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The Plastics Industry: A Comparative Study of Research and Innovation

Published online by Cambridge University Press:  26 March 2020

C. Freeman ,
A. Young  and
J. Fuller
C. Freeman
Affiliation:
National Institute
A. Young
Affiliation:
National Institute
J. Fuller
Affiliation:
National Institute
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Extract

Plastics are already one of the world's main groups of industrial materials; in volume terms, world plastics consumption is now greater than that of all non-ferrous metals combined. The main point that emerges from international comparisons is West Germany's predominance in production and exports (and also in exports of plastics machinery). German production of plastic materials in 1961 was 19 kilograms per head, compared to 17½ in the United States and 12 in Britain. This is not due to lower costs. In material costs, Germany has been, if anything, at a disadvantage : she had only a small petro-chemicals industry in the early post-war years, and she has very little natural gas. In labour costs (which in any case are not very important in this industry) and in plant costs, again there is no evidence of any marked German advantage over her competitors. In general her quoted prices were not below those of other countries.

Type
Articles
Information
National Institute Economic Review , Volume 26 , November 1963 , pp. 22 - 49
Copyright
Copyright © 1963 National Institute of Economic and Social Research

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Footnotes

This article was prepared by C. Freeman, assisted by Miss A. Young and Mrs. J. Fuller, of the National Institute. The study was made possible by financial contributions from the Organisation for Economic Co-operation and Development, who hold the copyright.

References

page 23 note (1) Plastics are man-made materials which can be made to flow on the application of adequate heat and pressure, and take up a desired shape. This shape is retained when the applied pressure and heat are withdrawn. They differ from similar man-made materials, such as glass and ceramics, in their organic origin. They are composed of giant molecules of organic substances based on chains of carbon atoms. For casein and cellulosics, these chains (polymers) are of natural origin, but the great majority of polymers are now synthesised from simple chemical units, or monomers.

The classification of plastics is necessarily somewhat arbitrary and there are synthetic materials which correspond to this definition but are still not considered as plastics here. An OECD Working Party has been attempting for some years to establish an internationally acceptable classification and for the purpose of this article plastics are defined on the same basis as in the Chemical Reports of the OECD.[2] Synthetic fibres and synthetic rubber, although belonging essentially to the same group of materials, are excluded from this definition. Where materials such as nylon can be used both as a fibre and as a plastic, that part of the production which is for fibres is excluded. The OECD Classification (and the Brussels nomenclature) divides plastics into four groups :

  • (i) Condensation products (39.01 in the Brussels nomenclature), including poly-condensation and poly-addition products; these are mainly but not exclusively thermo-setting products—that is to say, they become soft and plastic on the first application of heat, but then undergo a chemical change and set hard. The most important of these are phenolics made from phenol and formaldehyde (best known as Bakelite) and aminoplastics made from urea and formaldehyde and from melamine and formaldehyde.

  • (ii) Polymerisation products (39.02 in the Brussels nomenclature), including co-polymerisation products. These are mainly thermo-plastic : that is to say that although they will harden on cooling, they will re-soften on re-heating. The best known are PVC (polyvinyl chloride), polyethylene (of which ‘Polythene’ is a brand name) and polystyrene. Still small in volume of production is polypropylene, which is often classed together with polyethylene under the single heading of poly-olefins. Other important polymerisation products are acrylics (for example Perspex), polyvinyl acetate and poly-tetra-fluorethylene (PTFE).

  • (iii) Cellulosics (39.03 in the Brussels nomenclature), of which the best known are celluloid and regenerated cellulose film (Cellophane).

  • (iv) Hardened proteins (39.04 in the Brussels nomenclature) such as casein.

This classification is used in this article. Fuller details of the materials included in each sub-division are shown in the Appendix on Sources and Methods (page 50).

