Global roundup

11 November 2002 00:00  [Source: ACN]

Two Japanese majors agreed on a polyester-resin joint venture during the week of 1-7 November, which also saw Celanese lifting force majeure on supplies and reliance making India's biggest natural gas discovery in 30 years

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

 

China to up acrylic-fibre capacity

1 November. China's acrylic-fibre capacity will increase to 650 000 tonne/year this year from 550 000 tonne/year in 2001, according to Ren Guoqiang, vice chief engineer at Shanghai Petrochemical Co (SPC).

However, capacity increases planned in China in the next few years are unlikely to meet a rapid rise in domestic demand, he told delegates to the 7th World Fibres and Feedstocks Conference in Singapore last week.

Ren said that a further 139 500 tonne/year of capacity will be brought onstream in China by 2004-05 to try to satisfy demand, which is expected to continue to rise fairly rapidly.

China, with domestic demand totalling 892200 tonne/year in 2001 as against 827 400 tonne/year in 2000, is to bring new acrylonitrile capacities onstream to meet this demand. For example, SPC will expand its acrylonitrile plant in Jinshanwei, Shanghai, to 130 000 tonne/year from 70 000 tonne/year in early 2003.

SPC estimates that 20-25% of total acrylonitrile demand in 2005 will still be met by imports.

End-2003 start for Teijin's new fibre line

1 November. Japan's Teijin aims to start its new 5000 tonne/year industrial-grade polyester fibre line in Bangkok, Thailand, by end-2003, a company spokesman said.

The company has invested Yen1bn (US$8.1m) in the new line, which is under construction. The output of the new line will be used to produce seat belts and other industrial materials.

Two Japanese majors in polyester-resin jv

1 November. Mitsui Takeda Chemicals and Nippon Shokubai have agreed to integrate their unsaturated polyester resin operations.

They may form a new company as early as April 2003. The new company will bring under one roof Mitsui Takeda's three unsaturated polyester resin plants, with a combined capacity of 70 000 tonne/year, and Nippon's two plants, which have a total capacity of 48 000 tonne/year. The partners will streamline their five plants and reduce combined production.

The joint venture will also consolidate R&D, marketing and general administration functions of the two companies. It is expected to bring in annual sales of about Yen18bn (US$146m).

The two companies hope to trim costs by Yen2bn by lowering production, transferring a total of 180 employees at the two firms to other divisions, and cutting procurement costs.

Mitsui Takeda, which is likely to own 60% of the joint venture, will appoint its president. Capitalisation and other details are to be worked out by January.

BASF lifts force majeure on nylon

1 November. BASF announced that it is lifting force majeure on nylon in North America effective immediately, saying the production and delivery of all grades of nylon has resumed.

The company declared force majeure on 23 September after an explosion and fire damaged its caprolactam plant at Freeport, Texas, US.

ICI closes deal with Johnson Matthey

1 November. ICI said it has completed the £260m (US$404m) sale of its catalyst business Synetix to Johnson Matthey.

The company said it received £241m today and will receive the remaining £19m when the sale of its Indian catalyst business, which requires shareholder approval, is completed. Indian approval of the sale is expected in the final quarter, said ICI.

Total net proceeds of the sale, after tax and other costs, are expected to be £210m.

Sun Chem buys stake in French firm

1 November. Sun Chemical of Fort Lee, New Jersey, US, said it has acquired a 50% share and a 'strategic opportunity' in French pigments firm Assemblage Intermoleculaire en Chimie Organique. Financial terms of the acquisition were not disclosed.

Sun said the French firm produces high-performance additives that function as pigments in the security and speciality inks markets.

EMS-Chemie wants seat on Lonza board

1 November. Swiss speciality chemicals company EMS-Chemie said it expects to be represented on the board of directors of compatriot Lonza now it is clear that Martin Ebner's 19% stake has been dissipated among a number of institutional investors.

Ebner is a former chairman of Lonza. Earlier last week, his BZ Group sold the stake for about SF1.16bn (US$773m) to a variety of institutional investors through Deutsche Bank.

