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UNION CARBIDE PREDICTS CONTINUED STRONG ETHYLENE GLYCOL GROWTH

 HOUSTON, March 25 /PRNewswire/ -- "Growth in ethylene glycol markets has not been a problem, nor will it be," Gordon D. Mounts, vice president of Union Carbide Corporation's Industrial Chemicals Division, told the 1993 DeWitt Petrochemical Review here today. Worldwide, growth has averaged 5.5 percent annually over the past ten years, he said, "and we should see growth remain at a healthy 4.5 percent a year over the next five years."
 While acknowledging the existence of excess capacity in ethylene glycol, Mr. Mounts, who heads up Carbide's world-leading glycol business, predicts that the overcapacity will correct itself through anticipated producer dropouts and continued strong demand -- but not before well into the second half of the nineties. Despite excess capacity worldwide, some areas will be net importers, he notes. Asia, for example, has a 1.5 million tons a year import need today for ethylene glycol, and the need "will remain at that level for the next five years."
 In order to reap the benefits of ethylene glycol's near and long- term growth, producers have to look at the market on a global basis, Mr. Mounts stressed. "Like it or not, ethylene glycol has evolved into a global business. You had better be able to operate on that scale, which means operating modern, world-scale, low-cost and low-investment plants using the leading-edge technology. By world-scale," he explained, "I'm talking capacities of 350,000 tons per year."
 Operating globally also means having a large and secure source of raw material in resource-rich areas of the world, Mr. Mounts pointed out. Successful producers must have the economics that will enable them to compete in all world markets, not just local or regional ones, he warned. "Today, about 20 percent of all ethylene glycol sold is exported from one region to another," he said. "Don't be surprised if that percentage increases over the next five years."
 Producers must have the financial wherewithal to develop the technology that will be necessary to maintain competitive advantage for the business and to invest in hardware that will employ the leading technology. "Make no mistake about it, ethylene glycol technology is a moving, not a stationary target," Mr. Mounts cautioned, adding that keeping up with that technology is vital for a supplier to build a global business and be a low-cost producer. "Union Carbide's plans, for example, call for profit improvement to come from cost reduction and technology improvement, rather than an improved market supply/demand balance."
 Mr. Mounts emphasized that polyester is and will be the leading market for ethylene glycol -- accounting for 70 percent of the total in all areas of the world, but particularly in the Asian market for fibers. Polyethylene terephthalate (PET) for containers is a "hot product," Mr. Mounts said. "It is the largest recycled plastic in the world today and is the major driving force for ethylene glycol demand growth in the U.S. Every single PET producer in the U.S. and Europe is sold out and PET is growing in double digits."
 -0- 3/25/93
 /CONTACT: Greg Weingardt, 203-794-2533, or Lou Agnello, 203-794-3386, both of Union Carbide/
 (UK)


CO: Union Carbide Corporation ST: Connecticut, Texas IN: CHM SU:

SM -- NY075 -- 9762 03/25/93 16:19 EST
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Date:Mar 25, 1993
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