The producers of plastic materials use basic raw materials—such as petroleum products, natural gas, coal, cellulose, etc.—or intermediates derived from these materials, such as ethylene, propylene and acetylene—to produce plastic materials. These materials may be in the form of moulding and extrusion compounds, solid or liquid resins, emulsions, dispersions, and so forth. The materials producers may themselves turn out film, sheet, rods, tubes, mouldings, extrusions, and other fabricated products; or this may be done by specialised fabricators, who purchase the materials from the basic producers. The materials producers and the fabricators are together described as the plastics industry.

page 24 note (1) Appendix, page 52, table 17.

page 24 note (2) With certain exceptions noted in Appendix I, page 50.

page 24 note (3) A list of all firms and organisations who have co-operated in providing information, views and advice, is given in Appendix IV, page 62.

page 24 note (4) The term ‘world’ throughout the article excludes the USSR, Eastern Europe and China.

page 27 note (1) However, Britain was also handicapped in the early post- war years by a lack of refinery feedstock : thus she used an expensive process for producing ethylene from alcohol made from molasses.

page 28 note (1) West Germany has in fact a very small amount of natural gas, some of which is used in the polystyrene plant at Hüls.

page 28 note (2) This does not mean, of course, that none of the materials used was cheaper in Germany. Her coke and acetylene technology were particularly advanced, and she undoubtedly derived some benefits from this. There is also evidence of differences in pricing policy between chemical firms in Britain and West Germany which may have resulted in higher prices in Britain for such chemicals as formaldehyde.

page 29 note (1) The breakdown of the numbers employed at BASF Ludwigshafen,[8] was as follows (in thousands) :—

page 29 note (2) However, by this time the greater part of German poly styrene production was no longer of standard grades but of more specialised high impact materials, for which her prices were not particularly low.

page 29 note (3) A comparison of tariffs on plastic materials is given in Appendix II, table 26.

page 30 note (1) For instance, Rheinische Olefinwerke is jointly owned by BASF and Shell; Hoechst owns 50 per cent of the capital of Wacker and 33 per cent of the capital of Ruhrchemie; and BASF, Hoechst, Dynamit Nobel, Bayer and Hüls were all part of I.G. Farben before the post-war reorganisation of the German chemical industry.[10]

page 33 note (1) The high pressure method is used mainly for manufac turing low density polyethylene, and the low pressure method is used for high density (or linear) polyethylene.

page 34 note (1) ‘The German research teams, as exemplified in the I.G. laboratories, were outstanding instruments of accomplish ment. What could be done with these groups ? Should they be given picks and shovels ? Should they be broken up and transferred as individuals to laboratories in other countries ? Should they be allowed to continue in their present location ? Many hours were spent arguing the pros and cons of this situation and we inevitably arrived at the conclusion that humanity's interest would best be served by putting these groups to work in the surroundings and with the associations to which they were accustomed, but under a competent allied commissioner who would merely insist that no direct war projects be worked upon. Certainly some of the results would have war applications; but the tremendous good which could come from these able groups should outweigh that risk.’ German Plastics Practice—J. DeBell, W. C. Goggin, W. E. Gloor, pages 10-12.

page 34 note (2) These figures exclude technical services and capital expenditure.

page 34 note (3) The absolute figures are : United States £390 million, West Germany £55 million, Britain £37 million, Japan £18 million in 1961. But because of differences in research costs a ‘research exchange rate’ must be used.[18]

page 34 note (4) Thus for example the plastics section of one of the larger British chemical firms spends about 5 per cent of turnover on research and development, which is above the general average for the firm.

page 34 note (5) Among the distinguished scientists who worked for this firm were two Nobel prize-winners.

page 34 note (6) A small amount of work was however already being done at the National Chemical Laboratory.

page 35 note (1) An exact correspondence should not in any case be expected because of some variations in the propensity to patent between firms and industries and because patent statistics are analysed on a product field basis while research expenditure statistics are on a company classification.

page 35 note (2) For the analysis made here the main source has been a French publication[22] which systematically lists all the patents delivered for plastic materials from 1791-1955, dating them from the year of their acceptance. Since there is often a delay of one to four years between application, acceptance and publication, this covers most patents published up to 1959. This French source covers American, German, French and British patents (without double counting) and classifies them into various groups (Appendix table 27). It can be assumed that almost all patents of any significance would be published in one (and in many cases all) of these four countries. Unfortunately it has not been possible to analyse the patents according to the number of years which they have remained in force.

