The week in brief

20 August 2007 00:00  [Source: ICB]

Akzo Nobel finally seals £8bn ICI takeover

Akzo Nobel CEO Hans Wijers is positive takeover plans will be accepted by shareholders. "We have created a perfect platform to engage with shareholders and are confident we can convince them it's a good idea," he said after ICI accepted a cash offer valuing its shares at 670p each, totalling £8bn ($16.3bn, €11.8bn). While ICI is to become part of Akzo Nobel, Wijers said the branding of the two companies has not yet been decided. The deal should be approved by late 2007 but first has to be approved by Akzo Nobel's shareholders.

Producers on watch as Erin looms

Tropical Storm Erin threatened the US Texas Gulf coast while Tropical Storm Dean continued to churn westward in the South Atlantic, the National Hurricane Center said last week. A tropical storm warning was issued for the Texas Coast from Freeport to the Mexico border. The storm was expected to hit the middle Texas coast by mid-Thursday. Erin was located about 250 miles (402km) east of Brownsville, Texas and about 295 miles east-northeast of La Pesca, Mexico. The storm was moving west-northwest at nearly 12 mph (19.3km/h - see page 38).

China tainted toys may boost quality control

The tainted toys scandal (see page 13) may briefly chill US chemical and plastics investments in China, but the crisis will advance Chinese quality control in the long term. Joe Acker, president of the Synthetic Organic Chemical Manufacturers Association (SOCMA), last week said: "My sense is that the Chinese government is going to do what they need to do." Adding that the US consumer uproar caused by the recall of lead-tainted toys from China was not likely to have a negative impact on the trade in chemicals and plastics.

BASF claims $170m from Lyondell for contract

BASF has claimed $170m (€126m) in damages from Lyondell after a New Jersey court ruled that the US company had broken a contract on the supply of propylene oxide (PO). The contract was signed in 1998 to ensure that BASF would never have to pay Lyondell more than the lowest price Lyondell was charging its other customers for PO. Lyondell has the right to appeal against the court's decision.

Dow sells Canada caustic soda to Univar

Dow Chemical said it has signed an agreement to sell its caustic soda business in western Canada to Univar. The sale included the West Coast Distribution Center terminal assets, which consisted of marine, rail and truck facilities in north Vancouver, British Columbia, as well as miscellaneous equipment, the US major said. Subject to regulatory approval, the transaction was expected to be completed as soon as possible, it added.

Sayanskhimplast Russia blast kills four

A blast at Sayanskhimplast's vinyl chloride monomer (VCM) unit in Irkutsk, Russia, has killed four workers. Production facilities at the site were closed following the explosion. The accident did not result in any leaks of hazardous chemicals. However, residents in Sayansk, a town with a population of 45,000, about 14km (55 miles) away from the plant, reported an odd smell after the explosion, indicating a possible leak of ethylene dichloride, local media said (see page 56).

Tata faces eco lobby on Tanzania project

India's Tata Chemicals will conduct a fresh consultative meeting to help it abide by environmental standards, following protests over its plans to develop a soda ash plant near Lake Natron in Tanzania. According to recent media reports, conservation groups were outraged over the proposed soda ash factory as it threatens the survival of the entire East African population of lesser flamingos. Tata Chemicals is mulling a 500,000 tonne/year soda ash plant at the site.

EC approves INEOS/Lanxess ABS deal

The European Commission has cleared the planned acquisition by INEOS of the thermoplastic engineering business of Lanxess. The firms announced in June that INEOS would take a majority stake in Lanxess' Lustran acrylonitrile-butadiene-styrene (ABS) plastics business. The Commission's investigation found that the transaction would not hinder competition in the European Economic Area (EEA).

Albemarle files patent suit against isochem

Flame retardant producer Albemarle has filed a patent infringement action in Germany against Isochem Kautschuk. The action, filed in District Court Dusseldorf, alleges that Isochem infringed against Albemarle's patent for producing its Saytex 8010 flame retardant. The suit alleges that Isochem has violated Albemarle's patent by importing into and offering for sale in Germany flame retardant products that were produced using the patented process.

Celanese sells acetic acid plant

US chemical company Celanese has sold an acetic acid and acetic anhydride plant to Babcock & Brown, which has substantial holdings in the electrical industry. Financial terms were not disclosed. The buyer, an international investment and advisory firm, plans to convert the site in Pampa, Texas, into a power plant. Babcock & Brown said its converted plant could generate up to 800MW of coal-based electricity and 1,000MW of wind-based electricity.

Chiyoda wins Shell Singapore contract

Chiyoda has won an engineering, procurement service and construction (EPC) management contract from Shell Eastern Petroleum Ltd (SEPL) for its long residue catalytic cracker unit revamp project in Singapore. The front end engineering design for the project was completed by its unit, Chiyoda Singapore. It did not disclose financial details.

Sinopec subsidiaries' shares soar

Shares of Sinopec subsidiaries Shanghai Petrochemical and Yizheng Chemical Fibre soared last week, sparked by talks that the parent will buy out the units. Spokesmen from all three companies said they were unaware of such a plan. Yizheng's shares soared by 26.9% to Hong Kong dollars (HK$) 3.30 ($0.42, €0.31) each, while the value of Shanghai Petrochemical stock increased by 7.7% to HK$4.33/share. "We will make an announcement when we have such a plan," said Evan Jia, head of investor ­relations at Sinopec.

