This week's world news

10 November 2008 00:00  [Source: ICB]

COGNIS COMPLETES €23M PULCRA CHEMICALS SALE
Germany’s Cognis has completed the sale of Pulcra Chemicals to German investor Fashion Chemicals for €23.1m ($29.6m). Cognis said the divestment of Pulcra Chemicals, which supplies process chemicals to the textile and leather industries, was in line with its strategy to focus on its core businesses.

VERASUN FILES FOR BANKRUPTCY
US ethanol producer VeraSun Energy has filed for bankruptcy protection. The firm listed assets of $3.45bn (€2.69bn) and debts of $1.91bn in court documents. During the third quarter, VeraSun’s corn costs spiked, the company said. Its liquidity was further constrained by weakening capital markets and tightening trade credit. VeraSun also made bad bets on corn futures earlier in the year.

SHIN-ETSU TO INCREASE CELLULOSE CAPACITY
Japan’s Shin-Etsu Chemical plans to increase the capacity of a type of cellulose used in pharmaceutical products by 30% at its facility in Niigata prefecture due to increased demand. The “several billion yen” (Yen 1bn is about $10m) expansion at Shin-Etsu’s Naoetsu plant is scheduled to be completed in December 2009.

EQUATE CRACKER START-UP BY END OF NOVEMBER
Kuwait’s Equate Petrochemical plans to start commercial production at its Olefins II cracker by the end of November and expand polyethylene (PE) capacity at its facility in Shuaiba, Kuwait, in the next quarter, CEO Hamad al-Terkait said on the sidelines of the Middle East Petrochemical Conference in Dubai, the United Arab Emirates. “There are no feedstock issues at present, as gas supply is quite good,” he said. Equate is increasing capacity at its 600,000 tonne/year high density polyethylene (HDPE)/linear low density polyethylene (LLDPE) swing plant by 50%. The capacity of the ethane cracker will be 850,000 tonnes/year.

SABIC EXTENDS PVC, VCM SHUTDOWNS
Saudi petrochemical giant SABIC plans to restart its polyvinyl chloride (PVC) and vinyl chloride monomer (VCM) plants at Al-Jubail near the end of November, following maintenance turnarounds, a source close to the company said at the Middle East Petrochemical Conference. The shutdowns at the 400,000 tonne/year PVC unit and the 500,000 tonne/year VCM plant, originally scheduled to last three weeks, were extended to seven weeks due to compressor problems.

FOSTER WINS CONTRACT FOR SASOL WAX PROJECT
US-based engineering and construction firm Foster Wheeler has won a contract to work on Sasol’s wax expansion project in Sasolburg, near Johannesburg, South Africa. Dubbed the “Sasolburg Fischer-Tropsch Wax Expansion,” the project is expected to increase production of medium waxes and liquid paraffins by around 50%. The project’s front-end engineering design is expected to be completed in the second quarter of 2009. Sasol had said earlier it planned to invest rand 558m ($56m) to double production of hard waxes at Sasolburg in two phases by 2013.

TEXAS PETROCHEMICALS COMMISSIONS PIB PLANT
US-based Texas Petrochemicals has finished commissioning its new polyisobutylene (PIB) production unit in Houston, and started shipping product to customers. With the new plant, Texas Petrochemicals doubled its PIB capacity, it said, but provided no further details. PIB has applications in caulks, sealants, adhesives, cling film, lubricant base stocks and personal care.

SOUTH AFRICA FINES US SODA ASH EXPORTERS
South Africa’s competition commission said the export sales arm of US-based natural soda ash producers will pay a penalty of rand 9.7m ($900,000) as part of a settlement for price-fixing. The fine, equivalent to 8% of its annual sales in South Africa, would be paid by American Natural Soda Ash Corporation (ANSAC), an export sales association that includes FMC, General Chemical, OCI Chemical and Solvay Soda Ash. ANSAC also agreed to halt members’ collective sales through ANSAC.

USG EXPECTS TO BE PROFITABLE BY YEAR-END
Romania’s sodium carbonate producer Uzinele Sodice Govora (USG) should reach operating profitability by the end of this year, said its owner, Poland-based producer Ciech. Ciech CEO Ryszard Kunicki said investments in expanding USG’s capacity and modernizing its operations were paying off.