Taiyo to buy PVC business

2 November. Taiyo Vinyl Corp will acquire the PVC business of Kureha Chemical Industry Co by 1 January 2003, a Taiyo spokesman said.

Taiyo, an affiliate of Tosoh Corp, did not say how much the purchase cost, but said the takeover will enable it to boost capacity utilisation and increase efficiency in marketing and distribution.

The deal includes Kureha's 100 000 tonne/year PVC plant at Iwaki, Fukushima, Japan.

Taiyo operates three PVC plants in Japan, with capacities of 310 000 tonne/year at Yokkaichi, 170 000 tonne/year at Osaka and 90 000 tonne/year at Chiba.

India's biggest gas find in 30 years

2 November. A major offshore natural-gas discovery by Reliance Industries Ltd (RIL) in the Bay of Bengal may help solve feedstock shortages affecting petrochemical and urea plants in India.

RIL said the reservoir off the coast of Andhra Pradesh state is the country's biggest gas discovery in about 30 years. It has the potential to deliver about 40m standard m³/day of gas to consumers in 3-4 years.

A pipeline carrying RIL gas will ultimately be linked to Gail India's West-North trunk pipeline from Hazira in Gujarat to Delhi.

Dow, Asahi Kasei jv starts operations

2 November. SAL Petrochemical (Zhangjiagang) Co Ltd announced last week the official startup of its 120 000 tonne/year PS plant in Zhangjiagang, China.

The company is a 50:50 joint venture between Dow and Asahi Kasei.

It had earlier pushed back the startup of the PS project to Q3 2002 from mid-2002. It completed trial runs on the plant in August-September and brought the unit onstream in October.

DuPont restarts PTA plant

2 November. DuPont Far Eastern Petrochemicals has restarted its 450 000 tonne/year purified terephthalic acid (PTA) plant in Kuan Yin, Taoyuan county, Taiwan, following an unexpected five-day shutdown.

The company's T10 plant was forced to shut down on 24October because of a mechanical problem. It is now running at 100%.

Market sources say the company may have lost 10 000 tonne of PTA as a result of the outage.

DuPont was not immediately available for comment. The major operates another PTA plant at the same site. Named T9, it has a capacity of 400000 tonne/year.

Nirma's soda ash plant debottlenecked

2 November. Indian detergents major Nirma Ltd has completed expansion work on its soda ash plant at Bhavnagar, Gujarat, India, ahead of schedule and at a lower cost than estimated.

The Rs957.3m (US$19.8m) project has increased the soda ash plant's capacity to 650 000 tonne/year from 420000 tonne/year. It was completed in September this year.

The company had earlier announced it would complete the debottlenecking project in December at a cost of Rs1.1bn.

Nirma commissioned the second stream of its soda ash plant in September 2000 and the first stream in March 2000 at a total cost of Rs10.37bn.

The plant is based on Akzo Dry Lime technology purchased from Akzo Nobel Engineering of the Netherlands.

EPA rules butadiene carcinogenic

2 November. The US Environmental Protection Agency (EPA) has declared in a published health assessment that butadiene is carcinogenic.

The EPA said that, based on new information made available since 1985, '1,3-butadiene is carcinogenic to humans by inhalation, based on the total weight of evidence'.

The assessment is the first formal EPA evaluation of 1,3-butadiene since 1985. It noted that releases of butadiene from production processes are 'minor' and said the 'major environmental source of butadiene is incomplete combustion of gasoline and diesel fuels'.

It added that its health assessment will serve as the basis for future regulatory actions regarding butadiene.

The EPA is acting to reduce emissions of butadiene substantially, mainly through gasoline reformulation requirements. It projects a 50% reduction in butadiene emissions during 1996-2020.

ARS technology for Nanhai C2 cracker

3 November. Stone & Webster will supply its advanced recovery system (ARS) technology for the 800 000 tonne/year ethylene cracker at the heart of the US$4.3bn petrochemicals complex in Nanhai, China, to be built by Shell Chemicals and China National Offshore Oil Corp.

