13 April 2009 00:00 [Source: ICB]
LYONDELLBASELL CUTS 3,000 JOBS, CLOSES PLANTS
Dutch chemical major LyondellBasell will cut 3,000 jobs and close at least 10 manufacturing plants as part of a new plan to eliminate $700m (€525m) in fixed costs due to deteriorating market conditions. The job cuts represent 17% of the company’s workforce. Additionally, 2,000 contractors will be cut, approximately 30% of that workforce. Twenty offices and research and development sites will also be closed. Many of the plant closings have been announced already or completed, the company said. LyondellBasell did not specify the plants or the offices to be closed. The company’s original cost reduction plan called for eliminating $200m in fixed costs, but current market trends pushed the number higher.
PETRO RABIGH ACHIEVES ON-SPEC MATERIAL
Rabigh Refining and Petrochemical Company (Petro Rabigh) has achieved on-spec material production of ethylene at its 1.25m tonne/year cracker on April 8, sources close to the company said last week. “Trial production at the downstream polyethylene (PE) lines has already been done and they are gearing up for commercial production,” the source said, but declined to reveal a date on which commercial production would begin. Another source close to the company said that on-spec monoethylene glycol (MEG) was expected within this week and cargoes would be available for loading by May. ICIS news had reported an imminent shutdown of the new cracker on March 30 due to unstable production.
POSSIBLE GM BANKRUPTCY COULD COST INDUSTRY
A possible bankruptcy filing by General Motors (GM) could be costly to US plastics suppliers involved in the auto parts business, sources said last week. “Tier 1 and Tier 2 suppliers will get pennies on the dollar [if GM goes bankrupt],” a plastics buyer said. “Anyone currently supplying the automotive industry is really struggling,” the buyer added. “There’s going to be a lot of people going out of business or retooling.” While delayed payments from GM could hurt struggling plastics makers, it appears too soon to forecast the full extent as well as how many companies would be impacted, according to Kevin Swift, chief economist for the American Chemistry Council (ACC). The company has until June 1 to complete a reorganization plan.
IPEX CHEMICAL INDEX CONTINUES REBOUND
The ICIS Petrochemical Index (IPEX) for April rose by 9.7% to 182.93, as chemical prices continued a rebound on stronger feedstock values and recovering demand in some European and Asian markets. The April gain built on a 6.4% increase in March that had ended a sharp decline during the previous six months. Of the 12 products in the IPEX portfolio, methanol was the only one to weaken globally in April, losing 2.1%. Although methanol values rose by 11% in Asia on demand recovery and speculative buying, prices fell by 1.8% in Europe and by 8.4% in the US, amid persistent weakness in the automotive and construction industries. Globally, the top three gainers in the IPEX basket were benzene, up 38%; styrene, up 19%; and polystyrene (PS), up 14%.
US CHEMS MUST ENGAGE CONGRESS, GREENS - ACC
The US chemical sector must engage Congress and environmentalists to reform the nation’s chemical control system and restore consumer confidence, an industry leader says. Cal Dooley, president of the American Chemistry Council (ACC), told a regulatory conference that popular concern about bisphenol A (BPA) and phthalates in childcare products is evidence that existing controls are not sufficient. “The message being sent out to us clearly by consumers is that we don’t have a regulatory structure that is testing products adequately,” Dooley told the opening session of the 2009 Global Chemical Regulations Conference in Baltimore.
THAILAND’S PTT TAKES $339M LOAN TO GROW
Thai oil and gas giant PTT has taken a 10-year loan of Thai baht 12bn ($339m) from Siam Commercial Bank (SCB) to “seize opportunities” and boost the company’s expansion plans. PTT CEO and president Prasert Bunsumpun said the loan would be used to support investment opportunities including acquisitions. “There are opportunities during this crisis,” Bunsumpun added. ICIS news previously reported that the Thai major was eyeing a stake in the Southeast Asian assets of US major Dow Chemical. Dow is seeking to raise $4.3bn (€3.23bn) partly to overcome its debts as it was aiming to pay off a $12.5bn bridge loan by the end of this year.
MOODY’S CUTS TATA CHEMICALS ON SODA ASH
Moody’s has cut the credit rating for India’s Tata Chemicals, citing the uncertain outlook for soda ash and Tata’s slow progress in improving its finances following its $1bn (€750m) acquisition last year of US soda ash producer General Chemical Industry Products. The credit watchdog downgraded Tata’s corporate family rating to “Ba1,” from “Baa3,” with a negative credit outlook, and would not rule out a further downgrade if the outlook for soda ash deteriorates. A key concern surrounding Tata’s credit rating was the mid- to long-term outlook for soda ash pricing and demand.
