This week's world news

week in brief

28 January 2008 00:00  [Source: ICB]

DuPont posts 30% rise in Q4 profits

DuPont has posted a 30% increase in fourth-quarter (Q4) pretax operating income to $937m (€637m) on 11% higher sales of $7bn, driven by earnings growth across all business segments. The US-based company's underlying earnings per share (EPS) rose by 27% to 57 cents, coming in 8 cents ahead of analyst expectations. DuPont reaffirmed its 2008 full-year EPS outlook of $3.35-3.55 and its Q1 forecast of $1.12-1.17.

Solutia's exit from bankruptcy delayed

Credit market turmoil has delayed US-based Solutia's emergence from bankruptcy protection, as originally planned, on January 25. The company is having trouble securing the required $2bn (€1.36bn) in exit financing from banks. Unless credit conditions changed drastically since October 25, the banks had a February 29 deadline to complete the financing, Solutia said. The banks argued that credit conditions have indeed changed.

Evonik expands hydrogen peroxide

Germany-based Evonik Industries has expanded the capacity of its Brazilian hydrogen peroxide plant to 70,000 tonnes/year. The plant, in Barra do Riacho, Brazil, could be expanded further to 100,000 tonnes/year. The company plans to apply the technology used at the Brazilian plant at its sites in either Gibbons, Canada or Mobile, Alabama, US.

Europe chem stocks hit by rate worries

Europe's chemical makers suffered last Wednesday as the region's stock markets continued to tumble. The Dow Jones Eurostoxx chemicals index was down by 5.1% at the close, with German chemical giants BASF and Bayer among the biggest sector losers. BASF's share price lost 5.84%, with Bayer down 5.66%. Smaller specialty players were not as hard-hit as the market reacted to comments from European Central Bank President Jean-Claude Trichet, suggesting Europe might not follow the US in cutting rates.

SABIC opens Canada research center

US-based SABIC Innovative Plastics has opened a new plastics research center at its manufacturing site in Cobourg, east of Toronto, Canada. The Center for Manufacturing Innovation was supported by $700,000 (€476,000) in matching funds from the Ontario provincial government and will cooperate with researchers at universities and colleges.

IFC mulls $40m loan to Brazil ethanol project

US-based International Finance Corporation (IFC) will consider lending $40m (€27m) to Brazil's USJ Acucar e Alcool for partial funding of its $355m sugar-to-ethanol power expansion project. The IFC, the World Bank's private finance arm, said its board of directors is scheduled to consider the loan application for approval on February 22. The project, slated for completion in 2009, is expected to almost double cane crushing capacity for sugar and ethanol production to 10m tonnes/year from the current 5.5m tonnes/year.

Kemira sets up Indonesian firm 

Finland's Kermira has established a new company in Indonesia - PT Kemira Indonesia - to better exploit that country's growing pulp and paper chemicals markets. Indonesia's total annual pulp production was around 8m tonnes and paper production 7.4m tonnes, with strong growth prospects in coming years.

ConocoPhillips Q4 chemical profits drop

ConocoPhillips' Q4 net income in its chemical segment fell by 65% on lower product margins. Net income was $34m (€23m) - excluding a $65m tax benefit - down from $98m year-on-year. The decline was primarily due to lower olefin and polyolefin margins, and to a lesser extent, lower margins for aromatics and styrenics.

Krebs to produce Wacker material

India's Krebs Biochemicals and Industries has approved a manufacturing contract with Germany-based Wacker Chemie for the production of 700 tonnes/year of biotech product L-cystine. Wacker will supply the microbial strain and technology for the plant, and Krebs will set up the facility at Kothapalli, in Andhra Pradesh state, India.

Brenntag buys California distributor

Germany's Brenntag will buy Moraga, California, US-based specialty chemical distributor Schoofs, for an undisclosed sum. "Our two businesses are complementary in products and markets, and the unified company will further enhance our abilities in the western US," said Stephen Brauer, president of its US subsidiary, Brenntag Specialties.

 

W.R. Grace opens office in Dubai

US-based specialty chemicals maker W.R. Grace has opened a regional head office in Dubai to better exploit strong growth opportunities in the Middle East's construction and refining sectors. "Grace has a strong and rapidly growing client base in the region and the opening of a new regional headquarters in Dubai signifies a new phase in investment in the Gulf Cooperation Council (GCC) countries and the broader Middle East region," said Maurice Ghattas, vice president of Grace's Middle East business.

EU emissions bill changes hit industry

Carbon dioxide (CO2) emissions from petrochemicals, ammonia and aluminum manufacturing will be included in the EU emissions trading scheme (ETS) after 2013, according to the draft climate change bill published by the European Commission. The bill suggests adding these industries to the sectors already covered by the ETS, and says greenhouse gases other than CO2 should also be included in Phase 3 of the ETS.

Praxair posts record 2007 profits, sales

US-based Praxair's operating profits for the fourth quarter surged by 23% to $484m (€329m) on 19% higher sales of $2.5bn. Net income rose by 18% to $316m. "We finished an outstanding year with a strong fourth quarter. Sales growth was robust globally, led by South America and Asia," said chairman and CEO Steve Angel. For the full year of 2008, Praxair expects year-over-year sales growth in the range of 10-14%.

