16 November 2009 00:00 [Source: ICB]
SHELL SETS UP JV WITH QATAR PETROLEUM
Anglo-Dutch major Shell and state-run Qatar Petroleum International (QPI) have agreed to form a new joint venture (JV), QPI and Shell Petrochemicals Singapore. The new JV will own 50% of cracker operator The Petrochemical Corporation of Singapore and 30% of downstream polymer maker The Polyolefins Company. Shell has agreed to sell its entire stakes in the two companies to the new JV, officials said. "This is one of the first significant investments of QPI. QPI is evaluating many opportunities in Asia Pacific. Singapore is a major energy hub," said Nasser al-Jaidah, CEO of QPI. The transaction will be completed by the end of this year, officials from the companies said.
SHELL-QPI VENTURE DRIVEN BY FEEDSTOCK EDGE
Anglo-Dutch majorShell's agreement to set up a new partnership with Qatar Petroleum International (QPI) from its existing petrochemical assets in Singapore has been driven by the search for a feedstock edge, an official with Shell Chemicals said last Wednesday. "One of the critical success factors of any petrochemicals facility, whether it is in the Middle East or here in Singapore, is access to competitive feedstock," said Ben van Beurden, executive vice president of Shell Chemicals. "I'm hopeful that condensates and liquefied petroleum gas (LPG) would flow from Qatar to Singapore as a result of [Qatar Petroleum] taking an investment in these joint ventures," said van Beurden. The shareholdings of Sumitomo Chemical in both of cracker operator The Petrochemical Corporation of Singapore and polymer maker The Polyolefins Company remain unaffected by the deal.
POLYMERS DISTRIBUTOR DUE FOR 2010 LAUNCH
Allandis, a new pan-European polymer distributor, is planned to be launched in the first quarter of 2010, its creator said last week. Financing is in place and a series of four or five acquisitions over the next 18 months should create a major player in European polymer distribution, said Peter Fields, formerly chief operating officer at European distributor Azelis. Fields told ICIS he aims for sales of €300-400m ($450-600m) within two or three years. Allandis may purchase Azelis Plastics, the polymers arm of Azelis, which is conducting a strategic review of its organization. Azelis president and deputy chairman Hans Udo Wenzel said the review should be completed by the end of the year.
BIDDERS EYE UP ASSETS OF BANKRUPT CHEMTURA
Potential buyers of Chemtura's assets have retained attorneys to help them prepare bids, according to a court document filed last week. New York City-based law firm Morgan, Lewis and Bockius disclosed that it was representing two potential buyers of certain of Chemtura's assets, in a letter to the US bankruptcy court of the southern district of New York. The attorneys will provide services, including "preparing and submitting initial bid proposals," according to the letter. The potential buyers and targeted assets were not identified. Morgan, Lewis and Bockius also represents Chemtura in other legal matters. Chemtura filed for Chapter 11 bankruptcy protection on 18 March and aims to emerge from the process in March 2010.
COMMITTEE SOUGHT IN CHEMTURA BANKRUPTCY
A group representing holders of about 13% of the shares of the bankrupt US producer Chemtura is aiming to form an official equity committee by the end of November, a cofounder said last week. In a typical bankruptcy, common shareholders are wiped out, while debt holders tend to recover value. However, in rare cases, there is residual value in the stock. "There is no reason to wipe out the current stockholders. We've asked the bankruptcy court to form an official equity committee representing Chemtura shareholders," said Jon Jacks, founding member of the Chemtura Stock Alliance, which represents shareholders with around 33m shares, or 13% of the total shares outstanding. "We could see a ruling by month's end," he added in an interview with ICIS.
