This week's world news

24 March 2008 00:00  [Source: ICB]

Wal-Mart launches chemical screening

US retail giant Wal-Mart on April 1 will begin screening chemical-intensive products for adverse environmental effects and will seek product reformulation in some cases, according to Zach Freeze, manager of Wal-Mart's sustainable value network program for suppliers and buyers. The screening program will check "all chemicals against criteria for adverse impacts to human health and the environment [in order] to move away from the use of the most hazardous chemicals," Freeze said. The new process, which in part will be operated by third-party firms, will seek to identify any chemicals that are known to be carcinogens, mutagens or that have reproductive or developmental toxicity profiles, he said.

L&T coal gasifier for China methanol

India's engineering major Larsen & Toubro (L&T) has said it will supply the world's largest coal gasifier to a methanol project in China. The Indian rupees 1.7bn ($42m) contract, with Hebi Coal and Electricity, a subsidiary of Zhongyuan Coal Chemical Industry Group, includes the supply of both gasifer and synthesis gas (syngas) cooler assembly units. The gasifier will be able to handle 3,400 tonnes/day of coal.

Desotech buys Polymeric Processes

Desotech, a subsidiary of Dutch chemical major DSM, has acquired US-based Polymeric Processes Inc. (PPI) for an undisclosed sum to expand its UV-curable coatings business. Texas-based PPI produces UV-curable coatings for tube and pipe applications, a fast-growing market. "We feel very confident that the acquisition of PPI will enhance what we're able to offer this market in terms of both technology and service," said Desotech manager Anthony Toussaint.

Lukoil blast kills one

A blast at the Lukoil-Nizhe-gorodorgsintez refinery killed one worker and injured another last week. The explosion damaged the ammonia compressor but there was no leak, according to a statement from the Emergency Situations Department of Nizhny Nov-gorod region. The plant's main units were not affected, it said.

US to begin testing inorganic chemicals

The US Environmental Protection Agency (EPA) will launch a program in the third quarter to test inorganic chemicals produced in high volumes, EPA administrator Stephen Johnson said last week at the annual GlobalChem conference on chemical regulation. The program will expand the nine-year-old high-production-volume program, which has so far focused chiefly on organic chemicals. He also said the EPA will review and revise the inventory of some 83,000 chemicals that are regulated under the US Toxic Substances Control Act (TSCA). "We want to be sure that the TSCA inventory reflects the chemicals that are actually in production and use in this country," said Johnson.

A. Schulman to sell Texas plant...

US plastics compounder A. Schulman has agreed to sell its 135m lb (61,000 tonne)/year toll manufacturing plant in Orange, Texas, to Alloy Polymers for an undisclosed sum. A. Schulman wants to concentrate on higher value-added products, but it will continue to manufacture proprietary products at the Orange facility through a service agreement with Alloy, which provides specialty compounding services to the thermoplastics industry from plants in Richmond, Virginia Gahanna, Ohio and Crockett, Texas.

...While company itself is still for sale

US plastics compounder A. Schulman said last week that it had hired UBS Investment Bank as its financial adviser to consider a sale, a merger or an acquisition. "This is the latest step in the ongoing process of evaluating all alternatives available to the company to maximize stockholder value," said chairman Joseph Gingo, "We will also continue to move ahead with our operational initiatives to transform our business and position A. Schulman for long-term, profitable growth." Earlier this year, Ramius Capital Group, an investment firm that advocated sale of the company, successfully waged a proxy fight.

Jacobs acquires 60% of Saudi firm

Jacobs Engineering Group has acquired a 60% interest in Saudi Arabia's oil and petrochemical engineering firm Zamel & Turbag Consulting Engineers (ZATE) for an undisclosed sum. ZATE will merge with Jacobs' existing operations in Saudi Arabia to form Jacobs, Zamel and Turbag Consulting Engineers (Jacobs ZATE), with a total staff of 500 people. The acquisition, coming on the back of increasing oil, refining and chemical project activities in the Middle East, will strengthen Jacob's business, said the CEO.

BASF to phase rollout of Nanjing expansion

Germany-based BASF will start up the $900m (€576m) expansion at its joint-venture (JV) cracker complex with China's Sinopec, BASF-YPC, in phases through 2011. The project cost, previously slated at $500m, was raised after a feasibility study showed that more funds were needed for infrastructure and logistics measures. The JV, in Nanjing, Jiangsu province, will expand the capacity of its 600,000 tonne/year cracker to 750,000 tonnes/year, increase capacities at existing downstream plants and also build new units. The cracker expansion will go on stream in 2009-2010.

Petron studying $1.5bn expansion

Petron Corp. is studying a plan to invest $1.5bn (€960m) to add units at its Petro fluid catalytic cracker (FCC), which came on stream last month. The expansion would include several units to allow for full conversion of black products such as fuel oil into white products such as liquefied petroleum gas (LPG) and petrochemical products. The units would be added gradually through 2014.

