23 February 2004 00:01 [Source: ACN]
From stories supplied by the CNI and ACN teams. See www.online.com. For exclusive news and analysis, see the rest of ECN.
13 February. LG Chem has purchased Won50bn (US$43m) worth of short-term commercial paper issued by indebted LG Group affiliate LG Card.
An LG Chem spokesman said the company purchased the paper, which carries a 7.5% annual interest rate and a 90-day maturity, as part of an LG Group package to support its ailing card unit, under which LG Group affiliates have committed to provide Won1000bn in financial support to LG Card.
13 February. Asahi Kasei has reported a net profit of Yen19.79bn (US$187m) for the nine-month period to 31 December 2003 on sales of Yen904.55bn, hampered by a rising yen, increasing feedstock costs and falling domestic demand.
The company posted a nine-month operating profit of Yen44.63bn. This is the first year the company has reported quarterly figures, so there are no comparable figures for its first nine months in 2002-03.
Asahi’s overall operating profit was restricted by nine-month operating losses of Yen1.2bn, attributed to the construction-materials business and Yen7.8bn, due to the elimination of corporate costs.
The company’s chemicals segment returned a nine-month operating profit of Yen12.6bn on sales of Yen329bn. In this segment, sales were buoyed by exports, but margins for monomers and performance plastics were squeezed because of the high cost of naphtha and the yen’s sharp rise against the US dollar.
Asahi Kasei’s pharmaceutical division turned in a nine-month operating profit of Yen11.8bn on sales of Yen82.5bn.
13 February. Solvay announced a 20% fall to Euro673m (US$856m) in operating profit from continuing operations last year, with declines in all four divisions of plastics, processing, chemicals and pharmaceuticals.
The Belgian firm said it faced a very strong euro and oil price volatility in 2003. Pension, insurance and transport costs were also higher.
After including non-recurring items of Euro11m, operating income was down 13% at Euro662m, compared with Euro758m in 2002.
13 February. Republican and Democratic leaders in the US Senate have agreed to push through a pared-down, US$14bn energy bill by the end of this month, Capitol Hill sources said.
Senator Pete Domenici, Republican chairman of the Energy and Natural Resources Committee, introduced legislation late yesterday after reaching agreement with Republican majority leader Bill Frist and Democratic minority leader Tom Daschle. They agreed to consider the bill ‘swiftly, in a constrained fashion and with as few amendments as possible’.
The Senate leadership has been searching for a way to pass elements of the comprehensive energy bill that have broad bipartisan support after the original full bill was blocked in the Senate last November. Critics felt the original energy bill’s US$31bn price tag was too large. Opponents of the original bill also took issue with a provision that provided liability protection for producers of methyl tertiary butyl ether.
The new bill will halve the price of the original bill by reducing the tax incentives (in part by delaying implementation of most incentives until later this year) and chopping spending elements.
13 February. Canada’s federal government announced first-round funding of C$78m (US$60m) for seven ethanol projects.
The projects would use grain as a feedstock to produce ethanol and would have a combined capacity of nearly 600 000 tonne/year of ethanol, bringing the country’s total ethanol capacity to some 800 000 tonne, Canada’s Ministry of Natural Resource said in a statement.
The ministry did not state expected project-completion deadlines or individual project capacities.
16 February. Chinese Petroleum Corp (CPC) is still anxious to build a 1m tonne/year cracker to replace its older No 3 cracker, but said the issue of finding an appropriate site was continuing to delay a final decision.
A company spokesman said CPC still wanted to build the new worldscale cracker, but there had been little progress on securing a site. While government officials have said they would support the company’s efforts, CPC said it had still not seen any real moves by the state to realise the project.
She was responding to questions based on news reports that the company had finalised its scrap-and-build plan for its crackers.
16 February. Showa Denko has developed new software jointly with Toyohashi University of Technology to ensure that diversified raw materials are fed into its 600 000 tonne/year cracker in Oita, Japan, under optimum conditions to reduce costs and improve plant efficiency.
The software will be introduced at the Oita cracker in April this year, the company said.
16 February. Ube Industries has sold 13.5% of its 24.5% stake in Seibu Oil to Showa Shell Sekiyu.
The company declined to reveal the value of the stake, but said the sale would be concluded by mid-March. This will take Showa Shell’s stake in Seibu Oil to 38%.
Other stakeholders in Seibu Oil are Chubu Electric Power Co (10.79%), Hakko Kogyo (6.17%), Mizuho Financial Group (5%), Mitsui OSK (5%) Glass Co (4.94%) and others (19.1%).
