Aqueous polymers: “Growth, sustainability and security of supply are paramount

Lars Wallstein, Managing Director of Synthomer Germany, sees the situation with aqueous polymers as challenging. The commodities situation is difficult for suppliers and paint manufacturers. Wallstein does not expect the situation to ease soon, but that further providers to leave the market.

Lars Wallstein -

How do you rate the market for aqueous polymers?

Lars Wallstein: We see major challenges in the market at the moment. With the relentless raising of standards – to wit, REACH, the ban on APEOs, the biocides directive, green and clean trends – it is essential to have the wherewithal to invest in employees, technology, laboratories and facilities. This means it is important to have a good capital base, to enjoy the long-term trust of customers, owners and investors – and to invest. And yet there are still quite a large number of smaller, mostly local providers who are competing at low levels of investment, and low product and safety standards. They are playing for time. It is becoming increasingly difficult for smaller competitors to meet the numerous requirements simultaneously. The fact that the sharp rise in commodity prices has still not been passed on to any satisfactory extent is more likely to have exacerbated rather than improved the earnings situation of many polymer manufacturers. As a result, some of our competitors will probably leave the field.

How are you responding to these challenges?


Lars Wallstein

Managing Director Synthomer Germany

Wallstein: We recently reported very good figures for 2017, partly due to the successful acquisitions of Hexion's acrylic monomers, dispersions and powders in mid-2016 and Perstorp's oxo business in 2017. We therefore see the challenging environment as a great opportunity for Synthomer, because we are well positioned and looking to grow further. We are investing in a further 35,000 tonnes of dispersions capacity at our site in Worms, Germany, and this will come on stream in the fourth quarter. By then, the plant will have a capacity of approx. 125,000 tonnes and will be running at full capacity in two to three years. We are also making substantial investments at other sites, e.g. in France, Italy, Spain, the Czech Republic and Finland. And we are investing heavily in strengthening our teams. We are hiring a lot of new colleagues, mostly at our site in Marl, Germany, where we now employ around 150 people in R&D and technical service.

Current challenges consist in further expanding our European plant network, and in aligning and harmonising our product ranges and innovation pipelines. We are expending a lot of time at the moment on coordinating our organic growth plans with our customers and making capital investments. We are growing fairly dynamically and very successfully. The purchase of the Austrian plant from BASF early this year made us the clear number 1 in aqueous polymers in Europe, even though we feel very comfortable in the role of hidden champion.

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You mentioned higher commodity prices. Do you see any easing of the situation for the industry in this respect?

Wallstein: We see the whole commodity situation as one of the major challenges facing polymer suppliers and paint manufacturers alike. Security and reliability of supply are paramount. The commodity markets have become progressively volatile over the last 15 years and the supply situation, especially in Europe, has become more and more demanding.What has since become part of the daily routine for the major chemical companies is very annoying for us and our customers. It’s also arduous and costs a lot of energy and money. We believe that commodity markets will remain fairly tight and volatile and that price levels are unlikely to fall. The dominant issue is security of supply, not price. But it would be great if both were to improve.

For which commodities do you foresee real problems?

Wallstein: We are concerned that there is very little light at the end of the tunnel for MMA especially. A major outage would likely keep Europe on tenterhooks at this time of the year. The further outlook for the second half of the year is unclear, because MMA is scarce not only in Europe but also worldwide.

The situation with acrylic esters has eased after the force majeure event experienced by the main supplier in Europe. Nevertheless, prices remain very high.Styrene is known to be very volatile. Anti-dumping duties in China could affect global commodity flows and we are monitoring the situation very closely.

VAM has been steadily rising in price recently and that’s not a very satisfactory situation. Europe is a net importer of VAM. In my opinion, the ongoing European import duties work to the benefit of the major producers, and not the consumers. Both the major and the minor commodities need a lot of attention, because full REACH compliance must be ensured by the end of May. But we’ve already achieved that.

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