This week's world news

12 October 2009 00:00  [Source: ICB]

Mystery surrounds rescue of Wilton plant
US-based Third Coast Chemicals appeared to confirm last week that it was in talks about the feasibility of a takeover of the Dow ethylene oxide (EO)/ethylene glycol (EG)facility at Wilton, Teesside, UK, which is scheduled for closure in January 2010. Martin Staley, EMEA vice president for Third Coast, told ICIS: "We're working with the North East Process Industry Cluster (NEPIC) to see if there is an opportunity for the plant to be saved." The company had previously worked on a takeover plan that stalled in May. However, NEPIC CEO Stan Higgins later told ICIS that no negotiations were going on with Third Coast or anyone else. A spokeswoman for the UK's Department for Business, Innovation and Skills added: "We're not in any negotiations with Third Coast at the moment. I don't believe we're in negotiation with any other parties."

ifc: expanding Fertilizer investment a priority
Investment in the fertilizer industry in developing countries is a key strategic priority, the World Bank's International Finance Corp. (IFC) said. The IFC said that following the rise in food prices in 2008, food security had moved to the top of its agenda. It said long-term demand for agricultural products was strong because of a rising population, increasing protein consumption and an increased emphasis on alternative fuels. The IFC aims to promote agricultural productivity through investment in private sector companies in Africa, China, India, Latin America and the Commonwealth of Independent States.

La Seda gets reprieve
Troubled Spanish polyethylene terephthalate (PET) producer La Seda de Barcelona has been given a further four-week reprieve from banks as it tries resolve issues with its finances, a source close to the Spanish company said last Wednesday. La Seda was hoping that banks would refinance the company's debt, but was also considering the possibility of a new shareholder coming on board, the source added. The company said banks had shown a willingness to refinance the debt and that La Seda would continue to negotiate over the next four weeks. It added that a shareholder offered to increase its stake in the company and was prepared to lend La Seda €150m ($221m).

PWC: Time ripe for M&A in chemical distribution
There are significant opportunities globally for mergers and acquisitions (M&A) in chemical distribution, global consultancy PricewaterhouseCoopers (PwC) said. With a fragmented market and a recession-resistant business model, the time is right for M&A among private equity players wishing to enter the market, and for existing distributors looking to expand as capital markets start to unfreeze, said PwC consultants Mike Clements and Mark Hanrahan. They added that new research showed the top five distributors globally controlled only 15% of the market.

Monsanto net loss deepens in fiscal Q4
US agrochemicals and biotechnology major Monsanto reported a fiscal fourth-quarter (ended August) net loss of $233m (€158m) on 8.3% lower year-on-year sales of $1.9bn, compared with a loss of $172m in the same quarter last year. A sales decrease for flagship Roundup herbicide, and other glyphosate-based herbicides as a result of price competition and a global glyphosate supply and demand imbalance were noted as factors in the decline. The company also cited charges related to restructuring and the sale of its sunflower operations.

Evonik commissions plasticizer plant
German specialty chemical producer Evonik Industries has commissioned a plant to produce the plasticizer alcohol 2-propylheptanol (2-PH), at Marl Chemical Park, in Germany, to expand its range in high molecular-weight plasticizer alcohols. Evonik said it invested a high double-digit million-euro figure in the 60,000 tonne/year plant. 2-PH is used as a raw material for the production of a polyvinyl chloride (PVC) plasticizer.

Dow Chemical unveils line of solar shingles
US major Dow Chemical has unveiled a line of solar roofing shingles that will revolutionize the industry, the company said. DOW POWERHOUSE Solar Shingles are photovoltaic panels that can be installed on rooftops with standard asphalt shingle materials. The solar shingle systems will be available in limited quantities by mid-2010. Dow expects sales to reach $5bn (€3.4bn) in 2015 and $10bn-11bn by 2020.

UOP expands clean fuels
US industrial firm Honeywell's chemical technology arm UOP has expanded its clean fuels agreement with US coal gasification firm Rentech. The agreement, made last year, will now include UOP's gas processing technology for the treatment of synthesis (syngas), from sources such as biomass, natural gas and coal. The addition of the technology will allow Rentech and UOP to offer clients a one-stop source to producing, cleaning and upgrading syngas and then converting it to clean fuels, specialty waxes and chemicals.

Kuraray develops Septon K elastomers
Japanese chemical firm Kuraray has developed its SEPTON K Series of high-performance hydrogenated styrenic thermoplastic elastomers, which it says offers superior bondability to glass and metal, easy moldability and rubber-like elasticity. Current global demand for these types of elastomers amounts to 120,000 tonnes/year and is growing by around 7%/year, estimates Kuraray. The product is targeted towards automotive, electric and electronics, and other glass-related components. Kuraray eventually expects it to enter the film, sealant, coating and adhesive areas.

