Global roundup

26 August 2002 00:00  [Source: ACN]

Chemical industry losses mount in flood-hit central Europe while crude oil prices soar to a 15-month high on continuing worries over a military confrontation between the US and Iraq during the fortnight of 9-22 August

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

Work on PetroVietnam No2 in 2004...

9 August. PetroVietnam is likely to start construction work on its US$2.5bn No2 refinery and petrochemical complex in Nghi Son, Thanh Hoa province, about 150 km south of Hanoi, at end-2004. The refinery will include facilities for paraxylene, benzene, bitumen, PP PET, purified terephthalic acid and polyester.

A company official said a detailed feasibility study for the project was likely to be completed in the middle of 2003. PetroVietnam will then need some more time to seek foreign investors, select a licensor and issue invitation-to-bid documents for the selection of a turnkey contractor.

PetroVietnam is in talks with Mitsubishi Corp and JGC which have been invited to conduct the detailed feasibility study. Both Japanese majors had earlier helped PetroVietnam with a preliminary feasibility study.

The refinery, PP and PET facilities are expected to come onstream in 2008 while the aromatics, PTA and bitumen facilities, which form phase two of the complex, are scheduled to start up in 2011. The PP project is expected to have a capacity of 110 000 tonne/year. secures PP study approval

12 August. PetroVietnam has received government approval for a detailed feasibility study on a 110000 tonne/year PP project in Dong Quat, Vietnam. The project will be built downstream of the state-owned company's first refinery project at the same site.

The PP project is scheduled to come onstream at the same time as the 130000 bbl/day refinery project which is due to be mechanically completed at end-2005.

CPC plans 5000 job cuts

12 August. Taiwanese state-owned major Chinese Petroleum Corp (CPC) plans to cut 5000 jobs from its workforce of 16000 before it lists on the stock exchange.

A CPC official said the company would reduce its workforce by encouraging voluntary retirement. Discussions are ongoing with CPC's labour unions with the aim of setting up companies which could recruit retired workers.

The government plans to sell a stake of more than 50% in CPC. It is likely to retain a 34% share in the company.

Namhae to split into two

13 August. Shareholders of Namhae Chemical, the South Korean fertiliser and speciality chemicals producer, have agreed to divide the company into two entities.

A Namhae spokesman said the company would be split on 15 September with Namhae retaining the fertilisers business while the base and fine chemicals business would be transferred to a new company - Human Chemical Sciences Co (Huchems) which will be listed on the South Korean stock exchange on 7 October. Namhae to enter oil trading, p9

Floods hit Czech chemical plants

14 August. Chemical plants across much of the Czech Republic were forced to close after flood waters spilled from the Vltava and Labe rivers. Rubber and plastics producer Kaucuk, PVC maker Spolana, chemical producer Spolchemie and industrial fertilisers producer Lovochemie, were affected by the floods.

Cracker operator Chemopetrol continued to operate but a spokesman said it might run into trouble since ethylene supplies to its customers had been temporarily halted.

Spolchemie is estimated to be losing about Koruna100m (US$3.15m)/day, but hopes water damage costs will not climb above a few million koruna.

SIUCI to pick turnkey contractor by October

14 August. Sohar International Urea & Chemicals Industries (SIUCI) will pick a turnkey contractor for its ammonia-urea project in Sohar, Oman, at end-September or early October. The project will produce 660 000 tonne/year of ammonia and 1.15m tonne/year of granular urea.

SIUCI has invited potential contractors to resubmit their commercial bids by early September. It originally planned to select the preferred bidder in June, but delayed selection for commercial reasons. The shortlisted contractors are Toyo Engineering, Krupp Uhde and a consortium consisting of Snamprogetti and Mitsubishi Heavy Industries.

SIUCI expects to sign a gas agreement with the government following financial closure which should be in early 2003. It has already signed a 10-year take-or-pay offtake agreement with leading US fertiliser company Transammonia for the entire production of its project

Al-Babtain formaldehyde study

14 August. Al-Babtain Arabian Co has completed a feasibility study on a 100000 tonne/year formaldehyde project in Al-Juabil, Saudi Arabia. It plans to use the formaldehyde to make UF-85, melamine and urea formaldehyde compound, glazing powder, hexamine, melamine resin, paraformaldehyde and phenol. The entire project is estimated to cost US$16m.

