27 July 2009 00:00 [Source: ICB]
EUROPEAN STEEL CHEMICAL FIRMS FINED
The European Commission has fined seven chemical companies a total of €61m ($87m) for operating price-fixing cartels in certain chemicals used by the steel industry. The firms, including Germany's Almamet, Ecka Granulate, Evonik Degussa, SKW Stahl Metallurgie and ARQUES Industries, Slovakia's Novacke Chemicke and 1.garantovana and Slovenia's HSE were found to have fixed prices and shared markets for calcium carbide powder, calcium carbonate granulates and magnesium granulates between 2004 and 2007. Dutch chemical group AkzoNobel participated but was not fined because it informed the commission about the cartel's existence.
DUPONT UNDERLYING Q2 NET PROFIT DOWN BY 48%
US chemical major DuPont's underlying second-quarter (Q2) net profits were down by 48% year on year to $558m (€391m) on 22% lower sales of $6.9bn as demand for key products remained depressed. Earnings per share (EPS) of 61 cents came in 8 cents ahead of Wall Street estimates. "Our aggressive actions to improve productivity and reduce costs across the company are paying off as we contend with continued weak demand in key segments," said CEO Ellen Kullman. The firm reaffirmed a 2009 EPS outlook of $1.70-2.10.
WALL STREET OFFERS MIXED VIEWS ON DUPONT
Wall Street offered mixed outlooks following US chemical major DuPont's second-quarter earnings. JPMorgan analyst Jeffrey Zekauskas raised his 2009 earnings per share (EPS) estimate by five cents, to $1.75, and his 2010 forecast by 10 cents, to $2.10. However, Jefferies & Co. analyst Laurence Alexander cut his 2010 EPS estimate by 50 cents, to $1.85, while maintaining his 2009 EPS forecast of $1.70. "Our revised estimate assumes a slower recovery in most end-markets," said Alexander.
HIP PETROHEMIJA TO LAY OFF 852 EMPLOYEES
Debt-ridden Serbian petrochemical producer HIP Petrohemija will lay off 852 employees from its 2,300-strong workforce as part of its restructuring. The company had previously targeted 500 redundancies. It said that the extra job losses were necessary to encourage the state to provide soft loans that would aid the company's survival.
LYONDELL CREDITORS GET APPROVAL TO SUE EXECS
A US bankruptcy court approved a creditors' lawsuit against the lenders, former board members and officers of Lyondell Chemical, who are accused of driving the company into bankruptcy in roughly a year after its merger with Basell. The lawsuit names several prominent officers in the merged Netherlands-based chemical firm LyondellBasell Industries, including Ed Dineen, chief operating officer; Alan Bigman, chief financial officer; and Bart de Jong, president of the North American operations. Also named are Leonard Blavatnik and his industrial group, Access Industries. Access owned Basell at the time of the merger.
POLAND INCREASES SCOPE OF PRIVATIZATION PLANS
Poland has expanded its 2009-2010 national privatization program, with major stakes in fertilizer, titanium dioxide and biofuel producers a key element of the plan, the Polish treasury ministry said. Analysts said the extent of the program, with ministers now targeting receipts of up to zlotych (Zl) 30bn ($9.9bn, €7.0bn) for 2009-2010, instead of Zl15bn-20bn, surprised the markets. A minority stake in the second-largest Polish refiner and biofuels producer, Grupa Lotos, was among the assets newly announced as available to investors.
OLTCHIM RESCUE PLAN CLEARED BY COUNCIL
The Romanian government's rescue plan for indebted state chemical producer Oltchim does not amount to unfair state aid, the country's Competition Council said. The ruling will go to the EU Competition Commission, which must now give its view on the crisis package, which is worth around €434m ($620m). Romanian Prime Minister Emil Boc said Oltchim was a strategic company and large employer that required assistance to help it "remain a powerful industry in Romania's economy."
TOAGOSEI TO FOCUS ON SYNTHETIC HCI
Japanese producer Toagosei has decided to close the ethylene dichloride (EDC) and vinylidene chloride units at its Tokushima plant, as part of a shift to synthetic hydrochloric acid (HCl) production. "These businesses have been unprofitable for us, and they don't have a bright future," a company official said. Production will stop at the end of 2009. Toagosei has decided to use chlorine to produce more synthetic HCl instead of organic solvents. The firm is increasing its synthetic HCl capacity at Tokushima from 50,000 tonnes/year to 110,000-120,000 tonnes/year by September.
AIR PRODUCTS Q3 NET FALLS 24%; TO CUT JOBS
US-based industrial gases firm Air Products posted a 24% year-on-year decline in underlying earnings to $225m (€158m) on 28% lower sales of $2bn. Earnings per share of $1.05 came in 7 cents ahead of Wall Street estimates. The company said it would cut about 1,150 jobs across the global workforce and close some plants to reduce costs. "While we are still seeing the impact of the global recession on our volumes, we've seen signs of improvement during this quarter in some of our end-markets, particularly in Electronics and Asia," said CEO John McGlade.
