That Special Mixture

East-End Montréal has been one part of Québecois success, with a petrochemicals cluster that builds on the country's oil-based heritage while remaining vibrantly independent of it.
        "At this point, plastic resins and related feedstocks have been active with more than $1 billion (US$630.4 million) in investments in the past year," says Matuszewski.
        (Currency figures in this story were converted to U.S. dollars in October at an exchange rate of C$1=US$0.6304.)
        A 50-50 partnership between Shell Chemicals Canada and the chemical arm of the Société générale de financement du Québec (SGF) called PTT Poly Canada is the latest newcomer. The firm announced plans earlier this year to build a $100-million plant to produce polytrimethylene terephthalate (PTT), a thermoplastic polymer thought to combine the best properties of nylon and polyester that can be spun into both fibers and yarns for use in carpeting, textiles, apparel, films and other products. Full operation could come as soon as the fourth quarter 2003.
        The incentives package totaled $15 million from Invest Québec, including a loan of $5 million. The plant will directly and indirectly employ some 900, and its construction will provide around 1,000 jobs. The feedstock for the plant will come from a $441.3-million purified terephthalic acid (PTA) plant being built nearby by SGF/Interquisa, and from a propanediol (PDO) plant owned by Shell in Geismar, Louisiana. The Interquisa project, a similar partnership between SGF Chimie and the Spanish firm, was announced in 2000 and is due to be complete by early 2003. The plant will employ some 1,650 people in producing 550,000 tons of PTA annually.

Antony Patterson, president and chief executive officer of PTT Poly Canada

        Antony Patterson, president and CEO of PTT Poly Canada, describes the evolution of the product and the project.
        "Shell developed the idea for PTT more than 10 years ago, when it had the process to make one of the raw materials that really hadn't been possible before, the propanediol [PDO]. Once we had that, we realized we had the opportunity for PTT, which has been known since the 1940s, but no one felt they could make it competitively with nylon or polyester. With a good route to PDO, that became more likely."
        Shell developed the PTT technology in collaboration with Zimmer AG. Since the company already had a PET venture in Mexico, Shell considered the area of Tampico, Mexico for the PTT project, going so far as to purchase equipment. But then Shell exited the PET business there.
        "That didn't look as good an idea sitting by itself as it would have with PET there, and there obviously would have been additional costs to running it separately from a PET plant," says Patterson. "About that time, SGF came into the picture and said 'We have a site, we have a work force well trained in the petrochemical business, and we have a potential feedstock supply sitting across the road [Interquisa], and we think you should look at a site. Oh, and by the way, we're prepared to put up half the money.'"
        Suddenly Montréal looked more attractive, and soon thereafter, some of that equipment was making its way north instead of south. The responsiveness of SGF Chemical to projects with a strong technological impact and high added value has made it possible to attract several international partners, including Dow Chemical in the U.S., Petresa of the Spanish CEPSA Group, and Kvaerner ASA of Norway. SGF Chemical welcomes partners with a realistic view of the issues at stake and the objectives of investing $300 million in capital over a five-year period.
        "SGF has certainly been heavily involved with us, providing not just money but providing some knowledge to the joint venture, which we think is very important," says Patterson. "It's not just where the money is going, but a real concern for the development and progress of the project."
        If the Montréal deal had not come through, it probably would have gone ahead in Tampico, says Patterson. But either way, the final market for the product is no secret.
        "The North American carpet industry is something like 70 percent of the world's carpet, and we need a relatively small percentage of that market to switch to PTT for us to be very happy," he says.
        There may also be promise in the textile industry, another sleeping giant in Québec, with Montréal's strong identity as a design center.
        "If you want PTT to take off as a textile fiber, then this might not be a bad place to set up," he says.
        In fact, textile manufacturers, already well-established with new ventures in New Brunswick, have also found a home in neighboring Québec. China WorldBest opened a dyeing and finishing facility in Drummondville late last year. In June, Korhani opened a 525,000-sq.-ft. (48,773-sq.-m.) manufacturing and distribution facility in Sorel-Tracy, the company's third production facility in North America (the others are in Atlanta, Ga., and Port Huron, Mich.). The 100-year-old company maintains its corporate headquarters in Concord, Ontario, outside Toronto.
        Located 56 miles northwest of Montréal, the facility is halfway home -- the second phase of construction to add yet another 300,000 sq. ft. (27,870 sq. m.) is scheduled to begin in 2004. As company president and CFO Hessam Korhani expressed it at the building's grand opening, "Does everybody have their running shoes on?"