Global roundup

01 March 2004 00:01  [Source: ACN]

The European Commission launched its pollution register and SK Corp named its nominees for the board of directors in the week 20-26 February. During the same period, IPCL’s petrochemical complex was shut after a fire broke out, and Thailand’s NPC announced plans to spend $400m on C2 and PE projects

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

PSIDC’s stake in PACL for sale again

20 February. Punjab State Industrial Development Corp (PSIDC) will again seek to sell its stake in chlor-alkali maker Punjab Alkalis & Chemicals Ltd (PACL), the company said.

The state body had tried to sell its 44.26% equity stake in PACL in 2002, but prospective bidders wanted the company to restructure financially before the submission of bids. Institutional, corporate and retail investors hold the balance of 55.74% equity shares.

In a filing to the Bombay Stock Exchange, PACL said the Punjab government’s core disinvestment officials, at a 14 January meeting, came to the view that it would be appropriate to re-invite expressions of interest and continue the process of selling PSIDC’s stake in PACL.

PACL operates two membrane cell-based chlor-alkali units at Naya Nangal in Ropar district of Punjab. The two co-located units have a total capacity of 99 000 tonne/year of caustic soda, 87 714 tonne/year of chlorine and 277.20 tonne/year of hydrogen gas. The company also has facilities to produce 39 600 tonne/year of hydrochloric acid, 2000 tonne/year of calcium hypochlorite, 990 tonne/year of sodium hypochlorite and 1000 tonne/yr of barium sulphate.

Iran’s NPC invites bids for EG project

20 February. Iran’s National Petrochemical Co (NPC) is inviting tenders for its ethylene glycols (EG) project on Kharg Island.

The plant was slated to produce 500 000 tonne/year of monoethylene glycol and 50 000 tonne/year of diethylene glycol, the company said.

Govt offers discount on IPCL stake

20 February. The federal government of India will offer its remaining 33.95% stake in the Indian Petrochemicals Corp Ltd (IPCL) at a discounted floor price to investors, starting from today.

In a submission to the Bombay Stock Exchange, IPCL said that the government had decided to fix a floor price instead of a price band, with the minimum price per share being Rs170 (US$3.75). IPCL last traded at a price of Rs194.5.

The government will offer Reliance Petroinvestments Ltd (RPIL) the opportunity to buy up to 12.4m shares – or a 5% stake – at a price per share of Rs195, in accordance with a previously conducted valuation. RPIL has three days to inform the government whether it will accept the offer, although it is assumed it will do so in order to secure majority ownership of IPCL.

Reliance currently holds a 46.03% stake in IPCL. The government will offer the 5% stake to retail and institutional investors should Reliance reject the offer.

Asahi mulls acrylic plant in China

20 February. Asahi Kasei is studying a plan to invest Yen1bn (US$9m) on the construction of a 6000 tonne/year plant to produce light guide panels based on extruded acrylic sheets at Suzhou, Jiangsu province, China, a company spokesman said.

The company is planning a startup date for September 2005. A final decision on the project will be made this September.

TRIS affirms Vinythai rating

20 February. Thailand’s TRIS Rating Co affirmed its rating of Vinythai Plc (VNT) and the rating of the company’s Baht7.40b (US$189.6m) senior secured debentures at BBB, although it cautioned that domestic oversupply of polyvinyl chloride (PVC) and market instability could pose risks.

TRIS said the ratings reflected VNT’s low-cost position as well as its capable management team and support from its principal shareholders, Solvay of Belgium and Thailand’s Charoen Pokphand Group. The ratings also took into consideration VNT’s improving cash-flow protection and the expectation of growing demand for its PVC products.

However, TRIS said the domestic oversupply of PVC and continued fierce price competition in the domestic market would limit the profit margins of Thai producers. In addition, the credit rating was negatively affected by wide fluctuations in PVC prices and margins faced by all PVC producers worldwide.

BP: No plans to sell Zhenhai stake

20 February. BP said it had no plans to divest its 9.4% stake in Zhenhai Refining & Chemical Co following a news report that indicated that the Chinese company was interested in having the international energy and chemicals major sell its stake to domestic investors.

There had also been market speculation that BP would sell its stake in Zhenhai, China’s largest refiner, following the company’s sale earlier this year of its stakes in Sinopec and PetroChina.

The international major’s stakes in the two companies were seen as equity investments and not strategic investments. However, a spokesman said BP did not view the Zhenhai investment in the same light and it did not plan to divest its stake.

BP sold its 2% Sinopec stake for HK$5.76bn (US$741m) earlier this month and its 2% stake in PetroChina in January for US$1.65bn. It had purchased the Sinopec stake for US$385m in 2000; it purchased its PetroChina stake for US$578m in the same year.

