New Study Predicts Future Success for PEN

Polyethylene naphthalate (PEN) presents both a challenge and an opportunity for those companies that can develop cost-effective technology to produce NDC (2,6-dimethyl naphthalenedicarboxylate, a key raw material for PEN), says a recently published study by Kline & Company, Inc., a Fairfield, NJ-based management consulting firm.

The study, "Opportunities in the PEN Value Chain - Manufacturing Cost Analyses," summarizes Kline's assessment of the current status of technology for all units in the PEN value chain, as well as associated manufacturing costs. The study serves as a companion volume to "The Outlook for PEN - Evolution or Revolution?," an earlier Kline study that analyzes developing markets for PEN and related materials.

"As more players enter the PEN business and as the technology continues to develop, we foresee the price of NDC dropping to around $1.25 a lb or lower," predicts Dilip K. Chandwani, a business manager at Kline. "This holds the promise of significantly reduced PEN polymer costs -- perhaps as low as $2.00 to $2.50 a lb -- and expanded market opportunities."

According to Chandwani, only one U.S. company, Amoco, currently supplies NDC, at a price of $1.60 a lb. The high cost of the monomer results in a high polymer cost; PEN sells for more than $4.00 a lb, although in small quantities.

Although the synthesis of PEN dates back to 1945, it has only been available commercially since 1990. Until recently, interest in this polymer outside of specialized applications has been limited by the cost availability of NDC. Kline's new study provides a production cost estimate that assesses the PEN value chain from a business and technology standpoint, including an estimate of production costs associated with 2,6-dimethyl naphthalene (DMN, a raw material for NDC) production from o-xylene and butadiene; DMN to NDC; and NDC to PEN (both bottle grade and fiber and film grade).

As the latest commercial-scale addition to the polyester family, PEN provides superior performance capabilities compared to existing polyester resins, most notably polyethylene terephthalate (PET). In particular, PEN boosts barrier, electrical, mechanical, and thermal properties -- in some cases by as much as four to five times that of PET.

Kline's earlier study forecasts a growth in demand of 23% annually for PEN resin. "Despite this anticipated demand and its superior performance properties, PEN has two barriers to overcome before it can claim center stage," says Chandwani. "They are a lack of adequate feedstock supply, and a price that compares quite unfavorably with that of PET."

The major target markets for PEN resin include bottles, films, and fibers, with the first two expected to grab the largest portion of the market. Recent Food and Drug Administration (FDA) approval of PEN for a few food-packaging applications has piqued the interest of potential manufacturers, although commercial success hinges on future FDA approval of PEN/PET blends and copolymers.

According to Allen Stott, a senior associate at Kline, one of the anticipated new uses is in hot-fill, wide-mouthed food containers, where PEN's filling temperatures surpass the 85 degrees Celsius limit of ordinary PET. "PEN's combination of temperature resistance and excellent barrier properties will allow for further polymer penetration on the grocery shelf, either by itself or in a PEN/PET blend," predicts Stott. "PEN may also threaten the use of other high-performance polymers in packaging, perhaps in the beverage industry."

For more information contact: Dilip K. Chandwani, Kline & Company, Inc., 165 Passaic Avenue, Fairfield, NJ, 07004. Tel: 973-808-3424.