This week's world news

04 January 2010 00:00  [Source: ICB]

CHEMTURA TARGETS MID-2010 TO EXIT BANKRUPTCY

US-based specialty chemical firm Chemtura aims to come out of US Chapter 11 bankruptcy protection by mid-2010. The company filed for bankruptcy protection on March 18. Chemtura said it has managed to generate positive cash flow over the last four quarters, and is accumulating substantial cash balances. "Chemtura continues to work collaboratively with its official committee of unsecured creditors in developing a plan of reorganization that is expected to include agreement on a substantial debt-to-equity conversion," it said.

CHEMTURA CEO: ASSET SALES NOT REQUIRED

Chemtura CEO Craig Rogerson would not comment on reports of potential asset sales but said such sales would not be necessary in order for the US specialties producer to emerge from bankruptcy. "Asset sales are not a requirement of filing our plan of reorganization," said Rogerson in an interview with ICIS. Rogerson declined to comment on whether any asset sales were ongoing. However, "Project Hoover" and "Project Cloud" were mentioned under "merger and acquisition activity" in a December 15 filing to the US bankruptcy court by Chemtura's financial advisor, Lazard, outlining $1.05m (€0.73m) in fees and expenses billed to Chemtura from July to October 2009. Project Hoover was also mentioned in a December 16 filing by law firm Baker & McKenzie.

EVONIK TO FOCUS ON SPECIALTY CHEMICALS

Germany-based producer Evonik Industries will focus its development on specialty chemicals, with its energy and real estate businesses managed as independent subsidiaries. "The executive board of Evonik Industries has paved the way for a new growth phase. As part of its new strategic focus, in the coming years it will be driving forward the development of Evonik from a conglomerate to a leading global specialty chemicals company," the German group said. The company is looking for partners to invest in its energy sector, and will merge its real estate business with THS, a German apartment rental firm, in which it holds a 50% stake.

AIR PRODUCTS MOVES ON CO2 CAPTURE PROJECT

US industrial gases group Air Products is moving forward with a carbon dioxide (CO2) capture project at a refinery in Port Arthur, Texas, US. The captured CO2 will be supplied via pipeline for enhanced oil recovery in Texas. Air Products signed a cooperative agreement with the US Department of Energy (DOE) to begin phase one of a potential two-phase project to design and construct a state-of-the-art system to capture CO2 from its steam methane reformers at the refinery. The DOE is helping fund phase one with $901,874 (€622,293).

ASHLAND TO SELL PINOVA TO TORQUEST FOR $75M

US specialty chemical producer Ashland has agreed to sell its refined wood rosin and natural wood terpenes business to Canadian private equity firm TorQuest Partners for $75m (€51m). Ashland will transfer a plant in Brunswick, Georgia, US, and 200 employees to a firm formed by TorQuest. The business, formerly known as Pinova, was part of Hercules, which Ashland acquired in 2008.

EUROPE'S CEFIC CANCELS COPENHAGEN MEETING

European chemical industry body Cefic canceled its presence at Copenhagen following the UN's decision to restrict nongovernmental organization (NGO) members from the conference center. Cefic had planned to occupy a booth and to hold a meeting and panel discussion on climate change, but canceled due to the "chaotic situation" at the Bella Centre, its executive director of Energy, HSE and Logistics, Joachim Krueger, said. The UN decided to restrict access for NGOs to the center where world leaders were meeting to try and find a solution to climate change. Krueger said that, as a result, he couldn't bring in the planned speakers, and had had to cancel the event.

BAYER TO DELAY JOB CUTS IN GERMANY TO 2012

German chemical and pharmaceuticals giant Bayer has agreed with its workers council to extend a commitment to avoid job cuts for its staff of 23,000 in Germany by three years to the end of 2012, despite the uncertain economic outlook. In order to help Bayer cope going forward, workers agreed to flexible arrangements, allowing for increases or decreases in hours worked as needed, among other concessions. In addition, Bayer MaterialScience and its works council at the Krefeld-Uerdingen production hub, in North-Rhine Westphalia state, reached an agreement to ensure the viability of that site.

