31 January 2005 00:01 [Source: ACN]
From stories supplied by the CNI and ACN teams.
21 January. Xpro India has sold one of its two biaxially oriented polypropylene (BOPP) units to Texpro Films, its joint venture with Finland’s AB Rani Plast and Rani’s Slovakian joint venture Terichem.
The sale of the 2500 tonne/year unit in Pithampur, Madhya Pradesh, India, for Rs287m (US$6.56m) was confirmed on 19 January.
Xpro bought the unit from Supreme Industries for Rs140m in 2002, and is expected to book a handsome profit from the sale in its October-December 2004 results.
Xpro has a 50% stake in Texpro, with Rani Plast and Terichem holding the remaining 50%. Texpro will produce international-grade specialised capacitor films at the unit and market them to the electronics industry in India and abroad under the Tervakoski brand.
Rani Plast manufactures plastic films and has annual sales of Euro118.2m (US$152.96m). It has eight wholly owned and partly owned companies in Finland, Norway, Slovakia, Sweden and Ukraine.
21 January. The start-up of new polyvinyl chloride (PVC) capacities in China in the second half of 2004 is expected to trim the country’s reliance on imports this year, said local industry observers.
China started up at least 500 000 tonne of new capacity last year, most of which were brought onstream in the second half of the year.
They include Qilu Petrochemical’s expansion of its 230 000 tonne/year plant in Zibo, Shandong, to 600 000 tonne/year and Shandong Bohui’s 120 000 tonne/year expansion of its 80 000 tonne/year plant, also in Shandong.
China imported 2.29m tonne of PVC in 2003. Although the import volume for 2004 has not been released, the industry observers expect the volume to remain stable or lower from 2003.
Besides the capacity hike in 2004, China will start up more new capacities this year.
Formosa Plastics Corp is to start up its 300 000 tonne/year plant in Ningbo, Zhejiang, before the Lunar New Year in February, and Shanghai Chloralkali Chemical Co is scheduled to bring onstream a 120 000 tonne/year plant in Ningxia in the middle of this year.
21 January. Reliance Industries posted a net profit hike of 52% for the third quarter of the financial year ending 31 March 2005, much higher than the hike of 40% predicted by analysts.
The company recorded Rp20.91bn (US$478.92m) for its October-December net profit, up from Rp13.74bn in the corresponding period of 2003, the company said.
Total income during the same period increased to Rp180.99bn, up from Rp127.23bn in 2003. This was due to strong margins from its refining and petrochemicals divisions.
For the first nine months of the financial year, Reliance’s net profit was up by 41% to Rp52.8bn, gross turnover was up by 27% to Rp685.35bn, and operating profit was up by 30% to Rp102.39bn.
21 January. Mangalore Chemicals & Fertilisers Ltd (MCFL) boosted its net profit in October-December 2004 by 47.95% to Rs61.4m (US$1.41m) from Rs41.5m a year ago.
The hike was a result of a strong growth in sales. The company increased its net sales by 40.21% to Rs2521.9m from Rs1798.6m. Expenditure grew by 39.26% to Rs2397.8m from Rs1721.8m, and operating profit shot up by 61.58% to Rs124.1m from Rs76.8m.
21 January. Pioneer said chlorine, caustic soda, hydrochloric acid, and bleach production at its chlor-alkali plant in Henderson, Nevada, US, had been disrupted by rail service problems.
The company added that the production of bleach and the repackaging of chlorine at its smaller facilities in Santa Fe Springs and Tracy, California, and Tacoma, Washington, also were experiencing production problems since ‘the smaller plants depend on the supply of chlorine and caustic soda from the Henderson plant for their own operations’.
Pioneer’s chlor-alkali facility at Becancour, Quebec, Canada – operated by Canadian subsidiary PCI Chemicals Canada – is also running at a lower operating rate.
Pioneer said, ‘The rate reduction occurred because of a disruption in the return of empty railcars to Becancour, beginning in late December and continuing into January. That problem should be resolved by the end of this month.’
22 January. The EU Council of Ministers has toughened antidumping duties on polyethylene terephthalate (PET) imports from Taiwan and re-imposed duties on South Korean PET exporters.
