Global roundup

17 June 2002 00:00  [Source: ACN]

Tension between India and Pakistan showed signs of easing. Also in the week of 7-13 June, Formosa Plastics Groupcaved in to union pressure and announced wage hikes and bonuses while in Thailand, Prachai decided to rethink his strategy after the Supreme Court backed Thai Petrochemical Industry's restructuring plan

From stories supplied by the CNI and ACN teams. See www.cnionline.com. For exclusive news and analysis, see the rest of ACN

CPC plans value-added petchems

7 June. Chinese Petroleum Corp (CPC) plans to produce value-added petrochemicals at Tsuoyin, Kaohsiung, Taiwan, after it shuts a 270 000 bbl/day refinery at the site in 2015.

CPC is expected to submit a study within six months to the Ministry of Economic Affairs on its transformation plans for Tsuoyin. It has yet to decide on the product slate for Tsuoyin.

US unemployment rate falls

7 June. The US economic recovery appeared to be making some headway. The unemployment rate for May fell unexpectedly to 5.8%, down from a 7-year high of 6% in April, said the Labor Department. Economists welcomed the news but cautioned that it was not yet time for the Federal Reserve to hike interest rate.

Dow No3 cracker out until end-June

7 June. Dow Chemical's No3 cracker at Terneuzen, Netherlands, is unlikely to restart until the end of June. The 600 000 tonne/year cracker was forced to shutdown on 5 June due to an electrical failure. Dow said there had been damage to the furnaces. As it had earlier planned a two-week shutdown starting next week, the cracker will restart at the end of the month.

'Unep HFCs promotion raises risk'

7 June. The United Nations Environment Programme's (Unep) promotion of the use of hydrofluorocarbons (HFCs) is worsening the risks of climate change, according to the Multisectoral Initiative on Potent Greenhouse Gases.

The report criticises Unep and the fluorocarbon industry for portraying HFCs as 'benign' or an 'environmentally friendly' alternative to chlorofluorocarbons (CFCs) and hydrochlorofluorocarbons (HCFCs) in an effort to implement the Montreal Protocol, which it said was concerned only with ozone-depleting gases.

The report said agencies such as Unep had a mandate to eliminate CFCs and HCFCs for ozone reasons and had over time convinced themselves that this imperative justified the use of HFCs.

According to the report, emissions from fluorinated gases - HFCs, perfluorocarbons and sulphur hexafluoride - could represent 15% or more of all greenhouse gas emissions by 2050.

Ticona complete GUR UHMW-PEplant

7 June. Ticona, the technical polymers business of Celanese, has completed the construction of a 30 000 tonne/year GUR ultra-high molecular weight PE (UHMW-PE) plant in Bishop, Texas, US. The new plant replaces a 15000 tonne/year plant in Bayport, Texas. Ticona also operates a 30 000 tonne/year plant in Germany.

US bill seeks to reinstate Superfund taxes

7 June. A group of US senators has introduced legislation to reinstate expired Superfund taxes on the oil and chemical industry. Chemical manufacturers and petroleum refiners paid the taxes until they expired in 1995.

The bill, if approved, would reinstate a 9.7cent/bbl tax on petroleum, a tax on 42 chemical feedstocks and a corporate environmental income tax of 0.12% for companies making more than US$2m/year in profits.

The Bush administration and industry groups, including the American Chemistry Council, oppose the reinstatement of the taxes.

No US vote on foreign sales corporations

7 June. The House Ways and Means Committee of the US does not expect to vote soon on a bill to settle a long-running dispute over tax breaks for US exporters.

The tax credits, which benefit so-called foreign sales corporations established by US manufacturers in offshore tax havens, save the US chemical industry as much as US$250m/year.

However, the World Trade Organisation has declared the tax breaks as an illegal trade subsidy.

