Global roundup

01 December 2003 00:00  [Source: ACN]

Dow Chemical and Union Carbide sued four chemical-tanker operators, Zeon Corp shut two plants on safety breaches, and China imposed antidumping duties on TDI imports from Japan, South Korea and the US in the week 21-27 November. Also, Mitsui Chemicals reported a 71% slump in first-half net profit

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

Ube’s H1 operating profit down 4%

21 November. Ube Industries has reported a 4% year-on-year decrease in consolidated operating profit to Yen5.17bn (US$47.3m) for the six months to 30 September due to a decline in domestic demand in its chemicals, plastics, machinery and metals businesses as well as high feedstock and restructuring costs.

The company’s consolidated operating profit for the same period of the previous year was Yen5.39bn.

Ube’s consolidated net profit plunged to Yen619m from Yen2.60bn on a decline in sales to Yen242.29bn from Yen242.60bn.

Its chemicals and plastics division reported an H1 operating loss of Yen1.62bn from a loss of Yen1.04bn last year due to weak business for industrial chemicals as well as higher feedstock costs and lower margins overall.

Gail studies ethane/propane unit

21 November. Gail India has invited a number of engineering consultancy firms to prepare a detailed feasibility report on a proposed unit for the extraction of ethane and propane at Vijaipur in Madhya Pradesh, India.

The study is expected to help Gail decide whether to set up a gas cracker-based olefins complex at the site or a propane dehydrogenation and polypropylene complex. The report will also explore the possibility of integrating the proposed complexes and whether it is feasible to set up both of them at the same time. 

Mitsui H1 net profit down 71%

21 November. Mitsui Chemicals’ net profit for the six months ended 30 September was down by 71% to Yen3.7bn (US$33.9m), compared with Yen12.9bn in H1 a year earlier. A company spokesman said the drop was due to poorer margins caused by an increase in feedstock costs. The net profit was just under an earlier forecast of Yen4bn for the period.

The spokesman said sales rose to Yen525.5bn in the period, from Yen502.6bn a year earlier, due to higher volumes. But he added that the increase in volume was not enough to compensate for the lower sales margin.

Beijing Yanhua to up ethylene output

21 November. Beijing Yanhua Petrochemical expects to produce 760 000 tonne of ethylene in 2004 – up from a targeted 700 000 tonne this year.

A company spokesman said the company plans to run its cracker at above 100% of its nameplate capacity next year and has no scheduled turnarounds for the period. The company’s 700 000 tonne/year cracker in Yanshan near Beijing, China, was shut for 30 days for maintenance this year. 

Atofina to close UK PS line

21 November. Atofina is to close one of the two lines at its polystyrene (PS) plant in Stalybridge, UK, a spokesman confirmed.

The closure, effective July 2004, would result in plant capacity falling to 70 000 tonne/year from 110 000 tonne/year, she said. She explained that the capacity adjustment was needed because the UK PS market had been declining for several years.

Rhodia plans 984 job losses in cost cuts

21 November. Rhodia plans nearly 1000 job losses as part of the latest cost-cutting drive launched by new chief executive Jean-Pierre Clamadieu.

The French speciality chemicals group said 984 job cuts were estimated to be needed across all support functions in the business. Most of the job cuts – 728 – will be in Europe. Rhodia has a worldwide workforce of around 23 000.

Rhodia said the job cuts were an essential part of its latest cost-cutting plan, which is aimed at saving about Euro120m (about US$143m) by 2005, with annual savings of Euro165m from 2006.

Methanex to take write-down

21 November. Methanex said it will take a US$130m fourth-quarter write-down of methanol production assets in New Zealand and Alberta, Canada.

The company said in February that the company lost ‘substantially all’ of its contractual natural-gas entitlements from the offshore Maui field in New Zealand.

SVC PTA in sight after debt revamp OK

23 November. The prospects that India’s SVC Superchem Ltd will be able to go ahead with the commissioning of its mothballed purified terephthalic acid (PTA) project have brightened now that lenders have approved the restructuring of the company’s debt.

The company said it was awaiting approval by each member of a lenders’ consortium, after which the funds would be raised to start up the 120 000 tonne/year plant in Chhata in the Mathura district of Uttar Pradesh, India.

The plant has been awaiting commissioning since 1998. It could not proceed beyond trial runs due to technical snags, and the company later faced a severe liquidity crunch.