Seibu Oil operates a 120 000 bbl/day refinery in Yamaguchi, Japan.
16 February. Merck KGaA announced the sale of its US laboratory distribution business, VWR International, to private equity firm Clayton, Dubilier & Rice for US$1.68bn.
In 2003, VWR generated operating profit and sales of Euro79m (US$101m) and Euro2.43bn, respectively, accounting for 11% of group operating income and 33% of group sales.
The West Chester, Pennsylvania-based unit’s 750 000 products range from test tubes to fully equipped laboratory clean rooms and biologic materials for drug development.
16 February. Merck KGaA announced a 16% increase in 2003 operating income from its chemicals division to Euro302m (US$386m).
However, the group plunged to a Euro36m net loss in the fourth quarter on legal settlements and restructuring charges in its drugs business.
The rise in chemicals profits last year was achieved despite a 4.6% decline to Euro1.70bn in sales, with organic growth of 8.7% outweighed by negative currency effects (9.9%) and divestments (3.4%).
In the fourth quarter of 2003, the chemicals division’s operating income dropped 3.2% to Euro71.9m. Divisional sales were, however, up 1.2% (14% organic growth) at Euro446m.
The proposed hike in list prices, explained Dow, would affect all low-density PE resins, high-density PE resins, Dowlex PE resins, Attane ultra low-density PE copolymers, Elite enhanced PE resins, Aspun fibre grade resins, Inspire performance polymers and all PP resins.
Dow declined to reveal the increase in percentage terms, but said that present PE and PP prices did not allow for acceptable margins under current market conditions.
16 February. Vopak will invest A$55m (US$43m) in a 113 000-m3 oil products terminal in Australia’s Northern Territory.
The terminal at the new East Arm Port of Darwin will replace existing facilities and become operational in August 2005, Vopak said.
The company had reached an agreement with major oil suppliers in the Northern Territory and the regional government on the terminal. These suppliers jointly agreed to outsource their storage operations to an independent service company, the first of its kind in Australia, Vopak said.
The Darwin terminal would re-deliver oil products mainly via tank trucks, but it would also have a rail siding to enable delivery to the mining industry in the northern region and via the new north-south rail link to Australia’s southern states.
16 February. Brazilian state-owned energy group Petrobras and US industrial gases group Praxair announced the creation of a joint venture to produce and distribute liquefied natural gas (LNG) in Brazil.
Under the agreement, Petrobras and Praxair’s Brazilian subsidiary, White Martins, will install a LNG unit in Paulinia, Sao Paulo state.
Based on White Martins’ cryogenic technology, the unit will liquefy 380 000 m3/day of natural gas and require an investment of US$38m.
The new company will supply the LNG output to distributors, industries and filling stations, mainly in the regions of Sao Paulo, Parana, Goias and Brasilia.
17 February. Thai Poly Acrylic (TPA), a publicly traded affiliate of the UK’s Lucite International, has reported a slight drop in its 2003 net profit due to the increased cost of goods and sales expenses.
In a brief statement to the Stock Exchange of Thailand, the company said it recorded a net profit of Baht66.5m (US$1.7m) compared to a net profit of Baht67.5m in 2002.
The company recorded a 3.7% increase in sales to Baht.855.39m, compared with Baht825.26m in 2003, due largely to an increase in sales.
17 February. Showa Denko (SDK) has signed a memorandum of understanding (MoU) with Trace Storage Technology to form a joint venture in which it will take an equity stake in the Taiwanese company.
Under the MoU, Trace is considering issuing new shares, which would be allocated to third parties. SDK is considering subscribing to those shares. It did not say how large an investment it is considering, and noted that the investment scheme would be finalised only after SDK had performed due diligence on Trace.
Trace is owned by the Koos Group, a Taiwan conglomerate.
The transaction will be subject to approval by the Taiwan government. Details of the transaction will be announced after final agreement is reached.
Trace, which is capitalised at US$52m, is an integrated hard-disk manufacturer which has the capacity to produce 2m hard disks a month. It also owns aluminium-substrate-producing facilities.
17 February. Showa Denko (SDK) announced a 23% rise in 2003 operating profit to Yen38.5bn (US$364.8m) on sales that rose by Yen15.4bn or around 2.5%, on a consolidated basis, to Yen689.4bn.
However, SDK’s net profit fell about 6.7% year-on-year to Yen10.3bn. SDK’s summary forecast for 2004 sees moderate gains on last year’s results, with expected consolidated net sales of Yen695bn, operating income of Yen42m, and net income of Yen11.5bn.
