19 July 2004 00:01 [Source: ACN]
From stories supplied by the CNI and ACN teams.
9 July. Chemical imports and locally made chemical products could become slightly more expensive in India owing to a 2% surcharge on customs duties, excise taxes and service taxes announced by the government yesterday.
The surcharge, or cess, to fund primary education will not, however, be levied on imports attracting customs duty at bound rates under international commitments such as Indo-US and Indo-EU textile agreements.
The education tax will provide the Indian government with Rs40bn-50bn (US$875m-1.09bn) each year. The decision to levy the surcharge was announced by Finance Minister Palaniappan Chidambaram as a part of the Budget for the year to 31 March 2005.
Changes were also made to customs duties on several chemicals. The duty on catalysts was cut to 15% from 20%. This is expected to benefit the chemicals sector, including the fertilisers and pharmaceuticals segments.
The Budget also cut the customs duty on specified textiles and garment machinery to 5% from 20%. This is expected to improve the cost-competitiveness of Indian textiles and garments exports, thereby increasing the demand for synthetic fibres and yarn.
On the other hand, the demand for polymers may suffer as the excise duty on plastic insulated ware was doubled to 16% from 8%.
9 July. SK Corp has issued Won100bn (US$86m) worth of five-year bonds, with the funds raised to be used for debt repayment.
A company official said an issue of Won30bn was taken up by SK Securities, which is a shareholder of SK Corp and the SK Group’s brokerage affiliate.
The remaining Won70bn was placed with other institutional investors, with SK Securities acting as the placement agent.
The bonds carry an interest rate of 5%/year.
9 July. Japan’s Fair Trade Commission (FTC) will rule on 18 July whether or not plans by Asahi Kasei Chemicals and Dainippon Ink & Chemicals to form a biaxially oriented polystyrene sheet (BOPS) joint venture can go ahead.
The two companies put their joint venture on hold in March after running into difficulties with the FTC over anti-monopoly issues.
The joint venture was to have been established on 1 April. Details of the FTC’s anti-monopoly concerns were not revealed.
9 July. China is expected to import more liquid caustic soda in the next two years because of power shortages, logistical problems and growing domestic demand, a chemical industry analyst said.
Eddie Kok, a consultant for chlor-akali and vinyls at CMAI, said China started importing the product for the first time in the third quarter of 2003. Its imports in the first quarter of this year totalled 15 000 tonne, compared with exports of 9000 tonne.
‘The import-export volume disparity will continue to widen gradually, at least until the end of 2005,’ Kok said.
Imports were increasing partly to meet the rising demand from the local pulp and paper industry, he said. Also, widespread power shortages had helped suppress domestic caustic soda output, raising the country’s reliance on imports.
But the impact from the power problem may be reduced after 2005 when more new power plants were due to be commissioned, Kok said.
The fragmented Chinese caustic soda production market also played a part in the increasing imports, he said. China had more than 60 small caustic soda production plants in various parts of the country, but the supply chain to some end-users was restricted by logistics problems. Also, some of these plants had export sales commitments and others did not have access to ports, he added.
9 July. The European Chemical Industry Council (Cefic) revealed plans for a further series of pilot projects designed to test the workability of Reach, the EU’s proposed new chemical registration, evaluation, and authorisation policy.
Under the name Strategic Partnership for Reach Testing (Sport), and co-organised with the European Commission (EC), the pilot projects have been scheduled to begin at the end of August or early September.
They will go further than a North Rhine-Westphalia, Germany, pilot, which identified practical problems associated with Reach implementation as well as general confusion over the requirements of the proposed scheme.
A final Sport report will be published in mid-2005. Interim findings will be publicised as they become available.
Cefic plans to include up to 15 substances or categories of substances in Sport as they are used in a wide range of products. These will include chemicals in paints, coatings, detergent formulations, fuel additives, textiles and the photographic industry.
By covering a wide range of chemicals, Cefic hopes to gain a practical understanding of the sort of difficulties that might be encountered in a variety of situations.
Manufacturers, importers and downstream users will take part in testing the workability of the pre-registration, registration, and compliance processes of Reach.
They will be free to work either individually or to form voluntary industry consortia. The manufacturers or importers will also be required to communicate all relevant information down the supply chain.