GENENCOR EYES TEXTILE PROCESSING MARKET
Dutch enzyme producer Genencor wants to expand into the $18bn (€12.7bn) textile and garment processing market by replacing other chemicals with its enzymes, said Glenn Nedwin, vice president, technical enzymes, who presented at the BIO World Congress on Industrial Biotechnology and Bioprocessing in Montreal, Canada. "Enzymes account for just about 1% of the whole global textile chemical processing. This is a huge potential market for us," he said. Nedwin said Genencor's PrimaGreen product line would benefit the textile-processing industry by replacing harsh chemicals, lowering temperatures for textile processing, decreasing water consumption and reducing waste and water emissions.
LONZA NET PROFIT DOWN BY 56% IN FIRST HALF
Swiss fine chemicals firm Lonza posted a 56% drop in net profit for the first half of the year to Swiss franc (Swfr) 118m (€78m, $110m). Group sales dropped by 9% to Swfr1.33bn. The company attributed the weaker performance to the "nature of its Custom Manufacturing business model," along with a slowdown in parts of the Life Science Ingredients segment.
ADM TO START TWO US BIO-BASED PLANTS IN Q4
US agribusiness major Archer Daniels Midland (ADM) will start its new bio-based propylene glycol (PG) facility in Illinois, as well as a bioplastic facility in Iowa in the fourth quarter (Q4). Its new facility in Decatur, Illinois, will have the capability to produce 100,000 tonnes/year of PG made from glycerin, said Todd Werpy, vice president of ADM's advanced biofuels and chemicals business, at the BIO World Congress on Industrial Biotechnology. The company's new bioplastic facility in Clinton, Iowa, meanwhile, will start producing polyhydroxyalkanoate plastic with a capacity of 50,000 tonnes/year. ADM is producing the bioplastic in a joint venture with biotechnology company Metabolix.
SHELL CONTINUES SALE TALKS ON REFINERIES
UK-based energy major Shell is continuing talks with potential buyers for two of its German refineries near Hamburg, but would not confirm a report that a sale could be concluded by early next year, said company spokesman Rainer Winzenried. Selling the refineries at Hamburg-Harburg and at Heide in Germany's northern Schleswig-Holstein state remained the priority, rather than closing them down. The two refineries employ over 1,000 workers in total.
LONZA RESTRUCTURES CUSTOM MANUFACTURING
Switzerland-based fine chemical firm Lonza is consolidating its custom manufacturing businesses into a single division. By combining Lonza's Exclusive Synthesis and Biopharmaceutical business sectors, the new division, Lonza Custom Manufacturing, will "enhance synergies in sales and marketing, and on the operational side," said an official.
SHERWIN-WILLIAMS Q2 PROFIT DROPS BY 8%
US paint and coatings firm Sherwin-Williams' second-quarter (Q2) net income dropped by 8% to $158m (€111m), down from $172m year on year, as sales fell by 13% to $1.95bn, attributed primarily to weak paint sales volumes. "We believe we have gained share in most segments of the market and we are positioned to emerge from this recessionary cycle more efficient and more responsive to needs of our customers," said CEO Christopher Connor.
PKN ORLEN AIMS TO CUT ANNUAL COSTS BY 19%
Global consultancy Solomon Associates has advised Poland's energy and chemical group PKN Orlen to cut its annual costs by 19% to match the cost efficiency of top European peers, said Orlen spokesman Dawid Piekarz. Orlen should be able to bridge the cost efficiency gap between itself and top European companies in similar industries within three to five years, said Marek Serafin, deputy chairman of Orlen's Czech petrochemical and refining subsidiary, Unipetrol.
NATGAS SHORTAGE CHOKES ARGENTINA PETCHEMS
Several producers in an Argentine petrochemical complex are contending with natural gas cutbacks, as the government rations supplies during the southern hemisphere winter. "Even though the industry in general has not been working to its full extent - due to lower demand - and the winter season has not been very cold, the gas supply cutbacks continue to happen. This is a sign of the seriousness of the energy situation in Argentina," said Nestor Ramirez, general manager of local chemical producer Carboclor.
BMS TO CONSOLIDATE US POLYCARBONATE UNITS
German chemical firm Bayer MaterialScience (BMS) has decided to relocate US production of the company's polycarbonate (PC) and PC-blend films to Whately, Massachusetts, from its current facility in Berlin, Connecticut. The company expects the move to be complete by the end of 2009. The Berlin site employs about 20 people, and some of them will be offered positions at the Whately facility. The films are used in instrument panels, trade show displays, membrane switches, control panels and decals.
