17 January 2011 00:00 [Source: ICB]
DUPONT TO ACQUIRE DANISCO FOR $6.3BN
US chemical major DuPont has agreed to acquire Danish food ingredients and enzymes firm Danisco for $6.3bn (€4.9bn). The purchase will involve $5.8bn paid in cash and assumption of $500m of Danisco's net debt. DuPont expects the transaction to close early in the second quarter and to be earnings accretive in 2012. "This transaction is a perfect strategic fit with our growth opportunities and will help us solve global challenges presented by dramatic population growth in the decades to come, specifically related to food and energy," said DuPont CEO Ellen Kullman. Danisco and DuPont are already joint-venture partners in the development of cellulosic ethanol technology.
BUT ITS SHARE PRICE TUMBLES ON THE NEWS
Shares of US-based chemical company DuPont fell by $0.73 (€0.55), or 1.5%, to $49.03 last Monday on the announcement of its acquisition of Danish food additives and enzymes producer Danisco. Shares had been as low as $47.22 earlier in the day. Investors were concerned about the purchase price and the resulting dilution to earnings, which is not unusual in large acquisitions. Meanwhile Netherlands-based chemical and life sciences firm DSM, which holds a 4.95% stake in Danisco, said it was not considering a competitive bid for the company.
PETROCHINA AGREES JV DEAL WITH INEOS
PetroChina has signed a framework agreement with INEOS to form joint ventures for trading and refining activities at Grangemouth in Scotland and Lavera, France. Core to Swiss headquartered INEOS is also an agreement with PetroChina's parent company, China National Petroleum Corp. to share refining and petrochemical technology and expertise. The agreement gives INEOS the opportunity to lever its technology and expertise into the China market. PetroChina and INEOS hope to finalize the proposed joint ventures by the end of June 2011 (see pages five, 10 and 13).
EVONIK SIGNS MOU WITH GACL FOR HPPO PROJECT
Germany-based chemical firm Evonik Industries has signed a memorandum of understanding (MoU) with India's Gujarat Alkalies and Chemicals Ltd. (GACL) for a proposed hydrogen peroxide-to-propylene oxide (HPPO) project at Dahej in the state of Gujurat. Evonik said the project involved the construction by the company of a new hydrogen peroxide plant, and a propylene oxide (PO) facility by GACL. GACL intends to acquire a license from Evonik and German engineering firm Uhde to use the HPPO process to produce PO.
FULLER TO BOOST 2011 NET ON PRICING, COST CONTROL
US adhesives and sealants firm H.B. Fuller expects earnings to improve this year, aided by price hikes and cost controls. "This time last year, prices were declining. Now they're going up," recently appointed CEO Jim Owens said during the company's fiscal fourth quarter (Q4) (ended November) conference call. Price gains have begun to offset higher raw material costs, he said. The company's fiscal 2011 earnings-per-share guidance is $1.75-$1.85 (€1.31-1.39) per share, an increase of 9-16% over 2010. "Our caution is mostly focused on raw materials," he said. Although the company's full-year performance forecast did not factor in a sharp gain in January feedstock propylene, Owens expects growth via pricing and cost control through reformulation technology. The company reported an 11% year-on-year decline in Q4 net income because costs outpaced sales.
AIR PRODUCTS, LINDE FORM HYDROGEN CHLORIDE JV
Industrial gases firms Air Products and Linde Gas North America have formed a joint venture to supply high-purity anhydrous hydrochloric acid (HCl) to the electronics and other industries. The 50:50 Hydrochlor joint venture will build a facility at Freeport, Texas, US, to process and package HCl supplied via a pipeline from Dow Chemical, with expected start-up in the second quarter of 2012. Hydrochlor would sell HCl exclusively to the joint venture partners, which would continue to market HCl independently.