Biofuels put bite on Gummy bears

Gummy Bears could become the latest victims of increasing biofuels production, a US think-tank has said, quoting the German magazine Der Spiegel. The Cato Institute, a Libertarian group that opposes US biofuel subsidies, summarised the article in its daily dispatch, saying that prices for foodstuffs were rising in response to biofuels production. Der Spiegel said the boom in biofuels has caused crop prices to increase. And that, in turn, is squeezing margins on Gummy Bears, a popular treat enjoyed in many countries.

Jiangsu Sopo to increase acetic acid Jiangsu Sopo, a key eastern Chinese domestic acetic acid producer, plans to double its Zhenjiang capacity to 1.2m tonnes/year by 2009. "We will add another 600,000 tonne/year plant, which is expected to be ready by 2009," a company official said. The producer also has plans to expand its downstream facilities, which include gradually doubling its ethyl acetate capacity to 400,000 tonnes/year by 2008 and the possibility of a 200,000 tonne/year vinyl acetate monomer (VAM) plant in 2009.

Ciba H1 operating profit up by 5%

Ciba Specialty Chemicals says its operating income for the first half of 2007 rose by 5% year-on-year to Swiss franc (Swfr) 273m ($225.6m, €167.5m) on cost savings. "The process of transforming the business made further progress in the first half, with improvements coming through in operational efficiency and the actions taken in the water and paper treatment segment starting to show results," Armin Meyer, chairman of the board and CEO said. The Swiss firm said sales in the first six months rose by 2% from the same period last year.

EC confident UK committed to target

The European Commission says it is confident the UK will remain committed to the EU's aim of drastically increasing the use of renewable energy, despite reports it will fall short of agreed targets. An internal briefing paper from the UK's Department for Business, Enterprise and Regulatory Reform (formerly known as the Department of Trade and Industry) revealed the UK would miss the target to increase the use of renewables in the EU to 20% by 2020, according to UK press reports.

Shaw wins deal for China EB/SM project

Shaw Group has won a contract for a 500,000 tonne/year ethylbenzene/styrene monomer (EB/SM) plant from China's Tianjin Dagu Chemical Industry. Shaw values the contract, which covers technology and basic engineering work, at $50m (€37m). The plant would be located at the Tianjin Industrial Park, near the city of Tianjin, said Shaw, but did not say when the project would be completed.

China extends methylene chloride duties

China says it has extended methylene chloride antidumping duties on imports from the US, UK, Netherlands, Korea and Germany for another five years. The country's ministry of commerce said it carried out a review of the case over the past year, to which only INEOS Chlor responded. The review concluded that dumping could occur again and the 4-66% duties imposed in 2002 would be extended for another five years, starting from 15 August 2007.

Pemex denies plan to sell VCM plant

Mexico's state-run energy-to-petrochemical company Petroleos Mexicanos (Pemex) says it has no plans to sell a vinyl chloride monomer (VCM) plant to Mexican polyvinylchloride (PVC) manufacturer Mexichem. "Pemex Petrochemical is not negotiating any kind of sale of its VCM facilities with Mexichem," the company said. "However, both companies are aware that they should seek a mechanism to integrate the chlorine-VCM chain. Even so, selling of plants is not considered."

Poland's Ciech sees Q2 Profits rise by 166%

Europe's second-largest maker of soda ash, Poland's Ciech, said last week its second-quarter (Q2) operating profit leapt by 166% to zlotych (Zl) 85m ($30.8m, €22.5m) compared with the same period last year. It added that Q2 sales climbed to Zl873.4m, compared with Zl511m the same quarter last year, while net profit hit Zl63m, compared with Zl28m. Ongoing construction surges across Poland were a significant factor in the success, with soda ash being a key material for making glass.

Engineers India wins $27m contract

Engineers India Limited (EIL) has received a letter of intent from Abu Dhabi Polymers Company (Borouge) to manage the ­construction of its ­petrochemical complex in Abu Dhabi, the United Arab Emirates. EIL said the value of the proposed contract was $27m (€20m). Borouge is undertaking a $3bn expansion of its ­production facilities at Ruwais, Abu Dhabi.

Ecodiesel leads Brazil biodiesel sector in H1

Brazilian biodiesel maker Ecodiesel has produced 62.6m liters (16.5m gal) of biodiesel in the first half of 2007, or 51.5% of Brazil's total output. Brazil produced 121.5m liters of biodiesel between January and June, Ecodiesel said, quoting figures from the National Petroleum Agency (ANP). In June, Ecodiesel said it produced 17.8m liters of the biofuel, which accounted for 68.7% of the country's total output of 25.9m liters that month.

India eyes long-term deals with Syria

India has asked Syria to facilitate long-term contracts for the supply of rock phosphate and phosphoric acid for its phosphatic fertilizers industry. According to an official release, Chemicals and Fertilizers Minister Ram Vilas Paswan made the request to visit the Syrian Foreign Minister Walid Mouallem. Mouallem said that he would convey India's interest in stable and long-term arrangements to the relevant cabinet colleague.