EC inquiries showed that existing duties imposed in 2000 were insufficient to protect EU producers from cut-price Taiwanese PET competition. The duties re-imposed on South Korea were at the same rates as before.
The investigation was launched after a request from the Association of Plastic Manufacturers in Europe, which had complained about continued PET dumping. The result has been an increase in the standard antidumping duty rate for Taiwan PET exporters from Euro69.50/tonne (US$91/tonne) to Euro143.40/tonne.
But cooperative producer Far Eastern Textile has been exempted from its old Euro50.2/tonne duty. Shinkong Synthetic Fibers’ duty has fallen from Euro47/tonne to Euro24.50/tonne, the duty on Tuntex remained at Euro69.5/tonne, and Hualon received a lower Euro81.90/tonne duty.
By contrast, South Korean standard duties remained at Euro148.30/tonne, with Daehan Synthetic Fiber being exempted from its previous reduced Euro28.20/tonne duty. SK Chemicals and KP Chemical were also exempted, and Honam Petrochemical retained a lower Euro101.40/tonne rate.
22 January. The Houston Ship Channel in the US re-opened to commercial ship traffic late yesterday morning after being closed for nearly six hours because of dense fog, officials said.
The waterway, which serves the busiest US chemical port, was closed at about 05.00 hours local time (11.00 GMT) by Houston Ship Channel pilots, who said the fog made it unsafe to operate the large ships.
22 January. Nova Chemicals said it expected to receive a US$110m cash payment following resolution of a tax dispute that occurred before 1982.
The company, based in Calgary, Alberta, Canada, said it expected to record an after-tax gain of about US$91m in its 2004 fourth quarter as a result of the payment.
It expected to receive the payment from an affiliate of a company in which Nova previously had an interest.
Nova would not disclose the name of the affiliate or additional details about the US$110m settlement.
24 January. Bataan Polyethylene Corp (BPC) has postponed the re-start of its mothballed polyethylene (PE) plant indefinitely owing to weak margins and ownership-transfer paperwork, industry sources said.
The 250 000 tonne/year linear low-density PE/high-density PE swing plant was originally scheduled to restart in the first quarter of this year after Metro Alliance Holdings and Equities (Manila) bought it late last year.
‘The takeover is awaiting approval from the local authorities,’ a source said. Another source said the authorities were expected to approve the acquisition in early February. The three BPC shareholders had sold their majority shares to Metro Alliance for US$3, writing off some US$300m.
24 January. South Korea is likely to slash its 2005 benzene exports to the US by at least half from the previous year, Bert de Guzman, a consultant at DeWitt & Co said.
This would be a dramatic reversal of the strong exports in 2004, when South Korea doubled its exports to the US from 2003 to 339 987 tonne.
About 54 000 tonne of benzene is set to be exported from South Korea to the US in January this year, and 40 000 tonne in February. ‘This is due to a big drop in benzene prices in December,’ said de Guzman.
Benzene spot prices collapsed in mid-December 2004 to US$660/tonne fob Korea, a US$260/tonne fall from the previous week, because of declining US benzene prices and softening crude values. ‘I doubt that exports will continue after March this year, as there are new styrene units starting up in Asia in 2005,’ said de Guzman.
24 January. Formosa Petrochemical Corp (FPCC) has recorded a 165% jump in its net profit for 2004, according to a statement the company filed with the Taiwan Stock Exchange.
FPCC’s net profit for the year was NT$50.169bn (US$1.6bn), higher than the NT$18.935bn it earned in 2003.
The company attributed the profit increase to high refining margins and strong demand in the regional market, and added that the demand should remain strong for the next two to three years.
FPCC has a 450 000 bbl/day refinery in Mailiao and can produce up to 1.6m tonne/year of ethylene from two crackers at the same site.
24 January. Mitsubishi Chemical and Tokai Carbon have revoked the joint-venture agreement for their carbon black businesses after failing to secure approval from the Japan Fair Trade Commission (FTC), a Mitsubishi Chemical spokesman said.
The planned joint venture had targeted annual sales of Yen20bn (US$185.2m). Tokai, the largest carbon black producer in Japan, was to hold a 60% stake and Mitsubishi Chemical 40%. The agreement was announced on 12 July 2004.
