This week's world news

01 June 2009 00:00  [Source: ICB]

CHINA TO BOOST ETHYLENE CAPACITY BY 82%
China's ethylene capacity will likely grow by 82% to 17.84m tonnes/year over the next three years with the help of the government fiscal stimulus package dedicated to the petrochemical sector, industry sources said. The additional capacity will come from five new crackers and six cracker expansions projects that will be completed from this year to 2011, most of which are being carried out by subsidiaries of state-owned refiners Sinopec and PetroChina.

AUSTRIA STARTS UP GRASS-FED BIO-REFINERY PROJECT
Austria has started up a grass-fed bio-refinery project, the world's first such facility, said the country's minister for transport, innovation and technology, Doris Bures. The pilot project, in Utzenaich, Upper Austria, will convert grass silage into high-value amino and lactic acids, which are important basic materials in a number of industrial sectors, the ministry said. After a two-year trial run, the project will be scaled up into a commercial-size facility.

US CHEM SAFETY BOARD BLAMES FAULTY WELD
Substandard welding on a fertilizer tank in Chesapeake,Virginia, US, caused the tank to collapse last year, the US Chemical Safety Board said. The board's final report on the accident said improper inspections of the welds were also to blame for the November 12 urea ammonia nitrate solution (UAN) tank collapse at Allied Terminals. The above-ground tank released 2m gallons of liquid UAN fertilizer and seriously injured two workers.

AGRAQUEST SEEKS IPO IN 2010 OR 2011
US bio-pesticides producer AgraQuest is planning to go public through an initial public offering (IPO) in late 2010 or early 2011, depending on market conditions, said CEO Marcus Meadows-Smith. "We would use the injection of cash to accelerate product development," he said. Investors have put $130m (€92m) in equity capital into the Davis, California-based company since its founding in 1995.

SNF WIDENS SEARCH FOR US PLANT SITE
France-based water-soluble-­polymer producer SNF is widening its search for a US plant site, as it is no longer exclusively considering property near Plaquemine, Louisiana, a source close to the firm said. Instead, the company is examining other sites on which SNF has options for as many as 800 acres (324ha).

GROUP PREDICTS 2010 END TO "GREAT RECESSION"
The US manufacturing sector is experiencing the worst period of industrial performance since the 1930s, the Manufacturers Alliance said on Wednesday, calling this economic decline "the Great Recession." The alliance, a manufacturing and economic research group founded during the US Great Depression of the 1930s, anticipates "a severe decline in the manufacturing sector this year, followed by a modest rebound in 2010."

MONSANTO LOWERS 2009 PROFIT GUIDANCE
US-based agribusiness giant Monsanto expects to hit the low end of previous earnings guidance for the 2009 fiscal year, as cooler weather and stronger-than-expected competition took a toll on the company's Roundup agricultural herbicides segment. The company expects earnings per share for ongoing operations of approximately $4.40 per share (€3.12 per share), the low end of the previously announced range of $4.40-$4.50 per share. "Supply of glyphosate is now exceeding demand globally," Monsanto said.

PETROCHINA STARTS REFINERY EXPANSION
Chinese energy major PetroChina has begun construction work to expand refinery capacity at its subsidiary, Hohhot Petrochemical, to 5m tonnes/year from 1.5m tonnes/year. Hohhot plans to build 10 new refining and auxiliary units, and a new 150,000 tonne/year polypropylene (PP) plant in Hohhot, capital of northern Inner Mongolia province. With a total investment of yuan 7.8bn ($1.14bn), the plants are expected to come on stream in 2012.

GOODYEAR TO CUT BACK FRANCE TIRE PRODUCTION
US-based tire firm Goodyear plans to close down consumer tire production at a plant in Amiens, France, due to high costs and weak demand. The closure is expected to be completed in the third quarter of 2010, resulting in the loss of 820 jobs out of a total of 1,200 positions at the plant, and a reduction of 6m units of production capacity. Production at a second tire plant in Amiens, employing about 1,000 people, will not be affected.

COGNIS REPORTS €33M NET LOSS IN Q1 AS SALES FALL
German specialty chemical firm Cognis reported a net loss of €33m ($46m) in the first quarter versus a profit of €10m in the same period last year. Sales dropped by 14% to €659m, as volumes decreased on falling demand and customer destocking, especially in Europe. "The trading environment remains highly uncertain and volatile. We expect our cost-cutting measures to counteract lower sales," said Cognis CEO Antonio Trius.

EASTMAN COMPLETES FIRST RESIN UPGRADE
US-based specialty chemical firm Eastman Chemical has completed the first of several upgrades of its hydrogenated hydrocarbon resin facility in Middelburg, the Netherlands. By the end of 2009, these combined upgrades will increase capacity by more than 30% and in total by 65% versus 2006.

WACKER SCHOTT SOLAR COMMISSIONS FACTORY
German photovoltaic materials firm WACKER SCHOTT Solar has officially commissioned a new solar-grade silicon crystals factory at Jena, Germany. The company is a joint venture between Germany specialty chemicals and materials firm Wacker Chemie and SCHOTT Solar. The new building will be fitted with the necessary production equipment in stages and overall capacity is expected to reach 275MW by the end of 2009.