DOMINION TO BUY PPG SITE FOR NGL FACILITY
US pipeline operator Dominion plans to buy land from US chemical firm PPG Industries for a plant to process natural gas from the Marcellus shale field. Dominion reached an agreement on an option for land at PPG's Natrium site, near the West Virginia-Ohio border. PPG has a plant at the site that produces chlorine, calcium hypochlorite, muriatic acid and caustic soda. The planned facility would process up to 300m ft3/day (8.5m m3/day) of natural gas. Fractionation capacity for up to 38,000 bbl/day of natural gas liquids (NGLs) would also be available. NGLs, particularly ethane, are key feedstocks for US petrochemicals, accounting for an estimated 80% of the feeds used to make ethylene.
TANKERS FACE SEVERE CONGESTION AT NINGBO
Chemical tankers heading to eastern China's Ningbo port to unload cargoes are expected to wait for up to one week because of congestion, industry sources said last Wednesday. Chemical-capable berths at the port were fully occupied, with an estimated 15 tankers waiting for berth allocation, according to information from shipping agents in China. Contributing to the congestion were arrivals of domestic tankers, which are given priority over foreign vessels. "The congestion at [the port's] Zhenhai terminal is quite dismal, and we have been forewarned by our agents that waiting time for a berth is around seven days," said a Japan-based vessel owner. Vessels are waiting to unload cargoes of monoethylene glycol (MEG), styrene monomer (SM) and paraxylene (PX) from the Middle East, as well as Southeast and Northeast Asia, according to sources.
BAYER TO SHUT US METHYL ISOCYANATE UNIT IN 2012
Germany-based agrochemical supplier Bayer CropScience will cease production of methyl isocyanate at its plant in Institute, West Virginia, by mid-2012, sources said. The news comes prior to a January 20 presentation from the US Chemical Safety Board, which plans to issue its final report and recommendations from an investigation into the August 2008 explosion at the Bayer facility. In that incident, two workers died following an explosion in the plant's methomyl unit near a large tank that held about 40,000 lb (18.1 tonnes) of methyl isocyanate.
PAPER CHEMS FACE SHIFT TO ASIA, LATIN AMERICA
The pulp and paper chemical industry is facing a shift of production to Asia and Latin America, and the stagnation in developed markets is leading to a consolidation phase in the industry, research group Global Industry Analysts said. "Rapid economic growth has boosted paper demand in Asia Pacific with countries such as China, India, and the Southeast Asian nations emerging as significant markets," said the group. The group forecasts that the Asia-Pacific market for paper coating chemicals, the largest pulp and paper chemicals segment, will reach 4.47m tonnes in 2013.
IBN SINA UNIT SET FOR TURNAROUND IN 2013
National Methanol Company (Ibn Sina) plans to hold a turnaround at its 950,000 tonne/year natural gas-based methanol plant at Al-Jubail, in Saudi Arabia in 2013, a company source said. The plant was shut down for maintenance in April 2010 for two to three weeks and the next maintenance shutdown is due in 2013, the source added.
MOMENTIVE TO SHIP BPA FROM PERNIS IN JANUARY
US-based chemical company Momentive Performance Materials expects to be able to supply on-spec bisphenol A (BPA) from its Pernis, Netherlands, plant in the last week of January, following technical problems, a company source said. "We expect to produce only off-spec BPA which we can't sell externally. Therefore we will not be able to supply any BPA to our customers before the week of January 24," the source said. Momentive declared force majeure at its Pernis facility on December 29 after a technical problem resulted in the company not being able to ship BPA, liquid epoxy resins or solutions from its 160,000 tonne/year BPA plant.
BRENEI METHANOL PLANS SHUTDOWN IN MARCH
Brunei Methanol Co. (BMC) will shut its 850,000 tonne/year methanol plant in Sungai Liang Industrial Park for a 40-day scheduled maintenance turnaround from March 22, a company source said. BMC has contracts to sell the material to China, Taiwan, Korea, Southeast Asia, Japan and India.
