This week's world news
02 March 2009 00:00 [Source: ICB]
IPIC Makes $2.3bn Bid To acquire NOVA
Abu Dhabi-based International Petroleum Investment Company (IPIC) has agreed to acquire Canadian petrochemicals producer NOVA Chemicals for $6/share, or about $2.3bn (€1.8bn) - roughly 3.5 times its market valuation the day before. The offer, which includes a $250m credit backstop facility, was made as NOVA approached a February 28 deadline to raise $100m, without which NOVA could have lost access to its current credit facilities. "We can provide stability and allow NOVA Chemicals to meet its operational and financial requirements while continuing to expand and invest in its business," said IPIC managing director Khadem Al Qubaisi. NOVA's board unanimously approved the deal and recommended it to shareholders. Ratings agencies Fitch, Standard and Poor's and Moody's Investors service, which had downgraded NOVA's credit ratings on concerns about its ability to pay debts, all responded positively. NOVA CEO Jeff Lipton said the deal could close in 60-75 days.
Sun Chemical gives Brenntag rest of us
Sun Chemical's performance pigments division has appointed Brenntag Specialties, already Sun's agent for key areas in the west and south of the US, as its sales agents for the entire US market. The expanded distributor relationship will make it easier for industrial customers to access Sun Chemical's full line of organic, metallic and effect pigments and preparations, the company said.
SHAREHOLDERS SUE INTREPID POTASH
Shareholders have sued US fertilizer company Intrepid Potash, alleging that the company misled them about the educational background of its former president and chief operating officer, Patrick Avery, who resigned on February 11. The lawsuit alleges that Intrepid Potash failed to disclose that Avery did not have degrees from the University of Colorado or Loyola Marymount University - as stated in a federal registration statement filed when the company completed its initial public offering on April 21, 2008.
Leading US indicators up slightly in january
The index of US leading economic indicators rose by 0.4% in January, the New York City-based Conference Board said on Thursday. The slim gain followed an even narrower increase of 0.2% in December. Five of the 10 indicators that make up the board's closely watched leading economic index showed improvements in January, including increased money supply, low interest rates and improved consumer expectations, the group said.
PKN Orlen completes LPG sea terminal
PKN Orlen has completed the construction of a liquefied petroleum gas (LPG) sea terminal in Szczecin, north-western Poland, the Polish oil, petrochemical and chemical group said. The zloty (Zl) 50m ($13.2m, €10.5m) facility is part of Orlen's plan to diversify its raw energy supplies away from almost complete reliance on Russia. The terminal, which can take delivery of 200,000 tonnes/year of LPG, will start operating within two months.
Japan's trade deficit balloons to $9.85bn
Japan's trade deficit ballooned to a record yen (Y)952.58bn ($9.85bn) in January, as exports took a nosedive amid the slump in global demand, according to the Ministry of Finance. Shipments of Japan-made products plunged a record 45.7% year on year to Y3,482bn, with exports to the US declining 52.9%. The country also took in 31.7% less goods from abroad at Y4,435bn during the month.
Agrium Offers $3.6bn for CF Industries
Fertilizer producer CF Industries said on Wednesday that it will consider rival Agrium's $3.6bn (€2.8bn) proposal to acquire all of the capital stock of CF for cash and Agrium shares at $72/CF share. "CF Industries' board of directors will evaluate the proposal carefully in the context of CF Industries' strategic plans to create shareholder value, including its offer to acquire Terra Industries," the company said in a statement. Agrium's proposed plan is contingent on CF dropping its takeover bid for Terra Industries.
Three Indian states get OK For petchem hubs
Proposals to set up multibillion dollar petrochemical hubs in India's Gujarat, West Bengal and Andhra Pradesh states have secured government approval, according to India's Ministry of Chemicals and Fertilizers. However, investment could take some time to materialize, a source said: "In the current economic climate, with the global financial crisis still unfolding, one cannot expect foreign and domestic investors to rush in."
US AND EU form biofuels alliance, Brazil sits out
Industry associations in the US, Europe and Canada last week announced the creation of an international alliance to support biofuels, the Global Renewable Fuels Alliance, but the new group does not include ethanol heavyweight Brazil. "We were approached, but we decided not to join," said Joel Velasco, the chief US representative from Brazilian sugarcane group Unica. He said Brazil will continue to fight the US tariff on ethanol even if it meant filing a complaint at the World Trade Organization.