US TO LAUNCH MANDATORY NANOMATERIALS PLAN
The Environmental Protection Agency (EPA) will launch a mandatory nanomaterials data program within a year, a ranking agency official said last week, citing the failure of a voluntary research plan. James Jones, an EPA deputy assistant administrator, told an industry conference that the chemical sector missed “a golden opportunity to demonstrate that a voluntary approach could work” by failing to respond in sufficient numbers to an EPA request for disclosure of health and safety data on nano products.
MOSAIC’S Q3 EARNINGS FALL 88.7% FROM 2008
US fertilizer producer Mosaic saw an 88.7% drop in third-quarter earnings from a year ago as low demand dealt a blow to phosphate sales. Minnesota-based Mosaic reported net earnings of $58.8m (€44.1m) for the third quarter ended February 28. The company’s net earnings were $520.8m in the third quarter of 2008. Mosaic said its total phosphate sales volume was 1.1m tonnes, valued at $552.4m, less than half of last year’s $1.3bn. Potash sales fared somewhat better than the phosphates. Net sales fell by 12.2% to $480.8m for the third quarter.
REFORM OF US TOXICS LAW IS TOP OBAMA PRIORITY
Reform of the nation’s principle chemical assessment and control law is a top environmental priority for the Obama White House, a ranking administration official has said. James Jones, a deputy assistant administrator at the Environmental Protection Agency (EPA), told a chemical industry conference that EPA Administrator Lisa Jackson has identified reform of the 33-year-old Toxic Substances Control Act (TSCA) as among her top five priority concerns. “In a memo she sent out to EPA staff, she identified climate change, clean air, chemical assessment and management, site remediation and clean water as her top priority items,” Jones said.
WORKERS TRAP BOSSES IN FRENCH ADHESIVES PLANT
Workers at a Scapa-owned adhesives plant in southern France trapped four managers on the premises overnight as negotiations with the plant’s union took place over the possible closure of the site, the UK-based adhesives manufacturer said last week. “Yesterday the CGT union decided to go on immediate strike and close down the plant, telling the people who were there for the negotiations” the European operations director and three senior managers from the French organization “that they had to stay on site overnight,” Scapa European finance director Ian Bushell told ICIS.
US FIRMS ACCUSE ASIAN NATIONS OF DUMPING BAGS
Two major US plastic bag producers have accused competitors in Vietnam, Indonesia and Taiwan of dumping product in the US and are seeking compensatory duties against those imports. Superbag of Houston, Texas, and Hilex Poly of Hartsville, South Carolina, also are seeking US countervailing duties against Vietnam, charging that the Hanoi government is providing subsidies to its domestic bag makers in violation of World Trade Organization (WTO) rules. Joseph Dorn, an attorney with the Washington, DC, office of King & Spalding, filed the antidumping and countervailing petitions on behalf of the two companies with the US International Trade Commission (ITC).
HENKEL PROFITS DOWN AS RECESSION HITS
Henkel’s first-quarter operating profit dropped by 33% and organic sales fell by 7% in the wake of the global recession, the German adhesives and soap maker said last week. Operating profits for the three months fell to €215m ($287m), from €320m a year ago, mainly due to a 70% profit decline in Henkel’s adhesives business, which suffered from the weakness in the automotive, electronics and metal processing industries. Overall sales increased 3% to $3.25bn.
U.S. CHEMICALS GIVES AWAY CAR AT NPRA
Distributor U.S. Chemicals gave away a Smart Car in a draw at the National Petrochemical and Refiners Association (NPRA) conference in Texas, US, on March 30. The prize reflects the firm’s qualities: value, efficiency, environmental conscience and unique design, said CEO Carol Piccaro. “The value of maintaining our strong customer and supplier relationships is of paramount importance” The winner: Reichhold Chemicals’ John Siemon.
SALES DIP FOR LANXESS
Rhein Chemie, a wholly owned subsidiary of German specialty chemical company LANXESS, has reported a 4.7% dip in sales to €281m ($376.5m) for the financial year ending December 31, 2008. The company blamed a significant drop in volumes during the fourth quarter.
CALUMET FACES FINE
US base oil supplier Calumet reached a settlement with the US Environmental Protection Agency (EPA) to pay $230,000 (€172,500) to resolve Clean Air Act violations at its refinery in Shreveport, Louisiana. On October 30, a fire broke out in a storage tank that collects by-products from the refinery process at the 7,500 bbl/day base oil facility. The tank collapsed after the explosion, spilling the by-product and producing thick black smoke for two hours. No one was injured during the fire, and the surrounding area was not evacuated at the time.
