US Haltermann competing in specialty chems with former owner Dow

14 October 2009 16:08  [Source: ICIS news]

Haltermann is battling Dow for market shareHOUSTON (ICIS news)--A company Dow Chemical sold last year, Johann Haltermann, is now competing with its former parent in the specialty chemicals market, buyers said on Wednesday.

"I know they're being a pain in the neck to Dow," a large solvents buyer said, noting that Haltermann is producing US butyl acetate (butac) and other chemicals while marketing the material to distributors and buyers in direct competition with Dow.

A distributor said Haltermann has been marketing butac for about a month in the US. Butac is an ingredient in paints and coatings, including automotive paint.

Dow announced in late February 2008 that it was selling Haltermann and the Houston plant where it operated to Monument Chemicals of Indianapolis, Indiana.

Officials at Monument in Indianapolis and at Haltermann's plant in Houston did not return phone calls.

A Dow spokesperson said, "We can confirm that they are competing against us, but beyond that, we don't comment."

In selling Haltermann last year, Dow said it was divesting businesses that were "no longer strategic" to the company.

One buyer said Dow thought Haltermann would use the Houston plant to become strictly a toll processor - essentially an independent contractor that makes chemicals for other producers.

"It turns out that now they're going to use it to compete with Dow," the buyer said.

A distributor who has dealt recently with Haltermann said the Houston company started out making a small list of chemicals for producers, but expanded after the economy swung into a recession.

The buyer said Haltermann is also producing methyl isobutyl ketone (MIBK) and isopropanol (IPA), among other chemicals.

Another buyer said Haltermann had established itself as an alternate source for a few distributors and had flown "under the radar" until recent weeks.

US butac prices jumped almost 10 cents/lb in the past month, spurred by increases in feedstock propylene, sources said.

Major US butac producers include Dow, Eastman Chemical and Oxea Group.

The butac distributor price range for the week ended 13 October was 79-84 cents/lb ($1,742-1,852/tonne or €1,167-1,241/tonne), according to global chemical market intelligence service ICIS pricing. Contract prices were 74-78 cents/lb and spot FOB (free on board) rates were 65-73 cents/lb.

The distributor said prices quoted by Haltermann on butac were "below the low end" and had irritated other producers. The source said there was little room in the butac market for another producer.

"It will be interesting this month," the source said.

($1 = €0.67)

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By: Lane Kelley
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