17 March 2008 00:00 [Source: ICB]
US companies face Reach disruption
Many North American firms are unaware of the new European chemicals legislation Reach, which could affect them if they are to continue exporting chemicals to Europe, according to financial services firm PricewaterhouseCoopers (PwC). "The widespread lack of awareness raises concerns that North American companies may miss important Reach deadlines and, as a result, suffer significant business disruptions," said PwC, as it published a Reach survey. Most companies had not discussed the law with customers and suppliers to determine the impact on their supply chains, it added.
MOL sells $1.3bn stake to Oman Oil
Hungarian oil, gas and petrochemical group MOL is to swap 8% of its shares in return for unspecified assets and cash with Oman Oil Co, the energy major owned by the Sultanate of Oman. The deal is valued at forint (Ft) 221.3bn ($1.3bn, €834.4m). Analysts immediately expressed the view that the disposal would help MOL fend off any more unwanted takeover approaches from Austrian rival OMV. In a bulletin on the stake disposal, equities house KBC Securities said it was clear MOL was creating a new ownership structure that would obstruct any hostile bid from OMV.
Lanxess profits plunge, forecast cut
Germany's LANXESS posted an 87% fall in fourth-quarter earnings compared with last year and narrowed its forecast for 2008 due to a slowdown in the US economy. Its fourth-quarter earnings before interest and tax (EBIT) fell to €5m ($3.3m) from €39m in the same period of 2006, while sales were down by 12% to €1.46bn on negative currency effects and the divestment of its Lustran Polymers unit, the company said in a statement. For 2007, the company's EBIT fell by 42% to €215m, while sales dipped by 4.8% to €6.6bn.
China to boost environmental control
China is to set up an energy commission and has upgraded the country's environmental watchdog to a ministry to increase its management and control in these two areas. The State Council has upgraded the environmental watchdog to the Ministry of Environmental Protection, giving it more resources and power to enforce pollution control. The National Energy Commission will draft energy development strategies and consider energy security and development issues, said Hua Jianmin, secretary-general of the State Council.
CWT launches logistic hubs in Singapore
Singapore's logistics group CWT has launched two integrated petrochemical logistic hubs in Singapore for S$80m ($58m), as part of a larger plan to create 2.3m ft2 (214,000 m2) of warehouse space by 2009. The integrated hubs will have a total area of 925,000ft2 and will house key clients such as Germany's BASF and the US' DuPont. The units will store hazardous chemical products such as flammable materials, oxidizers and poisonous chemicals, and their location at Tanjong Penjuru will provide access from terminal ports and Jurong Island.
Sumitomo Seika acquires Arkema's SAP
Sumitomo Seika Chemicals has agreed to buy Arkema's business in superabsorbent polymers (SAP), with the European company making the product for the Japanese firm on its Carling industrial site in France. Arkema has a single production plant in Carling, with a capacity of 15,000 tonnes/year, generating annual sales of €20m ($30.6m). This will raise Sumitomo Seika's total SAP capacity to 155,000 tonnes/year from 140,000 tonnes/year.
Clariant builds new JV pigment plant in China
Clariant's Chinese joint venture (JV) Hangzhou Baihe Clariant will build a world-scale plant for quinacridone specialty organic pigments, said the Swiss specialty chemicals maker last week. The expansion, at the JV's existing production site in Hang Zhou City, Zhejiang province, will supply Chinese and global customers. Quinacridone organic pigments are used in many high-performance coatings, including architectural, automotive and industrial applications, as well as plastics and printing applications.
GE unit to invest $5bn in Asian renewables
US company General Electric Energy Financial Services is hoping to invest $5bn (€3.25bn) in renewable energy projects in Southeast and East Asia to tap the region's soaring energy demand. The investment arm of the NYSE-listed firm is expected to spend nearly a quarter of its total allocated funds outside the US by the end of 2010, a significant rise from its traditional level of 10%.
