16 August 2004 00:01 [Source: ACN]
From stories supplied by the CNI and ACN teams
6 August. Announcing that negotiations on the Indo-Thailand free trade agreement were complete, India’s commerce minister, Kamal Nath, said the first phase of the agreement, involving halving import duties on some 82 items, would be implemented from 1 September this year.
The duty would be further halved next year and reduced to zero from September 2006. The reduction in duties on other goods would happen in phases thereafter and the comprehensive, duty-free regime implemented by 2010.
Initially, the number of items listed for the early-harvest scheme was 84. But two items were pulled out from the list – polypropylene and polyethylene terephthalate, both of which are made by Reliance Industries in India – at the insistence of Thailand.
6 August. Singpu Chemicals’ interim H1 net profit rise did not match the stronger revenue growth because of high raw-material costs, the company said.
The company’s net profit grew by 32% year-on-year to S$12.6m (US$7.3m). This was weaker than the revenue hike of 44% to S$90.7m. The robust revenues were attributed to strong caustic soda and chlorine sales growth, and an increase in aniline exports.
Singpu’s chief executive officer, Chan Hian Siang, said an increase in the cost of raw materials, such as benzene, salt and electricity, ate into the company’s net profits.
6 August. Kolon Industries is at a disadvantage in the battle with Hyosung to gain control of electronics maker Orion Electric, an industry source said.
The source said Hyosung was in a better cash position to acquire Orion, which had an estimated value of Won300bn (US$257m). Last year, Kolon registered a net loss of Won68bn on sales of Won1250bn, while Hyosung posted a net profit of Won50.8bn on consolidated sales of Won4220bn.
Separately, a Kolon source said the company was interested in buying Orion as part of its own electronic materials-focused growth strategy.
6 August. Indian Rayon and Industries Ltd (IRIL) plans to expand the capacity of its chlor-alkali plant in Veraval, Gujarat, India, to 57 725 tonne/year from 41 975 tonne/year.
The company also plans to expand the capacity of its captive power plant by 18mW, to 34.5mW.
The total investment in the two projects is estimated to be around Rs1bn (US$21.5m). The company did not indicate the start-up dates.
6 August. Aker Kvaerner announced that it had won contracts with a combined value of about US$93m to build two sulphuric acid plants.
Under the first contract, Aker Kvaerner will build a second sulphuric acid plant and effluent treatment facility at Southern Peru Copper Corp’s smelter in Ilo, Peru. The lumpsum contract, which covers complete design, supply, erection and commissioning, is valued at about US$59m.
The new 3760 tonne/day (1.24m tonne/year) Ilo plant is required to capture off-gases from the smelter, which is also being modernised to comply with Peruvian environmental regulations on plant emissions.
In the second contract, Aker Kvaerner’s Chemetics division in Canada will build a 3850 tonne/day (1.27m tonne/year) single-train metallurgical sulphuric acid plant for copper producer JSC Kazakhmys Corp in Balkhash, Kazakhstan.
The lumpsum contract covers plant design, equipment supply and erection and commissioning technical assistance. It is valued at more than US$34m.
It was not immediately known when the two projects would be completed.
6 August. Wellman said its board had approved plans to add 661 200 tonne/year of extra polyethylene terephthalate (PET) resin capacity to its Pearl River, Mississippi, US, facility in the 2006 first quarter on strong demand.
The company said the expansion would cost US$50m. The added capacity will bring Wellman’s total US PET resin capacity to about 3.5m tonne/year.
9 August. At least four people have been killed in the deadliest accident to hit a Japanese nuclear-power plant. Seven people were also injured, after steam leaked from a turbine at the Mihama plant in Fukui prefecture.
Officials insisted that no radiation leaked from the plant, and there was no danger to the surrounding area. An official from Japan’s Nuclear and Industrial Safety Agency said that ‘about ten people suffered burns’ from the steam leak.
Kansai Electric Power Company, which operates the Mihama plant, said it had stopped power generation and was still investigating the cause of the accident.
9 August. Workers at LG-Caltex Oil have started returning to work after calling off their 18-day strike on 6 August.
The union representing the workers agreed to call off the strike shortly before the expiry of a deadline set by the company. LG-Caltex could have taken disciplinary action against the workers after the 15th day of the strike, including the sacking of staff.
