05 April 2010 00:08 [Source: ICB]
BRENNTAG'S IPO GIVEN A WARM RECEPTION
Germany's Brenntag saw its initial public offering (IPO) well-received during early trading on the Frankfurt stock exchange, the German chemical distribution group said last week. The shares, which were issued at €50.00 ($67.60) each, were trading on the exchange at €54.38 on their first day. The issue raised €747.50m for Brenntag's owner, London-based private equity firm BC Partners. Brenntag has been the fourth company to successfully float on Germany's stock market in 2010. A share price of slightly over €52.00 has given Brenntag a market capitalization of around €2.70bn, it added.
RAS TANURA PROJECT DELAY LIKELY TO BE SHORT
The giant Saudi Aramco/Dow Chemical Ras Tanura petrochemicals project, in Saudi Arabia, is likely to be delayed while the current and alternative locations are assessed, an Aramco source confirmed last Tuesday. The delay is likely to be relatively short, however, and not the five years implied in recent media reports, the source said. The reports had suggested Al Jubail, on Saudi Arabia's east coast, and Ras al Zour as alternative locations. Ras Tanura is on the coast, south of Al Jubail. Locating the project at Ras Tanura would involve heavy infrastructure costs, sources in Saudi Arabia said this week. Re-locating the mega-project, which would likely involve three phases and the production of an array of petrochemical intermediates, would be costly and raise feedstock supply issues.
EVONIK ACQUIRES ARKEMA'S SPECIALTIES
Evonik Industries has acquired the business of methacrylate specialty esters from French chemical producer Arkema as of the end of 2009, the German chemical company said, without disclosing any financial details. Evonik said the acquisition would enhance its performance polymers business unit as a specialist in methacrylate chemistry. The acquisition concerned products that would be integrated into the group's Visiomer sales range for methacrylate monomers, which are mainly used for the production of paints and coatings. No further details of the acquisition were disclosed.
LYONDELLBASELL TO SETTLE WITH US, STATE REGULATORS
LyondellBasell Industries is seeking a $1.35bn (€1.01bn) environmental settlement with US and state environmental regulators in a bankruptcy court. The settlement offer, filed last Tuesday in the federal bankruptcy court, stemmed from contamination of several LyondellBasell sites. Neither the company nor a US regulator had an immediate comment. The US operations of LyondellBasell filed for bankruptcy protection under Chapter 11 in 2009. Earlier in the bankruptcy process, state and federal regulators had filed several claims against the company seeking roughly $5.5bn. Under the settlement, LyondellBasell would allow the regulators to have $1.18bn in unsecured claims. The amount recovered under the claims would be established during the bankruptcy process.
EU TO EVALUATE REACH PROBLEMS FROM CHEMS
The EU is evaluating problems with Reach that were identified by the chemical industry, with a goal of June 1 to propose solutions to those issues, Geert Dancet, executive director of the European Chemicals Agency (ECHA) said last week. If solutions are found, companies should be better able to meet the November 30 deadline to register their chemicals under Reach, according to Dancet. He spoke at the Global Chemical Regulations Conference in Baltimore, Maryland. "We are working very hard in the coming months - there are only two months left - to sort out how to address these problems," Dancet said. The ECHA will host a large stakeholders conference in May to gain feedback to see how companies are dealing with the requirements for Reach. The ultimate deadline of November 30 for chemical registration would remain, Dancet said.
SABIC DEVELOPS POLYPROPYLENE CATALYST
Saudi Arabia's SABIC has developed a fourth-generation catalyst for polypropylene (PP) production. SABIC said its catalyst offered better performance than conventional PP catalysts, especially in applications such as packaging, carpets, piping and automotive parts. The company has already commercially applied the new catalyst at its IBN ZAHR Saudi European Petrochemical affiliate to produce nearly 30,000 tonnes of PP, which was sold into local and international markets. CEO Mohamed Al-Mady said the development of the catalyst was a "milestone" for SABIC that would further strengthen its position in the PP industry.
OBAMA DRILL PLAN EARNS PRAISE AND CRITICISM
President Barack Obama has announced plans to open up much of the US East Coast to oil and natural gas drilling - a move that drew praise from the petroleum industry, but criticism from biofuels manufacturers. "We appreciate the administration's recognition of the importance of developing our nation's oil and natural gas resources to create jobs, generate revenues and fuel our nation's economy," said American Petroleum Institute CEO Jack Gerard. "Relying on 20th century energy sources to address 21st century challenges will not solve the problem," Renewable Fuels Association president Bob Dinneen said.
SURGING CHINA DEMAND DRIVES PETROCHEMICALS
Surging demand in China continues to drive opportunities in petrochemicals, a senior ExxonMobil Chemicals executive said last week. The US energy and chemicals giant expects global petrochemicals demand to grow by about two percentage points above GDP. Demand growth in Asia could be between two and three points above GDP, it believes. "We are still seeing signs of economic recovery," ExxonMobil Chemicals' senior vice president Lynne Lachenmyer told ICIS news on the sidelines of the 35th National Petrochemical & Refiners Association (NPRA) International Petrochemical Conference in San Antonio, Texas, US.
