This week's world news

11 October 2010 00:00  [Source: ICB]

FRENCH STRIKES COULD CAUSE PRODUCTION ISSUES
The French port strikes could seriously affect some chemical production and global availability if they carry on for much longer, industry sources said. "It is of course - it could be - a major impact," one French producer said, while noting that there had not yet been any adverse effects. "It's a very bad sign for the French economy and very bad for the global and French petrochemical industries." Last Wednesday, strike action at the Fos-Lavera oil terminal in southern France was extended for a further 24 hours. Sources speculate that the strike could last until the end of the next general strike, on October 12.

CPCHEM CEO RESIGNS TO BECOME CP EXEC
Greg Garland resigned as president and CEO of US-based Chevron Phillips Chemical (CPChem) to join US energy giant ConocoPhillips as senior vice president of Americas exploration and production. CPChem's board of directors has already begun a process to select Garland's successor, said spokesman Brian Cain. CPChem is a 50:50 joint venture between ConocoPhillips and US energy firm Chevron.

WACKER CALLS FOR BETTER RAIL LINK TO BURGHAUSEN
Germany-based producer WACKER Chemie wants Bavaria state to upgrade a rail link to the company's chemical plants in Burghausen, southeast of Munich. WACKER board member Auguste Willems said the current one-track link was an "obstacle to investment" and jeopardized jobs. Failing an upgrade, WACKER would shift future investments elsewhere, he said. The current situation, which forced much of the transport to be handled by truck, was not commercially viable, Willems told daily newspaper Munchener Merkur. Willems said WACKER could shift its future investments in siloxane and polysilicon to its site near Dresden in Saxony state.

RPM FISCAL Q1 NET INCOME RISES 2.6% TO $75M
US-based coatings and sealants firm RPM International's fiscal first-quarter (Q1 - ended August) net income rose by 2.6% compared with the same period last year, to $75m (€54m) on the back of a sharp improvement in sales by its industrial segment. Net sales for the three-month period of $894.8m were 2.3% below the $916.0m reported a year ago. On a pro forma basis, assuming that the deconsolidation of Specialty Products Holding Corp. subsidiaries had been in effect during Q1 of fiscal 2010, sales increased by 6.1% year on year to $894.8m.

RPM'S EUROPEAN UNITS RECOVER QUICKER
US-based RPM International's European units have recovered faster from the global economic downturn than the coatings, sealants and specialty chemical firm's US subsidiaries, CEO Frank Sullivan said. "Our [European] businesses are doing slightly better there than in the US," he said on the company's earnings conference call. The US units have been particularly plagued by the weak US retail and the weak construction industries.

JOHNSON MATTHEY TO ACQUIRE INTERCAT
UK-based catalyst company Johnson Matthey has agreed to acquire US catalysts firm Intercat for $56m (€40m) in cash. Intercat is a leading supplier of fluid catalytic cracking additives and addition systems with production in Savannah, Georgia, US, and offices in the Netherlands and India. The deal is expected to be completed by October 31.

SHELL SAYS DPC TECH FOR PC IS ATTRACTIVE
Anglo-Dutch energy and chemical giant Shell's diphenyl carbonate (DPC) technology for polycarbonate (PC) production becomes more relevant to its chemical strategy as the polymer is commoditized, it said. Shell has developed the technology to the pilot plant stage, but has yet to decide how it might commercialize the process, which avoids highly toxic phosgene and is claimed to be cheaper than other routes to the intermediate for the widely used polymer. "DPC could enhance our position as a major supplier to PC players," a spokesman said. The process uses carbon dioxide, phenol and propylene oxide (PO) to create propylene glycol and DPC.

HOUSTON SHIP CHANNEL REOPENS TO ALL TRAFFIC
The US Coast Guard reopened the Houston Ship Channel at 07:00 hours local time last Wednesday to all traffic. A total of 62 ships - 37 inbound and 25 outbound - were waiting as of late last Tuesday to transit the channel. The Coast Guard removed power lines and a 300ft (91m) tower from the waterway, which connects to the top US petrochemical port. The authority had closed a 19 mile (31km) section of the channel on Sunday, following a barge collision with a powerline tower, which left the tower leaning on the barge and power lines dangling over the waterway.

ONE EQUITY MAY EXIT FROM SUD-CHEMIE NEXT YEAR
Private equity firm One Equity Partners will likely to sell its stake in German specialty chemical and catalyst firm Sud-Chemie next year, Sud-Chemie's CEO, Gunter von Au, said. "We are assuming that this [One Equity's exit] will happen next year," von Au told German business daily Handelsblatt in an interview. Von Au said One Equity's exit could be an opportunity for Sud-Chemie to raise additional capital for its electric vehicle battery projects, possibly as part of a "broad public share offering by mid-2011." Alternatively, a stake could be sold to a strategic investor, he said. Sud-Chemie is focusing on the high-growth sector of electric vehicle battery technology, a move that will profoundly change the company, he said. One Equity bought a stake in Sud-Chemie in 2005 and later boosted its share to over 50%.