FOSTER WHEELER TO MOVE OP HQ TO SWITZERLAND

US-based engineering and construction firm Foster Wheeler will move its operating headquarters to Geneva, Switzerland, from Perryville, New Jersey, US, amid a declining presence in North America. The decision is effective immediately, with the transition having already begun and the affected executives set to operate from Switzerland in January. "Given the worldwide growth of Foster Wheeler, nearly 85% of our business is currently outside of North America," CEO Raymond Milchovich said.

CHEMICAL INDUSTRY HAS ELIMINATED 83,440 JOBS

Chemical companies have cut over 83,400 jobs worldwide since the financial crisis tore through the markets in September 2008, based on announcements reported on ICIS news. In addition to the huge number of redundancies announced in Europe and North America over the last 11 months, thousands more workers have been forced into short-time work-ing hours.

LYONDELLBASELL MULLS RELIANCE BID

Dutch petrochemical major LyondellBasell has filed an amended reorganization plan with a US bankruptcy court. It proposes a $2.8bn (€1.96bn) rights issue, payment of a maximum of $428m in administrative, tax and other priority claims and full repayment of the new money portion of its debtor-in-possession (DIP) loan. LyondellBasell also said it would continue to evaluate an offer from Mumbai-based Reliance Industries worth $10bn-12bn, according to reports.

DYSTAR DEAL MAY SAVE 800 JOBS IN GERMANY

The sale of insolvent German textile and leather chemicals major DyStar to India's Kiri Dyes and Chemicals may save up to 800 of DyStar's 1,300 jobs in Germany, as well as four of its five production sites there, insolvency administrators said. The deal may also help secure 2,000 DyStar jobs outside Germany.

KRATON PERFORMANCE POLYMERS COMPLETES IPO

US-based Kraton Performance Polymers completed its initial public offering (IPO) on the New York Stock Exchange on December 17. The company, which trades under the symbol "KRA," priced 10.29m shares at $13.50/share. Underwriters of the stock offering were given a 30-day option to buy up to 1.5m more shares at a discounted IPO price. Proceeds will be used partly to repay debts and for general corporate purposes.

ALTAIR TO SELL RENEWABLE FUEL TO 14 AIRLINES

US renewable fuel supplier AltAir is negotiating the sale of up to 750m gallons (2.8bn liters) of renewable jet fuel and diesel to 14 major airlines in North America and Europe. AltAir will produce and blend the camelina-derived fuel at a 100m gal/year refinery at the Tesoro oil refinery facility in Anacortes, Washington, beginning in 2012.

HUNTSMAN: TRONOX MAY SEEK TO DITCH AUCTION

According to a filing by US-based chemical firm Huntsman in the New York Southern District Bankruptcy Court, US titanium dioxide producer Tronox may abandon the auction process for most of its plants, for which Huntsman has already made a $415m (€282m) stalking-horse bid.

SYNGENTA TO INVEST $100M IN CHINA CENTER

Switzerland-based agribusiness group Syngenta will expand its biotechnology center in Beijing, China, with a commitment to invest $100m (€69m) in the project over five years.

BRASKEM TO PRODUCE PP FROM SUGARCANE

Brazilian chemical producer Braskem will team up with industrial enzymes maker Novozymes to develop the large-scale production of polypropylene (PP) from sugarcane. "The partnership with Novozymes will further boost Braskem's technology development, and be a key step in the company's path to consolidate its worldwide leadership in green polymers, all leveraged by Brazil's competitive advantages within renewable resources," Braskem CEO Bernardo Gradin said.

PERU'S MAPLE ENERGY TO RECEIVE $25M IDB LOAN

The Inter-American Development Bank (IDB) plans to grant a $25m (€17m) loan to Peru's Maple Energy, which is developing a sugarcane-based ethanol project. The project, which includes construction of a 35m gal/year refinery and a 37MW electricity cogeneration plant will require a total investment of $245m.