Mitsubishi said then that competition in the domestic carbon black market was expected to intensify in the future despite strong demand from the domestic car-tire market. That prompted both companies to form the alliance and they had planned to embark on a joint marketing effort in Asia, especially in China.
But the FTC said the alliance might substantially restrict competition in the Japanese domestic market. Both companies have a combined 42% share of the domestic carbon black market.
24 January. Chevron Phillips Chemical said it would license its proprietary loop slurry polyethylene (PE) technology to Polietilenos Uniao, a wholly owned subsidiary of Unipar of Brazil.
The financial terms of the licensing agreement were not disclosed.
Chevron Phillips’ technology will be employed in a 200 000 tonne/year reactor that is part of Polietilenos Uniao’s strategic PE expansion at its plant in Santo Andre, São Paulo, Brazil. The facility is expected to start up in 2007. Chevron Phillips will provide consultation and support during the design, construction and start-up of the facility.
Ethylene for the new plant will be supplied by debottlenecking Petroquimica Uniao’s ethylene capacity at the São Paulo petrochemical complex.
25 January. More than 2000 business and political leaders from around the globe are arriving in the Swiss mountain resort at Davos for the annual World Economic Forum (WEF).
For five days, they will discuss issues ranging from China’s economic power to Iraq’s future after this Sunday’s elections.
More than 20 government leaders and heads of state are attending the meeting.
Unlike previous years, protests against the WEF are expected to be muted. Anti-globalisation campaigners have called off a demonstration planned for the weekend.
25 January. Polish petrochemical giant Polski Koncern Naftowy (PKN) Orlen confirmed plans to expand its cracker in Plock, central Poland, by about 340 000 tonne/year this spring.
The 60-day expansion programme would see ethylene output at the facility increase from about 360 000 tonne/year to almost 700 000 tonne/year, a company spokesman said. The work would start in early April, lasting until early June 2005.
The spokesman said the increase in ethylene output resulted from rising demand for polyethylene in Poland. He added that most of the increased ethylene output would be consumed within the domestic market.
25 January. US Senator Pete Domenici held a summit conference yesterday of stakeholders in what he termed ‘the looming natural-gas crisis’ and said the session was the first step in passing a US energy bill.
Domenici convened a meeting on Capitol Hill of more than 100 representatives of energy producers, consuming industries, environmentalists, property owners and government officials. He called the conference after more than 120 companies, trade groups and environmentalists responded to his 7 December 2004 invitation for solution proposals.
As chairman of the powerful Senate Committee on Energy & Natural Resources, he is well placed to move a comprehensive energy policy bill that includes possible remedies for high and volatile natural gas prices.
He cited US Department of Energy figures indicating that, by 2025, the US would have to import up to 30% of its natural gas supplies, double the country’s 2004 natural-gas import ratio of 15%.
‘Most of that imported natural gas,’ said Domenici, ‘will have to come in the form of LNG [liquefied natural gas].’ And yet, he noted, ‘progress towards selecting sites for LNG terminals needed to handle those imports is non-existent.’
He said a chief goal of his committee in crafting a new comprehensive energy bill ‘must be to find some way to reduce the multi-agency jurisdiction problem in siting LNG terminals’.
25 January. Formosa Plastics Corp (FPC) plans to bring the operating rate of its 300 000 tonne/year polyvinyl chloride (PVC) plant in Ningbo, Zhejiang, China, up to 100% from 30-40% by February or March.
The plant, which was commissioned on 10 January after a six-month delay, was operating below nameplate capacity as demand for PVC had been weak in the past few weeks, a company official said.
25 January. Nippon Petrochemical is confident of meeting the 1 April launch date for its new Asian Con-tract Price (ACP) for the domestic benzene market, a company official said.
The company launched its ACP for its benzene exports on 1 January. The ACP had received a favourable response from its export customers, the official said.
The ACP for export customers, which is based on Taiwan cfr benzene prices, replaced the monthly 50:50 price formula consisting of the US contract price for benzene and Japan open-spec naphtha prices.
The formula for the Japanese ACP would be the same. Current domestic prices are based on international benzene prices.
25 January. ExxonMobil today confirmed that its cracker on Jurong Island in Singapore is to be expanded by 75 000 tonne/year by Q4 2006.
