Damaged resin plant will be down at least 6 months

AP News
Posted: Apr 26, 2012 5:45 PM
Damaged resin plant will be down at least 6 months

The owner of a German factory that makes a key resin used in auto parts said Thursday that the plant will be out of commission until at least October.

The Evonik Industries AG plant was badly damaged in a March 31 explosion and fire, setting off a mad scramble by global automakers to find substitute materials. A shortage of the resin is threatening to cut global car and truck production just as the U.S. auto sales recovery is accelerating. Automakers and parts companies are testing substitutes but aren't sure if they'll be ready to go in time to hold off any auto production cuts.

The Evonnik plant in western Germany made at least a quarter of the world's PA-12, a nylon resin used in fuel and brake lines and hundreds of other auto parts. It's even used in household and sporting goods. The plant also makes 70 percent of the global supply of CDT, a key ingredient of PA-12 that's used by other companies that make PA-12.

PA-12 is unique because it doesn't absorb much moisture and it resists deterioration when carrying gasoline and other liquid hydrocarbons.

Automakers and their parts makers have been trying to divert their remaining supplies of PA-12 to lines and connectors that carry fuel and brake fluid. They're also trying to fast-track testing of possible substitute chemicals. So far no automaker has reported any production slowdowns. But if the industry can't come up with a substitute, the problem could cause a shortage of some models similar to what happened after last year's earthquake and tsunami in Japan.

"In the present state of knowledge, the CDT plant is expected to be operational again in the fourth quarter of 2012," Evonik said in a statement. The company also said it is offering customers substitute chemicals for PA-12 that do not require CDT. Spokesman Thomas Lange said in an email that the company is checking with customers to determine what's suitable for fuel lines.

Lange said he couldn't give a specific date or month for when the plant might be back in operation. Earlier this month Evonik said the factory would be down for at least three months.

The plant could be out until late in the fourth quarter. Evonik officials told auto parts suppliers on a conference call this week that the target time for reopening it is early winter, said J. Scot Sharland, executive director of the Automotive Industry Action Group, a trade association that's organizing the effort to test alternative plastics.

The world's other three large makers of PA-12 have told their customers they won't be able to make enough resin to comply with contracts, and they aren't sure when they'll be able to, Sharland said. That means the industry has to prepare for factory shutdowns, he said.

"This could be a bad one, and no one wants to go there if it's humanly possible to avoid," he said.

Companies are working together to test substitute materials, some of which already are in use in the auto industry. But the testing is likely to take four to six weeks at best, Sharland said.

The March 31 explosion at the Evonik plant killed two workers. Authorities are trying to figure out the cause.