9 August. Tamilnadu Petroproducts Ltd (TPL) is scheduled to start up its linear alkyl benzene (LAB) expansion project at Manali near Chennai in Tamil Nadu, India, by January 2005.
The Rs400m (US$8.6m) project was earlier planned for completion by April 2003. The project will increase TPL’s nameplate capacity to 120 000 tonne/year from 95 000 tonne/year.
9 August. Mitsubishi Chemical’s net profit for the fiscal first quarter ended 30 June more than doubled to Yen16.3bn (US$147.8m) from Yen7.95bn a year earlier, driven by a surge in the company’s sales of petrochemical products.
The company’s petrochemicals division recorded a more than twelve-fold jump in operating profit to Yen10bn, up from Yen799m a year earlier. The division’s sales increased by 10.5% to Yen200.03bn. The company said the increase was due to restructuring and increased polyolefin sales volumes, which were boosted by both capacity and demand increases.
The company noted that its joint venture with South Africa’s Sasol started shipments in April and it started up an expansion of its Kashima aromatics facility in May.
On a consolidated basis, the company’s operating profit rose by 80.1% to Yen32.35bn, while sales increased by 7.8% year-on-year to Yen497.76bn.
9 August. Pertamina is considering taking on an overseas or local partner to invest in improving the performance of its 225 000 tonne/year purified terephthalic acid (PTA) plant in Plaju, South Sumatra, Indonesia, a company official said.
The official said the PTA plant’s performance had been disappointing since its start-up in the mid-1990s, and its output had rarely met its nameplate capacity.
The Plaju plant has shut down frequently as a result of competition from new PTA players, and it has also had numerous shutdowns caused by mechanical troubles or feedstock shortages.
The official said Pertamina was studying a number of proposals from potential investors to improve the plant’s performance by installing new equipment.
9 August. Sumitomo Chemical announced a 64% rise in fiscal first-quarter group operating profit to Yen24.13bn (US$219m) from Yen14.67bn in the same period a year ago.
Group consolidated sales in the three months ended 30 June increased by 15% to Yen2999bn from Yen2606bn. Group net profit more than doubled to Yen16.71bn from Yen7.26bn.
The IT-related chemicals segment boosted operating profits more than five-fold to Yen6.98bn. Sales rose by 59% to Yen39.91bn from Yen25.11bn owing to robust demand for liquid crystal display colour filters and polarising film.
Operating profit in the petrochemical and plastics segment, however, fell by 38.6% to Yen575m from Yen938m a year ago as high feedstock costs, particularly that of naphtha, undermined margins. Sales revenue grew by 26.3% to Yen91.87bn from Yen72.74bn, largely as a result of increased product prices.
The basic chemicals division boosted operating profit by 42% to Yen1.02bn on sales up by 11.5% to Yen53.95bn. Sumitomo said the increase in turnover was fuelled by rising methyl methacrylate sales, higher market prices for caprolactam, and increased shipments.
Operating profit from the fine chemicals division soared by 64% to Yen2.63bn on the back of steady growth in pharmaceutical intermediate sales as exports increased. Overall sales of fine chemicals, however, were flat at around Yen20bn.
Operating profit from the pharmaceuticals business was also up by 50%, to Yen9.86bn. Revenues rose by 4.7% to Yen42.65bn from Yen40.73bn owing to solid sales from new hypertension and antibiotic drugs.
9 August. Sipchem said it had signed the final agreement to license DuPont’s technology for its new vinyl acetate monomer plant in Al-Jubail, Saudi Arabia.
Under the deal, for which financial details were not disclosed, DuPont will also provide technical assistance to Sipchem for the 300 000 tonne/year unit.
9 August. Praxair has struck a deal with the China National Offshore Oil Corp (CNOOC) and Shell Pet- rochemicals’ joint venture CSPC to supply oxygen and nitrogen requirements for CSPC’s new US$4.3bn petrochemical complex in Daya Bay, China.
Under the pact, Praxair will supply high-purity oxygen and nitrogen from two new air-separation units that will be built next to the CSPC site in the centre of the Petrochemical Industrial Park in Huizhou in Guangdong province.