India/Pakistan war talk cools

9 June. Tension between India and Pakistan showed signs of easing ahead of US Defence Secretary Donald Rumsfeld's visit to the two countries. Pakistan President Parvez Musharraf told a Malaysian newspaper that the chance of war was minimal and the threat had diminished in the last few days.

The US Deputy Secretary of State said India would make military gestures aimed at easing tension in the region in response to Pakistan's vow to stop Islamic militants from entering Kashmir.

Earlier, Pakistan shot down an unmanned Indian military aircraft that had entered its airspace.

Israeli forces get tough

10 June. Israeli forces once again raided Palestinian President Yasser Arafat's office compound, destroying buildings. The action, Israel said, was aimed at destroying terror infrastructure. Israeli forces had raided the compound in the previous week.

FPG caves in to unions' wage hike request

10 June. Formosa Plastics Group (FPG) has acceded to requests from labour unions to increase the salaries of some 45 000 employees by 1.85% and for bonuses during the Dragon Boat and Mid-Autumn festivals this year. The Taiwanese major agreed to pay workers a bonus of 25%of their monthly pay during the two festivals.

More than 15 unions last month protested at FPG's plans to freeze wage increases and bonuses this year.

The 1.85% pay hike is higher than last year's 1.26%. The bonuses granted last year during both festivals was half a month's pay.

PRI to start PVC line in 2003

10 June. Philippine Resin Industries (PRI) will start up a 70 000 tonne/year PVC line at Bataan, Philippines, some time in 2003. The new Yen4bn (US$32m) line will raise PRI's capacity to 160 000 tonne/year. PRI is a 50:50 joint venture between Tosoh Corp and Mitsubishi Corp.

Japan sends chartered plane to India

10 June. The Japanese government has sent a chartered aircraft to New Delhi, India, to help evacuate Japanese expatriates who are working in the country. Japanese nationals have been asked to leave the country in view of the recent tension between India and Pakistan.

Japanese traders recall staff

10 June. Marubeni Corp, Mitsui & Co, Itochu Corp, Mitsubishi Corp and Sumitomo Corp decided to evacuate expatriate staff from India and Pakistan in view of the tension between the two countries.

The decision follows a recommendation by Japan's Ministry of Foreign Affairs for all Japanese nationals to leave India and Pakistan. The recommendation is a step up from a 'travel advisory' issued earlier.

Most of the companies have already evacuated families of expatriate staff.

TPC Vina to expand PVC plant in July

10 June. TPC Vina is planning to expand its 80 000 tonne/year PVC plant in Go Dau Industrial Park, Dong Nai, Vietnam to 100 000 tonne/year in early July. The US$7m expansion project will involve the addition of a new line.

Supreme Court approves TPI debt plan

10 June. Thailand's Supreme Court handed down a landmark decision approving a debt restructuring plan for Thai Petrochemical Industry (TPI), the country's biggest debtor company.

The court has also given the green light to Effective Planners Ltd (EPL), the company appointed by TPI's creditors to administer the plan and to continue its administration.

The ruling came after nearly two years of arguments and appeals against the restructuring plan and EPL by TPI founder and former chief executive Prachai Leophairatana.

The struggle to restructure TPI's US$2.8bn debt is seen as an important test case for Thailand's efforts to tackle its corporate debt burden following the devaluation of the Baht in July 1997.

Texas widow sues Dow Chem

10 June. The widow of a former Dow Chemical employee in the US is suing the company to seek reimbursement of benefits paid Dow under a so-called 'dead peasant' insurance policy.

The suit challenges the controversial practice of corporate-owned life insurance (COLI) - also called 'dead peasant' coverage - and seeks certification as a class action. It was filed on behalf of the estate of James Baker who died in 1999. Baker worked as a security supervisor for Dow in Freeport, Texas, from 1953 until his retirement in 1993.

He is believed to be either one of 4051 employees insured by Dow in 1988 or one of another group of 17061 insured in 1991 with the company as a beneficiary.

Dow had earlier confirmed it has COLI policies on an undisclosed number of employees that benefit the company and not the employee.