Unipetrol should capitalize on plastics 

Unipetrol should take advantage of upcoming debottlenecking and underlying regional plastics growth to outstrip financial forecasts, bankers Wood & Co. have said. Analyst Bram Buring calculated that the Central and Eastern European (CEE) plastics market should experience underlying growth of around 10%/year across the next two to three years. If the Czech petrochemicals and refining group's upcoming maintenance shutdown happens, Unipetrol should be able to capitalize on this market dynamic and "meet or beat our koruna [Kc] 5.1bn [$247.4m, €182.1m] estimate for 2008 net profit", said Buring.

Polymer Group to expand capacity

Polymer Group plans to install a spunbond line in North America to serve hygiene and other customers in the US and Mexico, the US nonwovens producer has said. The new line will add some 15,000 tonnes/year in capacity to meet demand for nonwoven materials used in diapers and other personal hygiene products. The company did not state its current capacity. Polymer Group said it expected to begin commercial production in late 2008.

Kemira pigments unit ownership to continue

Kemira said last week it would continue the ownership of its pigments unit and run the division as part of Kemira Speciality business area, along with the ChemSolutions and Chemidet businesses. The Finnish firm decided to keep its pigments unit after evaluating strategic alternatives for the business.

EU June chemicals output falls by 0.8%

EU industrial output was up by 2.5% in June, compared with the same month last year, while chemicals and manmade fibers production was down by 0.8%, official statistics agency Eurostat has said. Industrial production increased by 2.3% year on year in the 13-member eurozone, while chemicals and manmade products fell by 0.6%. Month on month, chemicals and manmade fibers production was up by 0.2% in the EU27 and remained unchanged for the eurozone.

Rohm and Haas plans S Korea flat panel JV

Rohm and Haas says it will invest $190m (€139m) in a planned joint venture (JV) with South Korea's chemicals major SKC to develop and market films for use in liquid crystal (LCD) and plasma flat panel displays. The JV will be located in South Korea and include SKC's display technologies business, which will be spun off into a separate legal entity, the US specialty chemicals maker said. Rohm and Haas will have a 51% majority stake in the venture. Sales in the first year of operations were expected to reach $300m, it said.

Shandong acetic acid plant to open in 2009

Shandong Hualu Hengsheng Chemical's 200,000 tonne/year acetic acid line at Dezhou, Shandong province, is under construction and expected to be ready by early 2009. Acetic acid - used in the production of polyethylene terephthalate (PET) for end-products such as soft drink bottles - will be largely sold in the Chinese domestic market. "We are targeting the eastern and southern China markets where we can make use of the rail network in the Shandong region, as well as the Lanzhou and Lanshan ports," a company spokesman added.

PKN Orlen Q2 petchem profits rise on margins

PKN Orlen, the Polish oil and petrochemicals group, has posted a 56.4% year-on-year rise in second-quarter (Q2) petrochemicals operating profits due to favourable market conditions and higher product margins. Q2 operating profit reached zlotych (Zl) 348.7m ($125.7m, €92.5m), while revenues were up by 18.7% to (Zl) 3.56bn. The segment's results were largely driven by favorable market conditions since the beginning of 2007, and the related widening of the margins on most of its petrochemical products.

India's APL enhances oxo-alcohols growth

India's Andhra Petrochemicals Limited (APL) has increased the total capacity of its oxo-alcohols expansion project from 73,000 tonnes/year to 84,000 tonnes/year. The company will be expanding capacity by 115% instead of the proposed 87% at the current 39,000 tonne/year facility in Andhra Pradesh state, although the cost remains the same at rupees (Rs) 2.5bn ($61.8m, €45.5m). The expanded plant will have the capacity to produce 55,200 tonnes/year of 2-ethyl hexanol, 26,000 tonnes/year of standard butanol and 2,800 tonnes/year of iso-butanol.

Chiyoda wins Shell management contract

Japanese engineering firm Chiyoda Corporation has won an engineering, procurement service and construction management contract from Shell Eastern Petroleum for its long residue cracker revamp project in Singapore.

Brazil chemical imports increase

Brazil imported more than $2.1bn (€1.5bn) in chemical products in July, a monthly record that reflects growing economic activity, an industry association said last week. Brazil exported $949m in July, said the Brazilian Association of the Chemical Industry (Abiquim). The imports value shows a growth of 11.8% from June. Cumulative figures for the year, through July, have totaled $12.6bn, an increase of 42.7% compared with the same period during 2006.

Kingboard Chemical to build methanol plant

Kingboard Chemical is to invest in a methanol project in China by acquiring a major stake in Hong Kong-listed G-Prop Holdings. Kingboard will pay Hong Kong dollars (HK$)120m ($15.3m, €11.3m) for a 36.5% stake in G-Prop. G-Prop is planning to buy a Chinese firm for yuan (CNY) 60m ($7.9m). The Chinese firm, Inner Mongolia Yize Mining, is planning to build a coal-based methanol plant at Erdos, Inner Mongolia province.

 

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