08 March 2010 00:01 [Source: ICB]
Dow Chemical to sell Styron division
US-based Dow Chemical has agreed to sell its Styron division to private equity firm Bain Capital for $1.63bn (€1.21bn). As part of the transaction, Dow has an option to receive up to 15% of the equity of Styron as part of the sale consideration. "We are committed to further focusing our portfolio by shedding non-strategic assets that can no longer compete for growth resources inside the company, and in the process generating funds for further debt reduction," Dow chief executive Andrew Liveris said. Styron includes Dow's polycarbonate (PC), acrylonitrile butadiene styrene (ABS)/styrene acrylonitrile (SAN) resins, polystyrene (PS) and styrene monomer operations, as well as the company's stake in the Americas Styrenics joint venture with US group Chevron Phillips Chemical.
INEOS considers move to Switzerland to save tax
Chemical major INEOS may move its headquarters from the UK to Switzerland to help save around €450m ($616m) in taxes between now and 2014. The company is looking for approval from its lenders for the move, and is conducting an internal review of the proposal. INEOS said it is trading in line with its business plan and that its financial performance is expected to improve. The company's expectations of improved performance and changes to the UK tax system would lead to "additional tax being payable by its businesses; money that would otherwise help secure competitiveness and re-investment across its production facilities," INEOS added. CEO Tom Crotty said: "Many leading chemical companies have European or global operations resident in Switzerland, and we need to compete effectively with them."
LANXESS eyes France's Eliokem - reports
Germany's LANXESS is in early-stage talks to acquire France-based rubber producer Eliokem, German media reported last week. The acquisition price for Eliokem could be around €245m ($331m), or about seven times the 2010 projected operating income, the reports said, citing financial market sources. However, according to business daily Financial Times Deutschland, LANXESS may face competing bids from other producers. Eliokem was founded in 2001 as a result of the divestiture of US tire major Goodyear's specialty chemical business. It has production sites in France, the US, China and India. Eliokem is owned by financial investor AXA Private Equity, which bought it in 2006.
BASF CEO "angry" over alleged fraud
German chemical giant BASF's CEO, Jurgen Hambrecht, is angry and disappointed over fraud allegations at the company's main Ludwigshafen site in Germany. Six employees are being investigated for allegedly accepting bribes from an unnamed company to overstate invoices from a scaffolding and pipes supplier. BASF claims it lost about €1m ($1.35m) from the alleged fraud.
TDG acquires Hungary's RRS Logistics
UK logistics firm TDG has bought Hungarian transport services company RRS Logistics. TDG said the acquisition gives it a platform from which to grow in central and eastern Europe. Mike Branigan, TDG's CEO, said: "This is an excellent strategic fit, and supports TDG's continued growth and expansion plans." He also said the company is interested in expanding in Romania. Despite a drop in volumes last year, Branigan said that TDG has maintained a strong position in the UK chemical market and retains a dominant position in Spain and Belgium. "Volumes have dropped more than expected in northwest UK, but, overall, our bulk chemicals business has been very resilient," he said. TDG is part of UK-based holding company DouglasBay Capital.
BASF to close Feluy, Belgium, MA plant
German chemical major BASF will close its 115,000 tonne/year maleic anhydride (MA) plant at Feluy in Belgium during this week, a company source said last Wednesday. Confirmation of the shutdown follows months of negotiations with worker unions following BASF's announcement on October 22 last year that it intended to exit the European MA market thanks to low margins. BASF had originally intended to cease MA production by the end of 2009, but could not reach a settlement with union leaders.
CF Industries launches counter-offer for Terra
US fertilizer producer CF Industries has launched a counter-bid for Terra Industries, trying to edge out Yara Industries' earlier agreed $4.1bn (€3bn) offer and sparking yet another takeover battle in the global fertilizer industry. CF said it offered to buy Terra for $37.15 in cash and 0.0953 of a share of CF Industries common stock for each Terra share. The offer had a total value of $47.40/share, based on CF's closing price last Monday. This compares with the $41.40/share that was offered by Yara last month. "We withdrew our prior offer because we believed that Terra was unwilling to agree to a sale," said CF chief executive Stephen Wilson. "Now that Terra is for sale, we have made an offer that is superior to Yara's substantially lower, highly conditional offer," he said.
SQM and Rockwood NOT hit by earthquake
SQM fertilizer and Rockwood fine chemical operations were unaffected by the earthquake that hit central and southern Chile on February 27. SQM's production centers and its port operations at Tocopilla were not affected by the earthquake, the specialty fertilizer producer said. Rockwood's Chemetall Fine Chemical business produces lithium carbonate and other lithium compounds at sites in the Salar de Atacama and La Negra in Chile, both located about 900 miles north of the epicenter.