Animal activists challenge chem tests

10 June. US animal rights proponents are accusing environmentalists of insensitivity and cruelty to animals because they support federal efforts to test the toxic effects of thousands of chemicals on laboratory animals.

The dispute stems from the US Environmental Protection Agency (EPA) chemical testing programs prompted in large part by environmentalists' complaints that the government knows little about the safety of most industrial chemicals and pesticides.

Animal rights activists oppose the testing programs, saying they will result in the needless deaths of millions of lab animals.

Akzo Nobel buys Plascon UK

11 June. Akzo Nobel has bought speciality paints maker Plascon UK, in a US$12.3m deal. Plascon's last owner was Plascon South Africa, part of the Barloworld group.

The purchase makes Akzo Nobel one of the largest coatings producers in the world, strengthening its position vis-a-vis traditional rivals such as ICI.

Minor explosion at Asahi Kasei

11 June. An explosion occurred at Asahi Kasei's detonator-making plant in Nobeoka, Japan - the second accident at the plant this year. A company spokesman said the explosion did not cause any injury or death, nor were operations affected. Police are investigating the cause of the accident.

On 12 March the complex was ravaged by a fire which caused significant damage to its 33000 tonne/year nylon 6,6 facility.

Petronas to take stake in Johor port?

11 June. Petronas is reportedly set to take a stake in a project to develop the Port of Tanjung Pelepas in southern Johor, Malaysia.

The project is headed by Syed Mokhtar al-Bukhary, the latest prot'g' of Malaysian prime minister Mahathir Mohamed.

But the Malaysian oil, gas and petrochemical major has not indicated whether it would also take a stake in a proposed petrochemical complex nearby, also led by Mokhtar's company. Rumours are rife that the state-owned company will take a stake, in order to boost Mokhtar's investments, but Petronas declined to comment.

US slams EU for steel retaliation

11 June. US Trade Representative Josette Shiner has hit out at the European Union's (EU) threat to impose 100% tariffs on US steel and other exports to the continent.

Shiner warned that the EU's unilateral retaliatory sanctions was in violation of WTO rules.

The EU's 15 trade ministers voted last week to back EU Trade Commissioner Pascal Lamy's proposal to retaliate against the United States' unilateral imposition of 100% tariff for steel imports into the US.

The EU and other US trading partners, including Japan and China, have asked the World Trade Organisation (WTO) to censure the US.

Indonesia commits to more reforms

11 June. The Indonesian government has promised to press on with economic reforms, after signing to continue with a rescue package drawn up by the International Monetary Fund (IMF).

Among the promises are strong actions against former bank owners who refuse to repay billions of dollars in bailout funds. An anti-corruption commission is also expected to be set up soon.

The IMF's US$5bn rescue package, instituted in 1998 at the height of the Asian financial crisis, has been criticised by several top Indonesian leaders in recent weeks. The government opted to renew the aid last week for another three years.

Unocal faces human rights trial in LA

11 June. The Los Angeles court has reportedly ordered oil and gas major Unocal to stand trial for alleged human rights violation. The suit was brought against Unocal by the court on behalf of the citizens and refugees of Myanmar.

Unocal was alleged to have co-operated with the Burmese government to use prisoners to work on the Yadana gas pipeline project in the country in 1996, without paying them.

Bank of Japan maintains monetary policy

11 June. The Bank of Japan has decided to maintain its monetary policy, after a two-day board meeting.

The central bank of the world's second largest economy decided to maintain the level of liquidity in the financial system by leaving unchanged the level of targeted reserves in its current account at around Yen10 -15 000bn (US$80-121bn). The decision is said to indicate that Japan's economic recovery, although weak, is on track.

Al-Qaeda 'dirty bomb' plot foiled

11 June. An American Al-Qaeda member was arrested in New York, US, for trying to plant a 'dirty bomb' in the city.

A 'dirty bomb' uses radioactive scrap materials and, although not as devastating as a nuclear bomb, will cause significant damage if detonated.