Praxair did not disclose the length or the value of the contract. The supply of the products is scheduled to begin in May 2005.
10 August. Indian Farmers Fertiliser Cooperative (Iffco) is willing to buy a 52.2% equity stake in Southern Petrochemicals Industries Corp’s (SPIC’s) phosphoric acid joint venture in Jordan if the price is right.
Sources familiar with the proposed sell-off said Iffco was awaiting a due-diligence report from financial adviser Ernst and Young on the venture, after which it would firm up its valuation of the Indo-Jordan Chemicals Co.
10 August. Schenectady Herdillia Ltd (SHL) is to raise Rs507.6m (US$10.9m) from its existing shareholders to repay its debt and improve its debt-to-equity ratio.
The company is awaiting approval of its draft offer document from the Securities and Exchange Board of India.
The rights offer envisages an issue of 18.13m Rs10 shares at a premium of Rs18/share to existing shareholders in the ratio of three equity shares for every four equity shares held.
10 August. Saudi Arabia has published rules for forthcoming municipal elections that observers say hold out the possibility that women may be allowed to vote.
The new law approved by the municipal affairs ministry does not explicitly say women may play a part in council elections starting in November.
But neither are women clearly barred. Some say this means women may vote, though others maintain this is unlikely. Saudi women are not allowed to drive or travel without a male chaperone.
10 August. Talks between the management of Yeochun National Cracker Centre (YNCC) and its unions, aimed at resolving a long-running industrial dispute, are going well and the company’s workers are unlikely to take any industrial action.
The company’s union workers voted on 23 July in favour of taking strike action, but have since remained at work. A company official said the strike vote was considered a normal part of the bargaining process, adding that talks were likely to be concluded soon.
10 August. Tasco Chemical is not expected to make any changes at Tuntex Petrochemical in the short term despite having bought a majority share in the latter on 31 July, a Tuntex Petrochemical official said.
Tasco bought a 53% stake in Tuntex Petrochemical for NT$2.409bn (US$70.4m), even though there is no obvious synergy between the two companies. Tasco produces methyl tertiary butyl ether, methyl ethyl ketone, and maleic anhydride, while Tuntex manufactures purified terephthalic acid.
10 August. Tuntex Petrochemical has postponed the expansion of its purified terephthalic acid (PTA) plant in Taoyuan, Taiwan, because of the weak PTA market outlook, a company official said.
The company had planned to increase the capacity at its 440 000 tonne/year PTA plant to 540 000 tonne/year next year, but ‘the expansion is not expected to take place until after 2007’, the official said.
10 August. Showa Denko posted a 38.4% rise in operating profit for the first half of 2004 over the same period last year, with the increase driven by cost savings and restructuring.
The company recorded an operating profit of Yen22.23bn (US$200m) in the period on net sales of Yen348.28bn, which were up only 0.8% from the same period a year earlier. Part of the reason for the flat sales was its exit from several business lines since the corresponding period in 2003.
Ordinary income rose by 54.2% to Yen16.22bn, while net income was up 66.2% at Yen6.38bn.
10 August. The US Federal Reserve voted to raise the key federal funds interest rate by 25 basis points to 1.5%, saying the US economy ‘appears poised to resume a stronger pace of expansion’.
The US central bank said that, despite the quarter-point rate increase, it believed its monetary policy remained accommodative and, along with ‘robust underlying growth in productivity, was providing support to economic activity’.
10 August. Ube Industries’ operating loss in its chemicals and plastics division in Q1 of fiscal 2004-2005 rose to Yen700m (US$6.3m) from Yen600m in the same period last year.
This was despite a 2.4% increase in sales to Yen37.7bn from Yen36.8bn a year ago. A company spokesman said that, while sales and prices of caprolactam and synthetic rubber were up, they were offset by higher raw-material costs.
Nevertheless, Ube’s speciality chemicals and products division increased its Q1 operating profit by 68.2% to Yen 2.2bn from Yen 700m a year ago. The division accounted for 76% of the company’s consolidated Q1 operating profit, which rose to Yen2.88bn from Yen1.09bn a year earlier.
10 August. Siam Cement Co (SCC) has made a mandatory tender offer for all shares of National Petrochemical Co (NPC) that it does not already own.