HUNTSMAN SEES NO BIG PETCHEM INVESTMENTS
The US has no natural gas shortage, but it does have an energy policy shortage and because of this the country is unlikely to see any new major petrochemical developments in the foreseeable future, the chief executive of Huntsman said last Monday. Peter Huntsman said the failure of the US to enact a comprehensive energy policy has led to extreme energy price volatility. "What kills the chemicals industry is not high prices, it's volatility," he said on the sidelines of the International Petrochemical Conference. Huntsman was speaking before President Obama's announcement.
ESCALATING RAWS MAKE 2010 WORSE THAN 2009
Industrial markets could be more challenged by 2010 than 2009 because of the increasing price of raw materials, the chief buyer of a global industrial company said last week. "Prices are continuing to climb, but we can't pass them on," said John Wojakowski of UK-based resins group Scott Bader. He spoke on the sidelines of the International Petrochemical Conference. Although luxury products, such as yachts, are continuing to sell during the recession, demand for everyday products in the automotive or construction sectors is down, and showing no sign of recovery, he noted. "Consumers are very cautious," Wojakowski said. "They're making things last longer. We see it as a struggle to pass raw material prices through the chain."
INEOS COMPLETES SALE OF FLUOROCHEMICALS
UK-based petrochemicals major INEOS has completed the sale of its fluorochemicals business to Mexichem Fluor, a subsidiary of Mexico's Mexichem. The sale, announced last month, included the international business and assets related to INEOS' fluorochemical operations in North America, Europe, and Asia, it said without disclosing financial terms. INEOS' activities related to fluorspar and to the Clean Development Mechanism under the Kyoto Protocol were not included, however. Those activities would become a part of the INEOS Enterprises business, it said.
KURARAY TO BUILD ACRYLIC TPE PLANT
Japanese chemical firm Kuraray has decided to establish facilities at its Niigata plant in Tainai City, Niigata prefecture, that will be capable of mass producing 5,000 tonnes/year of a new acrylic thermoplastic elastomer with enhanced transparency and softness, as well as adhesive properties. The polymers will be targeted for the optical and molding materials field. Kuraray is targeting Yen 10bn ($107m) in sales of the new product by 2018.
SOLVAY TO FOCUS R&D ON LOW-CARBON ENERGY
Belgian chemical company Solvay's specialty polymers affiliate, Solvay Solexis, is to focus its research and development (R&D) efforts on developing low-carbon energy sources and meeting the increasing need for fresh water for human consumption. Solexis' overall R&D costs on energy and water will amount to a sizeable part of Solvay's total R&D budget, it said.
ZEP TO INVEST IN PENNSYLVANIA PROJECT
US specialty chemical firm Zep will build a logistics center in Pennsylvania and also plans to add production capacity there, creating 100 jobs over three years. The firm will invest in a $9.2m (€6.9m) project to consolidate six warehouses into a single 100,000ft2 (9,300m2) operating center in Lehigh County, the Pennsylvania government said. The state is contributing $2.7m - comprising a $2m low-interest loan as well as grants and tax credits - to Zep's project. Atlanta, Georgia-based Zep supplies detergents, disinfectants, hand cleaners, degreasers, deodorants, lubricants, floor finishes, and pest-control solutions.
UNIPETROL WELL PLACED FOR PETCHEM SURGE
Czech petrochemical producer Unipetrol is well placed to "capitalize on a petrochemical surge in demand," Raiffeisen Centrobank said in a research note. "Although the petchem upswing [took some time out] in the fourth quarter of 2009, we expect the positive trend to continue during 2010 and thereafter," the bank said. "We are optimistic about the development of demand for petchem products in the Czech Republic and Central and Eastern Europe in general, as the per capita demand for these products is still lagging behind Western Europe."
BAYER MATERIALSCIENCE TO BUILD CHLORINE PLANT
Bayer MaterialScience has signed a contract with plant engineering company Uhde to build a new chlorine production facility based on common salt, the German polymers and plastics major said last week. Bayer said the plant, which would have a capacity of 20,000 tonnes/year, will be built at Chempark Krefeld-Uerdingen, Germany, and is scheduled to start operating in the first half of next year.
BUSINESSES CAN AFFECT 2012 GLOBAL SUMMIT
A series of meetings will give chemical businesses a way to influence the global sustainable development summit in Brazil in 2012, an official with a US business advocacy group has said. The preparatory committee meetings - the first of which takes place in New York in mid-May - offer chemical businesses a chance to affect the agenda for the summit in Rio de Janeiro, Norine Kennedy, vice president of energy and environmental affairs for the US Council for International Business, told industry representatives at the Global Chemical Regulations Conference in Baltimore, Maryland. The Rio summit will also mark the end of the first period of commitment for the Kyoto Protocols and the end of the Marrakech process for sustainable consumption and production, among other global initiatives, Kennedy said.