Technology for the downstream polyolefin units will be provided by Basell, Shell's 50:50 joint venture with BASF.

Daelim Industrial's hdPE restart

4 November. Daelim Industrial hopes to restart a second of its three hdPE lines tomorrow as an industrial dispute that has reduced the South Korean major's polymer output for the past month rumbles on.

The dispute began on 5 October when an unspecified number of workers walked out in support of a 13% wage hike. Management is prepared to pay only 8%.

Negotiations are continuing, with no sign of a compromise to date.

Immediately after the walkout, one of the company's three hdPE lines was shut down and has remained idle since then.

The operating rate of another hdPE line has been maintained at 100% throughout the dispute.

DDE aims for 200% rise in sales

5 November. DuPont Dow Elastomers (DDE) aims to boost net sales of speciality polymers and elastomers in Asia by 200% by 2006 through innovative product development and marketing strategies, a company source said.

The company recorded net sales in speciality polymers and elastomers of Yen50bn (US$410.8m) in 2001-02 in Asia, excluding Japan, the source said.

Japan accounted for Yen40bn in net sales in 2001-02, but DDE expects demand growth in Japan to shrink in the coming years.

In speciality polymers, DDE is the No1 player in Asia (excluding Japan), with a market share of 30%, with Mitsui Chemicals No2, the source said.

In Japan, DDE is the No2 player, with a market share of 30-40%, behind Mitsui.

Mitsui's second resin-sales unit in China

5 November. Mitsui & Co will set up a synthetic resin sales company in Shanghai, China, by the end of this month to cater to its Japanese clients, including auto manufacturers and household appliance makers, who are increasingly shifting operations to China.

This will be its second sales company in China. Its first is in Hong Kong. The new sales unit will be capitalised at Yen37m (US$302 622).

The capital will be provided entirely by Mitsui and its local subsidiary. It will tap demand from non-Japanese companies operating in China, and is aiming for US$12m in sales by fiscal 2006.

Celanese lifts force majeure on Sing acetic

5 November. Celanese said its Singapore acetic acid plant is operating at full capacity again, allowing the lifting of force majeure on supplies and the resumption of deliveries to Asian customers.

It invoked force majeure in August because of the inability of a supplier to produce and deliver carbon monoxide to its Singapore facility owing to mechanical problems.

Throughout the force majeure, Celanese said it was able to continue supplying acetic acid and derivatives to customers from limited production activity at the Singapore facility, from its acetyl plants in the US and Europe, and from existing inventories.

UK chemicals output up in Q3

5 November. UK chemicals production outstripped overall manufacturing sector output in the three months to September, according to the Office for National Statistics.

Output from the chemicals and man-made fibres sector grew 1.9% during July-September compared with last year, while overall manufacturing registered a 3% decline.

Compared with the previous quarter, chemicals and man-made fibres production rose by 2% and overall manufacturing output grew by 1.1%.

Security tightened again on Jurong Island

6 November.Troops from the Singapore Armed Forces have been drafted in to tighten security around Singapore's Jurong Island, an army spokesman said. The island is home to some 70 petrochemical businesses.

The island has been a protected area since the 11 September terrorist attacks in the US prompted Singapore security agencies to guard against similar threats.

Troops were deployed around the complex in October and stayed there for two months before being replaced by police.

Seoul workers end strike

6 November. South Korea's most militant union group said it had ended a strike by about 120000 workers after lawmakers decided to delay a new law shortening the working week, yielding to labour pressure ahead of December's presidential election.

The Korea Confederation of Trade Unions (KCTU) told members at Hyundai Motor, South Korea's largest automaker, and 165 other workplaces to return to work after the one-day walkout, which resulted in more than Won100bn (US$82m) in lost production.

A KCTU spokesman said the National Assembly's Labour Committee had decided to take more time to discuss the proposed law to cut the working week by four hours to 40 hours.

The striking workers feared that a shorter working week would mean reduced incomes.

Snamprogetti to build LNG train in Qatar

6 November. Italian energy and petrochemicals group Eni said its engineering contractor subsidiary, Snamprogetti, has won a turnkey contract to build a fourth liquefied natural gas (LNG) train at Ras Laffan, Qatar.

