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What is the state of the chemical sector in France? The industry is flourishing in Lyon und Marseille

In France growth of the chemical sector is expected to continue. PROCESS brings you an exclusive report on investment and development in Marseille and Lyon, the two largest chemical centers in the country.
Christoph Uhlhaas
Call me anytime if you or any investor in Germany should have any more questions,” said Michel Peronnet who is responsible for industrial projects at the port of Marseille. He highlighted the key issue behind a trip to Lyon und Marseille, namely regional marketing.

No other region in France has such a high concentration of chemical facilities as the Lyon area. With a total turnover of €9 billion, Lyon has the largest output of any of the French regions, and it is one of the five leading centers of the European chemical industry. One out of every six French chemical production and research facilities is located there. At the French Petroleum Institute (IFP), more than 600 scientists are working on technologies which promise to be very significant in the future: synthesis of fuel from coal, gas and biomass as well as storage of carbon dioxide. The group is working with the University of Applied Sciences in Aachen on MRI-based techniques which give researchers total visibility into what is going on in a reactor. The imaging technique allows them to observe chemical activity in real time at any point in the reactor without interrupting the reaction.

In addition to French companies like Total and Air Liquide, BASF, Bayer and Lanxess also have a presence in Lyon. Otherwise, there is quite a large diversity of companies in the area. Odotec for example, a spinoff of École Polytechnique de Montréal Engineering School, offers electronic nose systems for automatic odor detection. The systems measure and map the strength of a variety of odors at various locations on a site. 15 of the systems have already been installed, and delivery of another 20 systems is planned for 2008.

Novasep-Finorga is a service provider which offers purification and synthetic chemical solutions for pharmaceutical active ingredient production. The company operates labs as well as pilot and volume production facilities with a capacity up to 120,000 liters.

The Chinese are there as well

There has been a Chinese company at the site since the beginning of the year. Bluestar, a subsidiary of the state-owned China National Chemical Corporation, took over the French company Rhodia Silicones which is much more efficient than Bluestar’s own silicon plant in China. Last year, prior to the takeover, Rhodia Silicones had a turnover of € 432 million with a workforce of 1200. 1400 employees in China only achieved sales of € 150 million. Olivier de Clermont-Tonnerre, head of production in France, highlighted the long-term strategy behind the takeover. The goal is to become one of the leading producers of silicon and end products, and the company will be investing € 20 million in Europe over the course of the next two years. A new plant will be built in Tianjin, China. Company headquarters and R&D will remain in Lyon. Nevertheless, the management team is now learning Chinese.

Base chemicals in Marseille

Fos-Sur-Mer, France’s largest industrial port, is located two hundred kilometers further south, 60 kilometers from Marseille. The port is the major center of the regional chemical industry.

Exxon, Shell, Total and BP have refineries within a radius of 20 kilometers in the Fos-Lavera-Berre triangle, and as a result, production of base chemicals is concentrated in this area. 30 percent of French refinery capacity and 30 percent of overall chemical production are located there. The list of major products includes ethylene, ETBE, MTBE and butadiene, 60 percent of which are made in the region around Marseille.

Fos-Sur-Mer is an integrated complex containing docks and industrial facilities. It is the third largest industrial port in Europe and the largest in the Mediterranean region. The port handles 95 million tons of goods a year, and major expansion is planned for the near future. Two new port terminals are scheduled to be completed by 2010, and Shell plans to build a third by 2016. According to Michel Peronnet, Director of Industrial Projects, € 4 million of private investment is in the pipeline. Fos is pursuing a long-term diversification strategy to reduce dependency on the oil business, because experts are anticipating a decline in turnover. Space has been allocated for industrial use in Fos. 600 sites have been developed and are now available. The complex is not fully utilized, and Michel Peronnet is actively trying to attract foreign investors.

Bayer made in investment at Fos when it took over a polyol plant for the production of polyurethane from the US producer Lyondell in 2000. A new production line with three times the capacity was built at the site in 2002. Production Manager Rodolphe Just highlighted the positive effect on the environment. The amount of waste water has been reduced by two-thirds in recent years. The plant belongs to Bayer, but for the most part Lyondell continues to operate it. 75 of the 86 employees work for the US company.

Lyondell has a turnover of $ 22 billion and is America’s third largest chemical producer. It will soon be taken over by Basell, a subsidiary of Access Industries which belongs to billionaire Len Blavatnik. The corporation has been operating an ETBE (ethyl tert-butyl ether) production plant since 1999 which has an annual capacity of 750,000 tons. Similar to the methyl variant (MTBE) which used to be the dominant solution, ETBE is used as an anti-knock fuel additive in spark ignition engines. Because ETBE is based on ethanol which is produced from agricultural sources whereas MTBE depends on fossil resources, ETBE enjoys a favorable tax status in the EU.

The PVC additive producer Baerlocher acquired a family-owned French company in 1987. The plant processes natural wax in Marseille and supplies products to large cosmetics producers. The acquisition gave the parent company direct access to a second product line, namely lubricants which are used in the production of PVC additives. 46 employees work at the plant which has an annual turnover of € 25.5 million.n