Al-Babtain Arabian plans to issue invitation-to-bid documents in Q1-2003. The project is due to start up at end-2003. The company is in the final stages of selecting a licensor for the project. Methanol will be sourced from Sabic.

Gacic eyes upping maleic/BDO capacity

15 August. Gulf Advanced Chemical Industries Co (Gacic) is considering increasing the capacity of its maleic anhydride/butanediol (BDO) project in Al-Jubail, Saudi Arabia, said a source close to the company. The project is currently slated to produce 43000 tonne/year of BDO, using maleic anhydride as feedstock.

The construction contract for the project was originally due to be awarded by July, with work beginning in December and startup scheduled for the end of 2004. The company is now targeting to select a contractor by the end of this year, although it believes the project can still come onstream by end-2004 as scheduled.

Gulf Farabi sets Nov deadline for EPC

15 August. Gulf Farabi Petrochemical Co has set 26 November as the deadline for six pre-qualified contractors to submit engineering, procurement and construction (EPC) bids for its n-paraffin and linear alkyl benzene (LAB) project in Al-Jubail, Saudi Arabia.

The company has decided to issue invitation-to-bid documents in two phases, the first on 31 August and the second on 20 September. It plans to bring onstream a 120000 tonne/ year n-paraffin plant and a 70000 tonne/year LAB plant in Q4 2004.

Teijin PC production disrupted

15 August. Production at Teijin Polycarbonate's plants on Jurong Island, Singapore, has been disrupted following Singapore Syngas' declaration of force majeure on carbon monoxide (CO) supplies earlier this month, according to sources close to the company.

Market sources said Teijin was running its polycarbonate (PC) lines at below full capacity. Teijin operates three lines with a total capacity of 130000 tonne/year.

Teijin declined to comment on whether it would declare force majeure on its PC supplies. It admitted that it was holding meetings with Singapore Syngas to discuss how to resolve the issue.

Teijin also sources CO from a Singapore Oxygen Air Liquide.

Aus grants special status to LG EDC

16 August. Australia's Federal Industry Minister Ian Macfarlane granted Major Project Facilitation (MPF)status to LG Chem's proposed 300000 tonne/year ethylene dichloride (EDC) project in Gladstone, Queensland.

LG Chem is proposing an investment of US$200m in the EDC project, the output of which will be exported to South Korea and China at an annual return of around US$75m.

Through the MPF service, the LG Chem project will benefit from a streamlined decision-making process for necessary government approvals.

Fire-hit plant to be rebuilt by Q1 2003

16 August. Asahi Kasei plans to finish rebuilding its fire-ravaged 33 000 tonne/year nylon-66 fibre plant at Nobeoka, Miyazaki, Japan, by March 2003.

An Asahi spokesman said part of the plant would resume production by April 2003, while total restoration would be completed by October 2003. The company reckons it will have to spend Yen12bn (US$102m) rebuilding the plant which was destroyed by a fire on 12 March.

Czech chems industry flood losses mount

16 August. The Czech chemical industry announced it is losing up to Koruna200m (US$6.3m)/day in sales revenues in the wake of the country's worst floods in over 100 years.

The Association of the Chemical Industry of the Czech Republic said six of its key members, situated on the rivers Labe and Vltava north of Prague, had been forced to close.

They included Spolana in Neratovice, Kaucuk in Kralupy nad Vltavou, Lovochemie in Lovosice, Spolchemie in Usti nad Labem, Ceska Rafinerska at Kralupy nad Vltavou and Chemopharma at Usti nad Labem.

TPI administrator appeals court ruling

19 August. Effective Planners Ltd (EPL), the company planning the debt restructuring of Thai Petrochemical Industry (TPI), has filed an appeal with the Supreme Court in another attempt to revise the TPI creditor's voting system and extend the deadline for selling off TPI's non-core assets.

The move follows a lower court decision last month to overturn two votes taken by TPI creditors earlier this year.