Colonial Pipeline postpones US expansion
The Colonial Pipeline has shelved plans to expand its US refined products pipeline due to weakening demand for petroleum products. The expansion, announced in 2006, would have added an additional 800,000 bbl/day of capacity to a 460-mile (736km) stretch of pipeline in Colonial's existing system from Baton Rouge, Louisiana, to Atlanta, Georgia. "We believe the US economy will rebound and we will be ready to resume full-scale work on what we trust will be an important and valuable upgrade of the US infrastructure," said Colonial president Tim Felt.
Petrom sees 2008 net profits drop 43%
Romanian oil and chemicals group Petrom's full-year 2008 net profits fell 43% year on year to Romania New Lei 1.02bn ($306m, €239m). Group turnover rose 36% to New Lei16.7bn. For the fourth quarter of 2008, Petrom posted a net loss of New Lei1.27bn, compared with a profit of New Lei230m for the same period in 2007. Turnover rose 4% to New Lei3.7 bn.
Towngas Plans $439m DME Plant in Chongqing
The Hong Kong and China Gas Company (Towngas) signed an agreement last week to build a yuan (CNY) 3bn ($439m), 400,000 tonne/year dimethyl ether (DME) plant at Chongqing in southwest China, an official from the Chongqing Development and Reform Commission said. The project is expected to generate more than CNY1bn in sales once it starts operating, the source added. "DME will see tight supply in China on increasing demand from the fuel blending sector, as 95% of DME output in China are blended into liquefied petroleum gas [LPG] to reduce cost," he said. "So we expect the new plant to create rich profit for us after it starts up."
Agrium to send 300 home from potash mine
Canadian fertilizer major Agrium will temporarily lay off 300 workers at its Vanscoy potash mine in Saskatchewan, Canada, for four weeks beginning March 11. At full capacity, the Vanscoy mine, which has a capacity of 1.79m tonnes/year, employs a workforce of about 500.
Henkel to sell German detergents site
Dusseldorf-based adhesives and soap producer Henkel is in talks to sell its detergents production site at Genthin in Saxon-Anhalt, Germany, and mulling short-time working hours for some 500 workers at its adhesive plants, CEO Kasper Rorsted said. He told German state television ARD that Henkel is talking to four interested parties to sell the Genthin site, with a deal possible in the first quarter.
Qingdao Petchem to build SM plant in 2010
Qingdao Petrochemical, a subsidiary of Sinopec, plans to build an 80,000 tonne/year styrene monomer (SM) plant in 2010. Construction is expected to start in early 2010, and start-up is slated for late 2011 or early 2012.
Kemira marks €68.5m Q4 loss on one-off charges
Finland's Kemira has booked a net loss of €68.5m ($87.8m) in the fourth quarter, ending December, owing to one-off restructuring costs. Kemira recorded a €25.7m deficit in the year-ago period. Revenue for the quarter declined 4% year on year to €628m, while operating losses stood at €68.1m.
corn for ethanol has zero land impact - RFA
Expansion of US corn-based ethanol production to 15bn gal/year (57bn liters/year) by 2015/2016 should not result in any new conversion of forest or grassland use in the US or abroad, according to a study from the Renewable Fuels Association (RFA). It said that the increase can be met without a decline in corn, wheat or soybean exports or stocks.
MOODY'S LOWERS CREDIT RATING ON GEORGIA GULF
Moody's Investors Service has downgraded its rating for Georgia Gulf, saying that the US polyvinyl chloride (PVC) producer will need either to amend or to refinance its secured facility by the end of July, or the company could breach its financial covenants. "Unfortunately, the weakening economic environment, along with a difficult credit market, have significantly reduced its options," Moody's senior vice president John Rogers said.
INDIA CLEARS BERGER PAINTS' GOA EXPANSION
India has granted environmental clearance for Berger Paints India Limited (BPIL) to expand its paints plant at Goa at a cost of rupees (Rs) 360m ($7.3m). The company expects to increase its emulsion paints capacity to 1,800 kiloliters/month from 1,200 kiloliters/month and its solvent-based paints capacity to 3,500 kiloliters/month from 1,500 kiloliters/month.