NAN YA STARTS SAFETY CHECKS AT CHIAYI PLANTS
Nan Ya Plastics, an affiliate of Taiwan's petrochemical giant Formosa Plastics, launched last Wednesday comprehensive safety checks of its facilities in Chiayi county after Sunday's fire damaged its 48,000 tonne/year synthetic paper plant. "We have started to look at all the machinery in detail to see if there is anything that needs to be maintained or replaced," said company spokesperson David Tsou, adding that the whole process would take 45 days to complete. Inspections will be conducted at Nan Ya's 174,000 tonne/year polyvinyl chloride (PVC) pipe plant,its 56,400 tonne/year PVC sheeting facility and its construction materials plant. The plants will continue operating during the safety checks.

US WINTER PRICE SPIKE FOR NATGAS UNLIKELY
The US has abundant supplies of natural gas for the coming North American winter season, and prices will hold steady despite increased fuel demand from electric utilities and industry, according to the Natural Gas Supply Association (NGSA). In its 2010-2011 winter outlook analysis, the NGSA said overall demand for natural gas is likely to be 2.4% higher this winter than in the 2009-2010 cold season, because of increased consumption by utilities and manufacturing as the US economy continues a modest but steady recovery. Despite that projected increase in demand, NGSA said it does not expect natgas prices to rise significantly because supplies and production are high.

DETERGENTS NEED BOOST IN EMERGING MARKETS
The detergent supply chain is not properly addressing consumer needs from emerging markets such as China and India, said Paul Polman, CEO of Dutch consumer goods company Unilever. "Detergent buyers and manufacturers will have to accelerate investments in this part of the world," he said at the World Detergents Conference in Montreux, Switzerland. "We need material sourcing commitments at a much higher rate than what we currently have." Polman added that the emerging markets should be seen as a major opportunity and an area of focus for Unilever's key suppliers. More than 50% of Unilever's businesses are already in these markets and 80% of the company's growth is in developing countries, he said.

PEMEX PLANS HDPE PLANT MAINTENANCE FOR 30 DAYS
Mexican producer PEMEX ­Petroquimica said maintenance is underway on train B of its 80,000 tonne/year Mitsui plant, which produces high density polyethylene (HDPE) in the Morelos petrochemical complex in Coatzacoalcos, Veracruz. The work required an investment of nearly Mexican pesos 20m ($1.6m) and is part of the annual maintenance program, PEMEX said. The work is scheduled to take 30 days.

LG CHEM TAKES OVER LG DOW POLYCARBONATE
South Korea's LG Chem has bought US-based Dow Chemical's 50% stake in their joint venture (JV), LG Dow Polycarbonate, and now owns the entire company. LG Dow will operate under the name LG Polycarbonate. Thetwo companies established the JV in early 1999 and started production in 2001. In 2007, the JV added a second train to its site at Yeosu, South Korea, increasing capacity to 170,000 tonnes/year.

ARKEM AIMS TO DOUBLE SALES TO $600M BY 2016
Turkish distributor Arkem aims to double revenues from its chemical operations to $600m (€431m) by 2016 by pursuing an ambitious expansion program that could eventually see it emerge as a global player in chemical distribution. At the European Petrochemical Association annual meeting in Budapest, Hungary, CEO Levand Kokuludag told ICIS he planned to transform the company into an international business by setting up terminals and expanding sales offices in Europe, Asia and the Middle East. He also plans to open offices in Shanghai, China, Beirut, Lebanon, Moscow, Russia and Dubai, United Arab Emirates, in 2011. There are also plans to open a shipping terminal in Temryuk, Russia, in the next two years.

SABIC SIGNS STORAGE DEAL WITH OILTANKING
Saudi Arabian industrial conglomerate SABIC has signed a long-term contract with Oiltanking Stolthaven Antwerp for storage services in Antwerp, Belgium. Oiltanking Stolthaven Antwerp will supply storage with zero-emission tanks to ensure an uninterrupted supply of feedstocks to SABIC's two major naphtha cracking facilities in Geleen, the Netherlands. The agreement, planned to go into effect in 2013, was signed at the European Petrochemical Association meeting in Budapest, Hungary.

