This week's world news

Week in brief

07 December 2009 00:01  [Source: ICB]

ACC: DUBAI WORLD WILL NOT DERAIL US RECOVERY
The potential default of Dubai World on more than $60bn (€40bn) in debt will not derail the expected recovery in the US chemical industry, American Chemistry Council (ACC) chief economist Kevin Swift said. "This reminds us that over a year from the start of the financial crisis, we have not gotten back to normal," said Swift. On the positive side, he said the weak US dollar and cheap natural gas are boosting exports. Swift's base case scenario calls for US chemical production volumes to rise by 3.4% in 2010, 4.0% in 2011 and 4.2% in 2012, after falling 9.4% in 2009.

QATAR PETROLEUM, CNOOC TO INVEST $5.8BN
Qatar Petroleum International (QPI) and China National Offshore Oil Corp. (CNOOC) plan to invest $5.8bn (€3.9bn) to build a petrochemical project in Hainan, China. The project, to be located in Yangpu Economic Development Zone, will include a 3.8m tonne/year liquefied petroleum gas (LPG) plant and downstream plants. A feasibility study is being conducted on the proposed project and the report is likely to be submitted to authorities in 2011.

DOW: REGULATIONS DON'T PROMOTE SUSTAINABILITY
Simply adding more regulations will not promote sustainability, said David Kepler, chief sustainability officer of US-based Dow Chemical. "We have to innovate into these answers. We can't just regulate changes," he said at the National Association of Chemical Distributors (NACD) meeting in Marco Island, Florida. "Sustainability is not something you do after you have made your money," Kepler added. "If you do not integrate sustainability into your economic plans, you are sub-optimizing."

UBA SAYS INDUSTRY STILL LEARNING FROM BHOPAL
Even 25 years after the Union Carbide chemical plant catastrophe in Bhopal, India, the global chemical industry needs to continue learning its lessons, the head of Germany's federal environmental agency, Umweltbundesamt (UBA), said. "The price of a catastrophe like Bhopal is so high that we just cannot afford to forget its lessons," said UBA president Jochen Flasbarth. "In Germany and in Europe, too, we need to make sure that we constantly do our best to ensure the safety of chemical plants and sites."

CREDIT SUISSE PANS CLARIANT RESTRUCTURING
Shares in Swiss chemical producer Clariant are overpriced and restructuring plans will fail to boost profits, Credit Suisse said. "We have examined the last 10 years of Clariant's ongoing restructuring history in detail and we find that its record on meeting targets is poor," the bank said. Credit Suisse said Clariant's aggressive headcount reductions are unlikely to help profits, adding that previous job cuts had had minimal impact on productivity and profitability.

BRENNTAG SEEKS DEALS AND GROWTH IN GREECE
German chemical distributor Brenntag wants acquisitions and organic growth in Greece, said Helmut Struger, Brenntag CEO for Central and Eastern Europe. "We're looking for acquisitions as well as building our business organically. This is an unconsolidated market with a vast number of smaller distributors, [each] with a turnover of €5m-10m ($8m-15m)," he said.

ACC TO TARGET SMALLER COMPANIES AS MEMBERS
The American Chemistry Council (ACC) aims to add hundreds of small to mid-sized companies to its membership to enhance advocacy efforts, said CEO Cal Dooley. "We want to expand our base, adding small to mid-size companies. We'd be more effective if we included another couple hundred members," said Dooley at a meeting in New York. The ACC currently has 135 member companies, representing 80-85% of chemical sales in the US, said the association. To attract smaller companies, the ACC will offer three years of free membership, as long as the firms remain committed to achieving RC certification at the end of the three years. The association will also provide services to help achieve certification.

EPA HAS "SLEDGEHAMMER APPROACH" SAYS ACC
The US Environmental Protection Agency (EPA) must give Congress more time to act on climate-change legislation, said Cal Dooley, CEO of the American Chemistry Council (ACC). "The complexity and potential impact of this requires Congress to be involved. This sledgehammer approach by EPA is inappropriate," said Dooley. "This is a very crude approach to deal with a complex issue that will have a dramatic impact on employment." The EPA plans to use its authority under the Clean Air Act (CAA) to require large industrial facilities, which emit 25,000 tonnes or more of greenhouse gasses annually, to obtain new construction or modification permits from the EPA.

THINK TANK: POLAND CHEMS NEED TO PRIVATIZE
Failure to move forward with the privatization of the Polish chemical industry and to liberalize gas markets could leave major companies facing a similar decline to the shipbuilding industry, according to a Warsaw-based think tank. "[If these moves are not accomplished, then] following on from the building of a museum of the shipbuilding industry we will also need a museum of the chemical industry," said Robert Gwiazdowski, president of Adam Smith Centre.

