TOGETHER WITH

Good morning. I'm looking into developing some online courses, and am putting out some feelers:

From the condenser:

· DuPont's medical plastic acquisition

· A new green H2 join venture

· POTD: hand sanitizer

SPECIALTY MATERIALS

DuPont acquired a medical tubing extruder

American specialty chemicals company, DuPont, reached an agreement with private equity (PE) firm, AEA Investors, to acquire AEA’s portfolio company, Spectrum Plastics Group for $1.75 billion.

Catching you up:

DuPont has seen a lot of change lately—following the Dow DuPont merger (2017) and de-merger (2019), the company has been shedding its “commodity” businesses (like the sale of its mobility and materials business) and leaning into high-growth specialties (like the acquisition of Laird, and the failed acquisition of Rogers Corporation).

Okay, so Spectrum?

Spectrum was formed back in 2017 when a different PE firm merged two injection molding specialists: Pexco and PPC Industries. The resulting company, in combination with the other companies they’ve strapped on since, now has a dominant position in the silicone and thermoplastic tubing fraction of the medical device market (think IVs, catheters, etc.). They are basically very good at extruding polymers into tubes, "from thin-wall, tight-tolerance extrusions with multiple lumens, to material combinations previously not thought feasible—faster than ever."

Zooming out:

In their earnings call, DuPont’s CEO Ed Breen noted that “Spectrum’s [relationships] are more with the medical device OEMs, but a lot of [DuPont's] technology actually goes through companies like Spectrum into that industry.” At one level this is just a move down the value chain into a secular growth market, but at another level the quote reveals the nature of the business: getting DuPont's polymers into medical device OEMs (that's who Spectrum sells to) is more about relationships than about product differentiation. Value may just be an abstract concept, but it drives decisions like this, so it's worth understanding where it's being created.

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SUSTAINABLE HYDROGEN

Technip and John Cockerill's green H2 JV

Process technology companies, Technip Energies and John Cockerill, are forming a green-hydrogen-focused joint venture (JV) called Rely.

Hydrogen 101:

Pretty much all of the world's on-purpose hydrogen is made by steam reforming natural gas, which produces CO2, so we’ve been looking at more sustainable alternatives like steam natural gas reforming but with carbon captured strapped on (blue hydrogen), methane pyrolysis (turquoise hydrogen), and water electrolysis (green hydrogen). Water electrolysis gets the green prefix because it's an electrochemical process that could, at least in theory, be driven with renewable energy.

The plan:

Technip Energies licenses its water electrolysis process to companies who want to make green hydrogen, and John Cockerill manufactures the electrolyzers used in that process. The plan is to form a 60:40 JV (with Technip owning the majority), and to jointly "offer end-to-end solutions, from pre-Final Investment Decision services including technical & financial advisory through to proprietary products, project execution and operation and maintenance."

Bigger picture:

Neither Technip or John Cockerill are operating companies, so ultimately they are just interested in deploying their process or equipment as much as possible. If you assume that their process and equipment costs are competitive with the market, taking market share is just a function of how quickly can you deliver a functional electrolysis unit to a future customer. And partnering up eliminates some of that friction.

Some more headlines

• BASF has a new home-compostable extrusion coating for food packaging

• Arkema raised its decarbonization goals to target a 1.5°C trajectory by 2030

• Clariant posted a lower-than-expected quarterly profit

• Oleo-X announced a new renewable diesel and SAF feedstock facility

• Trinseo is going to keep trying to sell its Styrenics unit

Product of The Day

Today, we're breaking down hand sanitizer.

It’s safe to say that the folks behind Purell and Germ-X had a solid fiscal year in 2020. The increased demand for hand sanitizer translates to increased demand for its components—which consists basically of rubbing alcohol with a few additives. We talked about rubbing alcohol in another POTD, but in short, it’s a water-based solution of denatured ethanol or isopropyl alcohol.

That rubbing alcohol is transformed into hand sanitizer by the addition of a few other molecules: something to combat the drying tendency of those alcohols (such as glycerol, PEG, or propylene glycol), something to make it a gel (polyacrylic acid), and a base (maybe sodium hydroxide) to neutralize that polyacrylic acid.

The reboiler

• Podcast: Check out this episode featuring Dr. Tina Tosukhowong of PTT Global Chemical on her career and stance on sustainability.

• Article: It’s hard to understand the petrochemical industry without knowing in's & out's of the 'enes.

• Learn: The Column gets its name from the separation unit processes. Check out this course to learn why mass transfer operations are the core of the industry.*

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