This week's world news

23 May 2011 00:00  [Source: ICB]

DOW TO SELL PP AND PP CATALYST UNITS
US-based Dow Chemical is aiming to sell its polypropylene (PP) business and its PP catalyst licensing business separately, sources in the financial community said. US-based investment bank Citibank is handling the sales, sources said. Dow's PP catalyst licensing business includes its UNIPOL, CONSISTA D7000 Donor and SHAC Catalyst process technologies.

MOMENTIVE TO SELL WOOD RESIN, ACRYLICS UNITS
US-based specialty chemicals and materials company Momentive Performance Materials has put its forest products resins business and acrylic monomers unit up for sale, sources in the financial community said. US-based investment banks Goldman Sachs and Morgan Stanley are handling the sale of the forest products resins business, while US brokerage The PrinceRidge Group is selling the ¬acrylic monomers unit, sources said. Momentive's forest products resins business had sales of $1.61bn (€1.26bn) in 2010. Its acrylic monomers business has annual sales of about $500m, said one source.

SUNOCO TO SELL PHENOL PLANT TO HONEYWELL
US-based refining company ¬Sunoco has agreed to sell its 1bn lb/year phenol and acetone plant in Philadelphia, Pennsylvania, for about $85m (€60m) to US ¬industrial firm Honeywell. Last year, Sunoco sold its polypropylene (PP) business to Brazil-based polymers firm Braskem. The plant deal is expected to close in the third quarter.

KLATTEN GAINS 25% BLOCKING STAKE IN SGL
German billionaire investor Susanne Klatten has raised her stake in carbon fiber firm SGL Carbon to more than 25%, gaining a blocking stake that will give her more influence. The move by Klatten, who controls Germany-based specialty chemicals firm Altana - and also holds a large stake in luxury carmaker BMW - could mean that BMW is edging out rival Volkswagen in a fight over access to SGL's carbon fiber technologies and lightweight materials, commentators said. In March, VW had taken an 8% stake in SGL.

KIT MOVES BIOMASS-TO-LIQUIDS PROJECT AHEAD
Germany's Karlsruhe Institute for Technology (KIT) said on Wednesday that it has completed the first construction phase of its €60m ($86m) biomass-to-liquids plant. KIT said the second-generation biofuels plant, being built at Karlsruhe, in southern Germany, would convert non-food biomass residues into diesel fuels. The project is expected to start up in early 2013. Capacity details were not disclosed.

BMS GERMANY TDI PROJECT IS ON SCHEDULE FOR 2014
Germany-based major Bayer MaterialScience's planned 300,000 tonne/year toluene di-isocyanate (TDI) project in Germany remains on track for start-up in 2014, amid a complex regulatory approval process. "We are on track to stick to our 2014 start-up timeline," said spokesman Ralf Guether. Bayer MaterialScience, which announced the €150m ($214m) gas-phase phosgenation-based TDI project at Dormagen, in Germany's North Rhine-Westphalia, state in March 2010, filed for approval with regulators in Cologne in April, Guether said.

US APRIL ARCHITECTURAL INDEX TAKES A TUMBLE
The outlook for future US construction activity took a downturn as the American Institute of Architects (AIA's) April design services index dropped sharply from March. The AIA's architecture billings index was 47.6 for April, down nearly three points from 50.5 in the previous month - a drop the AIA attributes largely to ongoing credit constraints for clients undertaking building projects. One year ago, the April index reached 48.6 - then its highest level since January 2008 - in what many hoped was a harbinger of consistent recovery in US construction markets. Any score above 50 indicates an increase in billings for architectural design services.

LINDSAY TO TAKE STAKE IN ODFJELL TANK TERMINALS
Norway-based chemical shipping firm Odfjell has agreed to form a strategic partnership with US ¬private equity firm Lindsay ¬Goldberg, under which Lindsay will take a 49% stake in Odfjell's tank terminals in Houston and Rotterdam. Lindsay Goldberg will also take a 49% stake in Odfjell's greenfield project in Charleston, South Carolina, US, and it will become Odfjell's partner in developing new business in the North American and European tank terminal markets. After closing the deal, the partners plan to inject €25m ($36m) in new equity into Odfjell's terminals in Rotterdam, to finance expansions.

PETROLOGISTICS C3 UNIT IN TEXAS GOES OFF LINE
Houston, US-based chemical company Petrologistics said last Wednesday its propylene (C3) plant in Texas was off line because of a lack of nitrogen supply. Nitrogen supply was interrupted because of a ruptured pipeline header, the company said in a filing with the Texas Commission on Environmental Quality. The company has 544,000 tonnes/year of capacity at a propane dehydrogenation (PDH) plant in Houston, Texas, US.