COMPANIES FINED €173M FOR CARTEL
The European Commission has imposed a total fine of €173m ($258m) on 10 leading chemical companies, including Akzo, Ciba and Arkema France for their part in a plastics additives cartel. Ciba, which is now part of BASF, was fined €68.4m; Akzo, now AkzoNobel, was ordered to pay €40.6m; Elementis was fined €32.57m; and Elf Aquitaine, which at the time owned Arkema France, was fined €28.6m; while Baerlocher, Reagens, GEA and Faci were fined smaller amounts. Chemtura escaped without financial punishment because it revealed the existence of the cartel to the Commission. The Commission said that between 1987 and 2000, the companies fixed prices, shared customers, allocated markets and exchanged sensitive commercial information for tin and epoxidized soybean oil/esters heat stabilizers.
AKZONOBEL TO BUY DOW'S POWDER COATINGS
AkzoNobel has signed an agreement to buy US-based Dow Chemical's powder coating activities, the Dutch coatings, paints and specialty chemical company said. The financial details of the transaction were not disclosed. Dow bought the powder coatings activities earlier this year as part of its acquisition of Rohm and Haas. "This business achieves global sales of several hundred million dollars and employs around 700 people," the company added in a statement. Leif Darner, the AkzoNobel board member responsible for Performance Coatings, said: "This is a strategic acquisition that will enable us to further penetrate key industrial coatings segments."
LANXESS Q3 NET PROFIT FALLS BY 59% TO €23M
Germany specialty chemical group LANXESS has posted a 59% fall in its third-quarter (Q3) net profit year on year to €23m ($34m) on lower sales, which fell by 24% on the same period last year to €1.37bn. "Our self-help measures coupled with an improved economic climate, in particular in China, have supported us in delivering a very respectable third quarter performance," said Axel Heitmann, LANXESS board of management chairman. The Performance Chemicals segment was the only division to see an improvement in earnings before interest, tax, depreciation and amortization (EBITDA) before exceptionals - it rose by 3% year on year to €67m. LANXESS said the global economic environment remained challenging, despite seeing some recent improvements.
US ECONOMISTS, PETCHEMS WARN OF JOB LOSSES
Private sector economists, refiners and petrochemical officials have warned Congress that pending climate control legislation will kill US jobs and growth, while doing nothing to reduce global emissions of greenhouse gases. The National Petrochemical & Refiners Association (NPRA) said in testimony to the Senate Finance Committee that the two climate change bills pending in Congress "would have devastating impacts on American businesses across the economic spectrum, and specifically on domestic refining and petrochemical companies." The Senate Finance Committee was hearing testimony on the potential jobs impact of two major climate bills. One bill would cap US industrial and transportation emissions of carbon dioxide and mandate annual reductions to 83% below 2005 levels by 2050.
VOPAK'S Q3 OPERATING PROFIT UP BY 27.5%
Dutch logistics company Vopak has reported a 27.5% increase in its third-quarter (Q3) operating profit to €104.3m ($155.7m) due to its cost management and increased available tank capacity. The company's Q3 occupancy rate fell by 1% to 93% year on year, while capacity had increased by 900,000m3 this year. "Demand for our services in the oil segment remained strong," Vopak chairman John Broeders said. "The chemicals [throughput] activities showed a light recovery. We consider it too early to conclude whether the recovery of the chemicals market is sustainable or not."
HUNTSMAN'S BID FOR TRONOX AT THE LOW END
Huntsman's $415m (€278m) bid for most of the pigment plants of bankrupt producer Tronox falls on the low end of similar deals, according to a banker. Huntsman made a stalking-horse bid for most of the titanium dioxide plants of Tronox. Huntsman's offer will establish a floor on bids during an auction scheduled for December 8. If no-one beats Huntsman, then it would win the auction. Huntsman's bid falls at the low end of similar merger and acquisition deals in the chemical industry, according to Stephen Floyd, a managing director of US investment bank Young & Partners. The companies made no immediate comment.
EITZEN CHEMICAL SEEKS TO RAISE $115M
Eitzen Chemical plans to raise $115m (€77m) to reduce debt through a private stock issue to its parent, Camillo Eitzen, the Eitzen Chemical CEO and a board member, the Norwegian company said. Oslo-based chemical shipper Eitzen will present the stock deal to its parent, at a general meeting on November 26.
