Insulation industry news from Global Insulation

China: BASF has begun trial operations at its mononitrobenzene plant within the integrated 400,000t methylene diphenyl diisocyanate (MDI) complex in Chongqing, China. This MDI site covers an area of more than 50 hectares, including facilities of 400,000t/yr of Mononitrobenzene, 300,000t/yr of aniline, 400,000t/yr of crude MDI, and an MDI splitter with a capacity of 400,000t/yr. Mononitrobenzene is a precursor for the production of MDI, a component for polyurethanes.

China: Zotefoams, which produces cellular material technology, has entered into a new venture with China's King Lai Group to manufacture and sell insulation products. The new venture will be called ZOTEK King Lai (ZKL).

Zotefoams and King Lai have a previous long-standing relationship for the sale of T-Tubes in China. Building on the success of T-Tubes clean-room insulation products for biotech, pharmaceutical and semiconductor plants, ZKL will offer a local supply to the market in China and a more rapid response to other markets including Asia, India and the Middle East.

ZKL is owned 51% by Zotefoams and 49% by King Lai. Manufacturing will be located in King Lai's plant in Kunshan, Jiangsu Province, China. The manufacturing of products made from Zotefoams' ZOTEK foam materials is expected to begin in the second half of 2015. Sales activity in China will be the direct responsibility of ZKL, using King Lai as the exclusive distributor, while all sales to customers outside China will be the responsibility of Zotefoams Operations Ltd in Thailand.

"I am delighted to extend our relationship with King Lai. Its commitment to operational excellence and strong position in products for clean-room markets make King Lai an ideal partner to accelerate the development of our unique materials," said David Stirling, managing director of Zotefoams.

China: China Magnesium Corporation Ltd (CMC) has executed and commenced a cooperation agreement with Pingyao County Fengyan Mineral Wool Co Ltd (FMW), effective from 1 February 2015. The effect of the agreement is that CMC will have a 60% economic interest in FMW, control a majority of the FMW board seats and be responsible for the management of FMW's business.

FMW is an established and profitable medium-sized metallurgy company based in Pingyao, Shanxi Province. It is a wholly-owned subsidiary of Fengyan Coal & Coke Group Company Ltd. FMW can produce 150,000t/yr of ferronickel and uses the waste slag from the ferronickel production to produce mineral wool and mineral wool acoustic board products, among other industrial products. It currently purchases all of CMC's semi-coke to use in its ferronickel production. Any external ferronickel requirements in respect of CMC's recycling and production are also currently supplied to CMC by FMW.

Kazakhstan/China/Russia: Russia's TechnoNicol will invest Euro12.4m to build a 300,000m²/yr capacity extruded polystyrene foam (XPS) insulation plant in the Karaganda Region of Kazakhstan. The plant will start production in 2016. Its products will be supplied to all regions of Kazakhstan and south Asia.

China: Chemicals producer Evonik Industries has started operations at a new 230,000t/yr capacity hydrogen peroxide plant in July 2014 in Jilin City, Jilin Province. Evonik invested more than US$139m in the site to raise its global capacity for hydrogen peroxide production to more than 900,000t/yr.

"This investment further consolidates our market leadership for hydrogen peroxide," said Klaus Engel, executive board chairman of Evonik Industries. Evonik will supply hydrogen peroxide from Jilin direct to the neighbouring propylene oxide plant run by Jishen Chemical Industry Co Ltd. Jishen will use the hydrogen peroxide to manufacture propylene oxide on the basis of the HPPO process. Propylene oxide is mainly used to make polyurethane intermediates that are used in manufacturing insulation materials for the construction and refrigeration industry.

"We are registering a great deal of demand around the world for our efficient HPPO process," said Gregor Hetzke, head of the advanced intermediates business unit at Evonik. "The Jilin plant represents another milestone on the way to establishing hydrogen peroxide as an eco-friendly oxidant for the process of chemical synthesis. The project is also proof of how we use new technologies to systematically drive forward our growth."

Evonik developed the HPPO process together with ThyssenKrupp Uhde. The new plant in Jilin is the second of its kind. The HPPO process allows the eco-friendly oxidant to also be used in the direct chemical synthesis of propylene oxide. The benefits of the new method are that it requires much lower investment costs, has high production efficiency and has excellent environmental compatibility.

Another large Evonik plant, a US$136m integrated production complex for isophorone and isophorone diamine, started trial operations in Shanghai in May 2014 and will be officially inaugurated in July 2014. The complex will have a capacity of 50,000t/yr.

"The new plant continues our successful growth story in isophorone chemistry," said Patrik Wohlhauser, executive board member and chief operating officer of Evonik Industries. "We are now represented in the three major economic zones, Europe, North America and Asia."

China: Orient Paper Inc has commenced the final commercial production phase of its papermill 1 (PM1) renovation project, which produces insulation liner paper. PM1 has a designed production capacity of 50,000t/yr.

"We are very pleased to re-launch the renovated PM1 a few months earlier than our original schedule," said Zhenyong Liu, chairman and CEO of Orient Paper. "The purpose of our modernisation plan is not only to convert PM1 into a more energy-efficient production line, but also to produce higher profit margin products."