MERCK’S DIVIDEND HIKE DEFIES GOVERNMENT
German specialty chemical producer Merck plans to hike its dividend by 25% to €1.50/share ($2.03/share), defying a government proposal that companies should not pay dividends in the current economic crisis. Merck also plans to reduce working hours and introduce other measures in its global pigments business to address declining demand, said CEO Karl-Ludwig Kley at the company’s annual meeting in Frankfurt. However, he added, the government’s proposal should apply to companies that would not survive without government aid.
START-UP OF POLYVINYL CHLORIDE UNIT UNCERTAIN
India’s ChemPlast Sanmar has said that the commissioning of its new polyvinyl chloride (PVC) plant is uncertain due to fresh environmental litigation and pending approvals. It said the Supreme Court had admitted two petitions against the setting up of the plant’s marine terminal facility, through which it would import vinyl chloride monomer (VCM) feedstock. The court had asked the company to file its reply by April 9. A company official told ICIS last month that it would commission the Indian rupees 5.2bn ($104m) 200,000 tonne/year facility in the second week of April.
CHEMTURA TO BE DELISTED
The New York Stock Exchange will delist US firm Chemtura from April 16, due to the recent bankruptcy filing by the company’s US operations.
JILIN RUNS MIBK UNIT BELOW 40% OF CAPACITY
China’s largest methyl isobutyl ketone (MIBK) producer, Jilin Chemical, is running one of its two 15,000 tonne/year lines in Jilin below 40% of capacity due to high feedstock acetone costs and poor demand. It is likely to maintain this operating rate throughout April.
HSBC UPGRADES DOW AFTER ACQUISITION
UK-based bank HSBC has raised its rating and target price for the shares of US-based Dow Chemical following the completion of Dow’s acquisition of US specialty chemical producer Rohm and Haas. HSBC raised its rating to “neutral,” from “underweight,” and raised its target price to $10 (€7.57), from $5.
MITSUBISHI CHEMICAL UPS ITS CRACKER RATES
Japan’s Mitsubishi Chemical has ramped up the combined operating rate of its three crackers in Japan to 75-80% since early April to build stocks ahead of scheduled maintenance. The operating rate of the three crackers was 70% in March. Its 375,000 tonne/year No. 1 cracker in Kashima will shut from May 7 to June 25, with the 476,000 tonne/year No. 2 cracker at the same site off line from June 28 to August 15. The 450,000 tonne/year cracker in Mizushima will shut from May 13 to July 6.
CPDC SHUTS ITS TOUFEN CAPRO PLANT FOR 45 DAYS
Taiwan’s China Petrochemical Development Corp. (CPDC)shut its 100,000 tonne/year caprolactam (capro) unit in the week ending April 3 for its annual turnaround. The Toufen plant will be shut for 45 days, with orders fulfilled with cargoes from its Kaohsiung site.
RIL STAKEHOLDERS APPROVE RPL MERGER
The shareholders and creditors of Reliance Industries Ltd. (RIL) have approved the merger of its subsidiary Reliance Petroleum Ltd. Approval followed a vote held at the Mumbai High Court, where a meeting was convened on March 4 with the company’s shareholders, secured creditors and unsecured creditors. RIL is now expected to seek the consent of both Mumbai and Gujarat high courts.
BAYER COMMITTED TO GERMAN PIPELINE PROJECT
Bayer remains committed to a carbon monoxide (CO) pipeline project in Germany after receiving renewed support from the state parliament and the state economics minister, Christa Thoben. The pipeline would connect the German major’s sites in Krefeld and Dormagen. On April 2, the state’s parliament vowed to ensure that big industrial projects such as this would enjoy a legally reliable planning framework. Thoben referred to the CO pipeline as a “critical test” for North-Rhine-Westphalia’s future as a site for industrial production.
LINDE WINS GAS SUPPLY CONTRACT WITH SINOPEC
Germany’s Linde has won a contract with Sinopec to build industrial gas plants for the Chinese producer’s vinyl subsidiary in Chongqing. Linde’s China-based business, Linde Gas (Hong Kong), would form a 50:50 joint venture with Sinopec Sichuan Vinylon Works by June, Linde said. The partners plan to make an initial investment of €50m ($68m) in the Chongqing site, which would include the construction of an air-separation plant producing 1,500 tonnes/day of oxygen. It will be built by 2011.
For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.
Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.
Sample issue >>
My Account/Renew >>
Register for online access >>
|ICIS Top 100 Chemical Companies|
|Download the listing here >>|