Air Products Q1 profits rise 17%

US-based Air Products posted a 17% rise in operating profits for its fiscal first quarter (Q1) ended December 2007 to $372m (€253m) on the back of higher volume growth, improved margins across most segments and a weaker dollar. Sales increased by 9% to nearly $2.5bn, while income from continuing operations surged by 16% to $257m.

MOL completes €560m share sale to CEZ

Hungarian oil and gas firm MOL has sold 7% of its shares to Czech electricity company CEZ for €560m ($816.8m). CEZ, Central and Eastern Europe's largest power supplier, bought 7.68m "A" shares at Hungarian forint (Ft) 30,000/share ($170/share). MOL was using the share sale, together with a wider strategic cooperation, in its ongoing attempt to fend off any hostile takeover bid that could be launched by Austrian rival OMV, analysts said. MOL and its allies now control more than 40% of the share capital.

EC fines Bayer, Zeon for price-fixing

The European Commission has fined Bayer and Zeon €34.23m ($49.9m) for their part in a price-fixing cartel for nitrile butadiene rubber, said EC Competition Commissioner Neelie Kroes. Between 2000 and 2002, German chemical giant Bayer and the Japanese firm Zeon raised or stabilized prices through a series of meetings and other illicit contacts, said the Commission. Bayer was fined a total of €28.87m and Zeon was hit with €5.36m.

Kuraray delays Texas EVOH expansion

Japan-based Kuraray has delayed its target for the second-phase expansion of its existing 35,000 tonne/year ethylene vinyl alcohol (EVOH) resin unit in Texas, US, to March 2009, due to weak demand for the product from car manufacturers. Kuraray previously said it had hoped to begin commercial operations by 2008.

BMS promotes eco coatings IN CHINA

Germany's Bayer Material-Science (BMS) is teaming up with Changzhou Coating Research Institute to promote the waterborne polyurethane (PU) coating industry in China. The partners aim to increase public awareness of the "eco-friendly" material through forums and conferences. The coating benefits the environment by reducing the emission of toxic volatile organic compounds, BMS said.

Biopharma drives UP Lonza profits

Switzerland's Lonza posted a 36% rise in its full year 2007 earnings before interest and tax (EBIT) to Swfr408m ($371.7m, €255m), pushed by a strong performance in the biopharmaceutical segment. Sales rose 26% to Swiss franc (Swfr) 2.87bn, while net income climbed 51% to Swfr301m.

Sibur eyes higher output, investments

Russia's Sibur is planning a ­significant increase in production and investments in 2008. The company plans to produce 15m tonnes of ­petrochemical products in 2008, up from 13.9m tonnes last year. It also plans to invest roubles (Rb) 40.9bn ($1.66bn), more than double its investment of Rb19.9bn last year, to upgrade its production facilites.

OM Group targets $3bn in sales

US-based specialty chemical company OM Group is targeting $3bn (€2bn) in annual sales by 2010, with acquisitions playing a major role, according to Stephen Dunmead, vice president and general manager of specialties. OM Group will focus efforts in three areas - electronic chemicals/surface treatment, portable power, and catalysts/advanced materials. In the first three quarters of 2007, OM boosted sales by 46% to $712m.

Russia petchem expansion planned

Salavatnefteorgsintez, a Russian petrochemical producer, has approved a major expansion of its ethylene and polyethylene (PE) facilities for the 2008-2012 period. Ethylene capacity will be raised from 250,000 tonnes/year to 380,000 tonnes/year, and a new 120,000 tonne/year PE facility will be built.

Canada approves Agrium's UAP bid

Agrium has received notice that Canada's competition regulator will not block its $2.65bn (€1.8bn) takeover of US-based United Agri Products. But the deal, announced on December 3, still needs approval from the US Federal Trade Commission.

JPMorgan upgrades CF Industries rating

JPMorgan raised its rating and 2008 earnings estimate on CF Industries due to a rise in the price of phosphate and urea fertilizer. The bank raised its 2008 earnings per share estimate on the US fertilizer company to $8.50 (€5.82) from $6.50 on the back of significantly stronger di-ammonium phosphate (DAP) prices and cash margins. JPMorgan also raised its rating on CF Industries to "overweight" from "neutral."

Toyo to build $283m Pertamina unit

Pertamina, the Indonesian energy major, awarded a $283m (€195m) contract to a Toyo Engineering consortium to build an olefins conversion unit. Japan-based Toyo and Indonesia-based Rekayasa Industri will carry out engineering, procurement, construction and commissioning (EPCC) work for the project at Balongan, Java. The proposed unit will produce 179,000 tonnes/year of propylene and start up in 2010.

Monsanto India sells herbicide business

Monsanto India will sell its herbicides butachlor and alachlor businesses to Singapore-based Sinochem International for Indian rupees (Rs) 330m ($84m). Sinochem will buy the assets in India, the Philippines, Thailand, Vietnam, Taiwan, Pakistan and Bangladesh.

