Week in brief

The world this week

26 October 2009 00:21  [Source: ICB]

DOW CHEMICAL ADJUSTED Q3 PROFIT DOWN BY 59%
US-based Dow Chemical posted an 82% improvement in third-quarter (Q3) net income from continuing operations of $799m (€533m), compared with $440m in the equivalent period of 2008, as divestments boosted results. Underlying earnings per share were 59% lower year on year at 24 cents, but were up from underlying earnings of 5 cents in Q2 2009. Sales of $12bn were down by 22% year on year but up by 6% from Q2. "We are seeing volume growth in certain businesses versus the prior quarter," said CEO Andrew Liveris.

DUPONT SEES DEVELOPING RECOVERY AS Q3 NET RISES
US chemical major DuPont has reported an 11% increase in third-quarter (Q3) 2009 net profit to $409m from the hurricane-hit Q3 2008 on lower sales volumes but significantly lower costs. Sales were down by 18% year on year at $6bn, with volumes 12% lower. CEO Ellen Kullman described "a developing recovery that is shaped [differently] by market and geography." DuPont is all but sold out of titanium dioxide, and is also seeing restocking in important auto supply chains, she said.

BASF TO CLOSE MALAIC FACILITY IN BELGIUM
German chemical giant BASF will close its 115,000 tonne/year maleic anhydride (MA) facility at Feluy, Belgium, by the end of the year and withdraw all activities from the site. Some 133 jobs will be affected and negotiations with union officials will begin as soon as possible, the company said in a statement. The plant had undergone restructuring in recent years but remained uncompetitive. "BASF's MA business is suffering from unsatisfactory profitability due to overcapacity and resulting low margins together with the effects of the current economic crisis," the company said.

GERMAN REGULATOR WARNS ABOUT NANOTECH
Germany's Federal Environmental Agency warned about the growing risks of nanomaterials and technologies, and called for a legislative framework, including a registration system for products containing nanomaterials. The agency also urged chemical and other producers to provide meaningful data on the environmental and health risks of nanomaterials. It advised consumers to avoid products containing nanomaterials insofar as their health and environmental impacts remained largely unknown.

AIR PRODUCTS POSTS 7% DECLINE IN Q4 NET PROFIT
US-based industrial gases firm Air Products posted a 7% drop in fiscal fourth-quarter (Q4 - ended September) net income to $243.9m (€163.4m), on lower volumes and unfavorable currency rates. These negative factors were partially offset by cost-reduction initiatives. Sales fell by 22% year on year to $2.1bn.

DUPONT, DOW CALL FOR EMISSIONS CAP IN CANADA
DuPont Canada and Dow Chemical Canada, two of the country's largest chemical producers, are urging the nation to adopt a national cap-and-trade system with an absolute cap on greenhouse gas emissions. The call for an absolute cap contrasts with arguments from Canada's growing oil sands and bitumen industry, urging an "intensity-based" system for their sector. DuPont and Dow, along with environmental groups, said having different caps "could create equity issues as well as fungibility issues that may impair trading efficiency" of a cap-and-trade system.

FATTY ALCOHOLS CAPACITY COULD LAST FIVE YEARS
Global fatty alcohol capacity today can supply the market for the next five years, said Norman Ellard, director of Singapore-based consulting firm Rohen. "The advent of new low-cost technologies from fatty acids has fueled a vast expansion of fatty alcohol with the introduction of almost 1m tonnes of new capacity in the last three years," he said at the 7th ICIS World Oleochemicals Conference in Berlin, Germany. "Fatty alcohols today are now also commoditized with the advent of these huge new capacities. The market for C16-18 is flooded and there is a glut of C18."

EUROPE, NORTH AMERICA OLEOCHEMS TO SHRINK
European and North American oleochemicals production will shrink over the coming years, said Alan Brunskill, an oleochemicals adviser. "The future production will be in Southeast Asia, supported by growth in China, India and Latin America," he said at the 7th ICIS World Oleochemicals Conference. Brunskill added that the market in Japan would completely disappear because of a lack of raw materials and competition in the region.