THAI COURT UPHOLDS SUSPENSION OF 65 PLANTS
The Supreme Administrative Court of Thailand upheld a ruling suspending the bulk of chemical projects in Rayong province due to environmental concerns, while exempting 11 of them. However, this provides little relief to oil and gas giant PTT and conglomerate Siam Cement (SCC). PTT stated that five industrial and two transportation projects of the company and its subsidiaries were among the exemptions. These include the gas separation plant No. 6 of PTT, the butane-1 tank & jetty project of PTT Chemical and the monomers recovery unit project of HMC Polymers.

SIBUR BUYS 50% STAKE IN BOPP MAKER BIAXPLEN
Russian petrochemical firm Sibur has acquired a 50% stake in Biaxplen, a major Russian producer of biaxially oriented polypropylene (BOPP) film. The acquisition will allow Sibur to facilitate its domestic PP sales amid its ongoing project to build a new PP plant at Tobolsk, in the Tyumen region of western Siberia, said Sibur CEO Dmitry Konov. Biaxplen operates three plants with total capacity of 87,000 tonnes/year and had sales of Roubles 3.9bn ($134.2m) in 2008.

MITSUI CHEMICALS TO INVEST $7.5M IN PU PLANT
Japan's Mitsui Chemicals plans to invest $7.5m (€5m) to build a 10,000 tonne/year polyurethane (PU) foam plant at Foshan in southern China. The plant to be located in Guangdong province is expected to start operations in the first quarter of 2011. Mitsui Chemicals will set up later this month a new company called Foshan Mitsui Chemicals Polyurethane to operate the plant. Products from the plant will be sold mainly to automakers and auxiliary parts manufacturers in southern China.

UBS SEES MORE M&A FROM THE MIDDLE EAST
The chemical industry is set to see more acquisitions by Middle Eastern firms and private equity funds, investment bank UBS said. "Middle Eastern oil, gas and petrochemical producers with expansionist strategies into mature markets will continue to consider mature market assets," it said, adding that once-in-a-cycle opportunities were disappearing because of the strong performance in global chemical stocks in the past year.

DOWD AND GUILD TAPPED AS TRONOX DISTRIBUTOR
US pigments producer Tronox has appointed Dowd and Guild as its US western region distributor for titanium dioxide covering 10 western states. Headquartered in San Ramon, California, US, Dowd and Guild is a specialty chemical distributor serving the paints and coatings, building products, inks, composites, plastics and related chemical industries in the western US.

UNIVAR OPENS DUBAI DISTRIBUTION FACILITY
Univar is to open a new chemical distribution facility in Dubai's Jebel Ali Free Zone to serve customers in the oil and gas, personal care, coatings and food industries. Univar EMEA president John van Osch said that despite the economic crisis, the business was expanding and the Middle East and Africa presented growth opportunities.

RHODIA SAYS NEW NYLON CUTS CARBON FOOTPRINT
A new plant-based nylon resin from Rhodia Engineering Plastics releases fewer greenhouse gases during production, and can be used in some high-end applications previously untapped by Rhodia's more conventional nylon products, the French specialty chemicals producer said. Rhodia said its new nylon 6,10 will be similar to its nylon 6 and nylon 6,6 resins but have a heightened high-temperature and chemical resistance and rigidity that put it "into the category of a high-performance plastic," said the firm.

ITOCHU WEIGHS VIETNAM PETCHEM VENTURE
Japanese trading firm Itochu said it may participate in a $3.5bn-4bn (€2.3bn-2.7bn) petrochemical project in Vietnam with Siam Cement Group (SCG) and Qatar Petrochemical International (QPI). "We are considering [participating], but nothing has been decided that we can make public," said an Itochu official. On November 25, SCG and Middle Eastern producer QPI signed a contract to build a petrochemical complex in southern Vietnam, which would include a 400,000 tonne/year high density polyethylene (HDPE) unit, a 450,000 tonne/year polypropylene (PP) plant and a 400,000 tonne/year linear low density polyethylene (LLDPE) unit.

EXXONMOBIL OFFERS MORE POLY ALPHA OLEFINS
US-based ExxonMobil Chemical will increase the availability of its high-viscosity poly alpha olefins by 15,000 short tons/year (13,600 tonnes/year) to meet growing demand. The additional production was achieved through a custom manufacturing agreement with US specialty chemical producer Albemarle. "The additional production of these fluids further demonstrates our commitment to grow with our valued customers," said Habib Quazi, ExxonMobil global vice president for synthetics.

AND COMPLETES AROMATICS EXPANSION
US-based ExxonMobil Chemical has completed the start-up of its expanded Rotterdam aromatics plant. Capacity at the plant has been increased by 25% for paraxylene (PX) to 700,000 tonnes/year, while benzene capacity has risen by 20% to 830,000 tonnes/year. "The new unit in Rotterdam benefits from integration with existing facilities and captures a number of synergies with the base plant," the company said.