Market sources had said in December last year that the capacity of the 800 000 tonne/year cracker would be increased by 70 000–80 000 tonne/year.
The well-placed sources had at that time insisted that the start-up of the extra capacity would be immediately after 35-40 days of debottlenecking work, which was due to begin in mid-May this year. But today’s announcement only specified that start-up would be by the fourth quarter of next year.
25 January. The A shares of Chinese petrochemical firms are likely to benefit from the government’s latest move to cut stamp duty, companies said.
With effect from yesterday, duties levied on A-share and B-share transactions on the Shanghai Stock Exchange and the Shenzhen Stock Exchange were halved to 0.1%.
The latest tax cut was aimed at revitalising investors’ sentiment and trimming share-trading costs. Last year the Shanghai composite index shed 15.4%, bringing investor confidence to a new low.
Petrochemical companies that own A shares include Jilin Chemical Industrial Co, Yangzi Petrochemical and Yizheng Chemical Fibre. These companies do not own B shares.
25 January. BP said it had no plans to move head-office jobs for olefins and derivatives to Scotland, UK, after the business, currently known as Newco, is spun off later this year.
A BP spokesman ruled out the staff transfer, which is expected to be proposed by some Members of Parliament (MPs) this week at a meeting of the Commons Scottish Affairs Committee.
Newco will operate chemical plants and a refinery at Grangemouth, near Falkirk, in east Scotland.
Falkirk East Labour MP Michael Connarty has sent a letter to Newco chief executive Ralph Alexander asking for hundreds of head office jobs to be relocated to near the plant from BP’s headquarters in Sunbury and London, both in southeast England.
25 January. Dow Chemical plans to establish a 600-job research and development (R&D) and global information technology (IT) centre in China, the company said.
The centre will later include other service and support facilities.
Dow said evaluation studies were underway and a decision would be made before the end of March on the location of the facility. It expects the IT components to be set up within 12 months, with the entire centre operational within three years.
About 600 jobs would be created by the end of 2007.
The company did not disclose investment figures.
26 January. Citing foreign competition, Solutia said it would leave the acrylic fibres business, pending approval by the US Bankruptcy Court, in a move that would affect 250 employees.
Solutia said its plant in Decatur, Alabama, US, would continue to operate as a producer of chemical intermediates for use in nylon products, but would close its acrylic fibre operation in early to mid-April.
‘Despite the tremendous efforts of those within our acrylic business to reduce costs and improve productivity, the business has simply been unable to compete, as fibre and textile manufacturing has moved outside the US,’ said John Saucier, president of Solutia’s integrated nylon platform.
26 January. Some of the aid agencies operating in Asia after the tsunami disaster are not up to the job, UK charity Oxfam says.
Millions were affected by the disaster, in which more than 280 000 people are believed to have died.
Exactly a month on, Oxfam praised the international response. But it also highlighted problems with the quality of the aid that had been given.
Oxfam pointed to difficulties coordinating the aid, saying that some inexperienced aid agencies were working in the disaster zone without the necessary skills and competence.
In particular, it criticised the way that some houses had been rebuilt in Sri Lanka, saying they were too close together, causing sanitation problems.
26 January. Imperial Oil reported a 170% increase in its 2004 chemicals net income on better margins and higher revenues.
Imperial’s chemicals net income for the 12 months ended 31 December was C$100m (US$81m) on revenues of C$1.51bn, up by 23%. Imperial mainly credited strong margins, in particular in polyethylene and benzene.
Petrochemicals sales volumes for the full year averaged 3300 tonne/day, unchanged from 2003.
For the fourth quarter of 2004, Imperial reported net income in its chemicals segment of C$28m, up from C$16m in the 2003 fourth quarter, on revenues of C$315m, up from C$237m, with the company again citing higher benzene and PE margins.
Petrochemicals sales volumes for the fourth quarter averaged 3300 tonne/day, up from 3200 tonne/day in the 2003 fourth quarter.
26 January. An explosion yesterday at an acetylene facility in Perth Amboy, New Jersey, US, killed three people and critically injured another.
