FORT SASKATCHEWAN, ALBERTA, CANADA - The Westaim Corporation announced today that its Surface Engineered Products (SEP) division has begun marketing its coking-resistant products to the ethylene industry, resulting in the first commercial sale of its CoatAlloyTM tubes and fittings to one of the world's largest ethylene producers.
The order for CoatAlloyTM tubes, which will be used in a full ethylene furnace, will be manufactured by the end of December. The customer's name is not being disclosed for competitive reasons. The ethylene producer will be the fourth company to use SEP's CoatAlloy products. Three other world leading ethylene producers have installed CoatAlloyTM tubes in qualifying trials.
SEP's first generation product, CoatAlloyTM-1100E, consists of standard commercial-alloy steel tubes and fittings whose inner walls are resurfaced with properties that help prevent coking (carbon build-up), carburization and hot erosion in ethylene furnace tubes. The build-up of coke in furnace tubes is a major problem for ethylene producers because it leads to costly decoking steps and increased rate of metal carburization, resulting in higher rates of tube replacement and lost production time. The problem is estimated to cost the worldwide ethylene industry more than C$3 billion (US$2 billion) annually in lost production alone.
"Until CoatAlloyTM, there has been no reliable solution to the costly problem of coking for ethylene producers," said Ted Redmond, President of the SEP division. "Our unique anti-coking products have resulted in significant improvements in run time and increased ethylene production in qualifying trials with ethylene producers. We would like to thank the ethylene producers and furnace designers that have assisted in testing this revolutionary technology."
To meet expected demand, SEP will accelerate its expansion plans for its new Edmonton, Alberta-based surface alloy application plant, which will have an initial capacity of 22,500 meters (73,800 feet) per year of 50-millimeter (2-inch) diameter tubes. SEP plans to expand the plant capacity to 30,000 m/yr (100,000 feet/yr) of 50-mm tubes [or 10,000 m/yr of 150-mm tubes] by the second quarter of 1999, instead of the previously scheduled time frame of the fourth quarter of 1999. With a plant capacity of 30,000 m/yr, Surface Engineered Products will be able to service approximately 9 per cent of the North American ethylene industry. The new plant will begin production in the fall of 1998, and will initially employ 86 workers, with plans to expand to approximately 300 employees during the next five years.
In qualifying trials since 1996, SEP has completed three full furnace retubes and four partial furnace retubes in four different furnace designs that are operated by three ethylene producers. SEP's CoatAlloyTM tubes and fittings have reduced coking rate by up to 90 per cent in these trials. CoatAlloyTM-1100E increases the capacity of ethylene plants by 2 per cent to 8 per cent and leads to lower unit production costs and increased profitability for ethylene producers.
Ethylene producers currently use C$400 million (US$250 million) per year of tubular products worldwide and are projected to consume C$600 million (US$380 million) per year by 2005. The market is typically 80 per cent for maintenance or retubing of existing furnaces and 20 per cent for new installations.
Technology
SEP has developed two groups of proprietary technologies: engineered surfaces (surface alloys) that are capable of providing unique surface properties in severe operating environments, and enabling application methods for processing commercial products previously considered uncoatable due to their complex shape or geometry. SEP's products and technologies have applications in the petrochemical and other process industries.
About Westaim
The Westaim Corporation's technology businesses consist of Surface Engineered Products, Westaim Biomedical and Advanced Display Technologies. Its industrial businesses produce coin blanks, aerospace materials and chemical products. A TSE 300 company, Westaim's common shares are listed on The Toronto Stock Exchange, The Alberta Stock Exchange and the Montreal Exchange under the trading symbol "WED".
For more information, contact:
Tony Johnston
Senior Vice President, Corporate Affairs
(403) 234-3103
website: www.westaim.com
e-mail: info@westaim.com
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