Ashland to close New Jersey plant
US specialty chemical producer Ashland Chemical will permanently close its plant in Boonton, New Jersey, by December and move operations to facilities in Wilmington, Delaware. The Boonton site was known for its water technologies division, but with the addition of Hercules, a water and paper chemicals producer, Ashland will save about $120m/year by eliminating redundancies, the company said.
CF Industries makes bid for Fertilizer Rival
Illinois, US-based fertilizer producer CF Industries has commenced an exchange offer for all the outstanding shares of rival Terra Industries. In a letter sent to the board of directors of Iowa-based Terra Industries, CF Industries chairman and CEO Stephen Wilson said the combination would create over $100m (€78m) in synergies. Last Monday, Terra Industries asked shareholders to allow its board of directors to review the offer and make a formal recommendation within 10 business days.
Yancheng shuts plants OVER water pollution
The Yancheng government has shut down more chemical companies near the Yancheng river in China's eastern Jiangsu province after the city's water supply was contaminated with phenol from Biaoxin Chemicals Co. Yancheng city's water supply was suspended for three days from February 20.
Dow starts arbitration against Kuwait PIC
US chemical major Dow Chemical has started arbitration proceedings against Kuwait's Petrochemical Industries Corp (PIC). The Midland, Michigan-based chemical giant alleges that on January 2 PIC broke its joint venture agreement to buy 50% of Dow's plastics business and that private negotiations to salvage the deal have failed. Dow is seeking more than $2.5bn (€2bn) in damages.
SWEDEN makes first consultation request
Sweden has proposed the harmonization of classification and labeling for the pesticide epoxiconazole and the flame retardant diantimony trioxide across the EU, said the European Chemicals Agency (ECHA). The proposal is subject to a 45-day public consultation period and final approval by the 27 EU member states. This is the first request for consultation since the EU's adoption last year of the regulation on the classification, labelling and packaging of substances and mixtures (REACH).
Cristal To idle TiO2 plants in THE US AND uk
Weak sales of titanium dioxide (TiO2) pigment have prompted Cristal Global to indefinitely idle two of its Millennium Inorganic Chemicals plants. The Hawkins Point plant in Baltimore, Maryland, US will be idled at the end of March, and about 70 hourly employees will be laid off. The company's Stallingborough plant in Grimsby, UK, will follow suit about two weeks later.
Segetis opens biofuel conversion facility
US renewable technology company Segetis has opened a biofuel conversion facility that produces green chemicals suitable for development and further commercialization. The facility, based in Minneapolis, Minnesota, will be able to produce up to 250,000 pounds/year (113.4 tonnes/year) of chemicals and chemical building blocks - sourced from rapidly renewable resources - when it is at full capacity, the company said.
Mitsubishi to close Two PTA plants In 2010
Mitsubishi Chemical plans to close two Japanese plants in 2010 as it restructures its purified terephthalic acid (PTA) business. The company will shut down a 250,000 tonne/year PTA plant in Matsuyama and a paraxylene-producing 100,000 tonne/year facility in Mizushima. Paraxylene is a raw material of PTA.
Verheugen says change inevitable
EU industry commissioner Gunter Verheugen warned that structural change in European industry, driven by the financial and economic crisis, cannot be prevented, only managed. "Policy makers cannot make management decisions," he said at the launch of an EU report on chemical industry competitiveness. "We must not allow market participants and members of the EU to jeopardize the functioning of the internal market."
VeraSun auction is on
The US Bankruptcy Court in the state of Delaware has approved bidding procedures for bankrupt US ethanol producer VeraSun Energy, which plans to sell substantially all of its assets, including its plants, in an auction on March 16.
PKN ORLEN CANCELS PLANS TO BUILD EB PLANT
PKN Orlen has dropped plans to build a 120,000 tonne/year ethylbenzene (EB) plant. Fellow Polish producer Synthos recently canceled a 15-year contract with Orlen for the supply of EB from the proposed plant, opting instead to source from a subsidiary in the Czech Republic.
BRASKEM SIGNS ETBE AGREEMENT WITH SOJITZ
Brazil's Braskem has signed an agreement with Japanese trading house Sojitz to supply ethyl tertiary butyl ether (ETBE). The trader will distribute 120,000 tonnes/year of Braskem's ETBE in the EU and Japanese markets for a three-year period.
By: Joseph Chang+1 713 525 2653
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