In this week's Chemical Market Reporter

09 October 2000 00:30  [Source: ICIS news]

Top Headlines

Financial buyers more active in chemical M&As

With the valuations of chemical industry mergers and acquisitions off from their peak, industrial buyers becoming more selective and antitrust issues creating obstacles to consolidation, private financial buyers have become increasingly active in the M&A marketplace and will continue to play a vital role in restructuring the chemical industry.

Millipore launches microelectronics IPO

Millipore plans to separate into two independent entities by offering up to 20% of its new microelectronics company in an initial public offering and spinning off the rest of that unit's shares later. The remaining Millipore will serve the biosciences market from research through manufacturing, a market that includes genomics, proteomics, drug discovery, biotechnology and pharmaceuticals.

Olin, OxyChem drop chloralkali jv plan

Olin and Occidental Petroleum's OxyChem have cancelled their proposed chloralkali joint venture. Citing regulatory issues and other problems, the companies dropped plans to combine businesses that have annual sales of $1.2bn (Euro1.4bn). OxyChem would have owned 66% of the new company.

Ruling against EPA's 'could undermine US health rules'

US Environmental Protection Agency (EPA) Administrator Carol Browner warns that a legal challenge by the chemical industry and other businesses to stringent new air quality standards could jeopardise federal health and safety regulations if it is upheld by the Supreme Court.

IFF launches major reorganisation

International Flavors & Fragrances (IFF), following its $970m merger announcement with Bush Boake Allen last month, will embark on a major reorganisation of its global corporate structure to shift its focus toward customers and rejuvenate sales and earnings growth. The company is aiming for annual cost savings of $25m to $30m by 2003, in addition to the previously announced $70m in expected savings from the merger.

DSM outlines growth strategy through 2005

DSM expects to increase its annual sales by around 60% to $9bn during the next five years despite a planned withdrawal from petrochemicals, which currently provide one-third of its turnover.

US, EU move toward a trade agreement

The European Union (EU) has agreed to lift its threat of retaliatory trade sanctions against the US until possibly the middle of next year, substantially reducing the danger of a trans-Atlantic trade war. A trade accord, reached in Brussels, Belgium in a dispute over an export-tax subsidy, delays at least temporarily the risk of EU sanctions, which could impose 100% duties on US exports worth $4bn.

Pfizer sells feed additives to Phibro for $155m

Pfizer has sold its medicated feed additives line to newly formed Phibro Animal Health, a subsidiary of privately-held Philipp Brothers Chemicals, for roughly $155m. Philipp Brothers partnered with Palladium Equity Partners LLC, a New York City-based private investment firm, in the transaction.

In the News

Envera formally launches its e-business initiative

Envera, the e-business solutions provider formed last March by several leading companies in the chemical and petroleum industries, has officially started its global e-business initiative.

Shin-Etsu to double capacity for optical preforms

The company has begun building a new $276m manufacturing facility for optical fibre preforms in Kashima, Japan. The plant is expected to be completed next November.

Biotech hails dismissal of GM case against FDA

The biotechnology industry is praising the dismissal of a lawsuit challenging the Food and Drug Administration (FDA)'s regulatory policies on genetically modified (GM) foods and crops. Judge Colleen Kollar-Kotelly of the US District Court for the District of Columbia has upheld FDA's policy and rejected a claim by a coalition of biotechnology opponents that the lack of labelling and mandatory safety testing violates federal law.

JM Huber plans major silicas expansion in India

Citing strong growth in Asia, the engineered materials division of JM Huber will double the capacity of its Asian silicas facility during the next 12 months. Located in the state of Gujarat, India, and operated by Huber Chemicals India, the plant's annual capacity of 2000 tonne will rise to 4000 tonne, then climb to 6000 tonne by the end of 2002.

Cargill buys Brazil's Fertiza

Cargill has acquired a majority interest in the Brazilian fertiliser producer Fertiza, bringing Cargill's total share of the Brazilian fertiliser market to 15%. The three-month acquisition process began when Cargill signed a letter of agreement with Fertinal, which held 80% of Fertiza's shares. Terms of the transaction are not being disclosed.

Wyeth-Ayerst to pay $30m in drug quality probe

Wyeth-Ayerst Laboratories has reached a settlement with the Food and Drug Administration (FDA) which requires the vaccine maker to pay a $30m fine for repeatedly violating federal drug quality rules at two of its manufacturing facilities. The consent decree, which is subject to federal court approval, also requires the company to improve quality at the plants or face up to $5m in additional penalties. The Wyeth plants are in Marietta, Pennsylvania and Pearl River, New York. The violations date back to 1995.

MBO for Borden Ink

Color Resolutions International, a new company formed and led by senior managers of the printing inks unit of Borden Chemical, has reached a definitive agreement to acquire that business from Borden Chemical in a management-led buyout. Terms of the sale are not being disclosed.

Ivax, BMS square off again in Taxol battle

Ivax has brought suit in a Florida state court against Bristol-Myers Squibb (BMS) and American BioScience over anti-competitive practices concerning BMS's Taxol (paclitaxel). Ivax is suing BMS and American BioScience for alleged abuse of process, violations of Florida's Antitrust Act, violations of Florida's Deceptive and Unfair Trade Practices Act and fraud arising from a series of alleged illegal acts committed by the companies designed to block Ivax from bringing its generic version of Taxol to market.

Emerging Eastern European firms battle over chem markets

Gazprom appears to have been thwarted in its attempt to take control of BorsodChem, the Hungarian producer of polyvinyl chloride (PVC) and isocyanates. Gazprom is striving to gain a sizeable foothold in the Central and Eastern European petrochemicals markets.

Koch and refinery employees indicted on felony counts

A US grand jury in Corpus Christi, Texas has returned a 97-count indictment against Koch Industries charging the company, a subsidiary and four employees with environmental crimes at Koch Petroleum Group's West Plant refinery in that city. The defendants are charged with violating federal air and hazardous waste laws. The charges also include conspiracy and making false statements to the Texas Natural Resource Conservation Commission.

LG Chemical to split into three entities

LG Chemical, the largest chemical company in South Korea, plans to spin itself off into three corporate entities. The restructuring is intended to improve LG's corporate value, maximise shareholder value and enhance management transparency. LG expects to complete the restructuring by mid-2001.

GE Silicones, Shin-Etsu form silane jv

GE Silicones and Shin-Etsu Chemical have signed a memorandum of understanding to establish a joint venture to produce silane monomers and siloxanes at an undetermined site in Southeast Asia. GE Silicones expects a more formal agreement to be signed before the end of the year. Total capital investment in the project will be about $276m. Construction of the facility is expected to begin during the second half of next year and it should become operational in April 2003.

Major Markets

PP calm before a storm of changes

TFF sets ambitious growth goals

Farmers oppose EU fertiliser measures

Fine chemicals arena is restructuring

Hydrochloric acid market is expected to strengthen

Butadiene is threatened by a lack of new capacity

Thermphos to shift its STPP to specialties

Lacklustre oilseed market to get boost from China

Further News

USDA to recall StarLink Bt corn

Borealis, DuPont launch copolymers jv

Diosynth invests in biotechnology

ACC seeks improvements to EPA's residual risk

Health claim may help plant stanol, sterol esters

EPA has changed few pesticide tolerances

Pharma lobbies against drug re-importation

ACC endorses new EPA air pollution rule

Socma urges CSB funding

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By: Joe Kamalick
+1 713 525 2653

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