The explosion occurred at 10:30 a.m. (15:30 GMT) at an Asco Acetylene Service storage facility, said Cesar Jovine, a public information spokesman for the city of Perth Amboy. Workers were transferring acetylene when the explosion occurred.
The blast caused part of the warehouse to collapse, Jovine said, adding that the cause of the explosion was under investigation.
26 January. Formosa Chemicals and Fibre Corp (FCFC) plans to bring its new styrene monomer (SM) plant in Mailiao, Taiwan, onstream by the second half of 2006, a company official said.
Construction of the plant began in mid-2004. FCFC has two other SM plants in Mailiao, with a total capacity of 600 000 tonne/year.
Most of the output from the new SM plant would be sold on the local market because of tight supply in the country.
The rest would be used to feed its styrene derivatives facilities in Ningbo, Zhejiang, China, where the company operates a 150 000 tonne/year acrylonitrile butadiene styrene plant.
26 January. Formosa Petrochemical Corp (FPCC) could reconfigure its propylene pricing formula despite having tweaked it only recently, industry sources said.
This month, FPCC adopted weekly prices published by Chemical Market Associates Inc (CMAI) as part of its formula for domestic propylene supplies. The CMAI prices replaced the South Korean quarterly pricing in the formula.
The South Koreans have ditched quarterly pricing in favour of monthly deals because of the volatile spot market. Also, instead of collective settlements, there will be individual deals between producers and buyers.
The current Taiwanese formula includes European quarterly term prices, US term prices and CMAI weekly prices, each contributing 30% towards settlements. The remaining 10% reflects Asian spot prices.
A source said: ‘FPCC is studying the feasibility of replacing CMAI weekly prices with Asian spot prices in 2006. This would increase its spot-price portion in the formula to 40% from the current 10% if it decides to go ahead with the change.’
26 January. China’s GDP (gross domestic product) for 2004 grew at 9.5%, the fastest since 1996, said Li Deshui, head of the country’s National Bureau of Statistics. The economy expanded by 9.3% in 2003.
China’s GDP grew by 9.8% in the first quarter of last year. That rate slowed to 9.6% in Q2 and to 9.1% in Q3. Li said the slowdown was a result of China’s macroeconomic controls introduced last May. The controls were aimed at controlling over-investment. But they failed to curb growth in Q4, when the GDP grew by 9.5%.
26 January. The Reliance group will start producing a speciality polymer, ultra high molecular weight polyethylene (PE), at a petrochemical complex in Thane, Maharashtra, India, which it is acquiring from National Organic Chemicals Industries Ltd (Nocil).
The company’s subsidiary, Relene Petrochemicals, started operating the complex under a temporary agreement in October 2004. Nocil will complete the transfer of the complex, and its plastics products plant at Akola in Maharashtra, to Reliance in April 2005.
The Thane complex, which Nocil shut in April 2002, can produce 2400 tonne/year of the speciality PE. Relene has started production at the complex’s 60 000 tonne/year high-density polyethylene plant and a 13 000 tonne/year speciality polymer ethyl vinyl acetate plant.
26 January. The new owner of Bataan Polyethylene Corp (BPC) hopes to wipe out the debts that it assumes after completing the takeover in February.
The chairman of Metro Alliance Holdings, Renato Magadia, said his company would take over BPC’s ‘heavy debts’ of Peso10bn (US$180.57m) despite having paid only US$3 for the bankrupt company.
Industry sources close to BPC said Metro Alliance had paid about US$20m to International Finance Corp, BPC’s main financier. Both sides are still negotiating the repayment for the rest of the debts.
‘We hope to wipe out the debts with BPE’s creditors. We may dissolve the company and form a new one,’ Magadia said.
26 January. Thai Plastic and Chemicals (TPC) 2004 net profit increased by 141% to Baht3.153bn (US$81.84m) from Baht1.306bn in 2003, the company said.
Total income for the year was Baht23.451bn, up 29% or Baht5.320bn on higher prices and sales volume for polyvinyl chloride (PVC) and finished products.
This was despite higher oil prices in the fourth quarter of 2004, when the price of raw materials such as vinyl chloride monomer and ethylene increased.
But domestic demand for PVC increased by 20% in 2004 owing to growth in the construction sector, real-estate market, and government infrastructure projects. That helped the company to raise its operating performance for the third consecutive year.
