Bayer Pouring Millions Into South Charleston Facilities

Bayer Pouring Millions Into South Charleston Facilities [Charleston Daily Mail, W.Va.]

From Charleston Daily Mail (WV) (July 13, 2011)

July 13--Bayer MaterialScience is investing $11 million in three projects at its South Charleston facilities, a company executive said.

Glenn Kraynie, vice president of the company's South Charleston plant, told the South Charleston Economic Development Authority Tuesday that the company is:

--Expanding its base polyol production capacity by de-bottlenecking its largest base polyols unit. "It will take some new technology, probably not on our reactor train, but on the downstream processing system," he said. "It will amount to about a 14 percent expansion of our biggest unit."

--Embarking on a quality improvement project that will focus on reducing the level of residual chemicals in polymer polyols produced at the plant.

--Working on the commercialization of its "green" natural oil polyols. Kraynie said the South Charleston plant is the first commercial plant in the world to produce polyols from castor bean oil.

"We're really excited about those future plans for our South Charleston plant," he said. All three projects are scheduled for completion next year.

"It's certainly good news," said South Charleston Mayor Frank Mullens, noting that just two months ago The Dow Chemical Co. announced plans to invest about $40 million in its South Charleston plant over the next four years.

"That's two great reports from two major players," Mullens said. "Both came in and used the words 'expansion' and 'growth.' That's exciting, considering the fact that a few years ago we weren't talking about that."

Bayer MaterialScience has 100 employees at its South Charleston facilities, Kraynie said. The company also has 35 research and development employees at the South Charleston technology park.

Mullens asked if the company's investment will increase employment.

"At this point I can't say," Kraynie said. "Our focus is to maintain our efficiency level where it is." Kraynie said he's going to Bayer's headquarters in Germany today "to meet with the board and say we've exceeded the efficiency benchmarks they set for our site five years ago."

Bayer MaterialScience is one of three business units that make up German-based Bayer AG. The other units are Bayer CropScience, which has a plant at Institute, and Bayer HealthCare, which does not have a facility in West Virginia.

Kraynie said Bayer MaterialScience makes high-tech polymer materials and accounts for 30 percent of Bayer AG's annual revenues. Bayer MaterialScience has 30 production sites around the world.

The South Charleston facilities include 11 polyol reactor systems on Blaine Island, which is inside The Dow Chemical Co.'s South Charleston plant fence line, plus an office at 501 Second Ave.

Kraynie said Bayer MaterialScience acquired some space on Blaine Island from Dow in 2009 and now occupies 19 of the island's 66 acres. Bayer MaterialScience also has a facility in New Martinsville.

There are five business units within Bayer MaterialScience: thermoplastic polyurethane; inorganic chemicals; coatings, adhesives and sealants; polycarbonates; and polyurethanes.

Polyurethanes account for more than 50 percent of Bayer MaterialScience's business.

Kraynie said there are two sides to the polyurethanes business -- isocyanates and polyether polyols. They are combined to make polyurethane.

"In South Charleston, we only make polyether polyols," Kraynie said. "South Charleston is the fourth-largest polyether polyols plant in Bayer MaterialScience."

He explained that ARCO Chemical Co. purchased the polyols business and assets in South Charleston from Union Carbide Corp. in 1989

Lyondell Chemical Co. purchased all of ARCO Chemical Co., including the polyols business, in 1998. Bayer purchased the polyols business and the supply of propylene oxide -- the raw material used at the South Charleston plant -- from Lyondell in 2000.

The propylene oxide Bayer MaterialScience uses at South Charleston comes from Lyondell's operations on the Gulf Coast. It comes upriver by barge. "We go through a barge about every three days," Kraynie said.

Propylene oxide is highly flammable.

"We convert that to polyols, which is a non-hazardous, clear, viscous fluid," Kraynie said. "All of our production is non-hazardous.

"The South Charleston facility is recognized as the flagship plant within Bayer MaterialScience for safety and the environment," he said. "It has been over 14 years -- later this month it will be 15 years -- since the plant has had a lost-work-day accident.

"We received the first Bayer MaterialScience CEO Safety Award in 2009. We are a U.S. Department of Labor Occupational Safety and Health Administration Voluntary Protection Program Star-Certified site. We were certified in 2005 and recertified in 2010."

The company's South Charleston facilities annually produce about 350 million pounds of base polyols, which employees call "flex" because a lot of it goes into flexible urethane foam, Kraynie said. The South Charleston facilities also produce about 225 million pounds of polymer polyols a year, which is used to give foam different properties.

The South Charleston plant ships more than 5,000 tank-truck loads a year -- about 20 trucks a day. It also fills an average of four or five rail cars a day.

"We also ship large quantities down to the Gulf Cost on three-million-pound barges once a month, primarily for export," Kraynie said.

The South Charleston facilities are heavily focused on serving automotive customers.

"Bayer MaterialScience has 45 percent of the global market share in automotive seating," Kraynie said. "In the North American Free Trade Zone (which includes Mexico, the United States and Canada), it's 56 percent. So in the majority of light vehicles assembled in North America, the seat foam is from South Charleston-produced polyols."

Customers include Ford, General Motors, Toyota, Honda, Volkswagen, Nissan and Chrysler. "Here in South Charleston, the overwhelming majority of our customer base is within one day's shipping by truck," he said.

"We also sell a lot of polyols into the slabstock market where they make furniture like couches and bedding," Kraynie said. "We are the sole supplier for Tempur-Pedic memory foam. You've seen the advertisement that says it was developed by NASA? It may have been developed for NASA originally but it was developed by Union Carbide scientists at South Charleston."

"We have not had a production-caused customer complaint in over five years at South Charleston," he said.

Over the last 12 years, Bayer MaterialScience has invested an average of $6.9 million a year in its South Charleston facilities, Kraynie said. That includes an average of $1.7 million a year on safety and the environment and an average of $2.4 million a year on reliability and mechanical integrity.

Kraynie was asked if inexpensive natural gas harvested from the Marcellus shale could be a plus for the company's South Charleston facilities.

"It would help keep price pressure on my steam provider," he said.

Also, if the region were to attract a cracker to convert ethane from natural gas, it "certainly should be attractive to a company that's then interested in producing my two major raw materials. Our challenge is to get the propylene oxide here. A cracker may address that."

Contact writer George Hohmann at business@dailymail.com or 304-348-4836.

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Posted: July 2011


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