EPL had hoped to arrange the sale of TPI's power station to Thailand's Banpu Power for an initial payment of US$58m, as part repayment of the company's US$2.8bn debt, but that sale was blocked by the court ruling.

BASF takes stake in Taiwan's Teco

19 August. BASF announced it had taken a stake in Taiwan's Teco Optronics as part of a new strategic initiative to further develop organic light-emitting diode (OLED) displays. The German chemicals giant said its Future Business subsidiary, which has taken the stake, would have a seat on Teco's supervisory board.

BASF Future Business has also formed a research partnership with Teco to develop the light-emitting dyes used to produce the displays. The dyes will then be used and further optimised in the production process at Teco, said BASF.

Three killed in blast at S Korean plant

19 August. Three people were killed and 12 injured in an explosion at the Pyungtaek, South Korea, plant of Dongwoo Fine-Chem, a subsidiary of Sumitomo Chemical.

Sumitomo said the blast occurred at Dongwoo's carbon fibre composite adhesives unit where trial production was under way for adhesives currently produced at Sumitomo's works in Osaka, Japan.

The cause of the blast was being investigated by the local authorities, said Sumitomo.

India levies ADD on phenol imports

19 August. The Indian Finance Ministry has imposed provisional antidumping duty (ADD) on imports of phenol from Singapore, South Africa and the European Union (EU). The Ministry imposed provisional ADD of US$95.77/tonne on imports from Mitsui & Co, Singapore, and US$101.62/tonne on imports from Mitsui Phenol Singapore. Supplies from all other Singapore exporters will attract provisional ADD of US$161.38/tonne.

Phenol imports from South Africa's Merisol will be subjected to provisional ADD of US$89.12/tonne on bulk sales and US$24.76/tonne on drum sales. In the case of other South African exporters, the Ministry slapped a levy of US$222.74/tonne on bulk sales and US$130.60/tonne on drum sales. The Ministry imposed a uniform levy of US$109.49/tonne on all imports from the EU.

DSM links with China's Nanjing Oriental

19 August. DSM said it would boost its presence in the Asian caprolactam market under a joint-venture agreement with China's Nanjing Oriental Chemical Industries.

DSM and Nanjing, a subsidiary of oil major Sinopec, would invest someRmb2.2bn (US $266m) in the joint venture which will be called Nanjing DSM Oriental Chemical Co. It will be based in Nanjing, in Jiangsu province, where Nanjing Oriental already has caprolactam capacity.

Lovochemie down for one month

19 August. Lovochemie, the Czech Republic's leading producer of industrial fertilisers, said flood damage at its Lovosice-based plant would keep it out of operation for at least one month. The damage, which occurred during the Czech Republic's worst flooding in more than 100 years ago, could cost Koruna150-200m (US$4.7-6.3m).

Lovochemie was hit by record high levels of water in the Labe river on 15 August.

Texas floods hit Solutia acrylo plant

19 August. US speciality chemicals producer Solutia said it expected its 453700 tonne/year acrylonitrile plant at Chocolate Bayou, Texas, would be unable to produce for perhaps two more weeks due to damage from a flood.

The company said it had no plans to declare force majeure and was taking care of its customers.

There was no immediate estimate on the cost of repairs needed to restart the facility.

US indicators fall for second month

20 August. A widely followed gauge of future US economic activity dropped in July, depressed by the stock market's poor performance and weakening consumer confidence.

The Conference Board's index of leading economic indicators fell 0.4% to 111.7 after a revised decline of 0.2% in June. The July decline was the largest since the 11 September attacks.

Economists believe that if the index drops for three months running, it indicates a coming recession.

Shell to pay penalty for hazardous chems

20 August. Shell Chemical will pay US$135 900 in penalties for failing to implement standards that protect workers against hazardous chemicals in one of its process units at Geismar, Louisiana, according to the US Occupational Safety and Health Administration (Osha).

Osha said that in addition to agreeing to the penalties, Shell had worked closely and cooperatively to work at improving its overall safety and health procedures.

The Osha office investigated a 12 February fatality at the Geismar facility where a catalyst technician, working with hazardous chemicals, was killed as a result of an explosion. Shell Chemical was cited with 14 safety and health violations for failing to implement elements of the Process Safety Management Standards for Highly Hazardous Chemicals.