THAILAND TO EXPORT MORE CASSAVA TO CHINA
Thailand's exports of cassava to China for ethanol production are likely to increase this year amid efforts by Beijing to use the commodity as a principal alternative to grain feedstock, US-based Commodore Research & Consultancy said in a report. The total value of Thailand's cassava chip trade rose to $920m (€708.4m) last year, compared with $500m in 2009, said the report.
DOW PUTS US BUTAC ON FORCE MAJEURE
A power outage at US-based Dow Chemical's plant in St. Charles, Louisiana, US, has led the company to declare force majeure on butyl acetate (butac) and other products. Dow spokeswoman Heather Gallegos said the outage occurred on January 7. Gallegos said Dow has put butac, n-butanol and some related chemicals on 70% sales allocation until further notice.
GERMANY TO OVERHAUL FATTY ACID PRODUCTION
German federal and state governments plan to overhaul production processes and rules for animal feed after dioxin was found in livestock. In particular, the federal and the state governments of Lower Saxony and Schleswig-Holstein called for stricter measures to ensure that firms did not produce fatty acids for animal feed on facilities that also make fatty acids for industrial uses. At the same time, animal feed suppliers should be subjected to stricter monitoring and licensing standards, officials said. The move comes after fatty acids meant for industrial purposes were mixed with vegetable-feed fat at an animal feed facility in the state of Schleswig-Holstein. The Schleswig-Holstein government estimated that 60,000-100,000 tonnes of contaminated animal feed had been supplied to farmers and other users.
NA INDUSTRIES SAP PLANT SET FOR 2012 STARTUP
Construction on the US-based NA Industries' 60,000 tonnes/year superabsorbent polymer (SAP) plant just outside Houston, Texas, US, is underway, and the plant will be completed in January 2012 - two months earlier than planned, the company has said. The $100m (€77m) plant will be adjacent to an American Acryl acrylic acid plant for feedstock sourcing. The American Acryl plant is operated as a 50:50 joint venture between France's Arkema and NA Industries, a subsidiary of Japan-based Nippon Shokubai. "At the start of April 2012, we will begin operations to qualify the product for our customers," said Taka Yatagai, president of NA Industries. "We will begin full commercial operations by June 2012 as scheduled."
TEXAS GREENHOUSE GAS SUIT THREATENS PROJECTS
The latest lawsuit from the US state of Texas opposing regulation of greenhouse gas emissions could prevent as many as 167 construction projects from proceeding, environmental groups said. Those projects include chemical and refinery facilities, according to the Texas Commission on Environmental Quality, a state environmental regulator that compiled the list. Those projects need preconstruction permits to proceed, according to court documents. The state's litigation is preventing those projects from receiving the permits, said Joanne Spalding, managing attorney for US environmental group The Sierra Club.
BASF TO EXPAND PLASTICS CAPACITY IN CHINA
Germany's BASF plans to expand its engineering plastics compounding capacity at its site in Shanghai, China, by 65,000 tonnes/year by 2015. The expansion is expected to have two phases, said Hermann Althoff, senior vice president of BASF's engineering plastics unit for the Asia-Pacific region. The first phase will increase capacity by 39,000 tonnes by the third quarter (Q3) of 2013. The second phase will increase capacity by 26,000 tonnes by Q3 of 2015. Althoff declined to provide a specific figure for the cost of the expansion, only saying that the capital expenditure would be in the double-digit million-euro range. "We produce engineering plastics products, such as polyamide and polybutylene terephthalate (PBT) at our Pudong site in Shanghai," said Althoff.
ODYSSEY LOGISTIC ACQUIRES OPTIMODAL
US-based Odyssey Logistic & Technology (OL&T) has acquired transportation company Optimodal for an undisclosed sum. OL&T CEO Robert Shellman said: "OL&T acquired Optimodal to add improved rail-shipping services to our portfolio and to drive down the carbon footprint related to moving cargo. Optimodal offers the flexibility of local, short-distance truck transport combined with the efficiencies and security of long-haul rail transport."
