Global roundup

29 March 2004 00:01  [Source: ACN]

Opec said it would consider delaying its production cut, and the NPRA warned about the threat to the US economic recovery of tight natural-gas supplies and high prices in the week 19-25 March. Meanwhile, Ineos scrapped its plans for a phenol plant in Thailand, and Honam won the bid for KP Chemical

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

Kingboard net profit up 57%

19 March. Kingboard Chemical Holdings recorded a 76% rise in sales and a 57% increase in net profit in its financial year to 31 December 2003, chiefly on the back of a rebound in the electronics industry.

Sales hit a record level of HK$4.4bn (US$564.6m), up from HK$2.5bn in 2002. Operating profit increased to HK$607m from HK$445m in the previous year, while net profit increased to HK$472m from HK$301m.

The company said the recovery in the electronics industry in the second half of the year helped boost its laminates output by 30% year-on-year, its single-side circuit board by 135%, and multi-layered circuit board by 40%. Total sales volumes for the company’s three main chemical products – formalin, hydrogen peroxide and epoxy resin – increased by 20%.

BAL posts 9.3% rise in net profit

19 March. Bayer ABS Ltd (BAL) saw its net profit rise by 9.3% to Rs253.4m (US$5.6m) in 2003 from Rs231.8m in the previous year, thanks to a reduction in interest on loans and a rise in investment-related other income.

Net sales rose by 13.3% to Rs3.44bn from Rs3.04bn a year earlier. Expenditure grew by 15.6% to Rs2.93bn from Rs2.53bn, while operating profit increased by 1.6% to Rs513.91m from Rs505.64m.

Interest paid on loans decreased to Rs15.2m from Rs41.4m, while other income grew to Rs13.9m from Rs10.6m.

Asahi, DIC jv to be called Sundic

19 March. Asahi Kasei Chemicals and Dainippon Ink & Chemicals (DIC) have decided to name their 50:50 biaxially oriented polystyrene sheet joint venture Sundic Inc, an Asahi Kasei spokesman said.

He said the companies might delay setting up the joint venture beyond the planned date of 1 April this year. No reason was given for the delay.

Asahi Kasei and DIC are yet to decide on the capitalisation and executive appointments for the new company.

Interest payments hit net profit

19 March. Pupuk Kaltim has reported a 174.4% increase in operating profit in its financial year to 31 December 2003 to Rp461.87bn from Rp169.0bn in 2002, but the company’s net profit grew by only 3.2% owing to a steep increase in interest expenses.

Pupuk Kaltim booked sales of Rp2660bn last year, an increase of 29.8% from Rp2050bn in 2002. Interest payments on its debt totalled Rp241.9bn in 2003, up by 194% from Rp82.64bn in 2002. As a result, the company’s net profit rose to only Rp223.38bn last year, compared with Rp216.1bn in 2002

Sanofi arranges loan for Aventis bid

19 March. Sanofi Synthelabo said it had completed the first round of syndication for a Euro12bn (US$14.64bn) credit facility to support its Euro47bn hostile offer for Franco-German rival Aventis.

Sanofi said an international syndicate of banks has been formed, led by BNP Paribas and Merrill Lynch. The other lenders are ABN Amro, Banco Bilbao Vizcaya Argentina, The Bank of Tokyo-Mitsubishi, CDC Finance-CDC IXIS of the US, France’s Natexis Banques Populaires, The Royal Bank of Scotland and Germany’s WestLB.

Sanofi cannot close its offer for Aventis until the outcome of a Paris Court of Appeal hearing on 6 May is known. Aventis is appealing against the French stock market regulator AMF’s clearance of the hostile bid. Should Aventis lose the case, Sanofi can close the offer eight days later. But if it wins, Sanofi’s offer will be declared invalid.