New Middle East plants to hit UK basic chems
UK chemical output is expected to rise broadly in line with manufacturing production in 2010, according to consultants Oxford Economics. Output, excluding pharmaceuticals, is forecast to rise by 1.75% this year and climb by 3.5% in 2011, but basic chemical production will be hit as new plants in the Middle East and China siphon off growth. "After flattening out in Q3, basic chemical output rose by 2% in Q4 , but prospects are for much slower growth through this year and next as competition from more brand new plants outside of Europe intensifies. Some currently closed capacity may well never reopen."
Yunnan Tiannanye builds PVC, caustic soda plant
China-based Yunnan Tiannanye Chemical started construction of a 100,000 tonne/year caustic soda plant and a 120,000 tonne/year carbide-based polyvinyl chloride (PVC) unit at Wenshan county in China's southwestern province of Yunnan in late February. The two plants, which cost yuan 828m ($121.2m) to build will be started up in 2011. "They are the auxiliary feedstock plants for a local large aluminum oxide producer," a company source said, adding: "In the company's strategic development pipeline, we will inject more cash to expand their capacities. Caustic soda capacity will be expanded to 300,000 tonnes/year, while PVC capacity [should reach] 400,000 tonnes/year."
France's Arkema trims Q4 net loss to €20m French chemical maker Arkema has incurred a smaller net loss of €20m ($27.4m) in the fourth quarter from €70m in the previous corresponding period, as margins for two of its three businesses improved. Sales for the October-December 2009 period still declined by 8.5% year on year to €1.08bn, but earnings before interest, tax, depreciation and amortization (EBITDA) surged by 74% to €82m. "In the fourth quarter of the year, an 8% improvement in volumes over the same quarter of 2008, together with the benefits from the cost-cutting initiatives implemented throughout the year, led to a 74% EBITDA increase," Arkema said.
Dow sets up Middle East pU alliance
Dow Chemical has signed a polyurethane (PU) systems alliance with a Saudi Arabian firm to better serve Middle Eastern markets. The alliance - between Dow unit Dow Formulated Systems and E.A. Juffali & Brothers - also expects to start building a polyol blends plant in Jeddah, Saudi Arabia, this year. The facility would produce Dow-formulated polyols, and the respective Dow PU systems would be marketed in the region. Financial terms or capacities were not disclosed.
short-time work costs
Germany's chemical producers incurred estimated costs of €250m ($338m) last year related to short-time work programs, chemical employers group BAVC said last week. Even though the programs were subsidized by the government, a good part of their costs was not covered, said BAVC.
EU free trade talks with Singapore start March
Singapore and the EU will start their first round of negotiations to forge a free-trade pact this month, the city-state's Ministry of Trade and Industry and the European Commission announced last week. The discussions will take place on 8-12 March in Singapore. Free-trade discussions could also start soon between the EU and Vietnam.
Wacker to focus on biotechnology
Germany's Wacker has decided to reorganize its biotech and fine chemical business to strengthen its focus on biotechnology, the Munich-based chemical company said. The division previously known as Wacker Fine Chemicals will operate under the name Wacker Biosolutions, effective immediately. Wacker Biosolutions will primarily focus on the growing sectors of food, pharmaceuticals and agrochemicals, alongside its existing portfolio of fine chemicals and chemical intermediates.
Canada to invest C$80m in ethanol plant
Canada's government plans to invest almost Canadian dollars 80m ($78m) over seven years in a 145m liter/year ethanol plant in Quebec province. The country's federal ministry of natural resources said the investment at Varennes, near Montreal, would support the production of ethanol in Quebec, sustain job creation and help stimulate the economy. A spokesperson for Toronto-based GreenField Ethanol, which owns the project, told ICIS News that the government money was for an existing corn-fed project.
BASF to start growing GM potato in 2010
German chemical giant BASF will begin growing its genetically modified starch potato Amflora for commercial applications in Europe after the European Commission granted cultivation approval. The potato can now be used for the production of industrial starch. "After waiting for more than 13 years, we are delighted that the Commission has approved Amflora," said Stefan Marcinowski, member of BASF's board of executive directors. "We hope that this decision is a milestone for further innovative products that will promote a competitive and sustainable agriculture in Europe."
KMG to acquire electro-chems business
Texas, US-based KMG Chemicals has agreed to acquire for $25.5m (€18.9m) in cash certain electronic chemicals assets from compatriot General Chemical Performance Products. The acquired business, which included a 48,000ft2 (4,464m2) manufacturing facility in Hollister, California, had revenues of about $42.7m last year. "This acquisition substantially increases KMG's share of the US wet process chemicals segment and expands our presence in the Asian markets," said KMG CEO Neal Butler.
CNOOC to build refinery, cracker in east China
China's largest offshore oil company, China National Offshore Oil Corp. (CNOOC), plans to build a 10m tonne/year refinery and a 1m tonne/year cracker in eastern Shandong province. The petrochemical complex will be located in Weifang Binhai Economic Development Area, Weifang city.