According to Liu, the insulation liner paper is used to sandwich certain insulation materials as a construction material for wall and floor insulation. It can also be combined with certain plastic woven cloth to manufacture new moisture-proof packaging materials for the transportation of books and magazines by the publishing industry in China. Both product applications are expected to benefit from stable market demand in the region.

China: Bayer MaterialScience intends to increase MDI production from 0.35Mt/yr to 0.50Mt/yr by the middle of 2014, according to polymer news website Gupta Verlag. De-bottlenecking will take place at the polymer manufacturer's MDI production facility at the Bayer Integrated Site Shanghai in Caojing, Shanghai.

"MDI is an important raw material for the production of polyurethane rigid foam, which is an effective insulation material for buildings and refrigerators. The de-bottlenecking will allow the company to further expand its business in China, which is one of the largest markets in the world for Bayer MaterialScience," said Wolfgang Miebach, President of Bayer MaterialScience China.

China: Demand for insulation materials in China is projected to grow 9.4%/yr to meet US$10.6bn in 2016, according to a new study from the Beijing office of The Freedonia Group. The Cleveland, US based industry research firm has also predicted in its report 'Insulation in China' that continued increases in building construction and output in the manufacturing sector will drive gains. Further growth will be spurred by changes in building codes to reduce energy consumption in building applications as well as efforts to reduce energy use in manufacturing processes.

The study valued demand in China for insulation in 2011 at US$6.74bn. This broke down into foamed plastic (US$5.52bn, 82%), fibreglass (US$386m, 6%), mineral wool (US$386m, 6%) and other products (US$450m, 6%). Predicted demand for 2016 was broken down as follows: foamed plastic (US$8.62bn, 82%), fibreglass (US$627m, 6%), mineral wool (US$643m, 6%) and other products (US$675m, 6%).

Building construction markets will continue to account for more than two-fifths of China's total insulation demand. The residential and non-residential segments will each expand at 10%/yr until 2016, supported by healthy growth in building construction. New multi-family housing starts, driven in large part by China's continuing urbanisation, and strong fixed investment activity in office, commercial, institutional and other highly insulated structures such as power and petrochemical plants will boost market gains for insulation materials. In addition, improvement and replacement of insulation in existing housing in order to raise energy efficiency, as well as to enhance comfort, will continue to promote market gains. Concerns about energy loss will lead to gains in all markets as the intensity of use of insulation increases.

Demand for insulation in the industrial and heating, ventilation and air conditioning (HVAC) equipment market will rise 8.4%/yr until 2016, trailing overall growth. Strong increases in investment in industrial and HVAC equipment as a result of continued industrialization in China will boost demand. Efforts to reduce energy consumption and costs in these applications - by both producers and the government - will also spur demand gains in this market. Demand in other important markets will be driven by rapidly expanding output of insulation-containing appliances (e.g., refrigerators and freezers) and transportation equipment.

New Zealand splits Christchurch US$34m rebuild contract between Winstone and Knauf

New Zealand: A US$34m New Zealand government procurement deal to supply wallboard for the rebuilding of Christchurch has been split between New Zealand's only wallboard manufacturer, Winstone Wallboards, and multinational manufacturer Knauf. Home affordability and a lack of competition for building supplies in the country were cited by a Productivity Commission report as key issues in making the decision

"Having Knauf set up shop in New Zealand will see increased industry competition that will provide consumers with more choice and could potentially drive down prices," said Economic Development Minister Steven Joyce. The government expects to save around 6% on wallboard costs.

Knauf, the world's second-largest wallboard manufacturer and one of only seven firms that dominate four-fifths of global production, already has a New Zealand operation, selling wool-based insulation material. The contracts will cover wallboard and associated fasteners, adhesives and jointing compounds being used in the Earthquake Commission and Southern Response Earthquake Services Limited reconstruction programmes. The contracts were let after a competitive tender that attracted nine bids.

China: China's Ministry of Public Security has announced that it will cease restrictions on certain insulation materials that were previously recognised as flammable materials, according to the website of the ministry's Fire Department. Polyurethane will become the biggest beneficiary of the relaxation to the existing rules. According to analysts, China's annual building insulation materials market capacity may reach US$16bn by the end of 2015.

China: Danish insulation maker Rockwool International has announced that its board of directors have approved a plan to construct a plant in China costing around Euro110m. The new plant will be constructed in Tianjin, approximately 150km from Beijing in northern China. The plant is expected to be ready by the end of 2014 and will have a capacity of more than 120,000t/yr of mineral wool insulation.

"We have seen a good sales development since we acquired the Australian company CSR's insulation activities in southern China in 2010," said Rockwool division managing director for East Division Theo Kooij. "So far the majority of our sales have gone to industrial insulation. With the new plant in the northern part of China we can now target the promising market for building insulation, which has the potential to become the biggest in the world over time. High-rise buildings, where fire safety is a serious concern, stand out as a promising segment for our non-combustible insulation. The national and regional authorities in China are now expressing a high interest in improving the fire safety of insulated buildings."

In 2011, sales in Asia accounted for 5% of the total group sales for Rockwool and this share is expected to grow in the coming years. China is the group's biggest single Asian market.