26 January. Production of acetone at Sasol’s 167 000 tonne/year plant at Secunda in South Africa has been affected by local flooding, a company spokesman confirmed today.
The South African solvents producer said the longer-term effects of the flooding, which occurred late last week, were not yet known.
Production at Sasol’s 20 000 tonne/year methyl isobutyl ketone plant in Sasolburg, South Africa, is also expected to be affected, since acetone from Secunda is used as the main feedstock.
26 January. Nova Chemicals has posted a 2004 net profit of US$252m on a gain from a tax settlement, higher operating rates, and improvement in polyethylene margins.
For the year ended 31 December, Nova said it earned US$2.71/share, compared with a loss of 2 cents/share in the previous year.
The company posted a US$91m gain from a tax-related settlement during the year.
Nova reported 2004 fourth-quarter net income of US$162m, up from a 2003 fourth-quarter loss of US$15m.
27 January. Canadian engineering firm SNC Lavalin is planning to build a methanol plant in China with a Chinese partner, according to officials.
The plant will be a coal-based methanol facility and it will be sited near Qufu city in Shandong province.
SNC’s partner is Eltech Science Technology of Shanghai. The companies signed an agreement on the project earlier this week on the sidelines of a Canadian trade delegation’s visit to China by Prime Minister Paul Martin and Trade Minister Jim Peterson.
Precise capacities remained unclear, but an SNC spokesman said the potential value of the project was US$800m. She added that work on the project feasibility study ‘is well underway’, but said the eventual capacity would only be determined once the study was concluded.
27 January. US President George W Bush has called on Iraqis to ‘defy terrorists’ and vote in the election on 30 January as violent attacks by insurgents continued across Iraq.
Bush was speaking on the deadliest day for American troops since the US-led March 2003 invasion.
Thirty marines and a sailor died in a helicopter crash in western Iraq, although officials said there was no indication of hostile action.
In separate incidents, six US soldiers and at least 22 Iraqis were killed.
In a statement, Hanfeng said the plant would be built in Jiangyan city, Jiangsu province.
Hanfeng said it reached agreement with Jiangyan municipal authorities to build the plant on about 25 acres of land in a designated industrial zone.
The site had enough space to eventually allow for two fertiliser plants and was well connected to riverways and land infrastructure, Hanfeng said.
The new plant’s urea raw-material feedstock supplies would be provided under long-term contracts by Jiangyan Fertilizer, a local urea producer.
27 January. Toray Industries will increase the capacitor polyester film capacity at its China subsidiary by 1500 tonne/year or about 7% in 2006, a company spokesman said.
Yihua Toray Polyester Film, a 50:50 joint venture with Jiangsu Yihua Group in Yizheng, will be able to produce 22 500 tonne/year of capacitor polyester film once the work is completed in early 2006.
The companies will spend about Yen2bn (US$19.3m) in building another line at the plant. Construction work is expected to start by March 2005. The first two lines have a capacity of 15 000 tonne/year and 6000 tonne/year.
The company hopes to generate Yen10bn worth of sales through the plant by 2010.
27 January. Siam Cement’s net profit in 2004 jumped by 83% jump to Baht36.48bn (US$947m), thanks largely to the boom in its petrochemical business.
The company attributed the record profit to a 29% increase in total sales to Baht192.4bn and a 45% increase in earnings from subsidiaries and associated companies to Baht9.81bn.
It said in a statement to the Stock Exchange of Thailand that 2004 was a profitable year for petrochemical producers because of high demand and limited production capacity throughout the world.
That allowed its petrochemicals business to post a net profit of Baht20.52bn, up from Baht7.78bn in 2003. Sales were up by 48% to Baht75.19bn.
27 January. Hangzhou Top Polyester is to start up a 180 000 tonne/year polyethylene terephthalate (PET) fibre-grade chip facility in Xiaoshan, Hangzhou, China, after the Lunar New Year holidays in mid-February, a company official said.
The official said the company had completed installing equipment for the project.
Hangzhou Top Polyester currently produces more than 210 000 tonne/year of polyester chips and polyester filament. The company is a subsidiary of the Kings Group.
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