The plant was originally planned to go onstream in July 1995 at a project cost of Rs3.82bn (US$83.3m). The cost later increased to Rs11.18bn due to cost and time over-runs and capitalisation of interest on loans. Secured and unsecured loans stood at Rs9.05bn as of 31 March 2003.

IPCL studies VCM expansion

24 November. Indian Petrochemicals Corp Ltd (IPCL) is conducting a feasibility study to decide whether to expand its vinyl chloride monomer (VCM) capacity to 350 000 tonne/year from 170 000 tonne/year at its petrochemical complex at Gandhar in Gujarat, India.

Its polyvinyl chloride capacity at the same site is being expanded to 300 000 tonne/year from 150 000 tonne/year. It is expected to be completed within two years.

China imposes ADD on TDI imports

24 November. China’s Ministry of Commerce (MoC) has imposed definitive antidumping duties (ADD) on toluene di-isocyanate (TDI) imports from Japan, South Korea and the US for a period of five years starting on 22 November.

It has slapped ADD of 28% on TDI imports from BASF of the US, 7% on Bayer Polymers and 28% on other companies operating in the US.

Among the Japanese producers, Mitsui Takeda will have to pay 4% ADD, Nippon Polyurethane Industry 5% and all other Japanese companies 49%.

South Korea’s DC Chemical and Korea Fine Chemical Co will each have to pay ADD at 3%, while other Korean companies will pay 5%.

With the exception of BASF, the definitive ADD rates levied on individual Japanese, South Korean and US companies are considerably lower than the preliminary rates imposed last June. The MoC did not give any reason for lowering the rates.

TPI Polene director resigns

24 November. TPI Polene said Orapin Leophairatana has resigned as director and executive director. No reasons were given for the resignation. Orapin is the wife of the company’s founder and chief executive, Prachai Leophairatana.

Orapin’s resignation comes ahead of an offering of new shares in the company to raise US$180m, which would be used to repay debts.

Zeon shuts units on safety breaches

25 November. Zeon Corp has suspended operations at its plants in Mizushima and Tokuyama, Japan, after admitting that it misreported the results of voluntary safety inspections, the company said.

Zeon said the Ministry of Economy, Trade and Industry (Meti) revoked the authorisation for the company to carry out its own safety inspections at the two plants, which will now stay closed until their safety has been confirmed by the Nuclear and Industrial Safety Agency (Nisa) and other authorities.

The company’s Mizushima plant produces isoprene rubber, polyvinyl chloride, synthetic aroma chemicals and speciality plastics, while the Tokuyama plants produces synthetic rubber and latex.

Showa Denko to open Moscow office

25 November. Showa Denko will open a resident representative’s office in Moscow, Russia, in January 2004 to make full use of research and development (R&D) resources in Russia.

The company started commissioning R&D work to institutions in Russia in 1998 in cooperation with Iskra Industry Co, a Tokyo-based trading firm specialising in business with Russia and China. The commissioned researches, involving over ten research institutions, have so far focused on the development of semiconductor-processing speciality gases and other chemical products.

TCB in Egypt acrylic-fibre jv

25 November. Thai Carbon Black Co (TCB) will, along with five other companies, invest in an Egypt-based acrylic-fibre joint venture.

The joint venture, named Alexandria Fiber Co, will produce, market and sell about 18 000 tonne/ year of acrylic fibre, TCB said in a statement to the Stock Exchange of Thailand.

TCB will hold a 27.5% stake, worth US$6.63m, with Thai Rayon Plc holding an equal stake. Egypt’s Sidi Kerir Petrochemicals Co will hold about 20%, valued at US$4.8m. Saudi Arabia’s Arab Petroleum Investment Corp will hold around 10%, valued at US$2.4m. The Saudi Egyptian Industrial Investment Co will also hold 10% and Alexandria Carbon Black Co of Egypt will hold 5%, valued at US$1.2m.

Vinythai to expand VCM output

25 November. Vinythai will expand its output of vinyl chloride monomer (VCM) next year by 13 000 tonne/year to 200 000 tonne/year, an official with the company said.

The official said the expansion would be carried out in stages throughout 2004, and that the company was targeting the first quarter of 2005 for the startup. The extra VCM will be used to feed the company’s PVC plant. He said the company is currently running its PVC plants below their full operating rate, as they have to rely on externally acquired VCM.

