rapid technological changes. Coverage includes the threemajor regional markets—the United States, Western Europe and Japan—as well as the Republic of Korea, Taiwan,China and ASEAN countries, where available.

In 2006, the global market for electronic chemicals for the production of printed circuit boards (PCBs) andsemiconductor packaging was valued in the billions of dollars. This diverse, complicated, technology-drivenglobal market is projected to grow at a robust average annual rate through 2011. Key market trends fuel thisengine and multiple industries come together to deliver electronic products to the marketplace.

Market forces drive the demand for materials, wafers, equipment, IC devices, services, software and components,as well as packaging and PCBs. Materials are used in various applications of this continuous loop. The majormacroeconomic drivers that influence this industry include:

• Globalization. A product can be designed in one country and manufactured in other.

• The rise of the consumer. Globalization has brought wealth to emerging economies.

• The communication and information age. Businesses and people are spread out all over the globe.

• The cost/performance paradox. Moore’s Law is still in effect.

• The rise of Asia. This global trend cannot be overemphasized.

Currently, the global growth of PCBs is being driven by the increased use of multilayered, flexible PCBs. Theboard density and design complexity keep increasing as electronic companies try to add more features to theproduct. The electronic designers are trying to design products with clock speeds in excess of 250 MHz. At thesespeeds, speed and power dissipation become an issue requiring the use of advanced materials that can maintaintheir physical properties under even more stressful conditions.

The chemical markets for PCB fabrication and semiconductor packaging are greatly influenced by the demand forproducts in the key markets. Some of the fastest-growing electronic markets are high-definition televisions; smallwireless devices, including mobile phones, PDAs, and GPS units; and integrated devices like the Apple iPhone®.These markets are projected to grow at extremely rapid average annual rates through 2011.

(For the complete December 2007 report on ELECTRONIC CHEMICALS: PART 2, PRINTED CIRCUIT BOARD [PCB] CHEMICALS AND

SEMICONDUCTOR PACKAGING MATERIALS, visit this report’s home page or see vol. 7 of Specialty Chemicals—Strategies for Success.)


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SCUP REPORTS SCHEDULED FOR 2007Report Title Author Status

Specialty Chemicals Industry Overview Uwe Fink PublishedCosmetic Chemicals Stefan Müller PublishedTextile Chemicals Tad Sasano PublishedFlavors and Fragrances Laslo Somogyi PublishedWater-Soluble Polymers Ray Will PublishedCompounding of Engineering Thermoplastics Fred Hajduk PublishedImaging Chemicals: Electrophotography Uwe Fink PublishedProcess Catalysts Masahiro Yoneyama PublishedSurfactants Hossein Janshekar PublishedConstruction Chemicals Stefan Müller PublishedElectronic Chemicals: Printed Circuit Boards Uwe Fink PublishedEmission Control Catalysts Masahiro Yoneyama Published

To view a list of SCUP reports for sale separately, please see our website athttp://www.sriconsulting.com/SCUP/Public/Reports/ . For additional information, please contact:

R. J. Chang, Assistant DirectorSpecialty Chemicals Update ProgramSRI Consulting4300 Bohannon Drive, Suite 200Menlo Park, CA 94025Tel. (650) 384-4300 Fax: (650) 330-1149

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CEH REPORTS AND PRODUCTREVIEWS IN PREPARATION

Report Title Author

Acetonitrile Barbara SestoAcetylene Sean DavisAcrylonitrile Barbara SestoAluminum Chemicals Bala SureshBoron Stefan SchlagCarbon Black Jim GlauserCarbon Disulfide Milen BlagoevDimethylformamide Sebastian BizzariDyes Yosuke IshikawaElastomers Overview RJ ChangEthyl Alcohol Eric LinakEthyl Ether Vimala FrancisFurfural Ralf GublerFurfuryl Alcohol Ralf GublerGlycerin Ralf GublerHelium Bala SureshHigh-Density Polyethylene Andrea BorrusoInorganic Pigments Ray WillIsoprene Emanuel OrmondeLithium, Lithium Minerals and Lithium Chemicals

Jim Glauser

Natural Gas Liquids Sean DavisNonene and Tetramer Bob ModlerPET Solid-State Resins Elvira GreinerPolybutadiene Elastomers Emanuel OrmondePolyimides Uwe LöchnerPolyisoprene Emanuel OrmondePolyvinyl Acetate Henry ChinnPropylene Glycols Henry ChinnVinyl Acetate Henry Chinn

This list is provided for the benefit of Chemical EconomicsHandbook users who may simultaneously be undertaking theirown studies in these areas. Clients are welcome to write or callus in order to discuss the work in progress.

CEH REPORTS AVAILABLE SEPARATELY

To obtain a list of CEH marketing research reports or productreviews for sale separately, please see our website athttp://www.sriconsulting.com/CEH/Public/Reports/ orcontact:

Koon-Ling Ring, DirectorChemical Economics Handbook ProgramSRI Consulting4300 Bohannon Drive, Suite 200Menlo Park, CA 94025Tel. (650) 384-4300 Fax: (650) 330-1149

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CHEMICAL INDUSTRIES NEWSLETTERThe Chemical Industries Newsletter is published monthly by SRI Consulting. The contents of the Newsletter are drawn from current researchand publications of SRIC’s multiclient programs. Readers are welcome to call or write for more information about the subjects and programsmentioned (see addresses and telephone/fax numbers below).

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About SRI ConsultingSRI Consulting provides the world’s most comprehensive ongoing databases on the chemical industries. We offer an array of research-basedprograms designed to provide clients with specific market intelligence and analysis. These programs, combined with strategic informationservices, help clients define new market opportunities, identify and communicate future challenges, formulate and implement businessstrategies, and develop innovative products, processes and services. SRIC provides creative yet practical strategies, supported by renownedindustry and technology expertise and delivered by multidisciplinary teams working closely with clients to ensure implementation. SRIConsulting is a division of Access Intelligence, LLC.

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