DuPont may reach 2008 profit in three years
US chemical major DuPont could take two-and-a-half to three years before it returns to the profit levels seen in 2008, according to a filing to the US Securities and Exchange Commission made last Wednesday. The expectation includes the loss of income from DuPont's pharmaceutical segment, according to the filing, which quoted Mark Vergnano, DuPont executive vice president at an investor meeting. In 2008, DuPont posted underlying earnings per share (EPS) of $2.70 per share, according to US bank Citigroup. Consensus estimates are for DuPont to earn $1.82 per share in 2009 and $2.07 per share in 2010.

Petro Rabigh exports surplus ethylene
Petro Rabigh, the joint venture between Japan's Sumitomo Chemical and Saudi state oil company Saudi Aramco, could export up to 23,000 tonnes of ethylene this month from Saudi Arabia as certain derivative plants are not running at full rates, market sources said. Around 14,000 tonnes of ethylene were sold to traders for early to mid-October lifting to Southeast Asia and possibly Europe, while a remaining 5,000 tonne cargo was offered for delivery in the second half of October.

CHARKIT expands ARKEMA hydrazine distribution
US-based distributor Charkit Chemical has announced that the company has entered into an agreement with French specialty chemical firm Arkema for the exclusive Canadian distribution of four of Arkema's hydrazine products: 100% hydrazine hydrate, 85% hydrazine hydrate, 55% hydrazine hydrate, and 55% catalyzed hydrazine hydrate. Charkit has been Arkema's exclusive distributor for hydrazine products in the US for more than 20 years, said Charkit.

late start for Comperj?
Brazilian state-operated energy and chemical major Petrobras declined to comment on an analyst's remarks that it would be "impossible" for the Brazilian energy major to start operations at the Comperj petrochemical complex in Rio de Janeiro state by 2012. "It is impossible for the complex to be built and operating in only two years, by 2012. Construction is running slowly, while there are still difficulties in finding major partners for the project," said Walter de Vitto, a gas, energy and oil analyst for Sao Paulo-based consulting firm Tendencias Consultoria.

Lyondell insurance to pay execs' legal costs
A US bankruptcy court has allowed the insurance policy of US-based Lyondell Chemical to cover the legal expenses of US industrial group Access Industries chairman Len Blavatnik and other executives as they defend themselves in a lawsuit connected to the company's bankruptcy. A committee representing unsecured creditors accused the officers of driving the company into bankruptcy by pursuing a merger with Basell. Access Industries is the ultimate parent company of Lyondell.

Ferro revamps business operating structure
US performance material producer Ferro reorganized into two operating groups to drive growth, product development and customer engagement. The Electronics, Color and Glass Materials Group will combine the company's Electronic Material Systems and Color and Glass Performance Materials businesses. The Polymer and Ceramic Engineered Materials Group will combine the company's Polymer Additives, Specialty Plastics, Performance Coatings and Pharmaceuticals businesses.

Stolt-Nielsen's Q3 net profit falls by 26%
Chemical tanker operator Stolt-Nielsen reported a 26% year-on-year fall in third-quarter (Q3) net profit to $30.8m (€20.9m) on weaker demand. The UK-based company's Q3 revenue was down by 18% to $429.1m from the same period last year, while operating profit dropped by 17% to $39.3m. However, the company noted an improvement in demand.

gas-derived chemicals to grow 20% by 2030
Global demand for natural gas as a chemical feedstock could grow by 20% by 2030, according to a report by the International Gas Union (IGU). Natural gas demand to produce ammonia could rise by 23% by 2030.

Solventis buys Shell customer list
Anglo-Belgian solvents distributor Solventis has purchased the customer list for hexylene glycol and isopropyl ether (IPE) from global major Shell Chemicals, following the closure of Dutch-based polymers producer LyondellBasell Industries' solvents unit in Berre, France. Solventis will distribute the chemicals from bulk tank farm facility in Belgium.

Synalloy sells Blackman Uhler
US metals and chemicals company Synalloy sold specialty chemical business Blackman Uhler Specialties to SantoLubes Manufacturing for $11.2m (€7.7m). Located at Spartanburg, South Carolina, Blackman Uhler produces chemicals for the refining, pulp, paper, textile, mining, agricultural, photo, coatings and water sectors under toll and contract agreements.

Mosaic to spend $30m on SO₂ controls
US fertilizer producer Mosaic will spend about $30m (€21m) to cut 7,600 tons/year of sulfur dioxide (SO₂) pollution from two plants and pay a $2.4m civil penalty to resolve alleged Clean Air Act violations, the US Environmental Protection Agency said. Mosaic will install pollution control equipment and upgrade existing controls to meet lower SO₂ emission limits at its Uncle Sam facility, in Louisiana, and will permanently cease sulfuric acid production at its Mulberry plant, in Florida.

Cefic launches services to help with Reach
Europe's chemical trade association Cefic has launched support services for companies participating in the Substance Information Exchange Forum (SIEF) stage of the EU's Reach chemical law, following reports that smaller companies were struggling with it. "To simplify the SIEF process, ReachCentrum is providing services such as SIEF communication, legal support, financial clearing house, management of letter of access and project management," said Cefic subsidiary ReachCentrum.