Oil price soars to 15-month high

20 August. Oil prices topped the US$30/bbl mark for the first time in 15 months on 20 August as concerns grew over possible military conflict between the US and Iraq.

Oil prices strengthened on fears of potential supply disruption in the Middle East, home to two-thirds of world oil reserves, as Washington made clear its intent to oust Iraqi leader Saddam Hussein.

The Organisation of Petroleum Exporting Countries (Opec) held its official output at the lowest level in a decade this year, helping to push crude prices up by almost 50%.

Oil traders expect an Opec ministers meeting in Japan next month to loosen tough production limits as US crude stocks have fallen to their lowest level in 17 months and in view of the fact that fuel demand normally balloons in the last quarter of the year.

Japan-China H1 trade hits new high

20 August. Trade between Japan and China in the first half of 2002 reached US$45.11bn, a year-on-year rise of 3.4%, according to the Japan External Trade Organisation (Jetro).

Strong exports from Japan boosted overall trade - up 11% to US$17.23bn. Exports rose partly due to China's reduction of import tariffs after it joined the World Trade Organisation.

However, Japan's imports from China fell 0.8% to US$27.87bn on a decline in textile imports which fell by 11%. The weaker yen also eroded the value of imports on a dollar basis. Jetro expects trade between Japan and China to top US$90bn for the first time in 2002.

M'bishi Chem to sell agrochem division

20 August. Mitsubishi Chemical is to sell its agrochemical division to Nihon Nohyaku for an undisclosed amount, due to an increasingly competitive domestic market.

Mitsubishi said its agrochemical business, to be sold officially on 1 October, generates an annual turnover of about US$60m through sales of technical grade insecticides and herbicides.

Mitsubishi said that although it had been trying to increase its presence in the agrochemical sector by focusing on creating new chemicals, the shrinking Japanese market and fierce competition from multinationals had made it difficult to continue operating the division.

German petchems aid flood victims

20 August. BASF pledged to donate Euro1m (US$984 000) in aid to flood victims in central Europe.

The German chemicals giant said it would also match the amount donated by its employees to the 'BASF helps' fund.

BASF's donation includes Euro200000 of immediate aid donated earlier this week by its subsidiary BASF Schwarzheide and Wingas, a joint venture between the BASF Wintershall subsidiary and Russia's Gazprom.

Meanwhile, German coal mining and chemicals group RAG pledged a donation to help victims of the flooding in Germany and central Europe.

Ibra to oversee Chandra Asri revamp

21 August.The Indonesian Bank Restructuring Agency (Ibra) has appointed four representatives to the board of commissioners and directors of Chandra Asri.

Ibra said it had installed the representatives to ensure that Chandra Asri's debt restructuring plan was implemented properly.

Ibra and other creditors finalised Chandra Asri's debt restructuring on 5 August.

Under the agreement, sustainable debts have been calculated at US$684.23m, with Ibra guaranteeing US$100m and Japanese creditors (Jipic) US$584.23m.

Debt converted to equity stands at US$564.4m, with Ibra holding a 25.86% stake in the company, Jipic 24.59% and former Chandra Asri head Prajogo Pangestu 49.55%.

Taiwan to speed up CPC privatisation

21 August. The Taiwanese government has decided to speed up the process of privatising state-owned Chinese Petroleum Corp (CPC) by six months to a year, according to a source from the Ministry of Economic Affairs (MoEA).

The source said the first stage of CPC's privatisation would be to invite bids from interested local and foreign investors to take up 24.19-44.69% in CPC by 31 December 2003, instead of mid-2004.

The second stage will see CPC's initial public offering officially launched in 2004, ahead of the earlier target of Q1 or Q2 in 2005.

The government, which currently owns a 100% stake in CPC, plans to retain a 34% stake in the company following its privatisation.

This stake will be divested at a later stage. Employees will be invited to take 24% of CPC.

Earlier date for Daqing cracker expansion

21 August. China's Daqing Petrochemical is planning to bring onstream its expanded cracker in Daqing, Heilongjiang, ahead of schedule and as early as October 2003.