Borealis seeks PE, PP price hikes

20 February. Borealis is seeking Euro100 (US$126)/tonne hikes from 1 March in European list prices for polyethylene (PE) and polypropylene (PP).

A spokesman for the Danish-headquartered polyolefins producer said the price rises were being sought owing to margin pressure and high feedstock costs. She added that the move would help meet investment needs.

The proposed rises represent a 12% increase across the entire polyolefins range compared with average market prices.

BASF eyes styrene price hikes

20 February. BASF is seeking to increase the European prices for its styrene copolymers from 1 March.

BASF plans increases in list prices for Styrolux, Luran S, Luran, Terluran, Terlux and Terblend N by Euro100 (US$126)/tonne due to falling margins.

A spokesman said the proposed increases represent a hike of 5-10% to list prices.

SK Corp names own board nominees

23 February. SK Corp has announced its own list of nominees for six positions on its board of directors which will be open for election in mid-March.

Sovereign Asset Management, a Monaco-based investment fund which owns a 14.99% stake in SK Corp, is challenging the company’s current board with its own slate of nominees.

Two members of the current board who have been specifically targeted for removal by Sovereign, SK Group chairman Son Kil-seung and SK Corp president Kim Chang-geun, have not been re-nominated for election to the board by SK Corp.

One SK Corp nominee is Nam Dae-woo, a former outside director of Korea Gas who has also been recommended for the SK board by Sovereign. The company said it was seeking to build a constructive relationship with Sovereign by accepting an outside director and audit committee member candidate that had been suggested by the fund.

SK Corp’s nominees also include former central bank governor and ex-deputy prime minister Cho Soon; former Kookmin Bank director Oh Sei-jong; Korea Resource Economics Association chairman Kim Tai-yoo; vice-chairman of Korea Accounting Association Suh Yoon-suk; and SK Group executive director and SK Gas chief executive Shin Yoon-suk.

EC launches pollution register

23 February. The European Commission (EC) launched its long-awaited pollution register covering the EU plus Norway, but environmentalists said member states must ensure its use and development.

The European Pollutant Emission Register (Eper) provides a searchable database on emissions to air and water of 50 pollutants in 2001. The Eper database can be searched by various categories – pollutant, facility, industrial activity and member state – and includes a number of chemical plants.

Updated data are to be added to the Eper every three years by the Commission.

The register provides principal emissions and sources data as required to implement the EC’s rulings on integrated pollution prevention and control. It can be found at www.eper.cec.eu.int

Chemical tanker released

23 February. The arrest warrant against the Norwegian chemical tanker Bow Neptune has been lifted after a bond was posted, operator Salus Shipping of Karmsund in Norway said.

The 28 160 dwt tanker was arrested in Rotterdam, Netherlands, earlier this month in a legal row over a contaminated parcel of phenol.

The Bow Neptune was detained on behalf of the cargo owner pending payment of a claim that included the cost of reprocessing the phenol.

Alleged cartel firms in Brazil raided

23 February. Brazilian anti-trust officials have raided the Sao Paulo offices of five industrial and medicinal gases companies as part of an investigation.

The Justice Ministry’s anti-trust agency, the Secretariat of Economic Law (SDE), said in a statement that it carried out a search-and-recovery operation at the offices of Air Products, Aga, Air Liquide Brasil, Industria Brasileira de Gases and Praxair subsidiary White Martins.

Goods and documents were confiscated during the raid, which took place on 18 February, according to the SDE.

The SDE said the companies were being investigated on various charges, including allegations of forming a cartel and fraud in bidding for public tenders.

Nam denies accepting SK nomination

24 February. Nam Dae-woo has denied accepting a nomination by SK Corp as a company director. Nam had been nominated by Sovereign Asset Management for the same position.

SK Corp presented a list of six nominees for its board on Monday in which it named Nam. It said at that time it was seeking to build a constructive relationship with Sovereign by accepting an outside director and audit committee member candidate that had been suggested by the fund. Nam’s statement indicates that Sovereign would not be willing to accept a compromise solution to its disagreements with SK Corp.

Clariant to cut 4000 jobs in 2 years

24 February. Clariant has revealed plans to eliminate 4000 jobs over the next two years under measures aimed at improving the efficiency of its organisational structure and business processes.

The cuts, equivalent to about 15% of its worldwide workforce of around 27 000, will affect mainly general administration, infrastructure, production and the supply chain. They are aimed at extending throughout the group the efficiency improvements implemented during the second half of last year in parts of Clariant’s purchasing, logistics and production operations.

Tanker sinks, nine missing

24 February. Nine crew members were missing today after a chemical tanker, Song Mao 8, capsized off the Guangdong coast of southern China, an official with the Hong Kong Maritime Rescue Co-ordination Centre said.

The official could not provide a record of the ship’s capacity, ownership or cargo.