A steering committee drawn from industry, the EC and others will oversee the projects and report to the EC’s working group on the practical preparation for Reach. Cefic, which will provide the secretariat, said it would provide ‘a very significant contribution’ to the funding of the project. Observers will be trade unions, other non-governmental organisations and the European Chemical Regions Network.
9 July. The planned signing of a contract between Linde and OAO Novatek for a natural gas-to-petrochemicals complex in Samara, about 800 km south-east of Moscow, Russia, failed to take place during a visit to Russia yesterday of German Chancellor Gerhard Schroder.
However, Linde expressed optimism that the project, to be coordinated by its east German subsidiary Linde-KCA Dresden, would still go ahead, albeit with delays.
‘Our goal is to sign the contract this year,’ said a Linde spokesman.
Linde-KCA Dresden has already carried out feasibility studies and an application was made earlier this year to German agency Hermes for an export-credit guarantee. The application process, however, had yet to be completed, said the Linde spokesman.
12 July. Cosmo Films has posted a net profit drop of 74.5% to Rs23.5m (US$515 580) in the first quarter of its financial year to 30 June 2004 from Rs92.1m in the same period of the previous year.
The sharp fall was triggered by a decline in operating margins, an increase in depreciation charges and a decrease in investment-related other income.
Cosmo attributed the squeeze on operating margins to a steep decline in selling prices and an increase in raw-material prices. Profitability was also affected by the initial stabilisation cost of a new BOPP line and extrusion-coatings line commissioned in March.
The company increased net sales by 6.5% to Rs924.3m from Rs867.7m in Q1 2003-04. Expenditure grew by 16.3% to Rs799.7m from Rs687.6m, while operating profit fell by 30.8% to Rs124.6m from Rs180.1m.
12 July. PTT Pcl has agreed with affiliate National Petrochemical Co (NPC) to form a 50:50 joint venture to build a US$400m, 400 000 tonne/year cracker in Mab Ta Phut, Rayong, Thailand, but the viability of the project was still under consideration, a NPC spokesman said.
This is despite a blueprint for the future of the Thai petrochemical industry recommending that another naphtha cracker should not be built in the country. The Petroleum Institute of Thailand, a research institute, had drawn up the blueprint, a final draft of which was submitted to the Ministry of Energy on 23 June.
12 July. Gail (India) is pressing ahead with plans to build a styrene butadiene rubber (SBR) plant in Haldia, West Bengal, India, after a market survey by consultant Lurgi India reportedly gave a positive picture on domestic demand for SBR.
Gail appointed Lurgi to prepare a detailed feasibility report on the project; the report is likely to be ready by the end of October.
Based on the report’s findings, Gail is expected to prepare an investment proposal to seek the approval of its board of directors, with final investment approval likely to be given in the first quarter of 2005.
Gail is proposing to build a 100 000 tonne/year SBR plant as a joint venture with Haldia Petrochemicals Ltd (HPL). The plant will procure75 000 tonne/year of butadiene from HPL and supplement the balance of its feedstock requirements through imports.
12 July. TPI Polene posted a 57.5% drop in net profit to Baht486m (US$11.9m) in the second quarter of its financial year to 30 June 2004 from Baht1.14bn in the same quarter of 2003, largely as a result of a Baht755m hit in foreign exchange losses.
The company said in a statement to the Stock Exchange of Thailand that its Q2 operating profit was up 43.3% to Baht701m, from Baht 489m a year earlier. Consolidated sales were up by 10.7% to Baht5.13bn, from Baht4.63bn.
12 July. ABB has completed the sale of its upstream oil, gas and petrochemicals business to an investor consortium.
The US$925m-975m sale was subject to regulatory approvals as well as the satisfactory completion and disposition of compliance matters. These conditions had been fulfilled, said ABB.
It confirmed that, on top of the US$925m sale price, ABB stood to receive up to an extra US$50m depending upon 2004 profits.
12 July. Texas Petrochemical (TPC) announced that the services of president and chief executive Carl Stutts, chief financial officer Joseph Grady, and senior vice-president and legal counsel Stephen Wright had been terminated and the officials were no longer with the company.
The brief statement gave no reason for the sacking of the officials.
Stutts was named chief executive in April last year, two months before the company sought protection from creditors under US Bankruptcy Law. The company emerged from bankruptcy protection in May this year.
In a separate statement issued with notice of the terminations, TPC said Charles Shaver had been elected president and chief executive of the company, and that Frederick Pevow, interim senior vice-president, would be the new chief financial officer.