The PetroChina subsidiary plans to expand its 480 000 tonne/year cracker to 600 000 tonne/year. It originally planned to bring the project onstream at end-2003.

The downstream facilities of the cracker will also be expanded, including its polymers, styrene and ABS plants. It was not immediately clear the extent to which the company was planning to increase these capacities.

Gail set to acquire 10% stake in HPL

21 August. The state-owned Gas Authority of India Ltd (Gail) has confirmed its intention to acquire a 10% stake in struggling Haldia Petrochemicals Ltd (HPL) for an investment of about Rs2bn (US$41.2m), provided it is satisfied with the outcome of due diligence currently being conducted on HPL.

An HPL spokesman said the due diligence should be completed in the first week of September and Gail hoped to sign the deal by end-September.

Debt-laden HPL desperately needs additional equity of at least Rs2bn to avoid further defaulting on its debt.

Injection of additional equity from Gail would help HPL avoid having its loans declared as non-performing assets by financial institutions which currently have an exposure in the company of over Rs40bn.

Spolana's flooded plant to stay shut

21 August. Czech PVC maker Spolana does not expect to resume production at its flood-damaged plant at Neratovice until end-November.

Spolana expects to lose at least Koruna850m (US$27m) in production and sales during the enforced closure and the replacement or repair of damaged equipment.

The total cost of the damage to the property and equipment is likely to rise as not all parts of the plant have been examined.

During the height of central Europe's worst floods in more than a century last week, Spolana was 90% flooded.

First criminal conviction in Enron scandal

21 August. The US government got its first criminal conviction from the Enron scandal with a guilty plea from former Enron executive Michael Kopper, who has agreed to co-operate with the investigation into his former company.

The 37-year-old Kopper pleaded guilty to charges of money laundering and wire fraud and agreed to surrender US$12m worth of allegedly illegally obtained assets as part of the plea bargain.

At the same time, the US Securities and Exchange Commission (SEC) said it had charged Kopper with violating the antifraud provisions of US securities laws.

The SEC said Kopper would be barred permanently from acting as an officer or director of a public company.

Strike hits Kumho's No2 phenol

21 August. Kumho P&B Chemicals was forced to shut down its 300 000 tonne/year No1 phenol line in Yeochon, South Korea, after 190 workers walked off the job over a wage dispute. The company said it will keep the line closed till the end of August.

Kumho said the workers first started agitating in early August before downing tools recently. This is the second such strike at the company, with the first one taking place last year.

Kumho's No2 line of 100 000 tonne/year was operating normally.

Williams puts Canada assets up for sale

21 August. US energy company Williams started an auction for its natural gas liquids (NGL) and petrochemicals assets in western Canada which it expects to complete in the fourth quarter.

Williams' chairman Steve Malcolm said the company had begun a reserve price auction for the Canadian assets, which include natural gas liquids and ethane extraction units in Alberta and British Columbia, a 73000 tonne/year propylene plant in Edmonton, Alberta, and a substantial pipeline infrastructure.

EPA to tighten rules on toluene exposure

21 August. The US Environmental Protection Agency (EPA) wants to tighten the safe general exposure level for toluene. The EPA is proposing a new reference dose (RfD) for toluene of 0.04 mg/kg/day. The current RfD of 0.2 mg/kg/day was set in 1994.

An RfD is an estimate of a continuous exposure that people can inhale daily over a lifetime without a significant risk of harmful, non-cancerous effects.

The agency did not ask for public comment but did invite scientists to submit their comments on issues addressed in its draft toxicological review.

TriPolyta, C Asri for new C3 agreement

22 August. Indonesia's TriPolyta will enter into a new offtake agreement with the country's sole cracker operator Chandra Asri for the supply of 22 000 tonne/month of propylene.

The new arrangement is a prerequisite for the conclusion of Chandra Asri's debt restructuring agreement between the Indonesian Bank Restructuring Agency (Ibra), major shareholder Prajogo Pangestu and the company's Japanese creditors/partners.

The new offtake agreement is due to be formalised on 30 September, when TriPolyta's shareholders are expected to meet. The agreement will mature in December 2003.

An old agreement between the two companies matured in June 2001 but was extended until the new agreement could be formalised.