17 February. Shell Chemicals said it might build a new ethylene oxide (EO) and ethylene glycol (EG) facility in Singapore to replace an EO/EG line at Geismar, Louisiana, US, that will be shut down permanently at the end of the year.
The company plans to shut down an older EO/EG line at Geismar, known as the Geismar Unit-1. That facility is one of three EO/EG units Shell has at Geismar. The EO unit to be shut down is believed to have a capacity of 160 000 tonne/year. The EO scheduled for year-end closure is thought to have a capacity of 90 000 tonne/year. However, Shell officials could not immediately confirm those capacity numbers.
Shell said that, to minimise the impact of the closure on its customers, it had entered into contractual supply and ethylene tolling agreements with other producers to access extra EO and EG. It would also increase the high-purity EO-production capacity for its other two units at Geismar.
17 February. The supervisory board of Franco-German life sciences group Aventis agreed unanimously to reject the hostile takeover bid formally launched today by French pharmaceuticals rival Sanofi-Synthélabo.
Aventis’ board said Sanofi’s share and cash offer, which is valued at around Euro47bn (US$60bn) was ‘clearly inadequate’ financially.
In addition, the board said the offer entailed important social risks with limited benefits for Aventis and recommended shareholders not to accept it.
17 February. Japanese home-products maker Kao Corp confirmed today that talks to buy the cosmetics business of compatriot conglomerate Kanebo have been called off.
In a brief statement, Kao said that it received notification from Kanebo that it wished to stop negotiations to transfer its cosmetic business and that those talks have now come to an end. Officials from Kao were unable to immediately provide further details.
Kao said it found the news unfortunate as the plan for the transfer of the business was in its final stages and that it was the most ideal option for Kanebo’s shareholders, employees and customers.
17 February. Brazil’s Mining and Energy Minister Dilma Rousseff is evaluating plans to merge the activities of chemicals companies in Sao Paulo and Rio de Janeiro.
She revealed, while visiting Petroquimica Uniao (PQU) in Santo Andre, Sao Paulo, yesterday, that players in the southeast region of Brazil had submitted a proposal to create a chemicals complex.
A spokesman for Unipar, PQU’s parent company, said Rousseff was visiting PQU to discuss expansion projects, as well as a wider restructuring of operations in Sao Paulo and Rio de Janeiro.
During a meeting with industry and local government representatives, Rousseff stressed that the proposal was ‘generic’ and did not yet demonstrate the economic and technical viability of such a merger.
18 February. BP is to shut down its isopropanol (IPA) production at Baglan Bay, south Wales, on 31 March with 55 job losses.
The move will bring to an end more than 40 years of petrochemicals production at the site near Port Talbot. The firm blamed the small scale of the approximately 100 000 tonne/year IPA plant and lack of production integration for the closure plan.
BP’s business manager for IPA, Wayne Zakers, said steps were being taken to safeguard supply to customers.
18 February. Honam Petrochemical is conducting test runs on its 150 000 tonne/year No3 high-density polyethylene (hdPE) plant at Yeochun, which was shut owing to an explosion that ripped through the plant on 3 October last year, a company spokesman said.
The company restarted its No3 hdPE unit on 14 February and hopes to achieve full capacity utilisation in a couple of weeks. The estimated cost of repairs has been put as high as US$40m-50m.
18 February. Over 200 people were killed today by explosions at a derailed cargo train loaded with chemicals and other products in Nishapur, northeast Iran.
The state-owned Islamic Republic News Agency (Irna) added that at least 350 people had been injured in the explosions, which destroyed five villages. The cause of the derailment has not yet been established.
Irna said the 51-wagon train had stopped at a station, but then it moved down the line without being halted, derailing at the next station where fires broke out. The train contained sulphur, fuel oil and gas, according to Irna, though other reports said fertilisers were also being carried.
Fire service personnel tackling the blaze were among those killed by the chain of explosions.
18 February. ExxonMobil Chemical is to acquire the sales and marketing assets of BP Chemicals’ European isopropyl alcohol (IPA) business, in a move aimed at increasing its IPA sales in Europe.
ExxonMobil said in a statement that, subject to regulatory approvals, ExxonMobil Chemical would work closely with BP Chemicals to ensure a smooth and seamless supply transition. The amount ExxonMobil would pay for the business was not disclosed.
18 February. Nippon Shokubai will expand ethanolamine (EA) plant in Kawasaki, Japan, by September-October 2004, a company source said.
