This week's world news
16 June 2008 00:00 [Source: ICB]
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EPA SEEKS ANSWERS TO GULF DEAD ZONE
The US Environmental Protection Agency launched a grant initiative last week to solicit ideas on how to reduce chemical pollution causing a dead zone in the ?xml:namespace>Gulf of Mexico. US state or tribal governments that come up with proposals by September 9 could receive as much as $4.2m (€2.69m).
COSTS KILL ANOTHER US BIODIESEL PROJECT
North Prairie Productions plans to halt construction of its 150,000 tonne/year Wisconsin refinery project. "We decided it wasn't going to work with commodity prices," company board chairman John Sheehy said. "We're going to cash out and give some money back." The company will return half of the $26m (€17m) equity it raised to investors, he said.
GERMAN CHEMS OPPOSE MINIMUM WAGE PLANS
German chemical employers are opposed to plans by the country's federal labor ministry to set minimum wages, chemical employers' association the BAVC said last week. The proposed legislative action would undermine the independence of the collective bargaining process and is not in line with Germany's federal constitution, the association said. Government-set minimum wages would actually cost jobs, rather than help less-qualified workers find and keep work, the BAVC asserted.
JACOBS WINS ESTELUX POLYSILICON CONTRACT
Jacobs Engineering, of the US, has won a contract to build a 4,000 tonne/year polysilicon plant for Italian polysilicon start-up Estelux at a petrochemical site in Ferrara, Italy. The €360m ($562m) plant is expected to reach full operating capacity in 2010.
SHINTECH'S LOUISIANA START-UP IN JULY
Japan's Shin-Etsu Chemical will start commercial production at the new $1.9bn (€1.2bn) Louisiana complex of US subsidiary Shintech in the latter half of July. "The US market is in bad shape, but fortunately demand [for PVC] is increasing on a global level," company president Chihiro Kanagawa said. Capacity of the 300,000 tonne/year PVC unit is expected to be doubled by 2009.
UNIQEMA BUY COMPLETED
US private equity firm H.I.G. Capital has completed its $92m (€58m) acquisition of oleochemical supplier Uniqema. H.I.G. intends to add on future specialty chemical acquisitions.
ABOCOL TO EXPAND FERTILIZERS FOR $88M
Colombia's Abonos Colombianos (Abocol) intends to set up new nitrogenous fertilizer production facilities and upgrade others, at a cost of $88m (€56m). Abocol will set up an 80,000 tonne/year nitric acid plant and an 82,000 tonne/year ammonium nitrate (AN) solution plant at its complex in Mamonal, Cartagena, as well as a 100,000 tonne/year calcium nitrate granulated plant and a 25,000 tonne/year calcium nitrate liquid plant. All four plants are slated for completion by 2009.
SHANGHAI TO RESTRICT CHEMS FOR OLYMPICS
China Shanghai Port plans to suspend the import and export of some hazardous chemicals from July 20 to August 31, in consideration of the Beijing Olympics. The prohibited chemicals fall into four broad categories - organic peroxides, virulent products, explosive goods and radioactive substances.
DAIICHI SANKYO IN $4.6BN RANBAXY BUY
Tokyo-based Daiichi Sankyo aims to buy a controlling stake in India's largest pharma company, Ranbaxy, for up to $4.6bn (€3.0bn), in a friendly takeover. The move will extend Daiichi Sankyo's global reach from 21 countries to 56, notably in China, India, Eastern Europe and other emerging markets, while expanding its generic drugs operations. Japan's drugmakers have been on a buying spree, owing to slow growth.
ULTRAPAR TO ACQUIRE SANTOS, RIO TERMINALS
Brazil's Ultrapar Participacoes has announced plans to acquire terminal operator Uniao Terminais from petrochemical group UNIPAR in a transaction worth about reais 482m ($295m). The deal includes a 102,000m3 terminal in Santos, used mainly for fuel, ethanol and chemicals, and a 17,000m3 facility in Rio de Janeiro, which handles mostly chemicals and lubricants.
DUPONT UPS PV PASTE PRODUCTION IN CHINA
DuPont will double the manufacturing capacity for thick-film metallization pastes at its Dongguan plant in China, as part of its strategy to more than triple sales to the photovoltaic (PV) industry. The US-based company said it expects its sales to the photovoltaics market to jump to more than $1bn (€630m) from $300m in the next five years. The photovoltaic market is expected to grow by more than 30% in each of the next several years.