BISPHENOL A IS SAFE, SAYS CALIFORNIA GOVERNMENT
A committee of California's Office of Environmental Health Hazard Assessment declined to put bisphenol A (BPA) on a list of chemicals that could cause reproductive harm. The judgment permits the continued use and sale of BPA in the most populous US state.
WACKER JV TO BUILD CHINA SILICONE EMULSION PLANT
China-based Wacker Dymatic Silicones plans to build a silicone emulsion plant in Shunde, Guangdong province. The company, which is jointly owned by German specialty chemical producer Wacker Chemie and China's Dymatic Chemicals, will build a 4,500 tonne/year facility, warehouse and offices at the site, which is the company's new headquarters.
FMC LITHIUM STARTS CHINA PLANT AND CLOSES US SITE
FMC Lithium, of the US, has started operations at a new butyllithium plant in Zhangjiagang, China, while closing another plant at Bayport, Texas, in the US. North American production will be consolidated in Bessemer City, North Carolina. "We believe this expansion, coupled with a consolidation in North America capacity, was necessary to better align with the needs of the marketplace and improve our profitability," said Jon Evans, FMC Lithium division manager.
HEBEI PROVINCE DRAWS UP SODA ASH UNIT PLANS
China's Qingxian county government is planning to build a 300,000 tonne/year soda ash plant in the country's Hebei province in the latter part of the third quarter. The plant will be built in the Qingxian Economic Development Zone and will likely cost yuan 800m ($117m).
LG CHEM TO INVEST UP TO $949M IN LCD GLASS
South Korea's LG Chem plans to invest up to won (W) 1,200bn ($949m) by 2012 in a liquid crystal display (LCD) glass manufacturing facility at Paju, north of Seoul. It will make an initial investment of W430bn this year and plans to start commercial production in 2012. The company expects to earn W1 trillion from sales by 2014, and for that to double four years later.
SK ENERGY TO SPIN OFF BASE OILS AND LUBES
SK Energy of South Korea, one of Asia's largest refiners and base oils producers, has decided to spin off its base oils and lubricants division into a separate entity by October 1. The new company will be 100% owned by SK Energy and will include the base oils and lubricant production facilities.
SINOPEC H1 ETHYLENE OUTPUT DIPS BY 10%
China's biggest oil refiner Sinopec produced 10% less ethylene in the first half of the year at 2.97m tonnes, with its crackers running at 94% capacity. Production may have declined due to cracker maintenance shutdowns, said analysts.
SINOPEC EXEC GETS DEATH SENTENCE WITH REPRIEVE
A former chairman of Asian refiner Sinopec has received a suspended death sentence from China for accepting about $28.66m (€20.35m) in bribes. Tonghai Chen was sentenced to death with a two-year reprieve in a verdict given by Beijing's No. 2 intermediate court. A suspended death penalty can be commuted to life in jail, and then 20 years in prison or less, if the court believes the person has repented.
DOW HIGHLIGHTS ALGAE-BASED CHEMICALS
Algae as a chemical feedstock looks promising, said Steve Gluck, scientific leader for US-based Dow Chemical's environmental technology center. Algae producers can turn low volumes into high-margin opportunities in chemicals like they did in the health food sector, he said at the BIO World Congress on Industrial Biotechnology and Bioprocessing.
DUPONT TO OVERSEE GLYCOL PLANT CLOSURE
Lyondell Chemical said that US major DuPont would oversee the closure of their jointly held ethylene glycol (EG) plant in Beaumont, Texas, US. Lyondell is a US subsidiary of bankrupt Netherlands-based LyondellBasell Industries. The plans for the shutdown need approval from the bankruptcy court. Lyondell subsidiary Equistar and DuPont operated the plant under the PD Glycol joint venture. The plant ceased operations after Hurricane Ike made landfall in September 2008 and damaged the plant.
PINNACLE AIMS TO STRENGTHEN PP BRAND
US polypropylene (PP) producer Pinnacle Polymers' new distribution agreements with four North American resellers will strengthen the company's brand by ensuring that less material is sold as generic or distributor-branded resin, said CEO Jerry Theys. "We have a much more advanced product list than our competitors in terms of impact and random copolymer, and if we sell it through a known format, then our customers will benefit," he said. Pinnacle previously sold resin through 10-15 resellers in North America, but now it has narrowed the field through formal agreements with Pure Polymers, Entec Polymers, Longhorn Polymers and SM Polymers.
WORKER WINS $9.6M JUDGMENT IN SUIT
An industrial worker blinded in one eye won a $9.6m (€6.8m) judgment in a Texas lawsuit he filed against US-based Occidental Chemical (OxyChem) and Lyondell Chemical. The worker, Jerry Jenkins, accused OxyChem of designing an acid-addition system at a Lyondell plant that lacked a pressure indicator. Moreover, the system failed to properly vent pressure, according to the lawsuit.
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