WILL COLLAPSING REACH IT KILL CHEMICALS?
European chemical firms will be forced out of business at the end of November as constant crashes at the EU’s Reach regulation website prevent them from meeting a preregistration deadline, said Melvyn Whyte, chairman of UK-based distributor Whyte Chemicals. The company has been preregistering since the dedicated Reach-IT platform opened. As the site has become busier, it has become slower and crashed more regularly, he said.

ADM TO ENTER BRAZIL SUGARCANE MARKET…
US agricultural and biofuel company Archer Daniels Midland (ADM) has announced plans to build two ethanol plants in Brazil, making its debut in sugarcane-based ethanol production. ADM’s plants in Brazil will have combined capacity to process 6m tonnes/year of sugarcane, half of which will be used to produce 70m–90m gal/year (265m–341m liters) of ethanol. The project is a partnership between ADM and Brazilian agricultural and biofuel group Cabrera, which will invest $500m (€395m) over seven years.

… AND Q1 NET SOARS
US agriculture and biofuel giant Archer Daniels Midland (ADM’s) fiscal first-quarter (ended September) net earnings rose by 138% from a year earlier to $1.05bn (€830m), lifted by improved oilseed processing profits and higher commodity selling prices. Net sales rose by 65% to $21.16bn. Operating earnings for refining, packaging, biodiesel and other activities climbed by 71%, to $106m due to improved refining and biodiesel margins in Europe and South America.

RHODIA, DOW CORNING COOPERATE ON TIRES
France’s Rhodia and US-based Dow Corning have agreed to develop and commercialize new silica and silane products that help make tires more energy-
efficient and safe. Precipitated silica and silane are used in tires to help reduce rolling resistance and thus lower fuel consumption and carbon dioxide (CO₂) emissions, they said.

IRAQ GAS IDEAL FOR PETCHEM PRODUCTION
The significant volumes of natural gas in southern Iraq present an opportunity for a strong petrochemical industry to develop there, said Phil Parker, Middle East general manager of Shell Chemicals, at the Middle East Petrochemical Conference, in Dubai, the United Arab Emirates. “There is plenty of natural gas available in Iraq which could be used for petrochemical production,” he said. However, Shell has no plans to engage in a petrochemical project in Iraq as conditions in the conflict-ridden country were not conducive, he added.

AMMO SALES MAY SHOOT UP ON OBAMA VICTORY
Ammunition sales could be on the upswing, benefiting US-based chlor-alkali and ammunition maker Olin, said Frank Mitsch chemicals analyst at US investment bankn BB&T Capital Markets. “The last time the Democrats won the White House from the Republicans, back in 1992, Winchester ammunition [an Olin product] experienced record sales as many gun owners had concerns that a Democratic President and a Democratic Congress would pass new restrictive laws on one’s ability to purchase ammunition,” said Mitsch.

CORN PRODUCTS BACKS OUT OF BUNGE DEAL
The board of US-based Corn Products International plans to withdraw support for the proposed $4.8bn (€3.7bn) acquisition by Brazilian agribusiness Bunge. Shares in both companies have plummeted since the deal was agreed to in June. Bunge’s stock dropped by over 60%, while Corn Products’ shares have fallen by more than 40%.

SOLUTIA MAY BE STUCK WITH NYLON UNIT
US specialty chemical producer Solutia may be stuck with parts of its nylon business that it had expected to sell. Solutia is drafting alternative plans in case it cannot sell the entire unit, CEO Jeffry Quinn said in a conference call. Either the sale or the alternative plans should be executed by the end of the first quarter of 2009, said Quinn.

BRASKEM POSTS A $400M LOSS ON FOREX
Brazilian chemical firm Braskem posted a reais (R) 849m ($400m) net loss in the third quarter, compared with a R132m profit in the same period last year on negative currency movements. The 20.3% depreciation of the real against the US dollar had a R1.35bn impact on the net result, though this was partially offset by a R497m gain in income tax and sociable contribution credits. Braskem’s revenue increased by 9% to R5.03bn, driven by higher petrochemical volumes and prices.