Serbia oil/petchems handover to Gazprom

Serbia's government has agreed to a draft deal with Russia to sell a 51% stake in national oil monopoly NIS - the parent company of petrochemical firm HIP Petrohemija - to Russian energy giant Gazprom. Analysts are concerned the deal might be politically motivated, in that it could be part of a payoff for Russia's support of Serbia's opposition to independence for the province of Kosovo.

China Resources buys Changzhou Polyester

Chinese polyethylene terephthalate (PET) producer Changzhou Andenie Polyester has been sold to China Resources, a Chinese state-owned conglomerate. "The Changzhou government was the driver behind this transaction because it did not want Changzhou Andenie Polyester and China Resources Polyester Changzhou to compete for sales and cannibalize each other's margins," said a source from Changzhou Andenie.

Canada launches cold-weather biodiesel test

A government-backed road test of biodiesel in extreme cold conditions has begun in the province of Alberta, the Canadian Renewable Fuels Association said. The test program will expose more than 60 trucks to some of the harshest winter conditions in North America. In Edmonton, the provincial capital, average February temperatures do not rise above freezing point, with average daily lows of minus 12-15°C (5-10°F).

Air Products provides tech for Algerian LNG

US-based Air Products has received an order from Texas-based engineering firm KBR to provide its proprietary process technology and main cryogenic heat exchanger for the Sonatrach liquefied natural gas (LNG) project in Skikda, Algeria. The 4.5m tonne/year project will be the largest LNG train ever built in Algeria, Air Products said. The equipment is scheduled to be delivered in late 2009.

Lucite turnaround

UK-based Lucite International will shut down its US acrylonitrile (ACN) plant in Beaumont, Texas, for up to three weeks in February for scheduled maintenance, market sources said. The plant, with a capacity of 185,000 tonnes/year, or 12% of total US ACN capacity, was offline for a few days earlier this month due to a power outage.

Praxair expands coatings capacities

US-based Praxair Surface Technologies is adding state-of-the art coatings technologies to two plants, in the US and Germany, to expand capacity. The expansion, to be completed early this year, will help Praxair meet strong global demand from industrial gas turbine makers. The plants being expanded are in Charlotte, North Carolina, and Schluechtern, Germany.

Protexa to build Peru methanol project

Mexico's Grupo Protexa is expected to locate its proposed methanol project in Pisco on the Peruvian coast, an official at Argentina-based Pluspetrol said. Pluspetrol, which is developing the Camisea gas field in Peru's Amazonian rainforest, has awarded a 50m cubic feet/day (1.4m cubic meters/day) natural gas supply contract to Protexa for the methanol project.

Hercules to resume operations at China JV

US-based Hercules expects to resume full operations at its Tianpu Chemical methylcellulose joint venture in China by the end of the first quarter, after an accident on January 13 that injured two workers. The damage was limited to a packaging line and the financial impact would be minimal, the firm said.

One Equity buys 15% stake in Pfleiderer

US-based investment firm One Equity Partners has acquired 15.02% of Germany-based global laminate flooring major Pfleiderer for an undisclosed sum, and did not rule out further investments in the company. One Equity also has a majority stake in Germany's specialty chemical and catalyst maker Sud-Chemie.

BASF delays Antwerp styrene restart

Germany-based BASF has been forced to delay the restart of its styrene monomer (SM) unit at Antwerp, Belgium, until at least the end of February, a company source confirmed. "We have decided to delay the restart of the plant and it will not run before the end of February. We have had some problems getting some parts - it is a timing issue," the source said.

Violent clash at indian fertilizer plant

Militant labor groups have clashed with security personnel at the Indian Farmers Fertilizer Cooperative (IFFCO) phosphate fertilizer plant in Paradeep, injuring more than 20 people. The facility remained undamaged, sources at the company said. Local media claimed that "criminals," backed by a trade union leader, held plant employees for ransom and tried to extort them. Allegedly drunken locals and laborers then reportedly picked a fight with IFFCO security personnel, and a number of people were injured.

Mitsubishi chemical integrates businesses

Japan-based Mitsubishi Chemical Holdings and its five subsidiaries have signed an agreement to integrate Mitsubishi Plastics, Mitsubishi Chemical Functional Products, Mitsubishi Chemical MKV, Mitsubishi Chemical Polyester Film and the functional materials division of Mitsubishi Chemical into one company, effective April 1. The new company will retain the name Mitsubishi Plastics.

Nippon Steel restarts ortho-cresol unit

Japan-based Nippon Steel Chemical has restarted full-scale production at the ortho-cresol unit of its joint venture Nippon Crenol at Kawasaki, in Kanagawa prefecture, after a capacity increase due to robust demand. The expansion to increase the capacity to 12,000 tonnes/year from 10,000 tonnes/year was carried out during the plant's turnaround from October to November, and full-scale production restarted in early January.

Avon going to Mexico

US cosmetics company Avon will shut its Guatemala manufacturing plant in late November to move production to its more modern facilities in Guanajuato, Mexico. The factory makes 3m units of cosmetics a year, including skin care and personal care products. The move will see 260 direct and 60 auxiliary workers leave the firm and is part of a major global restructuring by Avon. The move is expected to save the company $430m/year (€294m/year) after 2011.

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