Clariant moves into net profit

24 February. A substantial recovery in fourth-quarter profitability enabled Clariant to report a net profit last year of SF161m (US$128m) compared with a SF693m loss in 2002.

Clariant recorded net income of SF172m in Q4 – a SF1.01bn improvement on the SF835m deficit in October-December 2002.

Fourth-quarter earnings before interest, tax, depreciation and amortisation soared by 44% to SF390m compared with SF271m in Q4 2002. Sales from continuing operations in October-December were flat at SF1.93bn.

For the full year, Clariant’s Ebit before restructuring, impairment, disposals and goodwill amortisation fell by SF29m to SF611m. Ebit after restructuring, impairment, disposals and goodwill amortisation was SF559m compared with a loss of SF250m in 2002.

Sales in 2003 were down 3% at SF8.52bn.

Iran sees $6bn petchem sales

24 February. Iranian President Mohammad Khatami said the country’s petrochemicals sector is expected to generate US$6bn in revenues in the short-term, the state-owned Islamic Republic News Agency reported.

Half of the projected revenue total would come from exports, added Khatami, without specifying the timeframe to achieve the sales target.

Khatami was speaking to a group of oil officials at the inauguration of two liquefied natural gas projects in Gachsaran.

National Petrochemical Company recently said that Iran’s petrochemical exports were expected to jump from some US$1.2bn for the year ending March 2004 to more than US$4bn in 2006.

China expects more investments

24 February. China’s chemical industry expects more investment, a Chinese industry expert said.

Speaking at the 2004 China-US chemical industry conference in Houston, Texas, US, the president of China Chemical Industry News, Hao Chang-Jiang, noted that almost all the top oil and petrochemical enterprises had invested in the country.

He said: ‘Several foreign companies – such as ExxonMobil, Shell, BP, Total, DuPont, Bayer and BASF – have injected US$16.6bn in China with another US$18bn expected over the next five years.’

China’s petroleum and chemical industries generated US$130bn in gross industrial value last year, rising 16% over 2002.

Petrochemical sales increased 24.2% to US$218bn – accounting for 14% of all Chinese enterprises revenue. Petrochemical profits of US$21bn rose by 41% over 2002 and accounted for 22% of the total income of all Chinese enterprises.

IPCL complex shut after fire

25 February. Indian Petrochemical Corp Ltd (IPCL) has shut down its petrochemical complex in Nagothane, Maharashtra, India, after a minor fire late two nights ago, the company said in a statement to the Bombay Stock Exchange.

IPCL said the fire was brought under control within half an hour of breaking out with no loss of life, although three firemen were slightly injured. Details on damage to the complex were not immediately available.

The company’s 400 000 tonne/year ethylene cracker and all of its six downstream plants were shut down as soon as the blaze broke out.

They would be restarted after a technical audit had been carried and the necessary repairs completed in about 7-10 days, IPCL said.

Mitsui’s new PP unit in final tests

25 February. Mitsui Chemicals is in the last stage of trial runs at its 300 000 tonne/year polypropylene (PP) plant in Osaka, Japan, 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. 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.

Mitsui has five PP plants in production in Osaka. The total capacity currently stands at 371 000 tonne/year. With the new PP plant and scrapping of the three older units, Mitsui’s combined PP capacity would be 443 000 tonne/year in 2004, said the spokesman.

$400m on NPC’s C2, PE projects

25 February. Thailand’s National Petrochemical Co (NPC) is planning to spend around US$400m in the next three years to boost ethylene output and add one or more downstream polyethylene (PE) plants, according to NPC president Viroj Mavichak.

The announcement followed NPC’s signing of a memorandum of understanding on 23 February with parent company PTT to increase its supply of ethane feedstock to 500 000 tonne/year from 390 000 tonne/year.

The increased feedstock supply would allow NPC to hike its ethylene output by about 400 000 tonne/year from its current level of 437 000 tonne/year, an NPC spokesman said.

She said it was not yet clear whether the company would build a separate cracker at its complex in Mab Ta Phut, Thailand, or simply construct an extra line. The plan is for the major expansion, which would take the company’s total olefins production to around 1m tonne/year, to be completed by the end of 2006.

BASF, Toray in PBT jv

25 February. BASF and Toray Industries officially announced that they have agreed to form a 50:50 Malaysian joint venture for the production of polybutylene terephthalate (PBT) base resin.

The new company, Toray BASF PBT Resin Sdn. Bhd., will build a worldscale PBT plant with a capacity of 60 000 tonne/year at BASF’s site in Kuantan, Malaysia. Construction will start in the middle of this year, with startup scheduled for the beginning of 2006. The total investment for the plant would be about US$40m, the companies said.

BASF Petronas jv to cut op rate

25 February. The BASF Petronas joint venture said it would operate its new 1,4-butanediol (BDO) plant in Kuantan, Malaysia, at less than 50% capacity from next month in response to poor market conditions.

