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MANAGEMENT

Kenneth Spencer, president of Spencer Chemical Co., tells a C&EN editor the background on his company's entry into the polyethylene industry

Expanding Spencer Chemical Kenneth Spencer tells the "why" and "how" behind his company's expansion into polyethylene

S P E N C E R CHEMICAL CO.'S entry into the polyethylene industry has been one of the boldest in the plastics business. The company's total investment is not so large when compared to the giants of the industry, but it approximates 20% of Spencer's assets. "Polyethyl­ene is important to us all right," says Kenneth Spencer, the company's presi­dent, "but we aren't going to sink or swim just because of it. It's the size operation we can handle and still keep our financial structure in balance."

The company feels it is in a good position to supply whatever types of polyethylene may be demanded. Not only does it have a full-scale high-pressure plant going and a pilot low-pressure plant on the way, but on its own Spencer has developed a new type resin to fill the gap between these two— a high density polyethylene made by the high pressure process which ordi­narily produces lower density material.

Polyethylene was a natural for Spen­cer's expansion program. To a large extent the company had been built on the manufacture of ammonia and its derivatives, which were sold chiefly for agricultural use. What was wanted was a new product whose manufacture would utilize Spencer's experience in petrochemicals, but would be sold to an entirely different market. In this way the expansion would be comple­mentary yet provide diversification. In addition, the product had to be in a rapidly growing segment of the chemi­cal industry. Polyethylene fitted these requirements, and when Imperial Chemical Industries was required to license its polyethylene process to more U. S. producers, Spencer had already prepared itself to move, and obtained one of the first of the new ICI licenses. A 45-million-pound-per-year plant was built at Orange, Tex., and it has now

C i a u u i i u Vialf

4 5 0 8 C & E N SEPT. 17, 1956

THE RARE EARTHS-A NEW FRONTIER

They offer a rich, new field for research and

a challenging industrial potential

a report by LINDSAY

In its restless search for knowledge, science has brought us to the threshold of space, our eyes on the

infinity of the universe while we are continuing our investigation of the many mysteries that still exist here on our own planet. One of the richest, most exciting of these virtually unex­plored realms lies in that little known group of versatile metals—the rare earths.

There are 15 rare earths—atomic numbers 57 through 71 —and together they occupy about .012% of the earth's crust. They are remarkably alike in their chemical behavior because of their atomic structure. The main dif­ference lies in the disposition of the three outermost electrons. The differ­ence is always slight; the heavier rare eardi atoms have a smaller radii, hence are denser than the lighter ones.

This characteristic makes separation difficult, but it also makes the rare earths ideal subjects for the study of the magnetic properties of materials and to test various theories of physical chemistry and physics. The rare earths may hold the combination that will un­lock many of the secrets of nature.

Industry, too, is turning to the rare earths in a search for materials to im­prove products and processes. And they have found that the rare earths of­fer enormous potentials. Already many of these metals are being used in a vari­ety of industrial fields.

Rare earth chloride is a coi .nation of the chlorides of cerium, lanthanum, neodymium and praseodymium with smaller amounts of samarium, gadolin­ium and less common rare earth chlo­rides. From this material comes misch

metal used in lighter flints and as an additive in many grades of steel. Rare earth chloride also serves in the pro­duction of chrome, dentifrices, silk, alu­minum, fertilizer and catalysts.

Cerium, most common of the rare earths, is widely used, in its oxide form, as a polishing agent for optical and other forms of glass. Cerium hydrate is an ingredient in the production of the special glass used to view highly radio­active operations.

The rare earths have drying proper­ties that can be useful in the produc­tion of better paints. And, neodymium and praseodymium have potential value as colorants in the manufacture of ceramics.

The petroleum industry is investigat­ing the use of rare earths as catalysts in their cracking plants. And this unique group of metals shows promise in catalytic polymerization—a problem in the manufacture of many synthetic fibers and plastics.

Thulium, made radioactive, emits X-rays of proper length and strength for diagnostic use. A pea-sized bit of thu­lium will last a year as the source of rays in a small, portable X-ray unit . . . a device which would be of great value to physicians and hospitals.

Much of the interest in rare earth a n d t ho r ium chemicals has been sparked by Lindsay scientists. Since the days of the incandescent gas-mantle lamp, in the last years of the 19th Cen­tury, Lindsay has worked and pio­neered in this field. Expansion has come as researchers at Lindsay and in science and industry have uncovered new uses for the rare earths. Just re­cently Lindsay has expanded its ion

exchange installation and now has 100 columns in operation at its West Chi­cago plant for the separation of some of the "rarer" rare earths in commercial quantities and in purities up to 99.99%.

If you think there is even a remote possibility that the rare earths might have significant applications in your in­dustry, you may find it worthwhile to talk with our technical people. The data obtained through our years of re­search is available to you and we can supply you with rare earths in quanti­ties from a gram to a carload.