SECOND CRACKDOWN ON US BIODIESEL LOOMS
A second European complaint against US biodiesel imports could land another significant blow against the US biodiesel industry, sources said. The European Biodiesel Board (EBB) said it would file a formal "anticircumvention" complaint with EU trade authorities against US biodiesel suppliers it accuses of skirting tariffs put in place earlier this year on B20 (20% biodiesel, 80% mineral biodiesel). The EU claims some US companies started shipping product at blends of B19 or less, or shipping product to Europe via third-party countries.

FDA DELAYS BPA DECISION
The US Food and Drug Administration (FDA) has postponed announcing its health and safety assessment of the chemical bisphenol A (BPA). The FDA originally planned to give its decision on the safety of BPA on November 30. Agency spokesman Michael Herndon did not give a reason for the delay.

AIR PRODUCTS TO SUPPLY HYDROGEN TO SHELL
US-based industrial gases producer Air Products has signed a long-term agreement to supply hydrogen to a new unit at Shell's Pernis refinery complex near Rotterdam, the Netherlands. "Air Products will supply Shell the hydrogen via pipeline and add a more than 6-mile [9.6km] extension to its existing over 80-mile pipeline system," the company said. The supply is due on stream in 2011. The hydrogen will come from Air Products' new hydrogen plant in Rotterdam, which is expected on line in mid-2011.

HALDIA IS STILL ON TRACK
India's Haldia Petrochemicals will complete the expansion of its 520,000 tonne/year naphtha cracker and polymer plants as scheduled in mid-January 2010, unaffected by the four-day strike mounted by its contract workers, a source close to the company said. The strike, the first in 10 years, ended on November 24 after Haldia had agreed to a wage hike, the source said.

DYSTAR SHUTS FOUR GERMAN PLANTS
DyStar has shut down all of its plants in Germany, except the Ludwigshafen site, affecting more than 1,000 workers, as no investor has yet been found, administrators for the insolvent textile and leather chemicals producer said. Production at Ludwigshafen, where about 85 workers produce indigo, will continue. The 2,000 workers at DyStar subsidiaries outside Germany were not affected.

CF DIRECTORS ELECTED BY 2% MARGIN IN TERRA VOTE
US nitrogen fertilizer maker Terra Industries said that rival CF Industries' three nominees were elected to the Terra board, with 38% of shareholder votes, compared with 36% for Terra's incumbent directors. CF extended its right to $2.5bn (€1.68bn) of financing commitments for the acquisition of Terra until December 31. CF said it does not have any right to extend the financing commitments beyond December 31 unless a merger agreement has been signed.

SASOL TO DOUBLE SOUTH AFRICAN HARD WAX
Sasol is to invest rand (R) 8.4bn ($1.14bn) to double its production of hard wax in South Africa. The investment at the Sasolburg site will be done in two phases, with the first being completed in 2012 and the second in 2014.

LYONDELLBASELL TO CUT WESSELING PP BY 24%
LyondellBasell said it will shut down a polypropylene (PP) line at its site in Wesseling, Germany, by the end of the year as it is no longer economically viable. PP capacity at the facility will be reduced by 110,000 tonnes/year. LyondellBasell says it has 460,000 tonnes/year of PP capacity currently available at the site. "We have concluded that our current polypropylene operating rate at Wesseling is no longer economically viable," said Anton de Vries, LyondellBasell's president of Europe, Asia & International.

HENGYI, RONGSHENG PLAN $820M PTA PLANT IN CHINA
China's Zhejiang Hengyi Group Co and Zhejiang Rongsheng Holding Group will invest yuan (CNY) 5.6bn ($820m) to build a purified terephthalic acid (PTA) plant at Yangpu Economic Development Zone, Hainan province, a Development Zone official said. The 2m tonne/year plant, set to be the largest PTA plant in China, is to come on stream in 2012.

BASF STARTS UP NEW CPON AND CDON PLANTS
BASF has started production at its new €100m ($149m) cyclopentanone (CPon) and cyclododecanone (CDon) facility at Ludwigshafen, Germany. The plant has a capacity of 30,000/tonnes per year and is the first to use nitrous oxide for industrial scale oxidation. CDon is the key raw material for producing laurolactam, while CPon is a building block in the synthesis of crop protection products.

ADMINISTRATOR HALTS SALE OF TREVIRA
The insolvency administrator for German textile, fibre and polyester producer Trevira has halted the firm's sale to two investors. Instead, Trevira will be transferred into a new company effective January 1. The closing of financing had been extended time and again, creating uncertainty about Trevira's future.

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