Sunoco to idle refinery
US refiner Sunoco will idle its 145,000bbl/day Eagle Point refinery in Westville, New Jersey, because of weak demand for refined products amid recession and increased global capacity. The idling process will take four to six weeks to complete. Production will be shifted to nearby refineries in Philadelphia and Marcus Hook, Pennsylvania. About 400 employees will be laid off as a result of the move.

RPM plans to rebuild acquisitions pipeline
US coatings and sealants producer RPM International plans to rebuild its acquisitions pipeline as asking prices have fallen and economic stability has made it easier to forecast future earnings of target firms, CEO Frank Sullivan said during an earnings conference call. The company will consider product lines and free-standing businesses with values of $5m-100m (€3m-69m). "The private equity crazy game is over," Sullivan said.

Novolyte signs battery pact with China's Aleees
Novolyte Technologies reached an agreement with China-based Aleees to speed the development and commercialization of Aleees's lithium-iron phosphate (LFP) nanococrystallineolivine cathode materials for batteries. Aleees has the biggest market share of LFP in Asia, Cleveland, Ohio-based Novolyte said. "The partnership will assist greatly in our efforts to further commercialize Aleees's iron phosphate cathode technology and Novolyte lithium-ion electrolyte solutions in the Asian region," said Barry Misquitta, Novolyte vice president of energy storage materials.

ACC questions BPA link to girls' aggression
The American Chemistry Council (ACC) dismissed the results of a new study linking bisphenol A (BPA) exposure and aggressive behavior in young girls, saying the study was not meaningful unless replicated in a larger setting with more variables. The study, conducted for the US Department of Health and Human Services, found that two-year-old girls whose mothers were exposed to higher levels of BPA while pregnant were more likely to have "externalizing" behaviors such as aggression and hyperactivity.

Bilfinger to buy Chem engineer MCE for €350m
Germany-based construction company Bilfinger Berger has agreed to acquire Austrian chemical engineering and services firm MCE in a €350m ($515m) deal. MCE, with a staff of 6,600 and sales of more than €900m last year, is focused on chemicals, petrochemicals, fine chemicals, gas, energy and related sectors. Last year, MCE acquired Clariant's services firm, Technische Services Gersthofen.

ExxonMobil to expand Asia chems footprint
ExxonMobil Chemical's production footprint in Asia will increase significantly over the next two years as key projects in China and Singapore come on stream, president Stephen Pryor said last week. Production from ExxonMobil's Fujian, China, chemicals complex will be fully ramped up by the end of this year, while its cracker, polyolefins and specialties expansions in Singapore are due on stream in 2011. "Fujian represents the first, fully integrated refinery and petrochemicals project in China," Pryor said.

ZChP nears insolvency amid dispute – bank
Poland's second-largest fertilizer producer, Zaklady Chemiczne Police (ZChP), is struggling to remain solvent because trade unions are blocking its restructuring plan, according to Czech-based bank Wood & Co. Poland's Industrial Development Agency will not guarantee loans of zlotych (Zl) 190m ($65.7 m, €44.9m) from Polish bank PKO BP unless the plan is implemented. The company said it is holding talks with the unions.

Evonik, Cristal Material form LED lens venture
Germany-based diversified specialty chemicals major Evonik Industries and Taiwan's Cristal Material Corp. have formed a joint venture (JV) to manufacture high-quality glass lenses for next-generation, light-emitting diodes (LEDs). Evonik Cristal Materials Corp. will complement Evonik's strategy as a solution provider to the lighting industry, while providing Cristal Material with access to the market, Evonik said in a statement. "Participating in the joint venture offers Evonik an attractive opportunity for forward integration along the entire supply chain in the growing LED market," said Patrik Wohlhauser, chairman of Evonik Industries subsidiary Evonik Degussa's management board.

Jordan India to start phosacid plant in 2012
Jordan India Fertilizer Co. will commission its phosphoric acid project at Eshidiya, in Jordan, in 2012. The $625m (€431m) project has reached the construction stage. Jordanian King Abdullah II laid the foundation stone of the plant a week ago.

Dow completes $1.675bn sale of Morton to K+S
Dow Chemical has completed the $1.675bn (€1.139bn) divestment of its Morton Salt business to German fertilizer producer K+S. About $1bn of the proceeds will be used to pay the balance of a bridge loan. "With this transaction, we have accomplished our objective of fully paying off the bridge loan and eliminating this financing facility," CEO Andrew Liveris said.

US base oil demand may have peaked – buyers
Demand for base oils in the US rose above expectations in July and has held steady into October, but buyers at the European Petrochemical Association meeting said the buying spree may have peaked. Demand improved as the "cash for clunkers" stimulus program spurred activity from the automobile industry, but auto manufacturer projections through January are dismal.

Novapex to start up new IPA unit in January 2010
Novapex will start production at its 40,000 tonne/year isopropanol (IPA) unit located in Roussillon, southern France, on January 1 2010, the French phenol and acetone producer said. The expansion will be fully upstream integrated, using Novapex's own high-purity acetone as its feedstock, local contractor ERAS and Mitsui-licensed technology.

By: Joseph Chang
+1 713 525 2653

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