In order to make some comparison with the most recent period an analysis has also been made of patents taken out in Britain in the field of plastic materials up to 1962. This could be expected to have some bias towards British firms, since there will be a number of patents taken out by them in London but not elsewhere.

page 38 note (1) Already during the First World War, before the formation of I.G. Farben, there had been a considerable amount of research in Germany on synthetic materials.

page 38 note (2) An ‘advance’ may be marked by one or several related patents.

page 39 note (1) The materials are weighted by their relative importance in world trade.

page 39 note (2) It may be argued that the date of first polystyrene production in Britain and France should be set somewhat earlier as there was a small war-time production by Distillers in England which was discontinued in 1945 and not re-started until 1950 (the date which Hufbauer gives). Rhone-Poulenc had a similar small-scale production in France. There are other minor alterations which might be made to the dates, as it is difficult to draw the borderline between experimental and commercial production. But changing a date here or there by a year or two would not significantly modify the main outlines of the picture which emerges from his analysis.

page 43 note (1) The Annual Report of ICI for 1962, commenting on the firm's research expenditure, says ‘The largest single compon ent of this total was work associated with the invention, development, manufacture and use of organic polymers.’

page 43 note (2) Some patents may of course be taken out at any stage of the project.

page 44 note (1) There are some special reasons for the high United States production of polyethylene. Under a special war-time agreement, ICI transferred all its technical know-how to two American companies, Du Pont and Union Carbide, so that they could launch large-scale production for allied military requirements. Furthermore, under the Ryan judgment arising from the United States Government anti-trust action in 1952, high pressure polyethylene was compulsorily licensed to half a dozen other American companies, and these were given the right to export to those countries in which ICI's basic patent was still in force.

page 44 note (2) See Appendix table 25, page 59, for lower Japanese and Italian prices of PVC polymer.

page 44 note (3) This includes cables.

page 45 note (1) This explains the very high German consumption of urea-formaldehyde resins (table 3).

page 46 note (1) Car manufacturers in all countries need to be alive to the possibilities of economy in materials as these account for 70 per cent of manufacturing costs. Savings of up to 80 per cent have been possible for some components (Appendix table 16) but plastics still account for only about 1 per cent of the weight of a Volkswagen to over 80 per cent iron and steel and 6 per cent non-ferrous metals. Development work which is now in progress in several countries is likely soon to lead to a radical change in these percentages,[41]

page 47 note (1) One of the most important materials used in construction is rigid PVC. Appendix table 24, page 59, shows that Japan, West Germany and Italy all make much more extensive use of this material than the United States does.

page 48 note (1) ‘At my request the State Planning Committee and the Committee on Chemistry have submitted a memorandum with calculations of the economic efficiency of using plastics in the economy as substitutes for lead, copper, zinc, ferrous metals, fabrics and timber materials. Here is what this memorandum shows :

‘In the cable industry 67,000 tons of lead could have been replaced by polyethylene in 1962. Capital investments needed to organise the production of one ton of lead amounting to 1,630 rubles and for one ton of polyethylene, to 1,000 rubles. Each ton of polyethylene replaces three tons of lead. While capital investments totalling 108 million rubles are needed for building up capacities of 67,000 tons of lead, the building up of polyethylene capacities to replace this quantity of lead would require only 23 million rubles, or nearly 80 per cent less.

‘In addition to a big saving in capital investments the national economy would also have a big saving by reducing the cost of cables, since the cost of insulating a cable when polyethylene is used is cut by half.

‘Pipes also made of polyethylene could be used instead of steel gas pipes and waterpipes, in housing and industrial construction. Capital investments for building up production capacity of 1,000 metres of steel pipes amount to about 1,300 rubles and polyethylene pipes, to about 600 rubles, or nearly 54.6 per cent less.

‘Calculations show that in organising the production of 100 million metres of pipes from polyethylene, instead of steel pipes, the saving on capital investments would total 72 million rubles; moreover the cost of producing pipes from poly ethylene would be 30 per cent less than of metal pipes. Flooring from polymeric materials is 30-40 per cent cheaper than wooden flooring.

‘In the production of high-voltage transformers the use of one ton of epoxide resin makes it possible to release up to two tons of copper and nine tons of hot-rolled stock; one ton of polyamide resin replaces about five tons of bronze in the manufacture of sanitary equipment.

‘The use of plastics in engineering, and various other industries and construction reduces the weight of articles, and their size, cuts operating outlays and raises labour productivity.’

A correction has been issued for this article:

Errata