To be built for Qatar's Ras Laffan Liquefied Natural Gas Co Ltd II, the plant will produce around 4.7m tonne/year of LNG. It is due onstream in 2005.

Together with its joint-venture partners Chiyoda and Mitsui & Co, Snamprogetti will provide detailed engineering, procurement and construction.

Financial details of the contract were not available.

Asean leaders back economic integration

6 November. The Association of Southeast Asian Nations (Asean) leaders who met in Phnom Penh, Cambodia, this week have agreed to support economic integration between new and old members, and to improve economic relations with China and Japan.

Asean and China also signed a framework agreement on comprehensive economic co-operation, paving the way for tariff cuts on eight product lines within three years, starting in early 2003.

Asean leaders agreed that full implementation of the Asean Free Trade Area (Afta) for most member nations will be completed by 2010. The deadline for Myanmar, Cambodia, Laos and Vietnam will be 2015.

Sasol completes takeover

6 November. Sasol said it has increased its stake in Chinese surfactants producer Condea Nanjing Chemical from 70% to 100%.

The plan to purchase the remaining 30% stake from German utilities giant RWE was announced in September. Sasol had received the 70% stake in Condea Nanjing Chemical through its acquisition of the Condea chemicals business from RWE in March 2001.

Condea Nanjing Chemical will now be known as Sasol (China) Chemical.

OM Group to exit tungsten powders

6 November. Troubled metal chemicals producer OM Group has announced plans to cease production of tungsten carbide fine powders and close a Utah facility. The moves are designed to improve next year's results by US$12m.

The Cleveland, Ohio-based company also said it is negotiating the sale of its tungsten business and assets that it acquired from Dow Chemicals in 1998.

US Fed cuts key interest rate

7 November. The US Federal Reserve has voted to cut its key federal funds interest rate by 50 basis points, dropping the rate to 1.25% while citing 'greater uncertainty' in the economy and again hinting at war worries.

The Fed's rate-setting Open Market Committee said in a statement that it has also made a 50 basis point reduction in the discount rate to 0.75%. This is the first interest-rate cut the Fed has made this year.

DuPont completes ChemFirst purchase

7 NovemberDuPont has completed its US$400m acquisition of ChemFirst in a deal that makes DuPont a leading supplier of integrated-circuit fabrication materials. DuPont paid US$29.20/share for acquisition of the Jackson, Mississippi-based company that includes two semiconductor fabrication units and a chemical intermediates business.

The fabrication units will operate under DuPont as EKC Technology and Electronic Polymers, while the intermediates operation will become First Chemical Corp.

US election results could boost industry

7 November. The US election results, especially a shift to Republican control of the Senate, is likely to nudge legislation on energy and homeland security in directions that benefit the chemical sector, industry executives said.

The National Petrochemical and Refiners Association president, Bob Slaughter, said Republican leadership in the Senate is more likely to generate an energy policy that is more supply-oriented and that provides incentives for cogeneration.

Methanex files new compensation plea

7 November. Methanex has filed a new plea under the North American Free Trade Agreement (Nafta) seeking US$970m in compensation over California's decision to ban MTBE.

The senior vice-president of the Canadian firm, Michael MacDonald, said its case will be confined to seeking compensation. 'Nafta cannot overturn the ban, the Nafta process can only award damages.'

Asahi Kasei restarts SAN plant

7 November. Asahi Kasei has restarted its styrene acrylonitrile (SAN) plant at Kawasaki following a one-month maintenance shutdown, a company source said.

One SAN line was restarted today. A second line was brought back onstream at end-October. The combined capacity of the two lines is 65 000 tonne/year.

Company results

This year has been a generally fair one for petrochemical companies. Many of the companies in Asia, the US and Europe reported profit increases in the second and third quarters of 2002.