The source added that the company would use the routine maintenance period scheduled for this autumn to boost ethanolamine at its Kawasaki Site to 50 000 tonne/year from the current 40 000 tonne/year.
18 February. Mitsui Chemicals has experienced a delay in starting up its 300 000 tonne/year polypropylene (PP) plant in Osaka, Japan, but hopes to start up the new facility by the end of this month, a company spokesman said.
The company earlier expected to start up its PP plant either at the end of January or the beginning of February. The plant is currently undergoing extended trial runs. Mechanical completion of the project was achieved at the end of September.
The new unit will replace three of Mitsui’s PP units at the same site, which have a combined capacity of 228 000 tonne/year.
The spokesman added that the company would decide when to halt production of the three existing units after the new plant came online. Mitsui currently has five PP plants in production in Osaka. The total capacity currently stands at 371 000 tonne/year.
With the new PP plant and the scrapping of the three older units, Mitsui’s combined PP capacity would be 443 000 tonne/year in 2004, said the spokesman.
Mitsui aims to reduce its costs by US$48m through its scrap-and-build programme. It hopes to make savings of around US$42m on production costs and US$6m by trimming its logistics costs.
18 February. Dutch industrial chemicals, performance materials and life science products group DSM said yesterday it would cut about 500 jobs in support services and manufacturing staff departments at its Chemelot production complex near Geleen in southeast Netherlands.
The cuts, which represent around 21% of the 2400 manufacturing and support services jobs at Geleen in Limburg province, will be implemented over the next two years and are aimed at achieving annual savings of over Euro50m (US$64m).
18 February. Salus Shipping of Karmsund in Norway confirmed that its chemical tanker Bow Neptune had been arrested in Rotterdam, Netherlands, in a legal row over a contaminated parcel of phenol.
The 28 160 dwt Bow Neptune , which is operated by Salus and owned by subsidiary Irina, has been detained on behalf of the cargo owner pending payment of a claim that includes the cost of reprocessing the phenol.
The Norwegian flag tanker loaded about 3000 tonne of phenol in Rotterdam earlier this month together with around 13 000 tonne of other chemicals, mostly solvents, according to Solus fleet manager Geir Aarvik. The chemicals were destined for South Africa and the Far East, he said.
Aarvik said the phenol was divided into two tanks, one of which ruptured when it became overpressurised due to a vapour line blockage. Aarvik said that about 2000 tonne of phenol was contaminated when it became mixed with water in an adjacent cargo tank.
18 February. The EU said it would persist with its challenge against a US antidumping policy, which allegedly overcharges European chemical exporters, among others.
The so-called ‘zeroing’ methodology used by the US exaggerated the actual amount of dumping by companies, thus increasing the dumping liability of European exporters, according to the EU.
The EU has asked the World Trade Organization (WTO) to form a dispute panel to decide the rights and wrongs of the issue, a move that was immediately blocked by Washington.
However, a second request will be made on 19 March. The EU wants the WTO panel to examine 31 cases involving a wide range of products including chemicals, steel, pasta and ball bearings.
If the WTO rules in favour of the EU position, the EU will be able to impose retaliatory sanctions.
19 February. LG Chem has successfully developed a new high-barrier engineering plastics (EP) material named Hyperier, which the company claims is a global first, by applying nanotechnology.
EPs are high-performance plastics used as alternatives for metal hardware. Hyperier was highly durable to heat and impact, which made it ideal for automobiles and electronic appliances components by enabling them to be more lightweight and portable, the company said.
LG Chem said the product was unique in terms of its high-barrier capability of solvents, water and gas – important factors when used for automobile fuel tanks and containers for food, cosmetics and pesticides.
The shortcomings of existing barrier materials lay in the fact they required multi-layers due to low moulding ability and weakness in water. Moreover, high costs were unavoidable because of expensive moulding equipment and high error rates, the company said.
However, by applying nanotechnology to its new EP material, LG Chem had increased the barrier ability. Furthermore, its single-layer moulding capability provided cost effectiveness to processing companies by saving equipment and raw-material costs, it said.
19 February. Thai Plastics and Chemicals (TPC) is conducting a feasibility study on a new polyvinyl chloride (PVC) compounding line at its site in Mab Ta Phut, Thailand, according to a company source.
The company expects to decide whether or not to build the line in April. TPC currently produces 45 000-50 000 tonne/year of PVC compounding in ten lines. If built, the new line would have a capacity of 3000-5000 tonne/year, the source said.
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