ULTRAPAR LOGISTICS UNIT PLANS TO SELL BUSINESSES
The logistics subsidiary of Brazilian conglomerate Ultrapar Participacoes plans to sell three businesses for reais (R) 82m ($46m) to Aqces Logistica Internacional. Sectors in the Ultracargo deal include the subsidiary's in-house logistics, solid-bulk storage and road-transportation businesses. The deal should close in the middle of the year, Ultrapar said. Once closed, Ultracargo can focus exclusively on its liquid bulk storage business. Ultrapar's other businesses include its petrochemical subsidiary Oxiteno, fuel distributor Ipiranga and Ultragaz.
ITALIAN CUSTOMS SEIZE AMERICAN BIODIESEL
Italian customs officials have seized a shipment of biodiesel from North America on suspicion the renewable fuel was sold in violation of EU import rules, the European Biodiesel Board (EBB) said last Wednesday. EBB project manager Amandine Lacourt said that Italian customs agents seized 10,000 tonnes of biodiesel brought into the ports of Venice and Trieste in mid-March. Although the biodiesel was listed as originating in Quebec City, Canada, Italian authorities are alleging the material is subsidized biodiesel from the US, Lacourt said. That would place it in violation of duties the EU levied on material in March.
SHERWIN-WILLIAMS CLOSES DEAL FOR ARCH UNIT
Sherwin-Williams has closed its €40m ($53m) acquisition of Arch Chemicals' industrial coatings businesses. Announced last month, the deal for the Italy-headquartered business included industrial coatings operations in Italy, the UK, France, Spain, North America and Singapore. The acquired business recorded an operating loss of about $2m on sales of $147m last year. Arch said the divestiture would support its strategy to focus on its core biocides business.
SHELL CHEMICALS TO SPEND $9.5M ON CLEAN AIR ACT
Shell Chemicals has agreed to pay $9.5m (€7.1m) for pollution-reduction equipment and on civil penalties to resolve multiple US Clean Air Act violations, the Environmental Protection Agency and Justice Department said last week. Of the $9.5m, $6m will be spent on new air pollution control technologies to reduce emissions at petroleum refining facilities in Saraland, Alabama, and St. Rose, Louisiana.
DSM TO SELL FERTILIZER AND MELAMINE UNITS
Netherlands-based DSM has agreed to sell its fertilizer and melamine business groups to Egypt's Orascom Construction Industries (OCI) for €310m ($419m) on a cash and debt-free basis. The deal is expected to be completed in the second quarter, subject to regulatory and other customary approvals, DSM said. OCI said the acquisition would make it a global leader in fertilizer production and distribution.
DOW/BASF OUTAGE IN Q2
US major Dow Chemical's 300,000 tonne/year hydrogen peroxide-to-propylene oxide joint venture plant with Germany's BASF in Antwerp, Belgium, will go offline for process improvement in the second quarter (Q2). The plant should be back up in late June, said John Smith, Dow's global product director for propylene oxide (PO)/propylene glycol, on the sidelines of the International Petrochemical Conference (IPC).
The global photovoltaic market is likely to grow at a rate of 25%/year, with continued support from government regulations in Europe and China, said Eric Nichols, vice president for business management at Saflex - a subsidiary of US producer Solutia, on the sidelines of the IPC event.
STYRENICS JV TO MERGE
German chemical group BASF and Chinese major Sinopec expect to integrate their styrenics joint venture (JV), Yangzi-BASF Styrenics (YBS), into their large-scale petrochemical JV BASF-YPC Co. (BYC) later this year. Bernd Blumenberg, president of BYC, said that combining the two JVs, both located in Nanjing, would improve the synergies between the operations. YBS, owned 60:40 by BASF and Sinopec, produces polystyrene (PS) and expandable polystyrene (EPS), as well as the raw material styrene. BYC would remain a 50:50 JV following the merger.
NEW TDI PLANT BEING BUILT
China's Yantai Juli Isocyanic Ester has started building its new 45,000 tonne/year toluenedi-isocyanate (TDI) plant at Laiyang city in Shandong province. The yuan (CNY)1.8bn ($264m) plant was slated for start-up in the second half of 2011.
POSITIVE RESULTS FOR SHANGHAI PETROCHEMICAL
State-run Shanghai Petrochemical Co. posted a net profit of yuan (CNY) 1.59bn ($233m) for its 2009 financial year, compared with a net loss of CNY6.24bn in 2008. A fall in production costs and the decline of crude oil prices, improved refining operating margins and better profit of the petrochemical business contributed to the growth. Its turnover in 2009 amounted to CNY51.7bn, down by 14.23% year on year.
EPA REEVALUATING BPA
The US Environmental Protection Agency (EPA) said it will scrutinize bisphenol A's (BPA) effect on the environment and possibly add it to its chemicals of concern list. The EPA's action could add more pressure to limit the use of BPA in food packaging. Placing BPA on the agency's list would open the door for further regulation of the chemical, a feedstock for polycarbonate (PC) and epoxy resin. The EPA now joins the US Food and Drug Administration in reevaluating the health effects of BPA after studies linked it to cancer, heart disease and reproductive system defects.
The article titled "The new normal" in the March 29 issue of ICIS Chemical Business should have listed the authors as being with Charles River Associates, rather than CRA International, which is the former name of the consultancy. In addition, we misspelled one of the authors' names. The correct name is Vijay Sarathy, vice president at Charles River Associates. We regret the errors.
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