His arrest has turned the attention of the Federal Bureau of Investigation to possible small-scale, nuclear attacks by terrorists in the US.

EU Parliament acts to ban animal testing

11 June. The European Parliament voted by 474 to 43 to ban cosmetics tested on animals, setting up a potential clash with those European Union (EU)governments opposing the ban.

The restriction would become effective only if a majority of the EU's governments agreed to abide by the ruling.

Europe's cosmetics industry, which was worth US$42bn in 2001, has been lobbying the EU governments to oppose the ban.

Shell explores large-scale fuel cell tech

11June. Shell Chemicals said it has launched a project in Norway to explore possible large-scale applications of new zero-emission solid oxide fuel cell technology driven by natural gas.

The project, which is expected to require an investment of US$125m, will be undertaken in collaboration with Norwegian firms Aker Kvaerner and Statkraft.

The aim is to develop and commercialise multi-megawatt fuel cells by 2010, said Shell.

4-year high for China industrial output

11 June. China's industrial output growth rate hit a four-year high in May. The fastest-growing economy in the world registered an industrial growth of 12.9%, up from 12.1% a month earlier.

This is the fastest industrial expansion since 1998, according to the country's National Bureau of Statistics. Export growth also rose to a 20-month high, hitting 25.3% for May.

Industrial output is expected to grow even faster in the coming months, as the US economy recovers and demand for Chinese goods rises.

Atofina confirms SigmaKalon for sale

11 June. Atofina confirmed that its SigmaKalon coatings division is up for sale but declined to comment on reports that it is examining preliminary bids for the division.

A spokesman for the French chemicals major said SigmaKalon forms part of the company's plans to divest Euro1.5bn (US$1.4bn) worth of non-core activities between 2000 and 2003.

SK Corp's World Cup star misses penalty

11 June. Employees at South Korean refining and petrochemical major SK Corp have taken to heart their country's disappointing 1-1 draw with the US in the 2002 Soccer World Cup because midfielder Lee Eul-Yong, the man who failed to score a penalty, is a company employee.

SK Corp owns and sponsors a South Korean premier league soccer team called Bucheon SK with Lee as their midfield star. Despite the setback, SK Corp plans to continue supporting its soccer club.

FPC:Work on China PVC from September

12 June. Formosa Plastics Corp (FPC), a core affiliate of the Formosa Plastics Group (FPG), will start construction work on its 300 000 tonne/year PVC project in China in September. The US$119.5m project was approved by the Taiwanese government last month, after an almost two-year wait.

Another FPG affiliate, Formosa Chemicals & Fibre Corp, started construction work on its 250000 tonne/year ABS project in May. Both projects are expected onstream by 2004.

Mitsubishi Chem speciality subsidiary

12 June. Mitsubishi Chemical has decided to create a new speciality chemical company, called API Corp, which will replace Yoshitomi Fine Chemicals. It will transfer Yen5.8m (US$46m) worth of assets to API. The changes will take effect on 1 October.

Mitsubishi Chemical and sister company Mitsubishi Pharma Corp will also integrate part of their fine chemicals and active pharmaceutical ingredients business with the new company. Yoshitomi is currently 100% owned by Mitsubishi Pharma Corp, which in turn is 42% owned by Mitsubishi Chemical.

Petlin down again

12 June. Petlin Malaysia has again been forced to shut its 255 000 tonne/year ldPE plant in Kerteh, Malaysia, dashing hopes that it could achieve on-spec production after restarting the plant on 3 June.

The company, a joint venture between Petronas, Sasol and DSM, shut the plant in April after the facility failed to operate smoothly. It restarted on 3 June, but the problems persisted. Repairs are now under way.

Second Xianglu PTA line in Jan 2003

12 June. Xianglu Petrochemical will bring onstream its second PTA line of 450 000 tonne/year in January 2003. The company had earlier announced that it would start up its first line, also of 450 000 tonne/year, in Xiamen, Fujian, China, in October.