Polibrasil mulls site for PP

19 March. Polibrasil is considering two locations for its proposed US$220m project, the company’s president said. Jose Ricardo Roriz Coelho said the 260 000 tonne/year plant would be located either in Paulinia, close to the propylene feedstock, or in Maua, where the company already has a PP plant. Both locations are in Sao Paulo state, southeast Brazil.

‘First, we need a feedstock agreement with Petrobras, and then we will decide on the location,’ he said. If approved, the project could be completed at the end of 2007 or the beginning of 2008, he said.

Malaysians reject hardline Islam

22 March. A landslide victory for Prime Minister Abdullah Ahmad Badawi in last weekend’s Malaysian general election showed that voters overwhelmingly rejected the fundamentalist Islamic opposition, opting instead for Abdullah’s moderate policies and his promise to fight corruption.

The Islamic Party (PAS) lost control of the state of Terengganu and barely retained the state of Kelantan, which it had controlled for the past 14 years.

With the vote still being counted today, the National Front coalition had already won a two-thirds majority in the 219-seat parliament, which means that the government now has the power to pass laws uncontested by the opposition.

Honam wins bid for KP Chem

22 March. Honam Petrochemical has been chosen as the final preferred bidder for KP Chemical, a Honam source said.

KC Holdings Co, a consortium made up of a US financial institution, a Chinese company and a South Korean company, was beaten into second place. It was designated ‘preparatory preferred bidder’.

Honam will now conduct due diligence on, and price negotiations with, KP Chemical before concluding the acquisition by the first half of this year. The offered price and exact contract schedule have not yet been made public.

US DoJ withdraws amnesty

22 March. The US Department of Justice (DoJ) has withdrawn the amnesty from prosecution it granted last year to Stolt-Nielsen Transportation Group (SNTG), the world’s leading chemical-tanker operator, over alleged price fixing of deep-sea freight rates.

SNTG was granted conditional amnesty in February 2003 from prosecution and fines as part of its agreement to cooperate in a US investigation into claims of price rigging in the parcel-tanker business. The company is also cooperating with European authorities in their probe into possible collusive behaviour in the intra-European inland barge industry as well as their separate investigation into the parcel-tanker industry.

In a statement, parent company Stolt-Nielsen SA (SNSA) said the anti-trust division of the DoJ had voided its conditional leniency agreement and revoked the company’s conditional acceptance into the department’s corporate-leniency programme. SNSA’s chief executive, Niels Stolt-Nielsen, said: ‘The company fundamentally disagrees with the DoJ’s decision, and SNSA’s legal counsel will challenge it vigorously.’

Polls result sparks crisis in Taiwan

22 March. President Chen Shui-bian’s narrow election victory over his challenger from the Kuomintang (KMT) party, after an apparent assassination attempt on Chen and his vice-president on the eve of the vote, has sparked a crisis in Taiwan, with opposition leaders seeking to annul the election result.

Chen won the presidency on 20 March with a margin of fewer than 30 000 votes out of more than 13m ballots cast, or 0.22%.

In the official results, Taiwan’s Central Election Commission (CEC) said that Chen and vice-presidential running mate Lu Hsiu-lien, who is commonly known outside of the country as Annette Lu, received 6.47m votes, while KMT presidential nominee Lien Chan and his running mate James Soong of the People First Party received 6.44m votes. The turnout rate was 80.28%, the CEC said.

Chen and Lu were slightly injured by an as yet unknown gunman last Friday. A spokesman said Chen was shot in the belly and that the vice-president was hit in the right knee, and that the injuries were not life-threatening. Both were released from hospital after treatment.

The opposition has called for an investigation into the shooting and has filed a petition with legal authorities demanding a recount.

Suharto kin leads bid for Texmaco

23 March. Former Indonesian president Suharto’s son-in-law, retired general Prabowo Subianto, is to head a consortium to bid for the government’s assets in the troubled textile, chemicals and engineering group, Texmaco.

A source close to Prabowo said the consortium, which will be made up of Indonesian and Thailand investors, would submit its bid before 30 April.