Dow, Carbide sue tanker operators

25 November. Dow Chemical and Union Carbide confirmed that they have started legal proceedings against four leading international chemical tanker operators over their alleged conspiracy to inflate deep-sea chemical freight rates.

The suits claim that the alleged conspiracy began in 1998 and continued until November last year.A spokesman for Dow said the actions had been taken against Stolt-Nielsen, Odfjell, Tokyo Marine and Jo Tankers. All four are under investigation by antitrust authorities in Europe and the US in connection with alleged collusion to fix freight rates.

China slams US TV tariffs threat

26 November. China has criticised American plans to impose antidumping duties on some Chinese televisions as groundless and unfair.

The US has announced plans to impose tariffs of up to 45% on some Chinese TVs.

The move comes a week after the US limited imports of some Chinese textiles.

The China Daily quoted a commerce ministry official who accused the US of double standards. He pointed out that most of the components for Chinese televisions were imported from the US and Japan. He added that a reasonable conclusion would be that those TV parts in turn must have been dumped on China.

Moody’s ups Thailand’s credit rating

26 November. Moody’s Investors Service has raised Thailand’s foreign currency ratings, a move that will help the country’s chemicals producers lower their borrowing costs in a period when many had already been expected to refinance existing debts through the bond market.

Moody’s said it upgraded Thailand due to the strengthening of the country’s external payments position, its dramatic reduction in external debt, its resilient export performance, and its good prospects for continued economic growth and stability.

The agency raised the rating for the government’s long-term foreign currency bonds and foreign currency country ceiling to Baa1 from Baa3, the ceiling for foreign currency bank deposits to Baa1 from Ba1, and the foreign currency ceilings for short-term notes and deposits to Prime-2 from Not-Prime. The outlook on the foreign currency ceilings and rating remains stable. The stable outlook on the government’s Baa1 domestic currency bond rating remains unchanged.

TPI Polene delays share offer

26 November. TPI Polene has postponed its offering of new shares in the company indefinitely, saying that market conditions are not conducive to a successful fundraising.

TPI gets $40m loan

26 November. Thai Petrochemical Industry’s (TPI’s) debt-plan administrator said the Export-Import Bank of Thailand has extended a US$40m loan to TPI to replenish the company’s working capital and enable it to optimise its production level.

TPI has been forced to operate its complex below optimum rates, as cash-flow problems have made it difficult to procure sufficient feedstock.

A TPI source said the company’s operating rates had recently been averaging about 80%.

OECD sees faster economic growth

26 November. Global economic growth will pick up over the next two years, helped by tax and interest rate cuts, the Organisation for Economic Co-operation and Development (OECD) said.

The OECD forecasts that total growth among its 30 member countries will rise to 2% this year and further improve to 3% the year after. It said consumers were shaking off worries over jobs and Iraq, while firms were investing again.

The strongest recovery will be in the US, while the rebound in Europe and Japan will be slower and less steep.

Foster Wheeler in Saudi project

26 November. Foster Wheeler Energy confirmed it has been appointed technical consultant for Project Management and Development’s (PMD’s) petrochemicals project in Al-Jubail, Saudi Arabia.

The UK-based engineering contractor said it is already conducting an intensive and comprehensive study to provide PMD with capital and operating cost estimates for the approximately US$3.5bn complex, which is due onstream in 2008.

PMD has prepared a project-information memorandum to attract interest from potential overseas investors, said Foster Wheeler. PMD is understood to be hoping that foreign investors will take a 50% stake in the project.

Eight offers received for KP Chem

27 November. The mergers and acquisitions adviser for KP Chemical, KPMG, said it had received eight non-binding indicative offers for the sale of KP’s assets.

KPMG will decide which of the eight to grant data-room access to by 1 December. The prospective buyers are expected to make final and binding offers for KP, two weeks after being granted access to the company’s data room.

US faces Japanese tariffs threat

27 November. Japan has announced plans to retaliate in a dispute with the US over steel trade.

Earlier last month, the World Trade Organization ruled that tariffs imposed last year by the US on steel imports were illegal under its rules. The European Union has already announced plans to retaliate.

Japanese officials say they plan to impose additional tariffs of up to 30% on some goods.

The goods in question account for US$85m worth of imports from the US.

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