YANSAB DELAYS CRACKER TO Q1 2009
Saudi Arabia’s Yanbu National Petrochemical (Yansab) has delayed the start-up of its cracker complex in Yanbu to the end of the first quarter of 2009, said a source close to the project. “The facility is expected to reach mechanical completion by the end of November, as it is already 95% complete,” the source said at the Middle East Petrochemical Conference in Dubai, the United Arab Emirates. The complex, which had been expected to start up in the fourth quarter, was delayed due to a “human resource shortage,” the source said. The complex includes a 1.3m tonne/year cracker.

TANKER REPELS PIRATES BY SPRAYING WATER
A Danish-registered chemical tanker repelled Somali pirates in the Gulf of Aden last week by spraying water over the sides of the ship, the Copenhagen Post reported. The M/T Britta Maersk was traveling from Singapore to Saudi Arabia, when it was attacked by two speedboats.

CHINA DETAINS FEED MAKER ON MELAMINE
China has detained an animal feed producer that is believed to have supplied melamine-tainted feed to Dalian-based Hanwei. The local government of Shenyang said Shenyang Xinmin City Mingxing Feed Factory had bought a total of 45 tonnes of a melamine-tainted ingredient in two batches. The tainted ingredient was then mixed with other feeds to produce more than 200 tonnes of refined feed for chickens.

EVONIK PLANS €45M BRAZIL PEROXIDE PLANT
Germany’s Evonik Industries will invest €45m ($57m) in a new facility for the production of hydrogen peroxide at the Triunfo petrochemicals complex, near Porto Alegre, Brazil. The 40,000 tonne/year plant is scheduled to become operational in early 2011.

CME TRADES PLASTICS
US-based CME, the world’s largest futures exchange, has begun electronic trading on polypropylene (PP) and polyethylene (PE) contracts. The monthly contracts, which start with January, will be listed for 24 consecutive months and will be for 47,000lbs (21 tonnes) each, with physical delivery in Houston, Texas, US.

INEOS SAYS IT HAS ADEQUATE LIQUIDITY
UK-based chemical major INEOS said it has adequate liquidity, is prioritizing cash generation and reviewing its nonessential capital expenditure program. “The company has significantly reduced its borrowings over the last three years and has no significant debt maturing in the short term,” said INEOS in a statement.

MAKERS REJECT PLASTICIZER CALL
European manufacturers of plasticizers have rejected calls from nongovernmental groups to place the phthalates di-isononyl phthalate (DINP) and di-n-octyl phthalate (DNOP) on the EU’s Reach candidate list for hazardous chemicals. The European Council for Plasticizers and Intermediates, said DINP, di-isodecyl phthalate and DNOP do not meet any of the criteria for the listing, which already contains three other phthalates.

IBI TO BUILD BIODISEL IN ARGENTINA
Brazilian biodiesel producer Integrated Biodiesel Industries (IBI) plans to build another plant in Argentina. The second plant will have a capacity of 50,000 tonnes/year. Production should start in March. A 25,000 tonne/year plant is expected to start production in December.

GREEN EXCHANGE TO DEBUT AT INFORMEX
InformexUSA will feature a new Green Exchange program when the exhibition returns to San Francisco on January 27, 2009. Tailored to chemical makers and allied trades requiring economically viable, eco-friendly technologies, the Green Exchange will include the Green Pavilion, a space for companies offering green solutions. On January 29, a Green Chemistry Briefing Breakfast, produced with ICIS Chemical Business, will feature presenters John Warner of the Warner Babcock Institute Maureen Gorsen of the California Department of Toxic Substances and Rondal Gebhard of DSM Pharmaceutical Products.

KEY US MANUFACTURING INDEX HITS 26-YEAR LOW
The Institute for Supply Management (ISM) said its purchasing managers index (PMI) slid to 38.9 for October, down by 4.6 points from September's 43.5, and the lowest in 26 years. The nearest previous low was the 38.8 recorded in September 1982. The sharp decline in the October PMI marks the third consecutive month of US manufacturing contraction, and follows the sharpest one-month fall in seven years, when the index plummeted by 6.4 points to 43.5 in September.

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