Under the rules of Thailand’s Securities and Exchange Commission, an investor must make an offer for all shares in a company after acquiring a stake of 25% or higher in it.
SCC said that its stake in NPC rose from 24.97% to 27.47% after it took over the majority share in Thai Plastics and Chemicals, which owned a 2.5% NPC stake.
It is offering Baht77.6 (US$1.87) per NPC share, well below the current Baht94.5/share trading price.
11 August. Nihon Oxirane Co (NOC) is considering reducing the operating rate at its 200 000 tonne/year propylene oxide (PO) unit in Chiba because of poor margins, a company official said.
NOC had already cut some supplies to its Chinese customers because of high freight rates, he said. It exports about 20%-25% of its monthly output to China.
‘We’re just breaking even right now because of the high cost of naphtha and benzene,’ he said. He declined to specify the exact volume cut to China, but he said the supply to China would be further reduced if the operating rate at the PO unit was cut in the near term.
11 August. PTT Pcl aims to complete a proposed merger between affiliates National Petrochemical Co (NPC) and Thai Olefins Co (TOC) in 2005.
A PTT official said the merger was being considered by management officials at the three companies, and it was likely to be voted on by shareholders by the end of this year or in early 2005.
Another PTT official noted that approval by the boards of the three companies would not necessarily mean a merger could go through, as the proposal would require a strong endorsement by most of the shareholders of TOC and NPC.
PTT, which owns 44% of TOC and 38% of NPC, is the largest single shareholder in both companies.
11 August. Indian Oil Corp (IOC) is expected to receive approval from its board of directors to appoint process licensors, technology providers and other contractors for its proposed naphtha-based olefins complex in Panipat, Haryana, India, by the end of August.
The company has already selected ABB Lummus as the process licensor for its cracker. It has also selected process licensors for a number of downstream units. But company officials are reluctant to disclose the names of prospective technical collaborators pending board approval.
11 August. The board of directors of Aromatics (Thailand) Co (ATC) is likely to approve a plan to build a new aromatics plant at the Mab Ta Phut petrochemical complex in Rayong, Thailand.
An ATC official said approval for the proposed plant – which would produce around 500 000 tonne/year of paraxylene (PX) and 300 000 tonne/year of benzene – was likely because of the expected tightening of PX supply in the country.
ATC expects Thailand to face a PX supply deficit of 512 000 tonne by 2006 owing to new purified terephthalate acid production capacities coming onstream.
The new plant, which would come onstream in H2 2008, would cost about US$650m, the official said.
11 August. Strong demand and higher prices for its polyethylene and polypropylene products outweighed increased feedstock costs in April to June, enabling Borealis to more than double operating profit to Euro49m (US$60m), from Euro19m in Q2 last year. But higher raw-material costs meant they fell Euro7m short of Q1 earnings.
Net income soared more than eight-fold to Euro34m from Euro4m in Q2 last year on sales up 19% at Euro1.13bn.
12 August. Mitsubishi Rayon Co (MRC) is to invest Yen1bn (US$9.0m) in its Thai operations to expand its methyl methacrylate (MMA) output and to build a new butyl methacrylate (BMA) plant, a company spokesman said.
Through its affiliate, Thai MMA, Mitsubishi Rayon is planning to debottleneck its MMA plant in Mab Ta Phut by 15 000 tonne/year to 85 000 tonne/year by the end of this year.
Construction work on the company’s new 10 000 tonne/year BMA plant at the same site is expected to start in November this year, and the unit is expected to come onstream in the first quarter of 2005.
All of the new MMA and BMA capacity will be sold in the Thai market.
12 August. Royal Dutch/Shell has reached a preliminary agreement to unify its two boards and has hired bankers to assess the feasibility of merging its Dutch and British holding companies.
The move, advocated by several members of Shell’s steering committee, exceeded investors’ expectations, said the Financial Times. Most investors, the paper said, had expected the group to, at most, unify its Dutch and UK supervisory boards.
The advocates of reform are pushing for a total restructuring, including a full merger, to restore the company’s credibility after it had overstated its reserves earlier this year. The company is also under pressure because it lags its peers in finding and producing oil and natural gas.
Any formal decision about the unification would need the vote of both boards and an agreement at next year’s annual general meeting.
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