VANTAGE: GLYCERIN TO HAVE A GOOD 2010
Glycerin makers will see a good year in 2010 as pricing improves, US-based Vantage Specialty Chemicals chairman Bob Drennan said. "Normal demand is expected to return in Q4 2009 with the situation getting better by Q1 2010 as there will be less biodiesel on the market," he said while chairing the 7th ICIS World Oleochemicals Conference in Berlin, Germany. Vincent Bogaart, marketing manager for oleochemicals at UK-based Croda, said demand from developing nations would play a key part in the recovery.

FMC: BOLIVIA LITHIUM POTENTIAL OVERBLOWN
The potential of Bolivia to become a major source of lithium is exaggerated, said Eric Norris, global commercial director for US-based chemical firm FMC's lithium division. "People are interested in Bolivia because of the size of its deposits," he said. However, there was already plenty of lithium in the world, whether it is in the rest of South America, Australia or Asia, Norris said. The as-yet-untapped lithium reserves in Bolivia's Salar de Uyuni are estimated by the US Geological Survey to be around 5.4m tonnes, or around 50% of the world's proven reserves.

BURNS: COSMETICS A BIG MARKET FOR ALGAL OIL
Several algal oil producers and developers are looking at cosmetic applications as a highly profitable market, said Neil Burns, managing partner for US-based consultancy Neil A. Burns. He was speaking at the 7th ICIS Oleochemicals conference in Berlin. "Microalgae is being developed mostly for biofuels application. However, I believe that they are targeting the specialty chemicals area first, which presents a very profitable opportunity," he said.

DEFRA TO STUDY BIOMASS FEEDSTOCKS
The UK's Department for Environment, Food and Rural Affairs (DEFRA) will investigate the commercial feasibility of chemical production from sustainable biomass. The North East Process Industry Cluster will manage the 30-month Assessing Biomass to Chemicals project, which will provide insight into the possibility of full-scale chemical production from a range of sustainable biomass feedstocks, DEFRA said.

JAPAN PVC PRODUCTION HITS HIGHEST LEVEL IN 2009
Japan's production of polyvinyl chloride (PVC) reached the 150,000-tonne level in September for the first time since the same period a year earlier because of strong domestic shipments, said Kimikazu Sugawara, chairman of the country's Vinyl Environmental Council. The country's PVC output was 156,050 tonnes in September, up by 1.3% from the same period last year, representing the third consecutive month of year-on-year increases.

SHENHUA STARTS OPERATIONS AT CTL PLANT
China's largest coal producer, Shenhua Group, started commercial operations at its 1.08m tonne/year coal-to-liquids (CTL) plant at Erdos, Inner Mongolia, in early October, a company source said. China banned all CTL plants, except the two under Shenhua Group, in September 2008 because of heavy water consumption and pollution. Shenhua had plans to expand the plant capacity to 3.2m tonnes/year in a second phase, but no timetable is available, said the source.

WACKER, DOW CORNING EXPAND CHINA SILICA
German chemical producer WACKER and US silicones maker Dow Corning have begun expansion works at their joint pyrogenic silica plant in China's Jiangsu province. Investments in the expansion are in the "double-digit million euro sum," the companies said. The joint venture, including a siloxane plant at the same site, will have capacity of 210,000 tonnes/year, following the completion of the second-phase expansion at the pyrogenic silica plant.

INDIA RECOMMENDS 20% DUTY ON CAUSTIC IMPORTS
India's Ministry of Finance has recommended the imposition of a 20% safeguard duty on liquid caustic soda imports into the country for 200 days. The ministry made the recommendation after a month-long investigation, which was launched in response to a petition filed by the local chlor-alkali association in July.

SHERWIN-WILLIAMS' Q3 PROFITS FALL BY 1%
US-based paints maker Sherwin-Williams' third-quarter net income fell by 1% year on year to $175.2m (€117.4m) as a result of poor sales volumes and currency impacts. Sales fell by 12% year on year to $1.9bn. "It's obvious from third-quarter [Q3] sales results that many of our end-markets are not yet participating in the rumored economic recovery," CEO Christopher Connor said.

ISP PHARMA TO EXPAND HYDERABAD R&D CENTER
ISP Pharmaceutical plans to expand its research and development center in Hyderabad, India, as part of a larger program to research drug solubility, in order to help companies work with poorly soluble active pharmaceutical ingredients.