Company officials were not available to say when a replacement for Wright might be named.
13 July. Chinese polyester trade associations are expected to appeal within the next few months against possible anti-dumping duties to be imposed by the EU on Chinese synthetic filament yarn imports, a Hong Kong government official said.
The EU is carrying out a 15-month long investigation, which started on 17 June, into a complaint by the International Association of Users of Artificial and Synthetic Filament Yarns and of Natural Silk on behalf of EU polyester filament apparel fabrics producers, according to the official from Hong Kong’s Department of Trade and Industry.
13 July. Methanex has signed an agreement with Bridge Petroleum and Westech Energy to finance the drilling of two wells in central Taranaki, New Zealand, in an effort to boost gas supplies to its nearby methanol operations in Motonui and Waitara, a company spokesman said.
The company will have exclusive rights to purchase any gas from the Radnor-1 and Radnor-2 wells. Drilling work will start next month and the wells should come into production in the first half of 2005. Methanex did not say how much extra gas it expected to find or how much it was investing in the exploration.
13 July. Three Mitsui companies, including Mitsui Chemicals, have signed a Yen25bn (US$230.0m) contract with National Petrochemical Co (NPC) to build a 300 000 tonne/year high-density polyethylene (hdPE) plant in Ilam, Iran.
The hdPE plant will be built for NPC subsidiary Ilam Petrochemical Co under a technology licence for Mitsui Chemicals’ proprietary production process. Construction is expected to start in April 2005, with completion scheduled by December 2007.
The other Mitsui companies involved in the bid were Mitsui Engineering & Shipbuilding (MES) and Mitsui & Co. MES will form a consortium with Iran’s Energy Industries Engineering & Design Co to procure equipment and carry out the construction work.
The project will be funded by export credit from the Japan Bank for International Cooperation.
13 July. A total of 19 vessels that arrived in Singapore without the security clearance required under the newly introduced Maritime Transportation Security Act were subjected to stringent inspections over the past 12 days, although none of them had been detained, a spokesman for the Maritime and Port Authority of Singapore said.
The spokesman said 2060 vessels had arrived in Singapore since 1 July, when the new International Maritime Organisation security measures came into force, but fewer than 1% of these had been unable to show the port authorities the International Ship Security Certificates (ISSCs) required of them under international maritime law.
The offending vessels were flagged mostly in Panama, Liberia, Honduras and Bolivia.
13 July. The Chinese government has been slow to approve Tosoh’s 110 000 tonne/year polyvinyl chloride (PVC) plant project in Guangdong, Guangzhou province – possibly because it was regarded as being too small, a Tosoh spokesman said.
Tosoh had yet to receive Chinese government approval for its Yen40bn (US$368.3m) PVC project, even though construction was slated to begin in Q3 this year, the spokesman said. It may have to postpone its scheduled commercial production date of May 2006 if the project does not start on time.
13 July. CVRD and its partners have agreed to build, in Shandong, China, a metallurgical coke plant that would also, as a by-product, make 200 000 tonne/year of methanol.
CVRD, or Companhia Vale do Rio Doce, said the project was expected to start-up in 2006. It said its partners in the project were Itochu and Chinese coal-producer Yankuang. The plant will produce 2m tonne/year of coke. It will be based on a German coke facility that was bought by Yankuang and will be rebuilt in Shandong.
The total project investment cost is US$275m.
13 July. Sasol was due to complete the expansion of its vinyl chloride monomer (VCM) plant in Sasolburg at the end of this year, a spokesman for Krupp Uhde said.
The expansion would raise the plant’s capacity to 205 000 tonne/year from 165 000 tonne/year, he said.
The spokesman said Krupp Uhde was undertaking all the engineering, procurement and construction-management work.
The value of the contract was not disclosed.
13 July. German engineering group Zimmer said it had won a turnkey order from Reliance Industries (RIL) to build a polyester staple fibre (PSF) plant in Hazira, Gujarat, India.
Zimmer, which is part of the MG Technologies group, said the continuous polycondensation plant and staple fibre lines would have a design capacity of 210 000 tonne/year.
The value of the contract was not disclosed, but Zimmer said it would cover technology, basic engineering and equipment, construction supervision and commissioning.
14 July. Reliance Industries Ltd (RIL) has become the first private-sector company from India to be ranked among the world’s top 500 companies.
