This week's world news
23 March 2009 00:00 [Source: ICB]
Chemtura files for chapter 11 bankruptcy
The US operations of Chemtura have filed for bankruptcy protection, as collapsed demand choked off its liquidity. "Like other companies in our industry and around the world, Chemtura's order volumes have declined markedly in recent months due to the impact of the global economic recession on our customers and the industries they serve," said Craig Rogerson, CEO. "This has led to a significant decrease in our liquidity and cash flow," he said. Chemtura's foreign subsidiaries are not included in the filing. It has up to 50,000 creditors, according to court documents. Chemtura said it has received a commitment for up to $400m (€297m) in bankruptcy financing - also known as debtor-in-possession (DIP) financing. Companies use DIP financing to fund day-to-day operations while they reorganize under bankruptcy protection. Chemtura had hoped to announce a $700m asset sale by the end of March.
Lyondell misses European bond payment
Bankrupt US producer Lyondell Chemical missed a $52m (€40m) interest payment on European bonds maturing in 2015. The payment was initially due on 15 February; however it had a 30-day grace period, said company spokesman David Harpole. Lyondell missed both deadlines. The company missed the payment as a result of legal and contractual restrictions connected to the bonds, Harpole said. The missed payment has nothing to do with the amount, since Lyondell has arranged bankruptcy financing. Separately, the company said it plans to continue growing its operations in Asia via India, where it is in talks to participate in a major petrochemical project at Dahej in Gujarat state.
LANXESS makes cuts
LANXESS says it will save €250m ($325m) through wage and production cuts as it battles the downturn. The Germany-based specialty chemical group was adhering to a "price before volume" strategy, CEO Axel Heitmann said, and will temporarily shut down production capacities in the face of the crisis. But the outlook is bleak. "There is no sign yet of a turnaround or recovery in demand. One thing is clear: 2009 will be a highly unsatisfactory year for the entire chemical industry," he added at the group's annual press conference. LANXESS made a fourth-quarter 2008 net loss of €41m, compared to a €5m profit for Q4 2007. The company added it has cut its global budget by €100m in 2009, delaying several projects and capacity expansions.
Wacker to cut 2009 staff costs by 15%, save €163m
Wacker will slash its personnel costs by 15%, or around €163m ($212m), in 2009 over last year's levels to deal with weaker economic conditions, president and CEO Rudolf Staudigl said last week. "We are currently in talks with our employee representatives on further measures to lower our personnel expenses," said Staudigl at the company's annual press conference in Munich. Considerations include salary reductions and deferral of variable compensation, not permanent layoffs. For 2008, the company achieved a 4% increase in net profit to €438m on a 14% jump in sales to €4.3bn despite a significant deterioration in businesses in the fourth quarter.
Wacker to invest €800m
Wacker Chemie plans to invest €800m ($1bn) in 2009, with the "vast majority" going toward its polysilicon business, president and CEO Rudolf Staudigl says. "We see absolutely no sign of slowdown in demand for polysilicon from our customers," Staudigl said at the company's annual press conference (see previous brief). "We definitely expect our polysilicon business to remain attractive over the next few years and that's why we are continuing to expand capacity," he added. Wacker plans to boost its polysilicon capacity from 15,000 tonnes/year today to 35,500 tonnes/year by the end of 2011, said Staudigl.
SABIC is still committed
SABIC says it remains fully committed to the cracker project at Tianjin in China with state-owned refiner Sinopec, dismissing market speculations it might pull out of the joint venture. "China is the most important market for SABIC and we plan to continue growing our business in China," said the company.
QAPCO eyes Ras Laffan cracker start-up in 2009
Qatar Petrochemical Co. (QAPCO) still plans to start up its 1.3m tonne/year Ras Laffan ethane cracker soon, a top company official says. "This will be ready by no later than end of this year," said QAPCO general manager Mohamed Yousef al-Mulla. QAPCO said in December that completion would be pushed back to the second half of 2009 due to adjustments in the construction schedule.
BRIC markets provide opportunities for APIs
The fast-growing Brazil, Russia, India and China (BRIC) markets pose lucrative but challenging opportunities for regulated active pharmaceutical ingredient (API) manufacturers, a market researcher says. Growth in the BRIC markets is expected to surpass the US, the EU and Japan this year, said Kate Kuhrt, director, generics & API intelligence at information company Thomson Reuters. "Regulated market players are interested in reaching out to the BRIC markets at this point in time, when global market pressures, such as increasing competition and low regional growth, are increasing in both branded and generic pharmaceuticals," said Kuhrt.
petrobras stymied
Brazilan energy firm Petrobras could delay the start-up of its Comperj petrochemical project in Rio de Janeiro, Brazil, because of difficulties in attracting partners for the complex, a market analyst says. "Petrobras says the project is on schedule, but I doubt it will start up as planned, as it depends on other partners," said Lucas Brendler, market analyst for Porto Alegre-based Geracao Futuro Corretora de Valores.
a Crisis threatens drug supply chain - Baxter
The discovery early last year that a heparin product made by US group Baxter Healthcare had been deliberately adulterated reflects the precarious state of the world's drug supply, a Baxter executive says. "I honestly believe we are dealing with a drug crisis, a crisis affecting product supply," said Matt Anderson, corporate director of global supplier-quality for Baxter. Anderson participated in a panel on the risks inherent to supply-chain globalization as part of DCAT Week '09, a pharmaceutical industry conference organized by the Drug, Chemical and Associated Technologies Association (DCAT). "This event cries out for action for us to reduce the risk of this happening again," he said.