ECHA: LESSONS WERE LEARNED ON REACH
The European Chemicals Agency (ECHA) will take the lessons it learned from the first phase of the EU's Reach chemicals regulation in order to improve the process of registering substances for the next deadline in May 2013, said Geert Dancet, ECHA executive director, at the Helsinki Chemicals Forum. Dancet said lessons had been learned from the first registration process, and that the legislation could have benefited from marginal improvements. However, he added that Reach currently works "fairly well," and that it is not necessary to overhaul the whole legislation before the next deadline in May 2013. By then, manufacturers and importers of chemicals in volumes over 100 tonnes/year in the EU will be required to register their substances.

DOW RESTARTS TERNEUZEN CRACKER, RAMPS UP RATES
US-based Dow Chemical has restarted its No. 1 cracker at Terneuzen, in the Netherlands, after a delay because of technical issues. "We have completed our turnaround work and have successfully restarted the cracker," Dow said. Operating rates at the cracker are currently being ramped up, market sources said. The company had been struggling to bring the cracker back on line following planned maintenance which began on March 11.

POLAND MEETS WITH US ON SHALE GAS OPPORTUNITIES
Poland is holding a series of meetings with shale gas experts and officials from the US as it seeks to exploit reserves that could give it energy independence, the Polish economy ministry said. The meetings, organized to correspond with US President Barack Obama's visit to Warsaw on May 27-28, should gain impetus from a study by the US Energy Information Administration, which estimates Poland's shale gas reserves at around 5.3 trillion m3. This would be enough to meet Poland's gas consumption of 14 bn m3/year for decades to come, and put an end to its need to import 70% of its required gas from Russia, the ministry said.

INDORAMA TO RAISE EUROPE PTA CAPACITY
Thailand-based chemical firm Indorama Ventures will increase its European purified terephthalic acid (PTA) capacity by 46%, following expansion work at the company's site in the Netherlands. The 250,000 tonne/year expansion at the Rotterdam plant will boost capacity in Europe to 792,000 tonnes/year in 2014, from the current 542,000 tonnes/year, which includes the company's other PTA facility in Ottana, Italy.

DISASTERS PUSH JAPAN BACK INTO RECESSION
Japan slipped back into a technical recession, as the earthquake and tsunami of March 11 significantly dented production and exports of the world's third-largest economy. Economic output fell by 0.9% quarter on quarter, with the annualized rate of decline at 3.7%, according to data from Japan's Cabinet Office. Most economists had been expecting a 2% year-on-year GDP contraction for the March quarter. Japan may see at least one more quarterly contraction before the economy can return on a growth path and gain momentum, said David Cohen, chief economist at global research firm Action Economics.

EXXONMOBIL SINGAPORE PLANTS TO FOCUS ON LLDPE
Texas-based energy and chemical major ExxonMobil's existing and upcoming polyethylene (PE) plants on Jurong Island, Singapore, will focus on making metallocene linear low density PE (MLLDPE) if there is demand for such a volume of supply, said ExxonMobil polyolefins business unit vice president John Verity. ExxonMobil's existing 600,000 tonne/year PE plant in Singapore will focus on making MLLDPE once its two new PE facilities, with a combined capacity of 1.3m tonnes/year, come on stream. All three plants will produce MLLDPE if there is demand, he said at the ChinaPlas exhibition in Guangzhou.

EU COURT CONFIRMS €59M FINE AGAINST ARKEMA
The General Court of the EU has upheld a €59m ($84m) fine against France-based chemicals producer Arkema and its former parent, Elf Aquitaine, for participating in a sodium chlorate cartel. The court dismissed Arkema's action for annulment of the European Commission's ruling, saying the commission had acted in accordance with EU law, particularly since the company had infringed EU competition law before, which resulted in the fine being increased by 90%. The Commission imposed the fine in 2008, saying that the cartel allocated sales volumes, fixed prices and exchanged commercially sensitive information between May 1995 and February 2000.

LANXESS RENAMES ITS BASIC CHEMICALS UNIT
Germany-based chemical firm LANXESS is changing the name of its Basic Chemicals business unit to Advanced Industrial Intermediates (AII), to reflect a direct link to the group's product portfolio. "Successful developments have occurred over the last two years. Acquisitions in India and China have changed the face of our business unit," said Dr Hubert Fink, head of the AII business unit. "The new name clearly states what the business unit stands for: advanced intermediates for industry. The new name will further strengthen AII's ¬position and serve as fertile ground for continued growth," said LANXESS board member Werner Breuers.

