Packaging & Converting Intelligence recently had the opportunity to speak with Mario Barbieri, executive director of supply chain and upstream integration at PET resin supplier M&G Chemicals. The subject of the discussion was the upcoming development of the company's groundbreaking Corpus Christi manufacturing site in Texas, which will be a game-changer for PET manufacture.
Normally with a new site under development, the focus is on the output, and discussing some new machinery or systems that will make a higher output faster or more efficient.
It is important to understand that this is a given with M&G Chemicals' new Corpus Christi site and that the company has a track record when it comes to PET volume. In 2003, it opened a plant in Mexico that, at the time, had the highest volume capacity of PET production in the world at 450,000t.
In 2007, it inaugurated an even bigger plant in Brazil with the largest single-line capacity in the world at 650,000t. Given that the nearest competing plants today have a maximum annual capacity of 200,000-250,000t, the Mexican and Brazilian plants represent a significant competitive advantage for M&G.
Having established the ability to manufacture two to three times its nearest competitors' capacity on a single production line, the first questions that come to mind are why this location and why have a projected PET capacity of one million tons?
The answer, according to Mario Barbieri, M&G's executive director of supply chain and upstream integration, lies in the chemical needs related to PET production and a strategy in the location.
"For PET production, you need two chemicals, PTA and MEG, and to make PTA, you need paraxylene [PX]. M&G already has a track record of co-locating with producers of one of these materials to reduce the production and logistics costs. With Corpus Christi, we are moving to the next step: producing our own PTA, and having a large local supply of MEG and PX, which means that we can take full ownership of supply and manufacture of our PET.
"There is a very large and established refinery community to provide the raw materials we need locally. This, besides economics aspects, also has a superior environmental footprint, as we don't need to transport several of the materials in the chain at all."
"The next important point to make is related to Corpus Christi's location on the sea," Barbieri continues. "There is a large commercial port nearby for us to transport our products, and there is a local municipal government that is eager to work with business to develop the area - for example, we have set up a closed-loop water system via a desalination plant so that we avoid using civil water in an area where it's very scarce, and we are studying further expansions of the desalinisation plant to cover other users.
"Beyond the port, we also have three major rail networks that all go in and out of the local area, so we can efficiently move product by land or sea."
In addition to the multiple benefits in transportation and sourcing, the site will increase the company's US market presence. By having local access to MEG and PX, and co-locating the plants producing the PTA and the PET, raw material and transportation costs can be driven down.
"The ratio of PTA in PET is about 0.85:1.00," says Barbieri. "So, for a one-million-ton-capacity plant for PET, we need about 850,000t of PTA. For these volumes, we cannot wait to source the material from a location across the world, bring it to a second plant and transport the chemicals away; it would be too time and money-consuming.
"This way, we have a steady supply in our backyard that we can grow with overall demand and keep a consistent-quality supply to our plant. And again, with less transportation, this will be good for the environment," he says, adding that M&G can also send any excess PTA to the Mexican plant if required.
M&G takes pride in its work; planning the location of this plant is just one of a multitude of strategic decisions that have been made. Most other companies in its field purchase the technology to produce the PET, but M&G develops its own. It continues to be technology-focused, and, even if PET has been seen as a commodity by others, it invests heavily in R&D, and process or product improvement also, in order to develop the right grades required to expand the applications of PET.
According to the latest research by Canadean, rigid and flexible plastics are the biggest as well as the fastest-growing markets for packaging, accounting for more than 60% of total usage in 2014 and due to rise to 66% by 2017. The technology focus of M&G directly addresses this demand by providing an improved supply amount just when it is most needed by the market to drive this next stage of growth. The recent reductions in feedstock costs have made PET even more competitive than before in comparison with the alternative packaging materials, such as glass, aluminium, paperboard and polyethylene.
An example of this technical resourcefulness is M&G's 'Easy-Up' proprietary technology, as Barbieri explains: "In order to produce PET, you take your MEG and PTA, and have them first go through a polymerisation phase from which you get the 'melt'. That then needs to go through a solid-state-polycondensation [SSP] phase in order to be transformed into PET granules ready to be used by converters. The SSP phase is usually done in a high tower.
"There are a couple of issues with this set up. First, you need to build a massive tower, around 100m high, and you are normally building it in an area that may have shaky ground, high winds or various other issues that are problematic for a tall building. The second issue is that there is no simple way of clearing out all the resin from the tower, so each time you put a new batch of melt at the top, you are not removing 100% finished product at the end, thus generating some so-called 'off-spec' PET resin that will not pass the quality-assurance criteria."
"Easy-Up, in its most simple description, meant we took the vertical tower and made it horizontal, so it can go in the ground on its side," Barbieri says. "We no longer have the height or environmental issues a tower faces.
"The next benefit is that we can completely clean the entire tunnel, with no loss of product, after each batch, and we can do so quickly. This means that we can make various grades of PET in the Corpus Christi site - CSD, hot fill, water and so on - rather than being stuck with one grade.
"So we will be able to meet any PET need and can swap grades in or out of with ease. As we developed Easy-Up, we also are the only ones able to offer this efficiency to our customers".
Another focal point is on biomass and renewable sources. PET from fossil origin will continue to support the brand-owners' packaging development in the near future as, currently, there is no 100%-bio alternative available and, in any case, PET has strong sustainability credentials; it can be recycled, either bottle to bottle or into fibre that, in turn, can be made into carpets, clothes or other second-life items.
The really big evolution, however, is taking place with the move to disengage from crude oil and move to producing PET from renewable biomass. Second-generation non-food-related renewable materials are those based on agricultural waste, which sidesteps the thorny issue of diverting food from animal and human consumption to create bioplastics. As this is derived from waste and is not compromising the food chain, this biomass provides a more sustainable, less impactful, environmentally friendly solution. M&G is currently working on the development of 100% second-generation bioPET and, while it is early days in terms of production, as these plants come online, capacity will increase dramatically.
Ultimately, as well as providing another US base of operations feeding the local market, the new Corpus Christi plant, and the efficiencies provided in its new design and modern production technology, will enable M&G and its customers to compete more effectively with the Asian export market.