M'bishi to acquire Atofina H2O2 stake

22 August. Mitsubishi Corp is to acquire Atofina's 50% stake in Tokyo-based hydrogen peroxide (H2O2) producer Shin Sanso Kagaku.

Shin Sanso Kagaku will become an equally-owned joint venture of Mitsubishi and Dainippon Ink and Chemicals.

Mitsubishi could not declare the value of the deal, saying it had signed a non-disclosure agreement with Atofina.

Asia to replace US as growth engine?

22 August. Asia is poised to become the driver of global economic growth, taking the reins from the US, which is slipping into an extended period of under-performance, according to a senior economist.

Jim Walker, chief economist at securities firm CLSA Emerging Markets, said Asia, excluding Japan, was about to take over as the engine of world growth. The US outlook was not good and the outlook for the other parts of the world, namely Europe and Japan, was much worse.

Walker expects US growth to be only 2-3% for the next two years, with even lower growth in Europe and Japan. However, he said Asia was a US$4500-5000bn economy growing at 3% in real terms.

Investors flock from Taiwan to China

22 August. Taiwan has seen a dramatic rise in the number of factory closures and a drastic plunge in incoming investments, as Taiwanese manufacturers and overseas investors continue to flock to the lucrative Chinese market.

Taiwanese factory closures rocketed by 67% in July from a year ago to 296. Foreign investments plunged 49.7% to US$352m in the same month, with total investments for the first seven months of the year shedding 47.44%.

According to the Ministry of Economic Affairs, Taiwanese pumped US$1.94bn into businesses in China in the first seven months of the year, up 19.6% over the same period last year.

In fact, the China fever has seized most of Asia, with 57% of foreign investments that could have flowed to South-east Asia going to China.

Petchems escape Hunan flood crisis

22 August. China's Baling Co continued to operate its plants normally despite a government declaration of a state of emergency in Hunan province prompted by rising water levels.

Hunan has been hit by heavy rains which have reportedly killed 108 people and seen water levels at Hunan's Dongting Lake - China's second largest freshwater lake - rise to dangerous levels. Tens of thousands of troops and workers have been mobilised to shore up flood relief efforts in the area.

Although Baling's plants are located in Yueyang, next to the Dongting Lake, they have not been affected by the rains because the facilities are located on high land, a company source said.

Baling, a subsidiary of Sinopec, produces 600 000 tonne/year of urea, 70 000 tonne/year of caprolactam, 330 000 tonne/year of compound ammonia, 13 000 tonne/year of tire cord, 100 000 tonne/year of compound fertiliser and 100 000 tonne/year of ammonia sulphate.

Asian company results

Sinopec reported a 45% net profit fall for H1of its financial year to 30 June 2002 due to adverse market conditions which included low domestic prices for crude oil, refined oil, petroleum products and petrochemical products during Q1 and early-Q2.

Sinopec posted net profit of Rmb5.4bn (US$653.2m) - down from Rmb9.9bn in H1 2000. Its sales decreased 11.8% to Rmb146.20bn from Rmb165.82bn and operating profit fell 35% to Rmb10.71bn.

Shanghai Petrochemical Co (SPC) posted higher profits for the first half of its financial year to 30 June 2002 due to higher product prices which started improving in March.

SPC posted a 30.5% rise in net profit to Rmb208.61m compared to last year's Rmb159.81m.Operating profit increased by 35.9% to Rmb447.64m in the same period last year despite a 2.43% fall in sales to Rmb9.52bn from Rmb9.76bn.

The company said sales volumes of synthetic fibres and intermediate petrochemicals rose by more than 40%, resins and plastics increased by more than 20% while petroleum products saw a dip of 6.6%.

SPC remains less than optimistic about the market outlook for the second half of 2002. It expects overall product prices to remain low and be subject to volatility while crude oil prices are likely to be on the high side.

Beijing Yanhua Petrochemical posted a 55% drop in net profit to Rmb33.07m for H1 2002 from Rmb73.19m in H1 2001 on a sharp fall in product prices.

Net sales rose 4% to Rmb4.21bn from Rmb4.05bn in 2001.

Operating profit was up marginally to Rmb178.4m from Rmb178.1m on the back of higher sales.