E-STYRENICS HOPES TO START PS TRIAL IN Q4
Egyptian Styrenics Production (E-STYRENICS) hopes to start trial production at its new 200,000 tonne/year polystyrene (PS) plant in Alexandria, Egypt, in the fourth quarter (Q4) of 2011, a source at Egyptian Petrochemicals Holding (Echem) said. Echem is the largest shareholder in E-STYRENICS, with a 35% stake. The PS plant will use imported styrene feedstock until Echem's proposed 100,000 tonne/year styrene plant at the same site is built, the source said on the sidelines of the Arabplast exhibition in Dubai, the United Arab Emirates. Echem has been in talks with local banks to jointly build the styrene plant, the source added.
RHEIN CHEMIE BUYS ARGENTINA'S DARMEX
German chemical firm LANXESS said its wholly-owned subsidiary, Rhein Chemie, has acquired Argentina-based release agents and curing bladders-maker Darmex for an undisclosed sum. Rhein Chemie also acquired Darmex's bladder technology in Latin America, which is a key production hub for tire manufacturing. Darmex's production sites are located close to Brazil, where LANXESS has expanded its presence in the past few years. Bladders are used in the manufacturing process of tires. The size of the global bladder market is estimated to be worth more than €300m ($390m), LANXESS said. The demand for release agents and bladders is expected to expand in tandem with global tire production, which is expected to grow on average by around 5%/year.
DAK AMERICAS NEARS CLOSE OF PET DEAL
DAK Americas, a subsidiary of Mexico's Alpek, expects to close the acquisition of US-based Eastman Chemical's integrated US polyethylene terephthalate (PET) and purified terephthalic acid (PTA) business by the end of the month. DAK Americas said a waiting period under US competition law had expired without regulators requiring additional information from the companies. In October, Eastman and DAK announced that DAK would acquire the business for $600m (€462m).
HAWKINS TO BUY DISTRIBUTOR VERTEX
US chemical distributor Hawkins has agreed to acquire the assets of distributor Vertex Chemical and its affiliates. Vertex Chemical has been making sodium hypochlorite in the US since 1949. It provides terminal services and distributes bulk liquid inorganic chemicals and packages household chemicals. Hawkins, headquartered in Minneapolis, Minnesota, said the deal would give it an expanded geographic footprint and the ability to expand its water-treatment business.
TORAY TO RESUME BUILDING CARBON FIBER UNIT
Japanese chemical producer Toray Industries has decided to resume the previously halted construction of its 1,000 tonne/year carbon fiber unit in Aichi prefecture, thanks to improving demand. The rapid increase in demand for carbon fiber by the sporting goods, aircraft manufacturing and general industries in 2010 prompted Toray to restart the construction, the company said. The yen 16bn ($192m) unit is now scheduled to come on stream in September 2012. The total capacity of carbon fiber produced by the new and existing units at the same site will increase to 8,300 tonnes/year from 7,300 tonnes/year, raising the company's global carbon fiber capacity to 18,900 tonnes/year. Toray expects total demand for polyacrylonitrile (PAN) carbon fibers to grow by 15% in 2011.
SIME DARBY PLANTATION PLANS BIOETHANOL PLANT
Malaysia's Sime Darby Plantation and Japan's Mitsui Engineering and Shipbuilding plan to jointly build a small bioethanol test facility to check the feasibility of a large-scale unit, a source close to the company said. "The plant will convert palm empty fruit bunches (EFB) into bioethanol," the source said. "EFB was chosen as a feedstock as Malaysia is the world's second-largest producer of palm." The plant will be situated next to Sime Darby Plantation's Tennamaram palm oil mill at Bestari Jaya in Selangor, Malaysia, and will use 1.25 tonnes/day of EFB.
LIAHERD CHEMICAL TO BUILD PA PLANT IN CHINA
China's Shandong Liaherd Chemical Industry plans to spend about yuan 150m ($23m) to build a 50,000 tonne/year phthalic anhydride (PA) plant at Xintai in the eastern province of Shandong. Trial runs will begin when construction is completed by the second quarter of next year, according to a company filing to the Shenzhen Stock Exchange. The plant will take orthoxylene (OX) as a feedstock and use domestic technology in its production process.
