23 February 2009 00:00 [Source: ICB]
HIGH LEVEL GROUP ON CHEMICALS REPORTS
The chemical industry has taken advantage of a “once in a decade opportunity” to influence events and, crucially, attitudes towards the sector, the industry’s coordinator said ahead of the release of the final report of the EU’s High Level Group (HLG) on chemicals last week. Cefic’s head of trade policy, Rene van Sloten had coordinated the input by industry executives and trade groups to the project sponsored by the European Commission. The HLG discussed a wide range of industry and related topics with EU officials and politicians over 17 months. See next week’s issue for a full report.
LYONDELLBASELL CREDIT RATING DOWNGRADED
LyondellBasell Industries has failed to make interest payments on two European bonds due for Sunday 15 February. The Netherlands-based chemical producer confirmed a report by credit watchdog Standard & Poor’s, which downgraded its credit rating to “D” from “SD” after its European business failed to pay interest on bonds of $615m (€480m) and $500m, which mature in 2015. Another credit ratings agency, Fitch, said it had withdrawn its ratings for the LyondellBasell group, as well as coverage of several of its subsidiaries, following reports on the missed bond payments. LyondellBasell’s ?xml:namespace>
GLOBAL CHEMICAL M&A TO MODERATE IN 2009
Global chemical industry mergers and acquisitions (M&A) will not collapse, but will slow to a moderate pace in 2009,
US ECONOMY TO WORSEN BEFORE UPTURN IN 2010
The merger plans at the heart of the Polish chemical industry privatization process are not realistic because some of the companies involved are not fully state-owned, Citigroup says. “Although we see these plans as reasonable from the business point, in our view, they would only be realistic if all the chemical companies were fully state-owned. Since these companies are publicly traded and have various minority shareholders with various interests, these plans seem to be extremely difficult to execute from a shareholder and logistics point,” the financial conglomerate said in a report. See page 20 for a full report.
NO PERFORMANCE BONUSES FOR DOW EXECS
Solutia expects full-year 2009 earnings to fall by up to 17% from 2008, with fewer sales offsetting any relief from high raw material costs. The company said it expects plunging demand in the key construction and automotive industries, particularly in the previously stalwart western Europe and
Rockwood Holdings plans to ultimately trim 893 jobs – or 9% of its workforce – as it continues its cost-cutting measures, the
China-based Hubei Xingrui Chemical has invested nearly yuan (CNY) 600m ($87.7m) to build a 60,000 tonne/year organosilicon monomer unit in Yichang, central Hubei province, a company source said last week. Construction started on February 15 and was expected to take about two years, the source said. “We also plan to expand the capacity to 180,000 tonnes/year in the future in light of the current rising demand,” the source added.
EVONIK PREPARES TO LIST REAL ESTATE DIVISION
Eight years after the explosion at the AZF fertilizer factory in
EC URGES COORDINATION ON NANOMATERIALS
Research into nanomaterials must be coordinated to produce comparable and reliable risk-assessment data, one of the European Commission’s independent scientific committees says. In its latest opinion on nanomaterials, the Commission’s Scientific Committee on Emerging and Newly Identified Health Risks called for “coordinated research strategies” to further assess exposure to nanomaterials and identify potential hazards.
MERCK KGAA PLUMMETS TO €279.5M Q4 NET LOSS
Merck KGaA plummeted to a net loss after minorities of €279.5m ($353.8m) in the fourth quarter, down from a profit of €3.39bn in the same period a year ago, on the back of charges and weak results in its chemical division, the German drug and specialty chemical maker said last week. Revenue for the quarter rose by 5.4% to €1.90bn, while the group reported record full-year sales of €7.56bn, up by 7.1% from 2007. Merck posted a €258m loss in earnings before interest and tax (EBIT) in the fourth quarter, compared with a €47.5m loss in the same period a year earlier.
UNIPETROL CEO RESIGNS WITH IMMEDIATE EFFECT
Unipetrol CEO Francois Vleugels has resigned with immediate effect. The firm’s supervisory board subsequently appointed Krzysztof Urbanowicz as its new CEO. No explanation for the resignation was provided. Sources at Unipetrol were uncertain about why Vleugels had resigned, but conceded that he had long been unhappy at the failure of Polish owner PKN Orlen to approve his development plans for the company. Vleugels was known to regard Orlen as hamstrung by the fact that it is still state-owned and therefore subject to regular Polish government interference in its management.
China’s yuan (CNY)500bn ($73bn) fiscal package aimed at stimulating the country’s refining and petrochemical sector has been submitted to the National Development and Reform Commission for approval. Secretary general of China Petroleum and Chemical Industry Association Sun Weishan declined to say how soon the package would be approved, or how the funds would be disbursed. It includes a CNY100bn investment in 2009 and 2010 for upgrades in oil products, and an investment of CNY400bn for the construction of 20 large-scale petrochemical projects, said a report from state newspaper China Daily.
AIR LIQUIDE MAY MAINTAIN GROWTH IN COMING YEARS
Citigroup expects French industrial gases producer Air Liquide to sustain 10% in earnings growth over the next four years. Air Liquide posted an 8.6% increase in net profit for the full year to €1.22bn ($1.56bn), while sales were up 11% to €13.1bn. Citigroup expected the company to maintain growth, driven by the development of hydrogen markets, where legislation demands cleaner, desulfurized fuel, and cyclical demand for its low-capital-intensive services.
PETROBRAS PLANS FLAWED
OIL PRICES LOOK SET TO STAY BELOW $60/BBL
Oil prices are unlikely to breach $60/bbl in 2009 due to a lack of demand, said Gati al-Jebouri, CEO of Russian traders Litasco at last week’s International Petroleum Week conference. This is $10/bbl lower than the $70/bbl limit touted by industry experts at the end of 2008. The overriding fundamental is the weakening demand for the product, fueled by the global economic crisis, said Al-Jebouri.
CRODA REPORTS POSITIVE FOURTH QUARTER RESULTS
UK oleochemical company Croda has posted an 11% increase in fourth-quarter (Q4) 2008 continuing pretax profit to £20.9m ($29.8m, €23.2m), up from £18.8m in the same period a year earlier. Continuing sales rose by 8% year on year to £221m in Q4, driven by the consumer care segment, Croda said. Consumer care increased its continuing operating profit by 18% to £24m, while sales were up 46% to £113.9m.
REFINERY RESTARTED, BUT RUNNING AT REDUCED RATE
Philippine oil major Petron restarted its 180,000 bbl/day refinery in Limay, Bataan province, on February 11 and is running it at around 40% of capacity. It is producing 70,000–75,000 bbl/day. Petron’s refinery was taken off line in early December for a maintenance turnaround originally scheduled for early this year to speed up its tie-in with its new $300m petrochemical facility, which is is slated for commissioning in Q1.
CHINESE PTA OUTAGE ENDS
US-based producer Texas Petrochemicals has posted a fiscal second-quarter net loss of $26.7m (€20.8m), compared with a profit of $2.2m in the period a year earlier. This was due to a sharp decline in demand and impact from last September’s US Gulf Coast hurricanes. Revenues for the three months ending December 31, fell by $100m to $410m, down from $509.9m the year before.
SIBUR PLOWS AHEAD
Dow Corning wishes to clarify the statement in the “Fuel for thought” feature in last week’s ICIS Chemical Business. Its investment of $3bn over the next five to 10 years is to provide materials to the solar technology industry, not in the company’s own energy efficiency improvements.?xml:namespace>
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