The average price of the company's main products - olefins, polymers and synthetic rubber - fell 17.4% compared to the same period last year.

Yizheng Chemical Fibre posted a 55.4% drop in net profit to Rmb54.04m for H1 to 30 June from Rmb121.19m in H1 2001 on lower margins for its products. The Sinopec subsidiary also saw a 5.7% dip in sales to Rmb3.69bn from Rmb3.91bn. Figures for operating profit were not immediately available.

Yizheng said it witnessed rapid changes in domestic prices for polyester as well as its purified terephthalic acid (PTA) and monoethylene glycol (MEG) feedstocks in H1 2002.

Domestic prices for polyester reached a record low in January and February, but started to rebound from early March owing to an upsurge in demand which led to a substantial increase in PTA and MEG feedstock prices. The trend reversed again in June when polyester prices fell because of lower demand.

Petroleum Authority of Thailand plc (PTT) posted a net profit increase of 12.5% to Baht7.46bn (US$177.9m) in Q2 to 30 June 2002 from Baht6.63bn in Q2 the previous year, largely on foreign-exchange gains.

Income from investments reached Baht1.90bn in Q2 this year, compared to just Baht273m in Q2 in 2001, most of the gain being made on foreign-exchange dealings.

Net sales rose marginally to Baht96.62bn from Baht95.31bn a year earlier due to higher gas sales and a solid performance by PTT's exploration and production subsidiary which also enjoyed foreign-exchange gains.

PTT's H1 net profit was Baht12.79bn, down from Baht13.07bn in H1 2001, while sales fell to Baht182.77bn from Baht189.10bn. The chief reason for the H1 fall was a significant reduction in the price of liquid petroleum gas.

Thai Petrochemical Industry (TPI) boosted operating profit by 43.5% to Baht742m in Q2 of its financial year to 30 June 2002 from Baht517m in Q2 a year earlier on firmer product prices.

Net sales were up 2.2% to Baht19.27bn from Baht18.86bn. Net profit slumped to Baht1.45bn from Baht15.83bn in Q2 2001.

A TPI spokesman said the company posted an extraordinary gain on restructuring of about Baht14bn in Q2 last year. The restructuring involved the waiving of interest on loans and a debt-to-equity swap.

National Fertiliser Co (NFC) of Thailand posted a net loss of Baht510.4m in H1 to 30 June 2002 compared to a net loss of Baht488.4m in H1 2001 due to a sharp drop in fertiliser production caused by severe liquidity problems. As a result of cash-flow problems, it was forced to reduce its operating rate to 30.6%. NFC's sales fell 32% to Baht1.33bn from Baht1.97bn a year earlier.

Thai Plastics and Chemicals posted a net profit increase of 16.3% to Baht782m in Q2 to 30 June 2002 from Baht672m in Q2 2001 on higher sales volumes and selling prices for its main product.

Net sales rose 15% to Baht4.07bn, with sales volumes rising 8% and PVC prices 10%. Operating profit was not immediately available.

Honam Petrochemical more than tripled its H1 profits as a result of stronger demand and higher prices. It recorded a net profit of Won39.69bn (US$33.46m) compared to Won12.22bn in the same period last year. Operating profit grew 52.68% to Won31bn. Sales improved 15.92% to Won606.62bn.

LG Petrochemical reported a year-on-year fall of 10% in operating profit for H1 to 30 June 2002 due to lower sales volumes caused by a 23-day turnaround of its plants in May.

LG posted H1 operating profit of Won39bn from Won43.3bn in the same period last year. LG's sales declined 16% to Won473.7bn from Won566bn, even though prices rose.

Net profit rose 24% to Won30.5bn on a gain of Won50bn made on disposal of securities and income of Won25bn chalked up as dividend profit.

Hyundai Petrochemical posted an operating profit of Won85.68bn for H1 to 30 June 2002 compared to an operating loss of Won6bn in H1 2001.

The improved result was due to cost savings and new operational efficiencies introduced by the new management, the lower cost of naphtha, higher product prices and financial restructuring.

Gross profit shot up 167.5% to Won136.44bn from Won51bn, even though sales fell 4% to Won915bn from Won953bn.

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