Japan-China PTA jv planned

23 March. Mitsubishi Chemical, Mitsubishi Corp and Itochu Corp plan to team up with China International Trust and Investment Corp (Citic) in June to set up a 600 000 tonne/year purified terephthalic acid (PTA) plant in Ningbo, Zhejiang, China, a Mitsubishi Chemical source said.

The new company – Ningbo Mitsubishi Chemical Corp – will be capitalised at US$108m and is expected to notch up sales of US$377m by 2007. The new PTA plant is expected to start up in September 2006, with construction scheduled for completion in July 2006.

The joint venture partners submitted a feasibility study to the Chinese government earlier this month.

Opec to consider delay in output cut

23 March. The Organisation of Petroleum Exporting Countries (Opec) will consider a delay in the implementation of its 1 April production cut.

A delay will be considered – along with other proposals – by Opec’s ministers during their planned talks in Vienna on 31 March, according to Opecna, Opec’s official news service.

Petrobras acquires ICI’s C2 unit

23 March. Petrobras Energia has concluded the acquisition of a 25 000 tonne/year ethylene plant in San Lorenzo, Argentina, from ICI.

A spokesman ICI said the sale was part of the company’s strategy to focus on its speciality product and paints portfolio.

Petrobras plans to build a new 15km pipeline that will transport the ethylene produced at the San Lorenzo facility to the neighbouring city of General San Martin. In General San Martin, the ethylene will be transformed into ethylbenzene and used to increase the company’s styrene production.

Mitsui eyes PP compounding unit

24 March. Mitsui Chemicals plans to build a 15 000 tonne/year polypropylene (PP) compounding facility in Guangdong, China, a company spokesman said.

The company hopes to bring the plant onstream in March-April 2005.

Mitsui already operates a PP compounding unit and an acrylonitrile butadiene styrene compounding facility in Shanghai, China, in partnership with Mitsui & Co, Denka and Toray.

It is eyeing sales of Yen4bn (US$37.5m) from its Chinese compounding operations by 2007.

Peni cuts operating rate

24 March. Petrokimia Nusantara Interindo (Peni) has cut the operating rate of its three polymer lines to 50% of their capacity from 70% in February because of weak demand from overseas and domestic markets as well as higher ethylene feedstock costs, a company source said.

Peni has three lines with a total capacity of 450 000 tonne/year at its complex in Merak, West Java, Indonesia. Each of them is a swing unit capable of producing either linear low-density polyethylene (PE) or high-density PE.

Qenos ups op rate to 70-80%

24 March. Qenos has raised the operating rate of its 250 000 tonne/year cracker at Botany Bay in Sydney, Australia, to 70-80% from less than 50% in January, when an explosion and fire at Santos’ Moomba gas plant in South Australia led to a shortage of ethane feedstock supplies.

A Qenos spokesman said the company hoped ethane supplies from Santos would return to normal by the middle of this year. Meanwhile, he said the company had managed to ramp up its output to 70-80% by sourcing on-spec ethane.

Qenos is a 50:50 joint venture between Australian explosives and chemicals giant Orica and ExxonMobil. Its problems will not have any affect on Orica’s bottom line during this financial year since the company wrote off A$123m (US$92m) of its stake in the cracker operator to zero in its last financial year.

PetroChina’s chems lift earnings

24 March. Higher selling prices and increased volumes enabled PetroChina to report that its chemicals and marketing division recorded an operating profit of Rmb1.04bn (US$125.6m) in 2003 compared with a loss of Rmb3.16bn in 2002.

On a consolidated basis, the company recorded an operating profit of Rmb99.19bn, with about 92% of that total coming from its exploration and production business.

PetroChina’s consolidated turnover rose by 48.4% to Rmb303.78bn, while its net profit increased by 24.3% to Rmb64.61bn.

NPRA urges natgas-supply boost

24 March. A top US chemical trade group has urged the US Congress to increase the nation’s natural-gas supply as soon as possible or face extra energy costs of US$1bn over the next 20 years.