ARPECHIM TO CUT 360 PETCHEM JOBS BY END OF YEAR
Refiner Arpechim is to cut 360 jobs at its petrochemical unit at Pitesti, Romania, by the end of 2009, a Romanian national trade union confederation says. "The people will be dismissed gradually, but all of them will finally receive redundancy payments," said trade union leader Marian Dumitru. Arpechim employs approximately 500 people at its Pitesti unit.
GERMAN STATE BACKS ETHYLENE PIPELINE RULING
A key legislative committee in Germany's Baden-Wurttemberg state has approved a law allowing expropriations, ensuring that an ethylene pipeline project will be completed against the resistance of some of the affected property owners. Construction of the 364km (226 mile) pipeline to connect BASF's petrochemicals hub in Ludwigshafen with chemical producers at sites in Munchsmunster, Gendorf and Burghausen, in southern Germany, is well underway, with start-up expected by next year.
US CEREPLAST FORESEES $10BN MARKET BY 2020
US bioplastics manufacturer Cereplast expects evolving consumer preferences and the Obama administration's sustainability initiatives to help drive annual sales of US bioplastics to $10bn (€6.7bn) by 2020. By comparison, 2007 US bioplastics sales were $1bn. "American consumers are pushing major manufacturers and retailers to make the switch to environmentally conscious solutions," said Cereplast CEO Frederic Scheer. "Many of the largest retailers have already made inroads with programs designed to adopt alternative packaging, including Wal-Mart and Coca-Cola."
BAYER STILL COMMITTED TO SUSTAINABILITY - CEO
German chemicals and pharmaceuticals major Bayer confirmed its commitment to sustainability last week, highlighting its focus on health care, nutrition and climate protection. "For us, innovation is also the driver of sustainability," said Werner Wenning, chairman of the board, adding that it remained at the center of Bayer's corporate strategy. "We are making specific contributions to balance commercial success with the protection of the environment and the needs of society."
PTT CHEM STARTS UP NEW HDPE PLANT
Thailand's PTT Chemical was expected to start production at its new 250,000 tonne/year high density polyethylene (HDPE) plant at Mab Ta Phut on November 13. The new plant will be operated by fully owned subsidiary Bangkok Polyethylene. Meanwhile, capacity expansion at PTT Chemical's existing 250,000 tonne/year capacity HDPE plant on the same site is expected to be completed at the end of December. The capacity of the plant will be raised by 50,000 tonnes/year.
BIOFUEL SUCCESS NEEDS GM ATTITUDES TO CHANGE
More effort must be made to change negative public perceptions over the use of genetic engineering in the production of biofuels to speed up widespread commercial viability, global consultancy firm Accenture said last week. A new study has revealed how important genetic manipulation of crops and organisms is to biofuel production processes. "We didn't realize how prevalent [genetic engineering] was before," said Accenture senior executive Melissa Stark. However, strict EU legislation could hinder the development and widespread use of the technology in Europe, she added.
DIVERSITY OF CHEM FEEDSTOCKS PROTECTS LATAM
Latin America's growing diversity of chemical feedstocks can buffer the region against competition from Asia and the Middle East, a consultant said last week. Tecnon OrbiChem chairman Charles Fryer said oil, natural gas, ethanol and vegetable oil-based feedstocks can help Latin America's chemical industry thrive amid the rapid growth of petrochemical capacities in the Middle East and Asia. Speaking at the 29th annual Latin American Petrochemical Association (APLA) meeting, he said Middle East producers have a distinctive feedstock cost advantage, and have more of a global market vision than their Asian counterparts. The biggest threat to Latin America from the Middle East stems from ethylene capacity, which is expected to expand to 30m tonnes/year in four years from 19m tonnes/year in 2009, he said.