ROCKWOOD TO START WORK ON US LITHIUM EXPANSION
US specialty chemicals firm Rockwood Holdings is set to start construction work on its planned expansion of lithium production operations at Kings Mountain, North Carolina, US. When completed in 2012, the expansion project by Rockwood's Chemetall Foote subsidiary will produce battery-grade lithium hydroxide, Rockwood said. The project is being funded in part by a $28.4m (€20.7m) grant from the US Department of Energy.

VOLATILE CHEMICAL COSTS A CHALLENGE FOR P&G
Volatile costs in the commodity chemical and raw material chains are still a big challenge for consumer goods companies such as US-based Procter & Gamble (P&G), the company's CEO, Robert McDonald, said at the American Oil Chemists Society World Detergents conference, held in Montreux, Switzerland. "In the past two years, world oil prices dropped from $150/bbl to below $50/bbl and now hover around $75/bbl. The consumer goods industry is still recovering from the financial crisis of 2008 and global recession," he said.

ECHA BOARD APPOINTS THOMAS JAKL AS CHAIR
The European Chemicals Agency (ECHA's) management board has appointed Thomas Jakl as its chair for a second two-year term in office. The appointment was made at the ECHA's board meeting in Helsinki, Finland, on September 30. Jakl, who has chaired the governing board since September 2008, heads the chemicals policy department of the Austrian environment ministry and has been a member of the ECHA management board since the agency's establishment in 2007.

BLACKSTONE ACQUIRES POLYMER GROUP
US private equity firm Blackstone Capital Partners has agreed to purchase US nonwovens manufacturer Polymer Group Inc. for $18.16/share, or around $379m (€272m). The sale resulted from a strategic review process initiated on April 7. "Polymer Group is an attractive company because of its leading position in the nonwovens industry and its strong footprint in high-growth developing markets," said Blackstone senior managing director Chinh Chu. Chu spearheaded Blackstone Capital's acquisition of Germany's Celanese back in 2004, which turned out to be one of the most successful private equity deals engineered in history.

DOW PICKS KRAEF TO HEAD POLYURETHANES BUSINESS
US-based Dow Chemical picked Torsten Kraef as the new business group vice president of Dow Polyurethanes. Kraef was named in the role in August, the company said. He succeeds Guillermo Novo, who had been named business group vice president of Dow Coating Materials. Kraef has been with Dow for nearly 20 years and most recently served as business group vice president of Dow Building and Construction. Dow Polyurethanes includes the company's propylene oxide (PO), propylene glycol (PG), isocyanates and polyols businesses.

MEXICO FLOODS RECEDE AFTER TROPICAL STORM
Floodwaters in Mexico associated with Tropical Storm Matthew are now receding after storms dropped nearly 3 feet (1 meter) of rain in some areas near the petrochemical hub of Coatzacoalcos, Veracruz, a government spokesman said last Monday. The highway connecting the low-lying region to the port of Veracruz opened last Monday to all vehicular traffic, said Javier Araiza, a spokesman for the Transportation and Communication Secretariat for the state of Veracruz. Araiza also said the area's train network is back on line after more than a week of problems involving mudslides, bridge outages and water on the tracks.

DOW CHEMICAL WINS TOP US SAFETY AWARD
US-based multinational Dow Chemical has received the US National Safety Council's Robert W. Campbell award, which recognizes organisations that uphold high environmental, health and safety (EH&S) standards and link measurable achievement in EH&S performance to productivity and profitability. Dow is the ninth company - and the first chemical company - to earn the Campbell award, which is given annually. The council reviewed five years of Dow's safety and business data and was allowed unfettered access to the company's manufacturing sites before deciding on the recipient of the award.

POLAND'S ZAT AGREES TO BUY 53% STAKE IN ZAK
Zaklady Azotowe Tarnow (ZAT) has agreed to purchase a 53% stake in fellow Polish state-controlled chemical producer Zaklady Azotowe Kedzierzyn (ZAK). ZAT will pay zlotych (Zl) 150m ($52.4m, €38.1m) for 30m shares created by a share capital increase issued by ZAK, a nitrogen fertilizer, oxo-alcohols and plastics producer. The Polish treasury supported the consolidation of the two companies after a lack of satisfactory offers led to the cancelation of their planned privatization in May this year.

AUGUST US CHEMICAL SHIPMENTS INCREASE 18%
Shipments of US-made chemicals increased again in August, rising by 18% year on year, according to data released by the US Commerce Department. Shipments of US-made chemicals in August totaled $59.23bn (€42.64bn), compared with $50.20bn in the same period a year earlier. So far this year, US chemical shipments have increased by about 9% over the same period in 2009. Shipments also kept ahead of gains by non-durable goods shipped in the US, which rose by 15%.

By: Joseph Chang
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