266 ANN STREET, WEST CHICAGO, ILLINOIS

SEPT. 17, 1956 C & E N 4 5 0 9

PLEASE ADDRESS INQUIRIES TO:

LINDSAY CHEMICAL COMPANY

MANAGEMENT

We're delighted we went in when we did, says Spencer. "We have now begun to realize benefit from die plant, and it more than counters a decrease in realization from our nitrogen products."

When low-pressure polyethylene processes began to appear, Spencer was not worried about its high-pressure in­vestment. Its studies indicated that the markets for the two different types only overlapped about 20%. However, as Kenneth Spencer puts its, "Ameri­can industry has always done a good job of keeping alert to new develop­ments. Like shooting Mallard ducks, you have to lead—aim at a point ahead of where they are flying at the moment." So Spencer examined sam­ples of low-pressure material and started looking over the processes avail­able for license. It was much im­pressed by the extent of the patent "umbrella," as well as other advantages of the process Standard Oil (Indiana) had developed, and became one of its two licensees.

In the meantime, Spencer developed first an intermediate density and then a high density material strictly on its own. This material has already been produced on a commercial basis in the full-scale plant.

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• Marketing. Spencer had been warned that marketing polyethylene would be a. highly specialized affair, so the company prepared for it. A pilot plant was built for making small quan­tities of polyethylene, and a plastics laboratory was set up to train sales and technical service people in actual mold­ing and extrusion processes similar to those used by the customers. In this way, the staff became familiar with problems i t would have to face, months before commercial production was started.

The burden of proof of a new prod­uct supplied by a company new to the field lies with the company supplying it. This meant a large number of fabricators had to be talked into trying samples in their plants. Each demon­stration involved sending salesmen, technical service men, and sometimes market development and research people into the prospect's plant. Often, operation was complicated because the machines -were set up for other mate­rials but t h e experience was invaluable t o the company.

"These demonstrations were expen­sive," Spencer points out, ""but they are the only efiFective way to introduce new plastic products."

An indication of just how much em­phasis the company places on proper sales service is afforded b y the fact that sales people were sent to England right along witti the research and production people vvho went over to learn from ICI how to make polyethylene. ICI even allowed Spencer's men to accom­pany their own salesmen and technical service men on calls to customers' plants.

The entire polyethylene development has been very much a team effort. This is directed by a rather high-level horizontal committee, which includes representatives from operations, sales, research, technical service, market de­velopment, and other sections of the company. Problems in any one of these areas are likely to affect others, and the coordination afforded by this committee has contributed to the suc­cess of t h e polyethylene product.

• Coal Chemicals. While Spencer Chemical Co. has been almost entirely a petrochemical company, it is in­directly a n outgrowth of an effort to upgrade coal into more profitable end products. Kenneth Spencer has said, "I'm not smart enough to make a liv­ing, like my father and grandfather be­fore me, by mining raw coal and sell­ing it only for its BTU value. '

For many years the Spencer family have managed the Pittsburg & Midway Coal Mining Co. Kenneth Spencer shared with his father, Charles F. Spen­

cer, an interest in industrial develop­ment in the Middle West. They made an extensive survey of the area about 1940 and recommended to defense offi­cials that a complex of several plants î3e built. Most of these were Cou-structed later on, but the plant with which the coal company was directiy concerned was the ammonia and am­monium nitrate plant which it de­signed, constructed, and operated for the Government during World War II.

The subsidiary formed to handle this project eventually became Spencer Chemical Co. (no longer a subsidiary) and the plant is now Spencer's Jayhawk Works at Pittsburg, Kan. At the time the plant was being designed coal was the usual raw material for nitrogen fixation plants. However, economics indicated natural gas would be cheaper and the Pittsburg plant became the first U. S. ammonia plant to use the natural gas reforming process.

After purchasing the Jayhawk Works Spencer Chemical constructed a for­maldehyde plant near Chicago, pur­chased another government nitrogen plant at Henderson, Ky., constructed a third nitrogen plant at Vicksburg, Miss, and constructed the polyethylene plant at Orange, Tex. All of the am­monia plants are based on natural gas as a raw material. The formaldehyde plant uses methanol which Spencer makes at Jayhawk.

But it appears that rising natural gas prices might eventually make it eco­nomical for some of the chemical in­dustry to swing back towards coal. With this in mind, Spencer devotes a modest amount of research to coal gasi­fication and liquefaction. Once, it looked as if the time to switch to coal would be at least 10 to 15 years away, but Kenneth Spencer believes this time might come sooner than antici­pated. From the company's own standpoint the plant at Henderson, Ky., where natural gas is more expensive than it is at the other plants, and which sits above huge coal reserves, is a likely candidate for the first change to coal.

Spencer's expansion into the plastics field has improved the diversification of the company. "This, plus a beefed up research budget makes us feel that we are in a pretty good position," ac­cording to Spencer. "The chemical in­dustry has historically increased 10% per year—compared to 3% for all manufacturing. We've grown at a rate of about 15% per year, doubling our sales every five years. Well, that's a hectic pace to maintain and a difficult one to keep up forever. But we do expect to maintain a better than aver­age rate of growth." •

a few of the many purification uses of

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4 5 1 0 C & E N . SEPT. 17. I 9 5 6