This week's world news
08 June 2009 00:00 [Source: ICB]
Solutia completes sale of nylon to SK Capital
US-based specialty chemical and material firm Solutia completed the sale of its nylon business to an affiliate of compatriot private equity firm SK Capital Partners II for $50m (€36m), plus $4m in deferred payments. Solutia retains a 2% stake in the business. SK Capital has named the business Ascend Performance Materials, which will be led by industry veteran Frederic Poses.
Solutia unfazed by GM bankruptcy
US auto giant General Motors (GM)'s bankruptcy will not hurt US-based Solutia's automotive businesses, said Jeffry Quinn, CEO of the specialty chemical and materials firm. "With the massive amount of assistance GM is getting, this will be a very expedited slam-dunk bankruptcy - arms will be twisted and mountains moved to get them out," he said. "We see zero to minimal impact on our business." While Solutia's automotive exposure comprises around 60% of overall sales, only 8-9% comes from US-produced autos, said Quinn.
LyondellBasell to make bio-ETBE in Texas
Dutch petrochemical giant LyondellBasell will produce bio-ethyl tertiary butyl ether (ETBE) at its Channelview plant in Texas, US, beginning in the fourth quarter. Bio-ETBE is a gasoline blending component composed of ethanol produced from biomass and natural gas liquids. The bio-ETBE will be shipped to Japan for blending at Japanese refineries to help meet clean-burning fuel requirements in the country. The bio-ethanol will come from Brazil, where it is made from sugarcane.
Austria's paint industry sees orders collapse
Austria's paint, coatings and varnish industry saw orders collapse in the first few months of the year, and fears a further deterioration as markets have not yet bottomed out, said Gunther Berghofer, head of industry group Osterreichische Lackindustrie. Some producers recorded a decline in orders of up to 50% this year. "We have not yet reached the bottom, and if the trend continues further, industry rationalization measures will be inevitable," he said.
Europe PET firms call for standardization
Quality control issues and variation in the way Europe's recycled polyethylene terephthalate (PET) markets operate have led to calls for industry standardization. "Some countries have better control than others. If one or two problems [in individual countries] make the newspapers, it creates problems for the entire industry. We must ensure people work to the same standards," said one recycled PET manufacturer. A major issue for recycled PET producers is the disparity in the way bottles are collected across Europe. Some countries separate different colored material for recycling at the point of collection, while others do not.
DSM: Prospects good for white biotech
Technology, political will and consumer awareness is now sufficient to allow white biotechnology to finally fulfill its potential, said Volkert Claassen, Dutch chemical firm DSM's head of white biotechnology. "I think that the technology is finally there. That is probably the most pivotal thing, but on top of that, the political environment is very favorable in the US and Europe, but even in China right now," he said. White - or industrial - biotechnology is the use of living cells or enzymes to create products that would typically require petroleum-based feedstocks.
Europe's ethanol group jabs Brazil association
Brazil must work harder to divulge the advantages of using biofuels, instead of just trying to expand its own market, the European Bioethanol Fuel Association (eBio) said. "If you did that, the global market would take care of itself," eBio secretary general Robert Vierhout told delegates at the 2009 Ethanol Summit in Sao Paulo. Vierhout's statement drew an immediate reaction from Brazilian sugarcane association Unica, which has repeatedly attacked import restrictions imposed on ethanol by the US and Europe. "You are fundamentally wrong on that," Unica North American representative Joel Velasco told Vierhout. The road to energy independence is not through isolation, he added.
Repsol clarifies reason for ACN shutdown
Spanish acrylonitrile (ACN) producer Repsol's decision to idle its 125,000 tonne/year ACN plant and its methyl methacrylate (MMA) plant in Tarragona, Spain, was based on an unprecedented reduction in demand over a prolonged period, a company source confirmed. Market sources had earlier expressed confusion over Repsol's decision to close the plant when ACN prices were firming. Sources at Repsol clarified that this situation had been the case only for a relatively short period, while a continuous drop in demand had a long-term effect on the industry and had eroded margins.