Both lines will use technology supplied by Hitachi Ltd and Advance Engineering. The company is an affiliate of Taiwanese petrochemical company, Tuntex Petrochemicals.

More Middle East suicide bombings

12 June. A Palestinian suicide bomber blew himself up in a restaurant just north of Tel Aviv, in Israel, killing one Israeli teenager and wounding eight other people.

The violence erupted as Israeli prime minister Ariel Sharon was in the US persuading US leaders to reject Yasser Arafat as the Palestinian leader and as a partner for peace talks.

Meanwhile, a nine-year-old Palestinian boy was killed and another 13-year-old boy injured when Israeli soldiers shot at them near a Jewish settlement in the Gaza Strip.

Prachai to rethink strategy on TPI

12 June. Thai Petrochemical Industry's (TPI) founder Prachai Leophairatana, who was dismissed as chief executive officer(ceo) in 2000, is to rethink his strategy after a recent Supreme Court ruling backed a restructuring plan to rescue the heavily indebted company. Prachai had fought to have the plan rejected and the administrators dismissed, so that he could be reinstated as ceo. He said the verdict was a 'Black Monday' for him.

US help to quash Al-Qaeda in Kashmir

13 June. The India-Pakistan crisis eased further, aided by the shuttle diplomacy of US Defence Secretary Donald Rumsfeld. He also promised US aid to both countries to weed out al-Qaeda operatives suspected to be operating in Kashmir. But both countries rejected the offer.

ExxonMobil asks court to cut fine

13 June. ExxonMobil filed a motion with a federal court in Anchorage, Alaska, US, seeking to reduce the US$5bn fine levied for the 1989 Exxon Valdez oil spill.

The motion follows a ruling in the Ninth Circuit Court of Appeals last year, which found the punitive damages to be 'excessive' and sent the case back to the Anchorage district court with orders to reduce them.

Japan trade surplus up 20%

13 June. Japan's current account surplus in April rose 21.7% from a year earlier to Yen1085bn (US$15.57bn), the country's finance ministry said. The trade surplus for the month rose 18.9% to Yen1004bn, with exports rising 1.3% to Yen4169bn and imports falling 3.2% to Yen3164bn.

Univation tech for Qatar 450ktpa PE

13 June. A 450 000 tonne/year PE joint venture project between Atofina and Qatar Petrochemical Company will use Univation's Unipol PE process. The project is expected to start up by mid-2006.

FCFC targets end-June for bond issue

13 June. Formosa Chemicals & Fibre Corp (FCFC) plans to launch its NT3.75bn (US$109.9m) five-year unsecured corporate bonds by the end of this month.

A company source said the bond issue is expected to carry an interest rate of 3.7%. The company plans to use the money to repay earlier bond issues which have a high interest rate.

Cabot enters China silica jv

13 June. Speciality chemicals major Cabot Corp has entered into a joint venture with China National Blue Star Chemical Materials for a fumed silica project in Jiangxi, China. The project is expected to have a capacity of 4600 tonne/year and would start up in 2005.

US levies duty on India and Taiwan

13 June. The US International Trade Commission (ITC) has decided to impose antidumping duty on imports of PET film, sheet and strip from India and Taiwan.

Imports from Taiwan face an antidumping duty of 2.05-2.7% while Indian imports face a 24.11% duty.

The ITC investigation was prompted by allegations of dumping by DuPont Teijin Films, Mitsubishi Polyester Film of America and Toray Plastics.

Japan Polychem/JPO merger delayed

13 June. Japan Polyolefins' (JPO) proposed merger with Japan Polychem (JPC)may be postponed until some time next year from end-2002, said a JPO source. No reasons were given.

The two companies had earlier pushed back the date of their merger from Q2 2002 to end-2002 due to prolonged discussions over issues relating to organisation structure. JPC is expected to take a 51% stake in the new joint venture which is yet to be named.

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