LNG supply wave to rock gas fundamentals
A "supply tsunami" will hit the liquefied natural gas (LNG) market in the next two years, putting conventional natural gas fundamentals in jeopardy, an industry consultant says. There will be a 25% expansion in LNG capacity this year with projects in Qatar, Russia and Indonesia coming online, Purvin & Gertz consultant Chris Holmes said at the company's international LPG (liquefied petroleum gas) seminar in Houston, Texas, US. There will be 16m tonnes of LNG added to the global market in 2009 and another 20m tonnes in 2010, he added.
The worst is past for petchems - QAPCO
The worst period for the global petrochemical industry is now over and the outlook for the sector remains bright, a top official of Qatar Petrochemical Co (QAPCO) said last week. "I am optimistic. I see a bright future (for the industry) and demand will pick up," QAPCO general manager Mohamed Yousef Al-Mulla told ICIS. Al-Mulla said the worst times for the chemical industry were between end-October 2008 and the first week of December. "Then things started to pick up, at least (enough) to survive," he said, adding that conditions began to stabilise in January 2009 and circumstances allowed the company to start corporate planning in February.
MOL and OMV end case
Hungary's energy group MOL and Austria's OMV have agreed to a "perpetual suspension" of the defamation case brought in connection with last year's dispute over a possible merger of the firms. MOL brought proceedings in Hungary against energy group OMV last July after claiming OMV had accused it of indiscretion in regard to confidential documentation related to a European Commission competition investigation into the proposed merger. OMV abandoned its intention to make a $23bn (€17.7bn) hostile bid for MOL last August after the EC raised ompetition concerns.
Rhodia workers planto join French strike
Employees from French specialty chemical company Rhodia will join the general strike that was expected to bring France to a standstill last Thursday, according to trade union representatives. The CGT, France's largest union, said six coaches of employees would join the protests from Rhodia Polyamide's Saint-Fons site in the Rhone. The workers would be joined by colleagues from Arkema.
nabucco pipeline proposal blocked
The €6bn-8bn ($7.8bn-10.4bn) Nabucco gas pipeline initiative has been removed from the proposed list of projects to benefit from a €5bn EU stimulus plan, the Czech presidency of the EU said last Tuesday. Nabucco was deleted from the list at the request of Germany, which believed that it should rely on private financing, according to a source at the office of Alexandr Vondra, the Czech deputy prime minister charged with overseeing EU affairs.
expansion tender won
US engineering firm Jacobs has won a $100m (€77m) contract for an expansion project at the Mangalore refinery in India's Karnataka state. The contract was awarded by Mangalore Refinery Petrochemicals. According to the company's website, the refinery's processing capacity will be expanded to 15m tonnes/year from 9.6m tonnes/year.
profits rise
Net profits for Gulf Resources, a bromine and specialty chemical producer in China, for the fourth quarter (Q4) 2008 have more than doubled to $6.2m (€4.8m). This is up from $2.6m during the same period a year earlier, driven by a sharp surge in sales. Revenue for Q4 soared by almost 60% to $24.1m, boosted by strong sales of bromine and crude salt, as the production assets acquired at the end of 2007 and start of 2008 reached full utilization rates, it said. For Q1, the company expects to generate revenues of $22.4m and a net profit of $6.1m.
bankruptcy protection
The German division of US pigment manufacturer Tronox, based at Uerdingen, filed for bankruptcy protection on March 13. This follows the Chapter 11 bankruptcy protection that Tronox filed in the US on January 12. Spokesman Robert Gibney said that there would be no job losses as a result of the filing.
more job losses in texas
US-based Flint Hills Resources will lay off another 46 workers from its Odessa complex in Texas on April 1, according to the Texas Workforce Commission. This follows some 200 job cuts that were already expected to take place in the first quarter. Flint Hills plans to permanently decommission the site by the end of June. The shutdown process began on January 3.
futures trading for pvc
China's Dalian Commodity Exchange (DCE) plans to start polyvinyl chloride (PVC) futures trading to help hedge risks. A DCE source said that the exchange would add PVC once it gets the approval of China Securities Regulatory Commission. No date was given.
akzonobel rating down
Global ratings firm Moody's Investors Service has downgraded the credit of Netherlands-based AkzoNobel, saying that the economic slowdown would affect the coatings company's plan to maintain strong growth. AkzoNobel's senior unsecured rating was reduced to "Baa1" from "A3," with Moody's maintaining a negative outlook.
By: Joseph Chang+1 713 525 2653
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