VALERO BUYS THREE MORE ETHANOL PLANTS

US energy company Valero has agreed to acquire three more bankrupt ethanol plants, raising its total capacity by 43% to 1.1bn gal/year, making it a new US biofuels heavyweight. The refiner will pay $200m (€136m) for two plants controlled by ASA Ethanol Holdings and $72m for a third unit, controlled by Renew Energy.

FITCH NEGATIVE ON EURO CONSTRUCTION OUTLOOK

The 2010 credit outlook for European construction companies is forecast to be negative as economic conditions remain fragile and access to finance difficult, European ratings agency Fitch Ratings said. Fitch forecast an average 5-10% annual fall in construction revenues until 2011. "With a combination of weakened order books and margin pressures stemming from increasingly competitive tendering processes, the medium-term cash flow outlook for western European civil constructors looks increasingly challenging," said Julian Crush, senior director in Fitch's EMEA corporates team.

US WHOLESALE PRICES FOR CHEMICALS RISE 4.3%

US wholesale prices for organic chemicals jumped by 4.3% in November, the Labor Department said on Tuesday, part of an overall 1.8% increase in producer prices that included sharp advances in fuel costs. However, wholesale prices paid for plastic resins and materials fell by 0.5%. Overall, the department's producer price index (PPI) for November shot up by 1.8%, versus a gain of 0.3% in October.

LANXESS EXITS CHINA JV, DIVESTS US SERVICE OPS

German producer LANXESS has exited a joint venture (JV) with China's Weifang Yaxing group and divested infrastructure and supporting service operations in the US. LANXESS handed over its 55% stake in LANXESS Yaxing (Weifang) Chemicals Co for an undisclosed amount. LANXESS sold infrastructure and supporting services in Bushy Park, South Carolina, US to investment company Cooper River Partners for $10m (€6.8m). LANXESS has announced streamlining plans that include cutting costs by €360m ($529m) by 2012.

CHINA TO LOWER IMPORT DUTIES ON 600 PRODUCTS

China will lower yearly temporary import duties on over 600 products in 2010, including chemicals, the Ministry of Finance said. Products to benefit include coal, naphtha, polycarbonate, vinylchloride and phosphate ore.

OLTCHIM TO CUT 400 JOBS IN FIRST HALF OF 2010

Romanian chemical producer Oltchim is to cut 400 jobs in the first half of next year, including 200 in the first quarter, by contracting out some of its non-core activities. The cuts are additional to plans, announced in August, to reduce the workforce by one-third to 2,593 employees by 2010.

ICL REVEALS SIX EUROPE DEALS WORTH $40M

Fertilizer and specialty chemicals company Israel Chemicals Ltd (ICL) has completed six acquisitions over the past several months with a value of more than $40m (€27m) to broaden its product offerings in Europe and to extend its product lines for emerging regions. The acquisitions - Medentech, Primalab, Argochem, Merak, Hyproclean and Ekuline's cleaning products division - build ICL's presence in the water treatment and hygiene sectors.

INEOS DECLARES FM ON ETHYLENE, PROPYLENE

INEOS Olefins & Polymers Europe has declared force majeure on ethylene and propylene from its site in Cologne, Germany. The declaration comes following the outage of the smaller, Cracker 4 at the site on the morning of December 10. INEOS said it will work to resolve the issue as quickly as possible and is working with customers to help them source and secure alternative supplies.

AEKYUNG HAIYANG TO START EDA IN MARCH

China's Aekyung Haiyang Chemical expects to start up its new 10,000 tonne/year ethylenediamine (EDA) line at Yichun in Jiangxi province in March. The construction of the yuan (CNY) 82m ($12m) line started in October 2008. The company says it will source feedstock ethylene dichloride (EDC) and ammonia for the new line from the spot markets. Around 70-80% of the EDA products will be sold in the domestic market with the rest for captive use. The firm will to start a second phase - construction of a 20,000 tonne/year line - two months after the start-up of the new line, which will expand capacity to 60,000 tonnes/year.