HEMLOCK SEMICONDUCTOR STARTS UP POLYSILICON
US-based Hemlock Semiconductor Group has commenced operation of a new 8,500 tonne/year polysilicon production facility at its Hemlock, Michigan site. The new capacity represents the completion of the first phase of the $1bn (€719m) expansion the Michigan site announced in May 2007. The second phase will begin to come on stream in 2010 and, together with the first phase, will increase the total annual capacity to approximately 36,000 tonnes/year.

ARIZONA CHEMICAL TO CLOSE PLANT, CUT JOBS
US specialty resins and pine-based chemicals producer Arizona Chemical will permanently close its chemical plant in Port St. Joe, Florida, in July, affecting about 77 jobs. "Unfortunately, given the current economic outlook, the decision has been made that closing the Port St. Joe plant and moving its orders to the company's other refineries makes the best economic sense for the overall health of the business," CEO Kees Verhaar said. The company plans to transfer production to its refineries in Panama City, Florida, and Savannah, Georgia.

DOW, ROHM AND HAAS MERGE WATER UNITS
US-based Dow Chemical's Water Solutions business and Rohm and Haas's ion exchange resins business have merged to create Dow Water and Process Solutions. The new business, based in Edina, Minnesota, comes as a result of Dow's acquisition of Rohm and Haas, which closed on April 1. The new business has a strong presence in the Middle East, where it will look to become more efficient within segments including industrial and municipal water, industrial processes, pharmaceuticals, power, residential water and waste and water reuse, Dow said.

QAFCO PLANS TO BUILD NEW UREA PLANT
Qatari nitrogen producer Qafco is planning to build a new urea plant using 1m tonnes/year of ammonia surplus that will be available from one of its plants - Qafco V. "We expect to make a decision in summer," a source from Qafco told ICIS on the sidelines of the annual International Fertilizer Industry Association (IFA '09) conference in Shanghai, China. The cost of building the new plant, Qafco VI, will be slightly lower than the $3.2bn (€2.27bn) needed for Qafco V, the source said. The plant will have capacity of 1.3m tonnes/year of granular urea, and could be on stream just six months after the start-up of Qafco V in January 2011.

SASOL TO COMMISSION AMMONIUM SULFATE UNIT
South African chemicals and fertilizer producer Sasol is at the commissioning stage of a new 100,000 tonne/year ammonium sulfate plant, sources said at the IFA annual meeting in Shanghai, China. The new unit, which will use feedstock sulfuric acid and ammonia from Sasol's plants at Secunda, is expected to begin commercial production in June.

CELANESE FACILITY WINS AWARD
US-based Celanese's emulsion polymers facility in Boucherville, Canada, received the highest recognition in the CSST (Quebec Health and Safety Commission) Innovation Award competition for safety and accident prevention. The winning project was a new, automated cleaning system for a large emulsions reactor designed to eliminate confined-space entry, thus reducing the risk of potential injury from high-pressure water washing.

NESTE STARTS WORK ON ROTTERDAM RENEWABLE DIESEL
Neste Oil has started building an 800,000 tonne/year renewable diesel plant at the Port of Rotterdam that will be the largest in Europe. The €670m ($944m) facility is expected to be completed in 2011.

LANXESS INVESTS €10M ON CHINESE RUBBER R&D
German specialty chemical producer LANXESS has invested €10m ($14m) in expanding its rubber research and development (R&D) center in Qingdao, China. The plant will house a new mixing and testing lab and a pilot plant.

GREEN PLAINS BUYS TWO ETHANOL PLANTS
US renewable fuels firm Green Plains has agreed to acquire two former VeraSun ethanol plants in Nebraska for $123.5m (€88.9m), to become the fourth-largest US ethanol producer with a capacity of 480m gal/year. Green Plains is buying the plants, which have a total capacity of 150m gal/year, from a lender group led by AgStar Financial Services.

GERMAN COURT BLOCKS BAYER CO PIPELINE START
A German administrative court in Dusseldorf has rejected Bayer's application to start up a 67km (42 mile) carbon monoxide (CO) pipeline in North-Rhine Westphalia state that connects Bayer MaterialScience's production sites at Dormagen and Krefeld-Uerdingen. The court said the project's safety features are not sufficient.

SUNOCO TO BUY $200M ETHANOL PLANT FOR $8.5M
US refiner Sunoco successfully bid $8.5m (€6.1m) for an ethanol plant built by bankrupt Northeast Biofuels near Syracuse, New York. It is expected to run at full capacity by early next year, producing 100m gal/year (379m liters/year) of ethanol, said Sunoco. Northeast Biofuels spent $200m to build the plant. Sunoco is likely to spend $10m-20m.

CIECH-LAFARGE "GREEN CEMENT" JV GETS OK
The Polish office for Competition and Consumer Protection has approved a zlotych 40m ($12.7m, €9.1m) "green" cement joint venture (JV) between Ciech and French construction materials giant Lafarge.

WACKER CYCLODEXTRIN EXPANSION STARTS UP
German producer Wacker Chemie has started production at an expanded cyclodextrin facility at Eddyville, Iowa, US. The $21m (€15m) investment raises capacity for alpha and beta cyclodextrins by 50% and doubles gamma cyclodextrin capacity.

CORRECTION
The Commentary in the April 27 issue of ICIS Chemical Business incorrectly stated that US-based chemical giant DuPont's agriculture and pharmaceuticals businesses were its only segments posting profits in the first quarter. In fact, DuPont's safety & protection segment also posted a profit, with pretax operating income of $72m (€52m).

By: Joseph Chang
+1 713 525 2653

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