The company said it had been ranked 189th in terms of profits in the 2004 Fortune Global 500 list of the world’s largest corporations, with profits of US$1.12bn.
RIL was ranked 259th in terms of stockholders’ equity with US$7.93bn, 377th in terms of its assets which were valued at US$16.38bn, and No 482 in terms of revenues with US$11.32bn.
14 July. The chairman of Petronas, Azizan Zainul Abidin, has died, Petronas said in a statement.
Petronas said Azizan died early this morning at his home in Putrajaya. The group did not give the cause of death.
Azizan was appointed chairman of Petronas in 1995, having served as the group’s president and chief executive since 1988.
14 July. Management at Kolon Industries has opened talks with union leaders to try to end a 21-day strike that is threatening the company’s restructuring plans, a company source said.
More than 1200 workers at the company’s plant in Gumi are striking against management plans to re-engineer its older polyester yarn facilities and to focus on value-added yarn products and electronic and industrial materials.
The strikers are also seeking a 6% wage increase, a guarantee that over 200 workers will not be retrenched as a result of the restructuring, and an improvement in the working conditions of temporary employees.
14 July. LG Chem’s management and labour union agreed on a new employees’ benefits package late last night, averting a possible strike, a company official said.
No details of the package were available.
Last year, four LG Chem processing plants were hit by a 15-day strike after both sides failed to agree on the employees’ wage demands. The company employs about 12 000 workers.
14 July. Plans by Huntsman to build a new polyethylene (PE) plant in Wilton on Teesside in northeast England have received a major boost with the successful extension by subsidiary Huntsman International of its existing credit facilities.
Huntsman International said it had completed the amendment of its senior secured credit facilities to provide for a US$375m revolving credit facility through 30 September 2008. It had also secured agreement to borrow an extra US$125m, bringing the outstanding amount under the term-loan facility to US$1.365bn, and to extend the term to 31 December 2008. Huntsman added that the term might be extended to end-2010 if certain conditions were met.
14 July. Yukos said it had agreed to pay about US$1.25bn-1.30bn this month towards its 2000 tax bill of Rouble99.4bn (about US$3.4bn).
In a brief statement issued a week after it was ordered by the Court of Arbitration in Moscow to pay the Rouble99.4bn immediately, Yukos said it would be willing to make extra payments over a reasonable period of time by increasing debt or disposing of some assets if permitted by the court.
Yukos, which has had most of its assets and bank accounts frozen, confirmed that it had attempted to resolve back tax claims with an US$8bn global settlement offer to the Russian government. Besides the US$3.4bn tax demand for 2000, Yukos faces a similar judgement for 2001 and has been warned that it could face extra tax demands for 2002 and 2003.
14 July. ExxonMobil and the government of Qatar have agreed terms for a US$7bn gas-to-liquids (GTL) project that would be the largest such facility in the world.
Under the agreement, ExxonMobil will design, construct and perform all operations in connection with the 154 000 bbl/day project. About half of the plant’s production will be sulphur-free diesel, 20% will be lube base stocks, and the remainder will be naphtha and other associated products.
ExxonMobil’s spokesman in Houston, Bob Davis, said it was too soon to say how the naphtha produced by the project would be marketed. The plant will also produce 6 000 bbl/day of paraffin and 58 000 bbl/day of ethane.
The facility would be built in Ras Laffan. The agreement, known as a heads of agreement, specifies the main terms of the project. Details will be further defined in a development and production sharing agreement (DPSA). Davis could not say when a DPSA might be signed.
15 July. Hyosung has increased its stake in Capro Corp to 24.9% from 20.03% after a rights issue and its earlier purchase of Kohap’s stake in the caprolactam maker.
It initially raised its stake to 27.47% after buying out the 7.44% stake held by Kohap. But its stake fell to 24.9% after Capro shareholders exercised their warrants and new shares were issued to Capro employees. Capro employees will have a 20% share after the right issue.
15 July. BASF Korea is shutting its petrochemical units in Yeochun, South Korea, owing to a union workers’ strike that started yesterday, a company spokesman said.
The workers went on strike over a demand for a new employees’ benefits and pay-rise package.
BASF, which has a total of 323 workers, produces 100 000 tonne/year of methylene di-p-phenylene isocyanate, 80 000 tonne/year of nitrobenzene, 140 000 tonne/year of toluene diisocyanate, and 60 000 tonne/year of aniline at its Yeochun plant.
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