W. R. Grace to pay $250m for asbestos
Bankrupt US catalyst producer W. R. Grace has agreed to pay US regulators a record $250m (€163m) to settle a lawsuit filed against it to recover the cleanup costs of an asbestos site. The $250m is the highest that a company has paid in the history of the Environmental Protection Agency's Superfund program, which is charged with cleaning up hazardous waste. The asbestos was an impurity found in the vermiculite that W. R. Grace mined near Libby, Montana, from 1963-1990. The EPA has been cleaning up the site since May 2000.
First Resources to contest seizure
Indonesian crude palm oil (CPO) producer First Resources says it will challenge in court any government action to seize its plantation assets. It was responding to press releases by the Corruption Eradication Commission of Indonesia last week that it would auction off 19 of the company's plantation and mill assets, including three subsidiaries with regard to a court case relating to Martias, one of the founders and former shareholders of the Company.
Investors unimpressed with big pharma
Enthusiasm for big pharma has waned on Wall Street now that the years of double-digit growth could be over, according to US data provider Thomson Financial. Healthcare has traditionally been considered a sector for defensive investment, noted Jeff Shacket, vice president, corporate advisory services, during a presentation at DCAT Week '08 in New York. "There is some question, though, as to whether or not the weakness in the pipelines and some of the rising [patent] expiration problems have perhaps erased the downside protection that once insulated this industry in times of economic slowdown," he said.
Shandong aims for chemicals hub status
The economic zone in the southern part of Shandong province in China aims to develop into a major energy and coal chemical industry base in the country by 2010, a local government official said last week. The zone has targeted projects with production capacities of 1.5m tonnes/year of ammonia, 10.5m tonnes/year of coke, 4m tonnes/year of methanol, 600,000 tonnes/year of olefins, 1m tonnes/year of acetic acid, 250,000 tonnes/year of dimethyl ether (DME) and 250,000 tonnes/year of refined benzene, said the official from the Regional Economic Development Planning Department in southern Shandong.
Sonatrach, SBGH form Algeria fertilizer JV
Algeria's energy group Sonatrach and the industrial group Suhail Bahwan Group Holding (SBGH) of Oman have announced the formation of a joint venture (JV) to build a fertilizer plant in Algeria. The project would be located in the Arzew industrial zone and is set to produce 7,000 tonnes/day of urea and 4,000 tonnes/day of ammonia. The newly established JV is called Algerian-Omani Fertilizer, with Bahwan holding a 51% stake and Sonatrach the remainder.
New Argentina biofuels tax shocks
The implementation of an export tax on biofuels from Argentina is generating unease in the local industry, said sources. The Argentine government has imposed a tax of 20% on the export of biofuels from Argentina, through resolution 126/08 of the Minister of Economy and Production of Argentina.
India allows foreign investment in TiO2
India will allow 100% foreign equity investment in integrated titanium dioxide (TiO2) pigment projects under a new government policy. Such foreign direct investment would be allowed with government approval in the mining and mineral separation of titanium bearing materials and ores, subject to certain regulations under the existing Mines and Minerals Act, it added.
INEOS sells seal sands
UK chemical group INEOS is to purchase from BASF its Seal Sands, Teesside, UK site. The plant provides large-scale production of acylonitrile (ACN), adipodinitrile and other products.
Analyst sees $75 oil possible in a few years
World oil prices could moderate to around $75/bbl in the coming years, with increased consumption efficiencies, production innovations and reduced geopolitical tensions, says US energy analyst Jim Burkhard from Cambridge Energy Research Associates. Prices could hit $70-80/bbl within 10 years influenced by government policy, technology, labor availability and investments.
Infineum future cloudy
US major ExxonMobil Chemical and Anglo-Dutch giant Shell Chemicals are evaluating the sale of their lube additives joint venture Infineum. A strategic review of the UK-based company will involve JP Morgan, but no divestment decision has been made and there is no specific timetable for the study. Analysts believe the business, with estimated sales of $1.8bn-2bn (€1.2bn-1.3bn) a year and a global market share of about 22%, will attract interest from private equity and industry players new to the lubricants business.