ASHLAND BUYS AIR PRODUCTS SPECIALTIES
Ashland has agreed to buy Air Products' pressure-sensitive adhesives and atmospheric emulsions businesses for $92m (€58m). The deal between the two US firms will include the transfer of 80 employees at plants in Elkdon, Maryland, and Piedmont, South Carolina, into Ashland's Specialty Polymers & Adhesives business group.
BRASKEM TO INVEST $617M AT TRIUNFO
Brazilian petchem firm Braskem is to invest reais (R) 1bn ($617m) in the next three years at the Triunfo petrochemical complex. An ethanol-based polyethylene (PE) plant, previously announced, is part of the project, with an estimated cost of R400m-500m.
AIRGAS SET TO ACQUIRE OILIND SAFETY
US industrial gases company Airgas will acquire Oilind Safety, which is a provider of rental safety equipment. Oilind will operate as a stand-alone company within Airgas's construction and rental businesses.
AIR LIQUIDE ADDING TWO AIR SEPARATION UNITS
Air Liquide will invest over €120m ($185m) in two new air separation units (ASUs) to raise production capacity in Germany and Italy, on the back of increased demand, particularly from the steel industry. A 2,300 tonne/day ASU in Oberhausen, Germany, will be commissioned in 2010. Another ASU will be added to its 650km (403 mile) pipeline network in the north of Italy by the end of 2009.
US ENERGY AGENCY SEES OIL FALLING TO $57
The global oil price will fall to as low as $57/bbl by 2016 and will average $70/bbl by 2030 as exploration and development investments respond to current high crude prices, according to the US Energy Information Administration (EIA). The EIA's revised outlook to 2030 anticipates that worldwide production of hydrocarbon liquids will increase, and prices will decline, "as expanded investment in exploration and development brings new supplies to the world market."
S&P CUTS INEOS OUTLOOK
Standard & Poor's (S&P) has revised its outlook for UK-based chemical group INEOS to "negative" from "stable" due to less favorable business prospects in 2009. "The outlook revision reflects increased risks and profit pressures, notably in 2009, given less favorable chemical cycles in many segments, high feedstock and energy prices, a potentially insufficiently deleveraged balance sheet, and tight covenant leeway and liquidity in 2009," said S&P credit analyst Lucas Sevenin. S&P also affirmed its "B+" rating for INEOS.
CIBA DEFENDS USE OF TRICLOSAN IN SOAPS
Swiss-based Ciba Specialty Chemicals defended the use of the antibacterial agent triclosan in soaps by refuting claims that it can cause endocrine disruption in bullfrog tadpoles. Research commissioned by Ciba and conducted by Fort Environmental Laboratories in the US suggests that triclosan does not alter the normal course of thyroid-mediated metamorphosis in the tadpoles at environmentally relevant concentrations. Scientists in Canada found that exposing tadpoles to levels of triclosan commonly found in the environment could cause endocrine disruption.
SOLAZYME ROLLS OUT ALGAE-BASED DIESEL
US bioscience firm Solazyme said its algae-derived diesel has been certified as fully compatible with existing diesel fuel systems. The California-based company said a standard automobile was road-tested using the company's 100% algae-derived diesel.
DOW LIFTS ETHYLENE FM AT TERNEUZEN
US-based Dow Chemical has lifted ethylene force majeure, as its No. 2 cracker in Terneuzen, the Netherlands was back in full operation. The cracker, one of three operated by the company at the site, tripped on Sunday, June 1 and was expected to be out for around a week. The 575,000 tonne/year ethylene cracker was only recently restarted, with some delays, following a planned shutdown.
BORSODCHEM PREPARES FOR TDI TURNAROUND
Hungary's BorsodChem will shut down its 90,000 tonne/year toluene di-isocyanate (TDI) plant in Kazincbarcika for routine, annually scheduled maintenance in August. The shutdown is planned to last for approximately a month.
GOODYEAR PLANT EXPLOSION INJURES SIX
A small explosion caused six injuries at US-based Goodyear's styrene butadiene rubber (SBR) plant near the Houston Ship Channel in Texas. The injured employees were treated at the plant and sent to a local hospital for examination, said Goodyear spokesman Scott Baughman. The capacity of the SBR plant is 265,000 tonnes/year, according to ICIS plants and projects. Goodyear has halted operations at the plant.
PACE OF CHEMICAL M&A TO SLOW IN 2008
The pace of global chemical industry mergers and acquisitions (M&A) will likely slow in 2008, according to New York, US-based investment bank Young & Partners. In the first quarter, the global chemical industry completed 17 deals over $25m (€16m) in size - off the pace of 81 deals for all of 2007, Young said. However, the deal value of completed transactions was $25bn in the first quarter, boding well for the year, he said. In 2007, the chemical industry completed a record $55bn in deals.