Agrium reaffirms offer for CF Industries
Canadian fertilizer firm Agrium has reaffirmed its takeover bid to buy US-based fertilizer company CF Industries for $40m (€28m)in cash, and one common share of Agrium for each CF share. Agrium also said it would abandon its bid if it did not receive "a compelling majority." It urged CF shareholders to tender their shares by the deadline of June 22. The deadline was extended from June 15.
HIP Petrohemija and Dioki explore deals
Serbia's HIP Petrohemija and Croatia's Dioki are exploring ethylene supply and other strategic deals, the Serbian Ministry of Energy and Mining said. As the only major petrochemical producers in the heart of the Balkans, the two companies should explore complementary business links, the ministry said, following an energy forum attended by Serbian and Croatian ministers and companies in Belgrade.
Trevira files insolvency application in germany
German polyester producer Trevira has filed for the start of insolvency proceedings with a restructuring plan in a local court, Indian parent company Reliance Industries said. The company said the filing followed major efforts to overcome the impact of the industrial downturn in Europe, particularly in the automotive and textile sectors to which it is a major supplier.
BASF's Elastogran restarts TDI plant
BASF subsidiary Elastogran restarted its toluene di-isocyanate (TDI) facility at Schwarzheide, Germany, last week, following a delay and is currently ramping up its operating rates, said a company source. Stocks were reported to be low and "sales are being closely monitored," added the source. The company declined to provide precise details about production levels. The unit, with TDI capacity of 80,000 tonnes/year, went down in mid-April for scheduled maintenance, which was due to last for about one month.
Petro Rabigh expects stable production
Rabigh Refining and Petrochemical (Petro Rabigh) was expecting to stabilize operations at its cracker complex in Saudi Arabia by the end of last week, sources close to the company said. "Ethylene supply has been severely curtailed due to technical problems at the mixed-feed cracker, resulting in the shutdown of the cracker and 900,000 tonne/year polyethylene (PE) facility" two weeks ago, one of the sources said.
China to subsidize energy-saving products
The Chinese government plans to subsidize energy-efficient products, in a bid to boost domestic consumption and protect the environment. In the next three years, the government plans to subsidize such energy-saving products as air conditioners, refrigerators, flat-screen television sets, microwave ovens, electrical motors and washing machines, said Zhao Jiarong, a top official from China's National Development and Reform Commission.
Petrobras sees gasoline market falling in Brazil
Brazilian oil and chemical major Petrobras expects gasoline demand in Brazil to continue to drop due to sustained growth in the ethanol market. "Gasoline is the alternative fuel in Brazil because it has already been overtaken by ethanol," said Petrobras CEO Sergio Gabrielli. Gasoline in Brazil already accounts for less than 50% of four-stroke-engine fuel demand, and that figure will drop to 17% by 2020, Gabrielli told delegates of the 2009 Ethanol Summit in Sao Paulo. Gabrielli said Petrobras will no longer invest in gasoline refining because the product cannot compete with ethanol in Brazil.
Argentina unlikely to hike biodiesel exports
Argentina is not likely to increase biodiesel exports to Europe because the EU has plenty of the biofuel, said Fernando Pelaez, president of the Argentine Chamber of Biofuels (CARBIO). "Argentina has the potential to increase its biofuel exports, but the demand from Europe has remained flat because there's currently a large stock of biofuels in that market," he said. Formerly, nearly all of Argentina's biodiesel exports went to the US, which in turn exported material to the EU.
us weather Forecasters predict 11 named storms in hurricane season
Predictions for the 2009 Atlantic hurricane season have been announced. Colorado State University meteorologists now expect 11 named storms in the Atlantic basin, with five becoming hurricanes and two developing into major hurricanes with sustained winds of at least 111 miles per hour (178km/h). Historical averages per season are 9.6 named storms, 5.9 hurricanes and 2.3 major hurricanes.
China sulfur imports up from March
China's sulfur imports totaled 1.49m tonnes in April, up by 260,000 tonnes from March and 770,000 tonnes higher than April 2008. China's government, meanwhile, imposed a 17% value-added tax on sulfur imports on 1 June.
producers in Hessen start cutting jobs
Chemical producers in Germany's central Hessen state expect to start cutting 1,000 jobs in the coming weeks and months. Industry association Hessen Chemie cited a survey of 97 chemical producers, employing 63,000 workers in the state.