Undesa to consolidate fatty acid operations
Undesa will consolidate its Spanish fatty acid operations incrementally in 2008, beginning in the second quarter. The firm's fatty acid and glycerin operations will move from its current Vildecans site, near Barcelona, to join its derivative fatty acid plant in Zuera, close to Zaragoza. It is currently building up stocks at its Spanish and Italian sites for the transition period. There will also be an overlap in production at both the Spanish sites to aid the smooth running of the move.
China Agro-Tech invests in biodiesel
China Agro-Technology plans to invest nearly $200m (€129m) over the next four years to build a 2m tonne/year biodiesel refinery plant in the southern province of Guangxi. The plant will operate on jatropha feedstock. The firm expects the facility to come on stream six months from the date of commencement.
Sasol sees profits soar
Sasol has posted a doubling of the fiscal first-half operating profits for its chemical cluster at rand (R) 2.4bn ($300m) due to significant increases in margins, and expects its Iranian joint venture to boost earnings this year. Turnover for the segment rose by more than 9% to R31.8bn in the six months, ended December 31 2007, from the same period a year ago, said the South African energy major. Operating profit for Sasol Polymers jumped by 90% to R497m during the same period, while turnover increased by nearly 2% to R4.7bn.
DC Chem seals a $251m Taiwan deal
South Korea's DC Chem has secured a won 244bn ($251m) polysilicon (PS) supply deal from Taiwan-based Sino-American Silicon Products. The contract calls for the supply of PS to the Taiwanese semiconductor components' producer and distributor from 2009-2016 and will form more than 20% of DC Chem's total annual sales. This is the company's fifth such deal since the beginning of 2008, with the previous four deals being with Evergreen Solar, Deutsche Solar, Yingli Green Energy Holding and Motech Industries.
Ammonia Casale secures $28m contract
Swiss-based Ammonia Casale has won an €18m ($27.7m) contract from Iran's National Petrochemical Co. to supply technology for three plants. Its technology will be used on three ammonia projects in Zanjan, Golestan and the Lordegan petrochemical complexes. Each of the units will produce 2,050 tonnes/day (676,500 tonnes/year) of ammonia. It previously supplied technology to Iran's Razi Petrochemical.
Bayer ups stake in polyurethanes JV
German chemicals producer Bayer MaterialScience will acquire the remaining shares in its 50:50 polyurethane (PU) systems joint venture (JV) with Busing & Fasch. Bayer said it would take full control of the Oldenburg, Germany-based company BaySystems BUFA Polyurethane in April, but did not disclose the transaction fee. BaySystems BUFA offers systems for the production of integral skin foams, elastomers and rigid foams.
Australia's Incitec set to take Dyno Nobel
Incitec Pivot, Australia's largest fertilizer maker, has offered to buy the rest of Dyno Nobel in a cash and share offer valuing the explosives maker at Australian dollar (A$) 3.3bn ($3bn). Incitec, which already owns 13% of Dyno, plans to use its compatriot company's North American plants and extensive distribution platform to increase its fertilizer sales. "There is a natural fit as both businesses have nitrogen-based manufacturing at their core," Incitec managing director and CEO Julian Seagal said.
UK's TDG signs logistics deal with Brenntag
UK logistics group TDG has won a four-year contract to outsource the Spanish logistics operations of German chemicals distributor Brenntag. The contract involves the storage of industrial and specialty chemicals and their distribution to Brenntag's customers across mainland Spain, the Canary Islands and Portugal. TDG will run Brenntag's operations from its facility near Barcelona.
Dow breaks ground on polyols expansion
Dow Chemical has broken ground on a capacity expansion at its 350,000 tonne/year Terneuzen, Netherlands, polyols plant, the US petrochemicals major said. Dow said it was increasing the facility's capacity by 180,000 tonnes/year and expected work to be completed by mid-2009. The expansion plans were announced last September.
Mustang draws out ways to cut benzene
The US' Mustang Engineering outlined options for reducing benzene in the refinery gasoline pool, in a technical session at the 106th NPRA annual meeting last week. "Controlling benzene content of reformate offers the best opportunity to reduce benzene in the gasoline pool, said Ed Palmer, Mustang's manager for process engineering process plants.
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