CLARIANT TARGETS 400 JOB CUTS IN EUROPE
Swiss producer Clariant has identified 400 jobs to be eliminated by year-end in Europe, including 170 in Germany and 40 in Switzerland.

LONZA DROPS PATHEON
Swiss fine chemical major Lonza has pulled its bid to take over Canadian pharmaceutical contract manufacturer Patheon over stockholder resistance.

KANEKA SUPERVISOR GUILTY OF EMBEZZLING
A former US-based accounting supervisor with a subsidiary of Japanese chemical producer Kaneka has pleaded guilty to embezzling more than $3.6m (€2.4m) from the company, the US Attorney's office said. US officials alleged that Diana Simon, who was responsible for processing invoices, implemented a fraudulent scheme to transfer money from Kaneka Texas' bank account to her own bank account from June 2006 to February 2008. She then used the money to buy a luxury home, luxury vehicles and jewelry, and to finance multiple gambling trips to Louisiana and Las Vegas, Nevada, according to the charges. Simon faces up to 20 years' imprisonment and a maximum fine of $250,000.

EVONIK BUYS ELI LILLY API PLANT IN US
Germany-based specialty chemical major Evonik Industries has agreed to acquire US pharmaceutical company Eli Lilly's Tippecanoe Laboratories manufacturing facility in Lafayette, Indiana, US, for an undisclosed price. Evonik plans to fully integrate the plant, which makes active pharmaceutical ingredients (APIs) and precursors, into its global production network. "The pharmaceutical market is attractive, economically stable, and produces growth rates near the double-digit range every year," said CEO Klaus Engel. The deal includes a multiyear supplier agreement with Lilly for APIs and intermediates.

CHINA FIRM HUNTING FOR POTASH IN SASKATCHEWAN
China's Zhongchuan International Mining has been conducting drilling and seismic studies in Canada's Saskatchewan Province in a year-long search for potash resources. "Zhongchuan International has a dispensation granted in September 2008 to conduct sample drilling and seismic studies in an area of roughly 96km2 [37 square miles] about 60km [37 miles] southeast of Saskatoon," said Saskatchewan Ministry of Energy and Resources spokesman Bob Ellis.

BASF FINED FOR HCFC LEAKS IN THE US
|The US operations of BASF will pay $384,200 (€257,414) to resolve US Clean Air Act violations related to hydrochlorofluorocarbon (HCFC) leaks at company facilities in Texas, Michigan, Ohio and New Jersey, the US Environmental Protection Agency (EPA) said. The company will also spend more than $250,000 to reduce the use of refrigerant chemicals by retrofitting a Beaumont refrigeration unit in Texas with environmentally friendly alternatives, while also either retrofitting or retiring two other units.

COIM BUYS AIR PRODUCTS' PRE-POLYMER BUSINESS
Coim USA, a subsidiary of polyurethane (PU) producer Coim, plans to buy US industrial gases company Air Products' PU pre-polymers business. Air Products brands such as Versathane and Airthane will benefit from its integration with Coim's polyester manufacturing facility in West Deptford, New Jersey, US.

MERCK, DYESOL JOIN ON DYE SOLAR CELLS
Germany's Merck KGaA and Australian dye solar-cell materials manufacturer Dyesol have signed an agreement to collaborate on the development of electrolytes for use in dye solar cells. The agreement involves the development of new electrolytes, optimization of electrolytes for high performance, refinement of material specifications to assure ultralong life and scaling up for volume manufacture.

PETKIM SPENDING $5BN TO DOUBLE PRODUCTION
Turkish producer Petkim will spend $5bn (€3.35bn) over nine years to double petrochemical production capacity at its Aliaga site in Turkey. The expansion will follow a cluster model. "Our vision is to become a regional force in petrochemicals," CEO Kenan Yavuz said.

BLUEFIRE CELLULOSIC PLANT GOES TO MISSISSIPPI
US biofuels producer BlueFire Ethanol said it will move one of its cellulosic ethanol projects from California to Mississippi, citing red tape and a challenging business climate in California. BlueFire plans to build an 18m gal/year (68m liter/year) facility in Fulton, Mississippi, using a $40m (€27m) grant from the Department of Energy.

By: Joseph Chang
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