Capacity at the 100 000 tonne/year plant, which was commissioned last month, would be cut to under 50 000 tonne for up to a year, a spokesman for BASF said.

The plant, which cost about US$100m to build, is a 60:40 joint venture with Petronas.

BASF Petronas said in a statement that customers would not be affected by the temporary capacity cutback.

Dow seeks Europe PET price hike

25 February. Dow Chemical is seeking to raise European polyethylene terephthalate (PET) prices from 1 March. The increase would be Euro100/tonne for all Lighter PET resins.

Dow Europe’s commercial director for the PET/purified terephthalic acid business, Antonello Ciotti, said the increase would represent an average of 9-10% over current prices.

DuPont cost savings on track

25 February. DuPont is on track to achieve productivity and cost savings of US$900m by 2005, the company’s top official said.

Chairman and chief executive Charles Holliday also reaffirmed the company’s 2004 earning/share estimate of US$2-2.20.

Branta Mulia to issue bonds

26 February. Indonesian nylon tyre-cord producer Branta Mulia is to issue bonds worth Rp275bn (US$32.5m) before the end of March to finance the expansion of its production facilities, strengthen its working capital and pay off its debts.

The president commissioner of Branta Mulia, Ibrahim Risjad, said the company’s plants were running at full capacity and needed to be expanded to meet demand. He did not say by how much the plants would be expanded.

Branta operates a nylon-66 tyre-yarn plant with a capacity of 22 500 tonne/year, a polyester tyre-yarn plant with a capacity of 10 500 tonne/year, and a 21 000 tonne/year tyre-cord fabric facility at Bogor, West Java.

The company also operates an 18 000 tonne/year tyre-cord fabric plant in Thailand through its subsidiary, Thai Branta Mulia Co Ltd.

TPC posts 8% rise in net profit

26 February. Thai Plastic & Chemicals Co (TPC) has reported an 8% increase in its net profit for 2003, based on stronger margins for sales of its polyvinyl chloride (PVC) materials and products.

The year saw an upward trend in PVC prices after the market calmed following the outbreak of Sars (severe acute respiratory syndrome) and the end of the Iraq War in the second quarter, TPC said. The shortage of vinyl chloride monomer in late 2003 also caused a price increase for the company’s products. 

These factors helped contribute to its Baht1.31bn (US$33.4m) net profit, up from the Baht1.22bn recorded in 2002, it said. TPC reported consolidated revenues from sales of products and services of Baht18.06bn, an increase of 13% from the previous year. Cost of sales was at Baht15.02bn, an increase of 15% from 2002.Total revenues from sales and services were 80% consisting of those from PVC and related businesses and 20% from the sales of pipe and finished products.The increased cost of sales was due mainly to an increase in sales volume and in raw-material price increase, it said.

NPC, affiliates in phenol jv

26 February. Thailand’s National Petrochemical Co (NPC) said it would enter into a joint venture with other affiliates in the PTT Group of companies to build a 200 000 tonne/year phenol plant in Mab Ta Phut, Thailand.

The project’s investment cost would be about US$200m. A 40% stake in the project will be held by PTT Pcl and 20% each by Aromatics (Thailand) Co, Thai Olefins Co, and NPC.

NPC said it would use its reserves and a loan for the project. It said the project promised a 15.6% return on investment and was expected to start commercial operations in the second quarter of 2007.

TPI Polene places funds with court

26 February. TPI Polene Pcl said it had filed a petition and deposited funds to Thailand’s Central Bankruptcy Court, in order to repay the settlement amount of debt to participating creditors under its debt-repurchase process programme.

A company source said the total amount deposited with the court totalled Baht5.4bn (US$137.8m), and indicated a discount of about 18% on the amount owed. Should the creditors accept the discounted repayment, TPI Polene would still have to resume mediation talks on the remaining US$750m in outstanding debt. The debt-mediation talks were suspended in the summer of 2003 and will resume on 26 April.

Sinopec picks BP as partner

26 February. Sinopec has chosen BP as its partner for an acetic acid project in Nanjing, China. BP will be partnering Sinopec subsidiary Yangzi Petrochemical in the 500 000 tonne/year acetic acid project. BP and Yangzi will each take a 50% stake in the project.

BP was one of two foreign companies that bid for the project. The other investor is believed to be Celanese.

Early last year, ACN reported that BP and Celanese were considering building an acetic acid facility separately in Nanjing (ACN 24 February 2003). Last March, Celanese received approval for its 600 000 tonne/year project with no mention of a local partner.

ACN was told earlier this year that Yangzi was considering whether to partner with BP or Celanese (ACN 2 February). BP told ACN at that time that it was working closely with Sinopec on a potential acetic acid project, while Celanese had declined to comment.

Celanese’s project is progressing well ahead of the BP-Yangzi joint venture.

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