CropEnergies plans CO2 liquefaction plant
German bioethanol firm CropEnergies is planning a 100,000 tonne/year facility to liquefy carbon dioxide (CO2) emissions at its production site in Zeitz, in Saxony-Anhalt state. The plant will be built as a joint venture with Tyczka Energie for an estimated €10m ($14m). Upon completion in 2010, the plant will be capable of providing food-quality liquid CO2.
ECHA submits seven chems for restriction
The European Chemicals Agency (ECHA) has asked the European Commission to introduce strict controls for seven chemical substances that are considered to be a risk to the public. "I see this first science-based recommendation of substances for authorization as an important milestone," said ECHA executive director Geert Dancet. Three of the substances are classified as toxic to reproduction, one as carcinogenic, and three as persistent, bioaccumulative and toxic (PBT) or very persistent and very bio-accumulative (vPvB).
pending home sales jump for third month
US pending home sales shot up by 6.7% in April from March, the National Association of Realtors (NAR) said, the third monthly gain on the strength of record low housing prices and new tax credits. Pending home sales increased by 3.2% in March and 1.6% in February.
Henkel divests three adhesives brands
German adhesives and detergents producer Henkel has sold three non-core consumer adhesives brands in the US and Canada, as well as a distribution facility in Ohio, to North Carolina-based Shurtape Technologies. "With this divestment, Henkel is separating from a business not belonging to its core activities within the portfolio of the adhesive technologies business sector," the company said.
Bankruptcy filing a "defining moment" - GM
Car giant General Motors (GM) has filed for Chapter 11 bankruptcy protection, the third-largest bankruptcy in US history. "Today marks a defining moment in the history of GM," company CEO Fritz Henderson said. "When we exit the process and the new GM comes forward, you'll see an emphasis on products, customers and reinventing technology," he added.
China industries expand for a third time
China's manufacturing industry expanded for the third consecutive month in May, buoying hopes that the economy remains on a path to recovery. The country's Purchasing Managers' Index posted a reading of 53.1% last month, down from 53.5% in April, but above the 50% threshold that indicates expansion, data from the China Federation of Logistics & Purchasing showed.
Dow to close Bilbao unit
US major Dow Chemical will close its 65,000 tonne/year polystyrene (PS) plant in Bilbao, Spain, in the third quarter due to poor economics and reduced demand. Dow said the closure would affect its PS and Styrofoam production, also citing underutilization and overcapacity. Dow will increase operating rates at its remaining European PS plants.
Oltchim short feed after losing supplier
Romanian plastics and agrochemicals company Oltchim has been unable to obtain enough feedstock since its main supplier, Petrom subsidiary Arpechim, closed its steam cracker in November. Oltchim hopes to acquire Arpechim's petrochemical unit, which includes the steam cracker, but the debt-ridden state firm would need Romanian government guarantees on 80% of approximately €500m ($704.2m) in loans that it needs for a rescue plan.
Industry must work harder on safety - UN
The global chemical industry is not doing enough to help achieve the UN's goal of the safe production and consumption of chemicals by 2020, Achim Steiner, executive director of the UN Environment Programme. "With the exception of a few bold players, there is still a casual sense of urgency," he said at the Helsinki Chemicals Forum last month. "It is recognized by a number of companies and CEOs that more action is necessary, but it has not been translated into a sufficiently ambitious set of initiatives."
Mitsubishi chemical to exit caprolactam, sm
Japanese major Mitsubishi Chemical is to withdraw from the caprolactam (capro) and styrene monomer (SM) businesses as part of a restructure in its chemicals business. The firm cited "increasingly severe competition" from lower-cost producers in the Middle East and decreasing demand for petrochemicals in Japan.
Sunoco pursuES sale of struggling chems
US refiner Sunoco is actively pursuing the sale of its chemicals business. "We have just not been able to generate the returns in chemicals that we'd expect," said CEO Lynn Elsenhans.
By: Joseph Chang+1 713 525 2653
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