Japan's Mitsui ChemS to reorganize business
Japanese producer Mitsui Chemicals will restructure its business from 1 April, "in response to the volatile business environment." The plan calls for further segmentation of Mitsui's three business divisions - basic chemicals, performance materials and advanced chemicals - for easy tracking of operations, Mitsui said in a statement.
US Intrepid Potash to boost 2010 production
US fertilizer maker Intrepid Potash plans to increase potash production this year as market demand returns to more typical levels. "North American farmers faced an extremely wet October in the corn-growing region, followed by much-improved conditions during November, allowing them to apply potash in the fields at more historically normal levels," CEO Bob Jornayvaz said. Intrepid Potash, which operates mines near Moab, Utah, and Carlsbad, New Mexico, said 2010 sales volumes should rise from 2009, and that it would ramp up mines and plants to operate at typical production rates.
Jacobs wins Saudi Aramco sulFur project
US petrochemicals engineering firm Jacobs has won a contract to develop four 1,200 tonne/day sulfur recovery units for state-owned oil major Saudi Aramco. The units will be part of Saudi Arabia's Wasit Gas Development Program, which is expected to produce and process up to 2.5bn ft3/day (70m m3/day) of gas from two offshore sour gas fields.
US Solutia to raise $300m and re-finance
US specialty chemicals firm Solutia plans to raise $300m (€222m) in new debt and to refinance $1.05bn in loans and credit. The $300m will be raised in a public offering of senior notes due in 2020, with the proceeds going to general corporate purposes and acquisitions, including its planned €240m deal to buy Germany-based Etimex Solar. Meanwhile, the $1.05bn in refinancing will include a new senior secured $750m term loan due in 2017 and a new senior secured $300m cash flow revolving credit facility due in 2015. The refinancing will replace Solutia's existing senior secured term loan facility due in February 2014 and its existing senior secured asset-based loans facility due in February 2013.
A. Schulman buys McCann Color
A. Schulman has purchased Ohio, US-based color concentrates producer McCann Color for less than $10m (€7.3m) in cash as part of a plan to expand its presence in the North American masterbatch market, the company said. McCann Color produces UV absorbers, dry color, toll compounding and blending, and flame retardant compounds.
Bayer MaterialScience plans €150m TDI plant
Germany's Bayer MaterialScience is to invest about €150m ($205m) in a new 300,000 tonne/year toluene di-isocyanate (TDI) plant at its Chempark site in Dormagen, Germany, the polymers and plastics major said. The plant, which is scheduled to come on stream in 2014, will replace Bayer's existing TDI plants at Dormagen and Brunsbuttel.
Huntsman to deliver eAS IN APRIL
US-based chemical company Huntsman has completed construction of its 27,000 tonne/year joint venture ethylene amines (EAs) plant in Saudi Arabia and will start deliveries in April this year. "This new capacity makes Huntsman the largest global supplier of ethylene amines and a global leader in amine chemistry," said Peter Huntsman, the company's president and CEO.
Keltic Petrochemicals project Shut Down
The proposed multibillion dollar Keltic Petrochemicals project in Canada's eastern Nova Scotia province will not go ahead. "We are shutting the company down, the project will not be built," CEO Kevin Dunn said. He declined to comment on the reasons for this decision.
Solutia to buy EVA maker Etimex Solar
US-based specialty chemicals company Solutia has agreed to buy ethylene vinyl acetate (EVA) encapsulants producer Etimex Solar for €240m ($329m) in cash. Etimex Solar's parent, Etimex Holding, is a plastics packaging and components maker controlled by funds affiliated with German private equity group Alpha Gruppe.
Merck KGaA buys Millipore for €5.3bn
Merck KGaA has bought US biotech equipment supplier Millipore in a deal worth around €5.3bn ($7.2bn). Merck, the world's leading producer of liquid crystals used to make flat-panel televisions, said the acquisition would create a life sciences unit worth €2.1bn ($2.9bn) in its chemicals business. The deal would also boost total group revenue from its chemicals business to 35%, up from 25% now. Germany-based Merck plans to keep Millipore's headquarters in Billerica, Massachusetts.
Bayer's US plants safe from closure in 2010
Bayer has no plans to close any of its US plants during 2010. "In the US last year we had to apply restructuring measures, however all measures were completed by the end of last year," said Werner Wenning, chairman of the German chemicals and pharmaceutical producer.
DSM, Mitsubishi to swap PC, polyamide businesses
Dutch-based specialty chemical company DSM has signed contracts with Mitsubishi Chemical to acquire the Japanese firm's polyamide business in exchange for its polycarbonate (PC) operation. The deal is expected to close in the second quarter.
In our February 15 issue we incorrectly stated that Jane Hutterly had been appointed as the Soap and Detergent Association's (SDA) executive vice president, worldwide corporate and environmental affairs. In fact, she was appointed as the SDA's board chair.
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