Competitive Edge of Plastic Assistants Needs Improving

By Gong Liucheng

Rapid demand growth
To improve the workability of synthetic resins or their other
properties, assistants have to be added to the resins during
processing. Products with the desired qualities are then
produced through special processes. For example, to reduce the
shaping temperature of PVC (polyvinyl chloride) resin and make
end products flexible, plasticizers are added in the processing.
   The apparent consumption of plastic resins and copolymers
exceeded 43.304 million tons (including 4.956 million tons of
scrap plastics imported from abroad) in 2005. The output of
plastic products in companies with considerable scale reached
28.019 million tons in 2006, being 18.7% higher than 2005.
Plastic assistants are important components of the plastic
industry. The extensive plastic products market has provided
huge opportunities for development of the plastic assistants
sector. The consumption of assistants in plastic products was
2.05 million tons in China in 2005, of which 1.68 million tons
was consumed by PVC products. It is expected that the output of
PVC in China will reach 12.0 million tons in 2010, consuming 2.0
million tons of assistants. The average annual demand growth of
plastic assistants in China is expected to be 10% in the next
five years.

Weak overall competitive edge
China has already established a complete plastic assistant
research, development and production system. Major products can
largely meet the needs of the developing plastic industry.
Through combined efforts of production enterprises,
universities and research institutes, quite a few new products
have been developed. Some of them reached the level of advanced
countries. For example, the Institute of Chemistry at the
Chinese Academy of Sciences, the Guangzhou Institute of
Chemistry Chinese Academy of Sciences and the Guangdong Winner
Functional Materials Co., Ltd. have jointly developed a series
of rare earth functional assistants. Hangzhou Xinxin Plastic
Additive Scientific Research Co., Ltd. and Hangzhou Sanye
Chemical Co., Ltd. have jointly developed liquid calcium/zinc
compound stabilizers. Tianjin Univtech Co., Ltd. has developed
light stabilizers.
   The plastic assistants sector in China has developed to a
considerable scale. The plasticizer producing capacity of Qilu
Plasticizers Co., Ltd. reached 360 thousand t/a in 2006,
accounting for 18% of the total plasticizer capacity in China.
The capacity of chlorinated polyethylene in Weifang Yaxing
Chemical Co., Ltd. is more than 70 thousand t/a. The capacity
of rare earth compound stabilizers in Guangdong Guangyang
High-tech Co., Ltd. has reached 20 thousand t/a.
   China had nearly 1 thousand plastic assistant producers in
2006. Except for a few large plasticizer producers, most
producers are medium and small enterprises. Products are mostly
general-purpose, low-grade varieties. The processing level is
low, the technical equipment is outdated, the technical force
is weak and the product quality is not stable. Some medium and
small enterprises have shut down or shifted to other products
in the fiercely competitive market.

Impact from export setbacks of plastic products
Due to impacts from the WEEE (Waste Electrical and Electronic
Equipment) and the RoHS (Restriction on Hazardous Substances)
issued by the EU, the export of plastic products from China has
suffered setbacks. RoHS stipulates that starting from July 1st,
2006, eight categories of electromechanical products exported
to the EU market - including large household electric appliances,
small household electric appliances, IT and telecommunication
equipment, video/audio equipment and illumination equipment -
should not contain six hazardous substances -lead, mercury,
cadmium, hexabasic chromium, PBB (poly-brominated biphenyls)
and PBDE (poly-brominated diphenyl ethers). On July 5th, 2005
the EU decided to prohibit the use of DEHP (di-2-ethylhexyl
phthalate), DBP (dibutyl phthalate), BBP (butyl benzyl
phthalate), DINP (diisononyl phthalate) and DIDP (diisodecyl
phthalate) in various toys and child-care articles. In the toy
markets of various EU countries, products from China have
recently accounted for around 70%. These decrees and decisions
therefore have a huge impact on plastic assistants (especially
plasticizers, heat stabilizers and flame-retarding agents) in
China. 80% of plasticizers in China are phthalate varieties, 70%
heat stabilizers contain heavy metals such as lead and 70%
flame-retarding agents contain halogen.
   Indeed, the development of China's plastic assistants sector
faces a dire situation. Not only do these EU decrees have great
impacts, but the high price of raw materials caused by the rise
in crude oil prices is shrinking profits.
   The plastic assistants sector should therefore strengthen
the development of environment-friendly varieties and research
on environment-friendly process technologies; reduce the
proportion of phthalate plasticizers; increase the proportion
of nontoxic and environment- friendly heat stabilizers such as
calcium/zinc compound varieties; reduce the proportion of
halogen-containing flame-retarding agents; and achieve
complete production capability for functional and
environment-friendly products.

Output of Plastic Assistants
         in China  in 2005   (thousand tons)
Variety                Output
Plasticizers            810
Heat stabilizers        210
Flame-retarding agents    150
Foaming agents             94
Impact modifiers and processing modifiers    10
Lubricants                 72
Antioxidants            15
Anti-static agents      4
Light stabilizers       4
Anti-fogging agents     2
Source: CNCIC