In a statement to the Senate Environment & Public Works Committee, the National Petrochemical & Refiners Association (NPRA) warned that tight natural-gas supplies and high prices ‘severely disadvantage the US refining and petrochemical industries and could hinder the economic recovery underway’.

Fair-trade issues may stall BOPS jv

25 March. Plans by Asahi Kasei Chemicals and Dainippon Ink & Chemicals (DIC) to form a biaxially oriented polystyrene sheet (BOPS) joint venture have run into difficulties with Japan’s Fair Trade Commission (FTC) over anti-monopoly issues.

A source close to the companies said the FTC’s deliberations on the joint venture might delay the establishment of the new company beyond the planned date of 1 April this year. Details of the FTC’s anti-monopoly concerns were not revealed.

Ineos scraps Thai phenol plan

25 March. Ineos Phenol is scrapping plans to build a phenol plant in Thailand and will instead expand its facility in Antwerp to 640 000 tonne/year from 450 000 tonne/year.

Its chief executive, Peter Bickert, said the ‘tentative’ greenfield project in Mab Ta Phut had been cancelled because a detailed analysis had shown it would give the company inadequate returns on investment.

India to impose ADD on China TiO2

25 March. India has recommended an antidumping duty on imports of titanium dioxide from China, the Directorate General of Antidumping (DGAD) said today.

In its final findings, DGAD recommended imposing an antidumping duty equal to the difference between US$1227/tonne and the landed value of imports.

The authority said that titanium dioxide was being exported from China below its normal value, causing material injury to the Indian industry.

The DGAD had announced its preliminary findings on 6 June 2003. The period of investigation was from 1 January 2002 to 31 December 2002.

Kao seeks wider investor base

25 March. Japanese chemicals and cosmetics maker Kao Corp has introduced an American Depository Receipts (ADR) programme to widen its foreign investor base.

A Kao spokesman said the ADRs are to be traded in the US’ over-the-counter (OTC) market. One ADR will equal 10 of Kao’s common shares.

An ADR is a US-listed stock representing a specified number of shares in a non-US corporation. ADRs are bought and sold in US markets just like regular stocks. An ADR is issued by a US Bank, consisting of a bundle of shares of a non-US corporation that is being held in custody overseas.

JP Morgan Chase Bank has been designated as the depository bank.

SIL mulls multi-purpose unit

25 March. Standard Industries Ltd (SIL) is exploring the possibility of setting up a multi-purpose hydrogenation plant to add value to its hydrogen by-product.

The proposed plant would undertake hydrogenation jobs on a contract basis from other chemical companies. SIL has not yet worked out the capacity, cost or timeframe for the implementation of what it says could be an innovative unit.

Like other chlor-alkali producers, SIL uses hydrogen partly for the production of hydrochloric acid and partly as fuel for captive power plants. It also sells some of its hydrogen output to other companies.

SIL operates a chlor-alkali plant and downstream units at Thane in Maharashtra, India. It has a combined capacity to produce 191 770 tonne/year of caustic soda, caustic potash, chlorine, hydrochloric acid, potassium carbonate and ethyl chloride. It also has the capacity to produce 23.2m cubic metres of hydrogen, 500 tonne/year of ethylene chlorohydrine, 2175 tonne/year of methyl chloroform and 600 tonne/year of vinyldene chloride.

Blue Star drops Ssangyong bid

25 March. China National Blue Star Group, a mainland Chinese chemicals conglomerate, has backed away from its bid to buy South Korean sport-utility vehicle (SUV) maker Ssyangyong Motors. It has, accordingly, been stripped of its status as preferred bidder for the company.

An official for South Korea’s Chohung Bank said that Ssyangyong’s creditors committee had stripped the Chinese company of its status after it refused to improve on its bid for the SUV maker.

The creditors, led by Chohung, are selling a 55.4% stake that they hold in Ssangyong. Blue Star beat a number of major automakers in the bidding.

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