AGRIUM RAISES Q2 EARNINGS GUIDANCE
Canada's fertilizer producer Agrium has significantly raised its second-quarter earnings per share guidance to $2.80-3, from the previous range of $1.92-2.22. "Our excellent results are due to strong performance from both our retail and wholesale operations, which is particularly impressive, given that the North American spring application season has been hampered by excessively cold and wet weather this year," said CEO Mike Wilson.
SPANISH STRIKE AFFECTS SURFACTANTS OUTPUT
One ethylene oxide (EO) buyer's surfactant production in Southern Europe has been brought to a standstill because of truck driver strike action in the region. The source said there was no option but to stop output as there were no deliveries either entering or leaving the site, due to the road blockages on the France/Spain border. Negotiations were ongoing between the Spanish haulage companies and the government.
PAKISTAN MAY USE ETHANOL IN 2009
Pakistan might start using 10% ethanol-blended gasoline as early as January, following the successful implementation of a pilot program, said Pakistani ethanol producers. If the government implements the blending mandate, the domestic market would require around 140,000 tonnes/year of ethanol.
BOREALIS DECLARES FM ON AUSTRIA LLDPE
Austrian firm Borealis has declared force majeure on linear low density polyethylene (LLDPE) at its stricken 350,000 tonne/year unit in Schwechat, Austria. "The plant was troublesome last week and didn't come back on stream over the weekend," said a company source last Wednesday.
EC FINES CARTEL €79.1M
The European Commission fined chemical groups a total of €79.1m ($121.6m) for cartel activity in the sodium chlorate market in 1994-2000. The Commission imposed fines, for allocating sales volumes and fixing prices for sodium chlorate, on Sweden's EKA Chemicals and AkzoNobel of the Netherlands Finnish Chemicals Erikem Luxembourg Arkema and Elf Aquitaine, both French and Aragonesas Industrias y Energia and Uralita, both Spanish. "These companies have to learn the hard way that the [Comission] will impose high fines when they rip off their customers, and ultimately consumers, by forming a cartel," said EU competition commissioner Neelie Kroes.
EVONIK TO CLOSE GERMANY ORTHOESTERS
Tough market conditions have forced Germany-based Evonik Industries to close down its orthoesters production plant in Niederkassel, Germany. The plant will cease production in the third quarter and employees affected will be transferred to other units at the site. The most important products at Niederkassel are alcoholates used as catalysts in biodiesel.
YINGFENG TO BUILD FERT PLANTS IN SICHUAN
China's Yingfeng Fertilisers intends to build three fertilizer plants in Sichuan, Southwest China, in place of its five units that collapsed following the earthquake on May 12. The facilities have a planned capacity of 800,000 tonnes/year of nitrogen phosphorus potassium (NPK) fertilizer, 600,000 tonnes/year of sulfuric acid and 150,000 tonnes/year of synthetic ammonia. Yingfeng plans to resume production at its 200,000 tonne/year NPK plant in Shifang, central Sichuan, in the third week of June.
JUNZHENG BREAKS GROUND ON PVC PROJECT
China's Junzheng Energy Chemical has broken ground on a 400,000 tonne/year polyvinyl chloride (PVC) plant at Wuhai, in Inner Mongolia autonomous region, earlier this month. Junzheng has invested yuan 1.95bn ($282m) in the PVC project, which is expected to go on stream in 2009.
BAN STRAINS CHINESE BAG MAKERS' FINANCES
China's plastic bag ban has forced producers in Fuzhou city to cut production drastically, pushing many small producers into bankruptcy, said a source from the local plastics sector. "We can't switch to produce nonwoven bags with the credit crunch we are facing," said a manager of one small enterprise. Producers would have to invest more than yuan 100,000 ($14,500) on new equipment if they wanted to switch to producing substitutes, he added.
SIX INDIAN STATES ON PETCHEM HUB SHORTLIST
India's department of chemicals and petrochemicals has recommended proposals from six states for petroleum, chemical and petrochemical investment regions, said a senior official. "We have examined the proposals from Andhra Pradesh, Gujarat, West Bengal, Karnataka, Orissa and Tamil Nadu and have forwarded them to a high-powered committee under the Cabinet secretary," said Ram Vilas Paswan, who is Minister for Chemicals and Fertilisers.
GrowHow UK is a joint venture (JV) between Norway's Yara International and the US's Terra Industries. In the June 9, 2008, edition of ICIS Chemical Business, we incorrectly stated that the UK's Chance & Hunt was part of this JV.By: Joseph Chang+1 713 525 2653
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