POTASHCORP TO CLOSE MINE FOR EIGHT WEEKS

Canadian fertilizer maker Potash Corp. of Saskatchewan (PotashCorp) will shut down its New Brunswick potash mine from January 17 to March 8. The potash mine, located near Sussex, New Brunswick, Canada, has capacity of 800,000 tonnes/year and has 340 employees. PotashCorp said the mine also has a capacity to produce 700,000 tonnes/year of salt. The company had shut down other potash mines in Saskatchewan at various times in 2009, as dictated by low demand.

HEXCEL LAUDS BOEING 787 DREAMLINER FLIGHT

US carbon fiber producer Hexcel lauded Boeing for its successful first test flight of the 787 Dreamliner airplane, which was delayed more than two years due to manufacturing issues. The plane uses carbon fiber from suppliers including Hexcel. "Hexcel is proud to be flying on the Boeing 787 as it heralds a new age of commercial transport aircraft," it said.

ENPC SECURES $1.05BN TO BOOST FERTILIZERS

Egyptian Nitrogen Products Co. (ENPC) has secured $1.05bn (€725m) in financing to triple nitrogen capacity at a fertilizer plant in Damietta, Egypt. The financing, from a consortium of Egyptian-led banks, will allow ENPC to proceed with construction of the second and third production trains at the Damietta nitrogen fertilizer facility in which Canadian fertilizer firm Agrium holds a 26% stake. After expansion is completed in 2012, the plant will have a capacity of 1.95m tonnes/year of urea and 150,000 tonnes/year of ammonia.

NIPPON SHOKUBAI MAY ACCELERATE SAP START-UP

Japanese chemical producer Nippon Shokubai may bring forward the completion of its new 60,000 tonne/year super absorbent polymers (SAP) unit at Himeji from the current plan of October because of robust demand, a company official said. The unit is expected to start commercial production "in autumn [of 2010]," he said. The new plant will raise its global SAP capacity to 470,000 tonnes/year.

OLTCHIM IN TALKS OVER ARPECHIM PURCHASE

Romanian chemical producer Oltchim is in advanced talks with oil company Petrom over the purchase of its Arpechim petrochemical assets. "We are waiting for the final decision from Petrom's supervisory board and soon after we can sign the agreement for purchasing Arpechim," an Oltchim spokeperson said. Arpechim's 200,000 tonne/year ethylene cracker, in Pitesti, Romania, is connected to Oltchim via a local pipeline.

DSM PHARMA CHEMICALS RESTRUCTURES

A reorganization of DSM Pharma Chemicals' business in Venlo, the Netherlands, will lead to the loss of 35 jobs. The reorganization is expected to happen in 2010 and advice from the local works council has been requested. The company said some operations would be incorporated at DSM Pharma Chemicals in Linz, Austria. "To be able to be successful in the future, the site Venlo therefore has to optimize its cost structure. For this a so-called 'lean and mean' model has been chosen. This means that all activities at the site have been examined in detail to determine the minimum necessary occupation," the company said in a statement.

ROSNEFT MULLS BUYS OF NAFTAN, POLIMIR

Russian energy major Rosneft is interested in taking over Belarusian petrochemical companies Naftan and Polimir. Rosneft had undertaken preliminary talks with the Belarusian authorities, Rosneft CEO Sergei Bogdanchikov said. Since 2003, the Belarusian government has been mulling the privatization of Naftan and Polimir. Authorities have estimated that controlling stakes in both plants would cost about $3bn (€2bn).

INDIA TO DECIDE ON CAUSTIC DUTY IN 2010

The Indian government is likely to decide on a safeguard duty on caustic soda imports by the end of February 2010, sources familiar with the process said. The Ministry of Finance held a public hearing on the case on December 8, after the local chlor-alkali association filed a petition in July. Caustic soda producers involved in the case had until December 31 to submit their arguments.

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