Borden Responds To Consumer Trends

March 23, 2005
Chemical manufacturer building formaldehyde and resin plant for engineered-wood products in Brazil.

Consumers want more ready-to-assemble furniture and other finished-wood products, and Columbus, Ohio-based Borden Chemical Inc. is meeting the demand.

The $1.4 billion company announced in late February that its Brazilian subsidiary, Borden Quimica Industria e Comercio SA, intends to build a formaldehyde and resins manufacturing complex to serve the rapidly growing engineered wood products market in southern Brazil and northern Uruguay. Ready-to-assemble furniture manufacturers use the formaldehyde and resins to make their finished goods, which are sold to both the domestic and export markets.

The plan is to build a world-scale formaldehyde plant with a rated annual capacity of 125,000 metric tons, as well as a resins facility with a rated annual capacity of 170,000 metric tons. Both phenol formaldehyde resins and urea formaldehyde resins will be produced. The facility will include manufacturing technology enabling it to produce resins that meet the highest environmental requirements for low-emissions of volatile chemicals.

The manufacturing complex will be located in the state of Rio Grande do Sul. In addition, the company will build a resins blending facility in northern Uruguay to serve customers in that market with complete, ready-to-use resin systems.

"Borden Quimica is a recognized market and technology leader in forest product resins, and this expansion will enable us to efficiently serve our customers as they grow and expand their operations," says Luiz Cintra, vice president, Latin America for Borden Chemical.

Manufacturing of forest products such as particleboard and plywood is expected to grow rapidly in southern Brazil and northern Uruguay over the next five years, Cintra says. Building formaldehyde and resins production capability in the region means Borden can supply resin systems critical to making those products while significantly reducing shipping costs.

Borden Chemical currently has three other plants in Brazil, located in Curitiba, Cotia and Boituva. The company expanded its Curitiba complex in 2001, adding a formaldehyde plant and additional resin capacity. Overall, the company operates 48 manufacturing facilities serving North and South America, Europe and the Asia-Pacific region.

Borden, which produces performance adhesives along with resins and formaldehyde, has been expanding its presence in other global markets as well. The company is in the final review process in Europe for its acquisition of Bakelite in Iserlohn-Letmathe, Germany. Bakelite, which produces phenolic and epoxy thermosetting resins and moulding compounds, has 13 plants in Europe and Asia and generated sales of US $610 million in 2003.

"The merging of our two businesses creates a company with a true global reach," Borden President and CEO Craig O. Morrison said in October 2004, when the company signed the acquisition agreement. (Most of Bakelite's sales and operations are outside of North America, while the bulk of Borden's are within North America.)

Additionally, one of Borden's two Chinese joint ventures (Asia Dekor Group in this case) opened a formaldehyde and resin plant in Heyun, China, last August. Borden's other joint-venture plant in China manufactures materials for fiber optics and is located near Shanghai.

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