Takeda Chemical reported a 7% year-on-year increase in operating profit for the first half of its financial year ended 30 September 2002. It posted an operating profit of Yen157.3bn (US$1.29bn), up from Yen146.9bn reported in H1 2001-02. Its sales rose by 4% to Yen528.7bn from Yen510.5bn. The company reported a net profit rise of 2%, from Yen130.8bn to Yen133.6bn. It has raised its full-year operating profit forecast by 6% to Yen290bn from Yen278bn and its net profit has been estimated at Yen260bn, up 10% from the previous forecast of Yen236bn.

Pidilite Industries (PIL) saw its operating profit grow by 25.7% to Rs285.2m (US$5.9m) in Q2 of its financial year to 30 September 2002, from Rs226.8m in the same period of 2001-02 on higher sales.

Net sales rose by 14.6% to Rs1.43bn in Q2 of 2002-03, from Rs1.25bn for the same quarter last year, while net profit increased by 21.7% to Rs155.4m from Rs127.6m a year earlier.

ExxonMobil's earnings from its chemical business totalled US$353m during the third quarter, reflecting higher volumes and improved margins, the company said. The Irving, Texas-based company recorded chemical earnings of US$156m in the same quarter last year.

Huntsman reported earnings of US$132.2m for Huntsman International before interest, taxes, depreciation and amortisation (Ebitda) with 61% of the group's total earnings in the quarter ended 30 September.

In the same period, Huntsman LLC, formerly known as Huntsman Corp, reported Ebitda of US$71.3m on increased sales of base chemicals and performance polymers. Huntsman said its other operating entities combined for third-quarter Ebitda of $10.4m.

Lyondell Chemical posted a 6% increase in basic Q3 earnings from its own intermediate chemicals and derivatives operations on a 15% jump in sales with a net loss of US$2m. The figures exclude results from the Equistar and Lyondell-Citgo Refining joint ventures and include only Lyondell's intermediate and derivatives business.

The chemical division of Sumitomo Corp has reported a year-on-year decrease of 28% in its H1 operating profit for the financial period through 30 September 2002. It attributed the decline to the impact of the generally difficult global economic conditions.

The division posted an H1 operating profit of Yen 1.8bn (US$14.7m), down from Yen 2.5bn. Its gross profit fell by 12%, from Yen 13.8bn to Yen 12.1bn, but net profit stayed steady at Yen 1.2bn. The company did not release chemical sales figures.

On a group level during the same period, Sumitomo reported a decrease in H1 operating profit, from Yen 38.72bn to Yen 42.35bn. This was a result of sales falling from Yen 4.83 trn to Yen 4.56 trn. Group net profit, however, rose by 5%, from Yen 20.30bn to Yen 21.41bn.

Bayer ABS of India recorded an operating profit of Rs150.0m (US$3.1m) in Q3 2002, up by 73.8% from Rs86.3m in the same quarter last year. Gross sales rose by 37.79% to Rs934.2m in Q3 2002 from Rs677.9m in the previous year, while net profit shot up by 126.3%, from Rs32.2m to Rs72.8m, aided by lower interest payments of Rs8.24m, down from Rs12.5m last year.

Orica announced a 248% rise in profit before significant items to Aus$239.1m (US$134m) in its full financial year to 30 September 2002, from Aus$62.3m in the previous year. After significant items, its profit was Aus$213.6m, compared with a loss of Aus$192.7m in 2000-01, an improvement of Aus$406.3m. The company recorded revenues of Aus$4.25bn for 2001-02, as against Aus$4.19bn a year earlier.

India Glycols increased operating profit by 113% to Rs208.6m (US$4.3m) in the second quarter of its financial year to 30 September 2002, compared with Rs97.7m in Q2 of the previous year. Gross sales rose by 63%, from Rs509.4m a year earlier to Rs829.9m, while net profit increased by 82%, from Rs37.6m to Rs68.3m.

Cepsa boosted Q3 earnings before interest and tax (Ebit) from its petrochemicals division by about 7% to Euro60.9m (US$60.1m), a spokeswoman said. Earnings before interest, tax, depreciation and amortisation (Ebitda) were up by about 5% to Euro74.2m, she added. Absolute quarterly figures were not published before Q2 this year.

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