10% renewable Energy by 2010: China's goal

China aims for renewables to supply 10% of its energy needs in 2010, cutting reliance on fossil fuels by around 300m tonnes of coal equivalent. Besides increasing hydro, wind and solar output, Beijing plans to triple the production of nongrain fuel ethanol to 3m tonnes during the 11th five-year period (2006-2010). It also aims to increase its biodiesel output to 200,000 tonnes from 50,000 tonnes in 2005. Beijing has encouraged the growth of nongrain feed such as sorghum, cassava, jatropha and tallow in the northeastern region, Shandong, Guangxi, Chongqing, Sichuan and Hainan. Waste vegetable oil collection points will also be set up in major cities such as Beijing, Shanghai, Chongqing, Chengdu and Guangzhou for biodiesel production.

Nippon Oil, Kyushu Oil plan merger

Nippon Oil and Kyushu Oil plan to merge operations to stay competitive in Japan's weak petroleum industry and to increase exports to booming markets in Asia and the Pacific rim region, a Nippon Oil spokesman said last week. The two companies have signed a memorandum to begin talks on the proposed merger, which is targeted for completion by October 1.

IOI plans $138m palm plantation acquisition

Malaysian palm oil firm IOI plans to acquire a 65% stake in two Sarawak-based plantation companies for Malaysian ringgit 439.85m ($137.88m) to capitalize on strong growth projected for the palm oil industry. The two companies, Double Dynasty and Nirwana Muhibbah, have a total plantation area of 44,350ha (110,000 acres), of which approximately 13,500ha make up planted area. IOI is the world's largest publicly traded palm oil producer and the proposed acquisition will increase its plantation area in Malaysia to 213,800ha, while in Indonesia, its land holdings total 152,000ha through two joint ventures.

Ningbo Wanhua to build aniline plant

Chinese producer Ningbo Wanhua Polyurethanes has awarded a contract to KBR to provide the technology and basic engineering for a 360,000 tonne/year aniline plant. Wanhua will use the aniline to produce methylene di-p-phenylene isocyanate (MDI), which is used to make polyurethane (PU). US engineering and construction firm KBR obtained the aniline technology through a licensing agreement with US-based DuPont.

Eastman uses green process

US-based Eastman Chemical next month will introduce two cosmetic ingredients produced using enzymatic esterification, a green processing technology. The move will not only mark Eastman's debut in the cosmetic-active-ingredients market but also its first steps toward green and natural cosmetics.

Shell to invest in second-gen ethanol

Royal Dutch Shell plans to invest in second-generation ethanol production in Brazil. The focus of the project will be cellulosic ethanol. The Anglo-Dutch petroleum and petrochemical giant is talking with Brazilian ethanol producers and is also investing in research in partnership with Sao Paulo's Unicamp university, said a company official.

Petrovietnam gets tapioca ethanol deals

Vietnam's state-run Petrovietnam, through subsidiary Petrosetco, is planning an $80m (€51m), 75m liter/year ethanol plant in the city of Vung Tao with Japan's Itochu Corp. Petrosetco is also planning a $138m, 1.2m tonne/year ethanol plant in central Vietnam with UK biodiesel company Bronzeoak. Both plants are being designed to use tapioca as feedstock.

FDA moves forward on China Presence

The US Food and Drug Administration (FDA) has received approval from the US State Department to establish eight full-time, permanent FDA positions at US diplomatic posts in China, pending authorization from the Chinese government. The FDA will also hire five Chinese nationals to work with the new FDA staff at the US Embassy in Beijing and the US Consulates General in Shanghai and Guangzhou. "Along with the important Memoranda of Agreement signed with two FDA counterpart Chinese agencies, our efforts to fill permanent FDA positions in China are a significant step toward ensuring access to safe food, drugs, and medical devices in the global market," said Murray Lumpkin, FDA deputy commissioner for International and Special Programs.

Continental, Boeing, GE plan Biofuel Flight

Continental Airlines, Boeing and GE Aviation plan to conduct a biofuel demonstration flight in the first half of 2009 in an effort to identify sustainable fuel solutions for the aviation industry. Continental is the first major US carrier to announce such plans. The partners will work with an undisclosed fuel provider to identify sustainable fuel sources that do not impact food crops, water resources or contribute to deforestation, and which can be produced in sufficient quantities to support a pre-flight test schedule that includes laboratory and ground-based jet engine performance testing.

