Small may be beautiful, but big has to be bountiful

Current received wisdom around the global chemicals industry is that 'small is beautiful'. One by one, the major players in the market have embarked on complicated series of mergers and demergers, sell-offs and acquisitions, joint ventures and consortia all with the aim of achieving more flexible businesses, better able to respond to the rapid changes in consumer demand for their multitude of products.

There is, however, one small problem with such scenarios. If traditional producers of bulk chemicals and intermediates see their future well-being better served by moving their product portfolios further downstream towards the ultimate consumer, who will deliver their raw materials the ethylenes, propylenes, styrenics and all the other 'building blocks' that effectively have few customers but the chemicals industry?

There may be many process steps from a 'building block' to a speciality chemical with its own niche, albeit highly profitable, market. But there is no avoiding the fact that the first few steps along that road involve big plants. As we report this month on the news pages, these are plants such as BP's joint venture to build solvent plants in Indonesia; or the 800 000tpa steam cracker recently announced by BASF and FINA for, where else, Texas; or going even further upstream, the huge nitrogen-supply complex planned for the Mexican offshore oil industry (admittedly somewhat beyond the scope of the chemicals industry, though the technologies involved are common to both).

To some extent plants like these are merely conforming to what was the received wisdom of the 1970s and '80s. 'Economies of scale' was the philosophy then. Enormous single train complexes were cheaper to build, easier to operate, and unfortunately produced vast quantities of product to flood notoriously cyclical downstream markets. So what's new? Well, in this month's crop, as with many other current major projects, it's the technology that's new.

This point was well made at last month's BHR conference in Antwerp on Process Intensification in Practice (to be reported on in detail in a future issue). Although by most definitions (and there are many), process intensification assumes a move to more compact, smaller items of process equipment to improve a particular process, several speakers made the point that process substitution can be equally beneficial. BP's plans to use its new ethyl acetate process (direct from ethylene and acetic acid) in Indonesia is a case in point.

Hoechst's Joachim Semel sees process intensification as the key to realising the often contradictory goals of quality improvements, capacity increases, energy savings and reduced production costs in new world-scale plants. Yes, we need smaller plants; but the big ones must be made more efficient, because we need them too.