DHUNSERI TO ADD 650,000 TONNES OF PET CAPACITY
India's Dhunseri Petrochem and Tea will bring 650,000 tonnes/year of new polyethylene terephthalate (PET) capacity on stream in 2012, a company executive said on the sidelines of the Arab International Plastics and Rubber Industry Trade Show and Conference in Dubai, the United Arab Emirates. One project - expected to start up in the first quarter of 2012 - will add 210,000 tonnes/year of capacity to its PET resin plant in Haldia, West Bengal. The second project in Port Said, Egypt, is expected to begin operations in the third quarter of 2012. That plant will have a bottle-chip capacity of 440,000 tonnes/year.
NEW RATE LOOMS FOR VENEZUELAN PLASTICS
Officials from Venezuela's petrochemical industry met with government officials last Monday to learn the details of the nation's new exchange-rate system - one that could increase the costs of some imports that are crucial to the industry. The nation eliminated its two-tiered exchange rate system, which was set at $1 = bolivares (Bs) 4.30 and $1 = Bs 2.60, depending on the nature of imports. Food, medicine and some specialty raw materials fell under this second category. Under the new system, all imports will fall under the weaker Venezuelan currency rate, $1 = Bs4.30. The move will increase costs for some transformers that require specialty grades of imported resins such as co-polymers. Previously, those imports fell under the Bs2.60 conversion rate.
OCTAL PET PLANT IN OMAN ON SCHEDULE FOR 2012
Oman's Octal Petrochemical expects to begin start-up of its 600,000 tonne/year polyethylene terephthalate (PET) plant at Salalah in 2012, with its purified terephthalic acid (PTA) unit to be completed by the end of 2013, a company executive said on the sidelines of the 10th Arab International Plastics and Rubber Industry Trade Show and Conference in Dubai, the United Arab Emirates. "The PET facility consists of two 300,000 tonne/year lines each, with the first line to start at first quarter 2012, and the second line expected to start operating a couple of months after that," the official said. The PTA unit under development has nameplate capacity of 1.2m tonnes/year and the majority of its output will be for captive use.
DOW MAY PURSUE JOINT VENTURES FOR HDPE, PP
US-based Dow Chemical could pursue joint ventures of its high density polyethylene (HDPE) and polypropylene (PP) businesses, as these have no technology advantages and produce commodity-like returns, said Deutsche Bank analyst David Begleiter. Dow could realize $2bn-3bn (€1.6bn-2.3bn) for a 50% share in HDPE and PP, he said. Dow might also consider selling its 42.5% interest in Equate, its polymers joint venture with Kuwait's Petrochemical Industries Co, Boubyan Petrochemical and Qurain Petrochemical Industries, the analyst noted. He estimated that Dow's interest in Equate was worth $2.5bn.
SAUDI KAYAN TO START UP NEW PC PLANT IN MARCH
Saudi Kayan expects to start up its new polycarbonate (PC) plant in Al-Jubail, Saudi Arabia, at the end of March, a SABIC source said. Saudi Arabia-based industrial conglomerate SABIC has a 35% stake in polymers firm Saudi Kayan. The facility, with a nameplate capacity of 260,000 tonnes/year, will be the first PC plant in the Middle East, the SABIC source said on the sidelines of the Arabplast exhibition in Dubai, the United Arab Emirates. Supply from the plant will be used in applications such as optical products, greenhouses and automobiles, the source said.
ROCKWOOD CLOSES SALE OF PLASTICS COMPOUNDING
US-based specialty chemical firm Rockwood Holdings has closed the sale of its AlphaGary plastic compounding business to Mexichem for $300m (€234m) in cash. AlphaGary, which makes specialty plastic compounds for the wire and cable business, as well as medical applications and other uses, was the largest division in Rockwood's specialty compounds segment. Rockwood will use the proceeds to pay down debt.
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