RAG Evonik decision "within weeks"

Germany's RAG Stiftung expects to decide within weeks - possibly in April - whether to proceed with a stock listing and the sale of a stake in Evonik Industries, which includes the former Degussa specialty chemical operation, RAG spokesman Wolf-Rudiger Grohmann told ICIS last week. He was responding to a report by the Financial Times Deutschland newspaper that RAG had already decided to postpone both options to 2009 due to unfavorable capital market conditions.

Mays Chemical acquires Ochoa

Mays Chemical has acquired the assets of Puerto Rico's Ochoa Industrial Sales for an undisclosed sum, becoming the largest chemical distributor there on the island, according to the company. Ochoa, which is focused on the industrial and pharmaceutical segments, had revenues of about $40m (€26m) last year. Mays, a privately owned chemical distributor based in Indianapolis, Indiana US, says it had revenues of over $160m in 2007.

DuPont starts up sulfuric facility

US major DuPont has started up a new sulfuric acid regeneration plant at a refinery in El Paso, Texas, and is working to start up another such plant in Linden, New Jersey. The company's onsite sulfuric acid regeneration and sulfur gas recovery plants help refiners to regenerate sulfuric acid used in the alkylation process and convert refinery gases to sulfuric products.

Perstorp to buy Rhodia, Lyondell isocyanates

Rhodia and Lyondell Chimie have entered exclusive negotiations to sell their isocyanates businesses to Swedish specialty chemicals firm Perstorp. The "last major step" in the refocusing of Rhodia's portfolio, the divestment would lead to the break-up of the Rhodia Organics enterprise. The company has said that it was looking for solutions to the problem of its underperforming isocyanates and salicylic acid businesses.

Japan's Iwatani plans $36m hydrogen unit

Japanese industrial gas maker Iwatani International has begun construction on a yen 3.7bn ($36.29m) liquefied hydrogen plant at its factory in Chiba prefecture in order to meet an expected increase in demand from various industries, including semiconductors and solar batteries. The 3,000 liter/hour plant will be the first liquefied hydrogen facility in western Japan and Iwatani's second in the country when it begins operations in June 2009.

Explosion at US aerosol plant

An explosion at an aerosol plant in Spooner, Wisconsin, injured two workers on March 18. The facility is operated by Cortec, a St. Paul, Minnesota-based producer of a range of corrosion-inhibiting chemicals and related products.

IFC to invest $12m in MOL chlor-alkali

India's Meghmani Organics Ltd. (MOL) said IFC, the private-sector lending arm of the World Bank, will invest rupees (Rs) 461m ($11.5m) in MOL's proposed Rs5.5bn chlor-alkali plant in Dahej, Gujarat state. IFC will also provide Rs800m as a long-term loan and will have the right to subscribe to warrants of up to Rs50m. MOL expects to commission the project by December or January.

Grace invests in green concrete

US-based W. R. Grace has made a strategic investment in CERATECH, a Maryland-based firm that says it has developed green, sustainable concrete admixture technologies for formulating high-strength, fast-setting concrete, primarily using fly ash, a waste stream product from coal-fired power plants.

Mitsubishi Chem sets up Indian subsidiary

Japan's Mitsubishi Chemical Corp. (MCC) has established a subsidiary, Mitsubishi Chemical India, in Gurgaon, Haryana state, for its expanding resin compounding business. It will initially sell elastomers, engineering plastics and functional products including acrylamide in India that have been produced elsewhere. But MCC aims to make Mitsubishi Chemical India a manufacturing base of functional resins, polyvinyl chloride (PVC) and engineering plastics by building plants at a location adjacent to the company's polypropylene (PP) compounding plant in Neemrana, Rajasthan, which is now being built.

Eastman expanding copolyester capacity

US-based Eastman Chemical is expanding capacity for its Tritan copolyester at Kingsport, Tennessee, to meet growing demand. The move, to be completed by late 2009, included the construction of new manufacturing facilities and the conversion of some existing operations.

S&P downgrades Clariant

Standard & Poor's (S&P) has lowered its long-term corporate credit rating for Switzerland-based specialty chemicals producer Clariant from "BBB" to "BBB-", due to "weak underlying profitability and subpar cash flow coverage." Clariant ranked among the low end of S&P-rated chemical companies in 2007. The credit rating agency affirmed Clariant's "A-3" short-term rating, however, and said its credit outlook was "stable."

Eurochem invests $15m in Lithuania DAP plant

Russian fertilizer producer Eurochem expects to almost double investment in its Lifosa phosphate fertilizer facility, in the Kedaynyansky district of Lithuania this year, to $14.9m (€9.5m).

LSB starts building large PTA plant

Spain's La Seda de Barcelona has begun construction of a €400m ($625m), 700,000 tonne/year purified terephthalic acid (PTA) plant in Sines, Portugal. The plant is meant to cover the current shortfall in the European market for PTA, the raw material of the company's strategic product, polyethylene terephthalate (PET).

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