BRASKEM, IDESA REVEAL PE CAPACITY FOR MEXICO JV
Brazilian chemicals major Braskem and Mexico's IDESA have revealed that their proposed Ethylene XXI polyethylene (PE) complex in Coatzacoalcos, Mexico, will include a 450,000 tonne/year HDPE plant plus smaller linear low density and low density units. At APLA (see above) Braskem vice president Roberto Ramos said the complex would have capacity to produce 350,000 tonnes/year of linear low density polyethylene (LLDPE) and 200,000 tonnes/year of low density polyethylene (LDPE). "The project will probably be the most important petrochemicals project to be built in the Americas," he said. Braskem will control the joint venture PE complex. The ethane-based complex will comprise a 1m tonne/year ethylene plant and the three integrated polymerization units.
FREP CHINA BEGINS COMMERCIAL OPERATION
Fujian Refining & Petrochemical Company (FREP) has started commercial operation at China's first fully integrated refinery and petrochemicals project. The Fujian Integrated Refining & Ethylene Joint Venture plant expands the capacity of FREP's refinery to 12m tonnes/year from 4m tonnes/year. The upgraded refinery primarily processes sour Arabian crude. Newly constructed facilities include an 800,000 tonne/year ethylene steam cracker, an 800,000 tonne/year polyethylene (PE) unit, a 400,000 tonne/year polypropylene (PP) unit, and a 700,000 tonne/year paraxylene (PX) unit.
CHAVEZ RHETORIC HURTS COLOMBIA POLYMER TRADE
Recent comments by Venezuelan President Hugo Chavez renewed trade tension with Colombia, risking further damage to the closely tied polymer markets of both countries, said Latin American plastic suppliers last week. Polyethylene terephthalate (PET) producers and traders throughout South America were reporting sharply lower polymer trade between Colombia and Venezuela during the third quarter. As early as September 8, Colombian PET producer Enka cited decreasing orders from Venezuela, despite tighter inventories there. Sources at Enka said Venezuelan buyers have faced limited access to funds at the official exchange rate, turning instead to secondary markets.
SHELL TO START UP CRACKER IN Q1 2010
Shell Chemicals is on track to start up its new 800,000 tonne/year naphtha cracker in the petrochemical hub of Jurong Island, Singapore, in the first quarter of next year. The global producer is also in the process of starting up a downstream 750,000 tonne/year monoethylene glycol (MEG) plant at the same site, said its executive vice president, Ben van Beurden. Shell had recently completed the construction of an ethylene jetty, and received its first shipment of ethylene at its Shell Eastern Petrochemicals Complex project in Singapore. The jetty has been designed to load and discharge refrigerated ethylene to and from ethylene carriers.
MOODY'S UPGRADES POLYONE OUTLOOK
US ratings service Moody's has upgraded the outlook on US polymer materials firm PolyOne to positive, from stable, behind significant improvements in the operating income of the company's specialty and performance businesses. PolyOne posted a Q3 net income of $49.6m (€33.2m), which is up from a loss of $5.6m year over year, as the company reported better margins and lower sales costs. Moody's, which cited income improvements in the prior two quarters, noted that the improved performance came in spite of very weak economic conditions in the US and Europe, with volumes down by 15-20% or more in most of PolyOne's specialty and performance businesses.
PROJECT HOLD-UPS MAY MEAN PEAK IS MISSED
Delays to petrochemical projects in Latin America could result in producers missing the expected peak in the global petrochemicals demand cycle between 2012 and 2014, warned a consultant with US-based Nexant last week. Raul Arias said most of the major new petrochemical projects in Latin America are expected to start up between 2013 and 2015. Many have already been delayed.
The story "Party like it's 1989" in the November 9 issue suggested that Hoechst is part of DuPont. In fact, it is the three units of the old Lacufa paints and coatings combine bought by Hoechst that are now part of DuPont. We apologize for the error.
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