BASF TO BUILD ACRYLIC DISPERSIONS PLANT
Germany-based BASF will build an acrylic dispersions plant in Durban, South Africa, aiming to strengthen its position in the region. The company said the plant, which is scheduled to begin production in the second half of 2012, will benefit from the local ¬availability of raw materials and proximity to customers. Acrylic dispersions are mainly used in the coatings and construction industry. "With this new facility, we are well positioned to support our customers' growth in South Africa and its neighbouring countries," said Christoph Hansen, BASF's senior vice president of dispersions for adhesives and construction in Europe.

EASTMAN CONSIDERS THIRD COPOLYESTER PLANT
US-based Eastman Chemical is expected to start up a new 30,000 tonne/year Tritan copolyester plant at Tennessee in the US by early 2012 and is considering a further facility to meet strong demand, said specialty plastics regional business director Travis Smith at the Chinaplas exhibition in Guangzhou, China. The company's existing 30,000 tonne/year plant at the same site is running at full rates and its production ¬cannot meet demand, he said. Smith predicted that Tritan output from the second plant could be absorbed by the market within three to five years and therefore a third plant was under consideration. Eastman sells almost half of its Tritan material in China, with the focus on applications in housewares, small appliances and infant care.

BASF PUTS STOP TO CAPRO LEAKAGE INTO RHINE RIVER
Germany's BASF has stopped a caprolactam (capro) leak into the Rhine river from a plant at its petrochemicals hub in Ludwigshafen, Germany. BASF said some 1,900kg of capro escaped between 14:50 and 18:00 local time from a leaking metal pipeline during maintenance work last Monday. "The escape from the affected plant has been stopped," BASF said, adding that it is investigating the cause of the leakage. According to the ICIS plants and projects database, BASF's capro capacity at the Ludwigshafen hub is 170,000 tonnes/year.

US MANUFACTURING GROWTH EXPECTED IN 2011
US manufacturing executives expect growth to continue and revenues to increase through the rest of this year, although producers will struggle to contain costs as raw material prices rise, according to the semi-annual outlook survey of manufacturing industries conducted by the Institute for Supply Management (ISM). The survey said 68% of responding production executives predict that their companies' revenues will be 13.2% higher for 2011, compared with last year. This ¬represents a growing level of business confidence among ¬manufacturers, which at the start of this year said they expected 2011 revenue gains of only about 5.6%.

OMV AIMS TO RAISE €900M TO FUND EXPANSION
Austria-based energy and petrochemical firm OMV plans to raise up to €900m ($1.3bn) in fresh capital from a share sale to finance its expansion into Turkey and Tunisia. Existing shareholders will be offered one new share for every 11 held, with a maximum of 27.3m new shares to be sold, which will be equivalent to 9.1% of all shares issued by the group. OMV has been examining its options for sourcing new capital since it paid €1bn to take over Turkish refined oil products marketing company Petrol Ofisi in October 2010. It hopes to use the company to channel investments into refining, petrochemical and gas opportunities in Turkey.

US CHEMICALS MOVE TO BLOCK NATGAS BILL
US chemical industry officials urged members of the US House of Representatives to oppose a bill that would subsidize and otherwise encourage the use of natural gas as a transportation fuel, ¬warning that the legislation could drive gas prices higher. The American Chemistry Council (ACC) said it sent letters to nearly 250 representatives, asking that they vote against HR 1380, titled New Alternative Transportation to Give Americans Solutions Act (NAT GAS Act). The NAT GAS Act would provide tax incentives for the purchase of natural gas-fueled vehicles, the construction of ¬natural gas retail fueling stations and the use of natural gas as a ¬vehicle fuel.

MHTL TO SHUT DOWN TRINIDAD PLANTS
Methanol Holdings (Trinidad) Ltd. (MHTL) plans to shut down the urea portion of its ammonia/urea/melamine complex in Trinidad for maintenance for most of June for its first scheduled turnaround since starting up in early 2010, melamine distributor Southern Chemical Corp. said. MHTL's two 30,000 tonne/year melamine plants in Trinidad will also be shut down as they receive their feedstock directly from the urea plant.

POLYONE TARGETS 30% GAIN IN 2011 ASIA SALES
US polymers molding and extrusion firm PolyOne aims to increase its sales in Asia by more than 30% in 2011 and to double its sales in the region over the next three years. The company's Asia operations contributed $193.5m (€135.5m) of its $2.6bn in total global sales in 2010. ¬"Because of the good outlook of demand growth in this region, we also have plans for new investments in Asia, including mergers and acquisitions," said Shengyang Ju, general manager of PolyOne's Geon performance materials business in Asia. He spoke at the Chinaplas exhibition in Guangzhou.

GERMANY DOUBLES 2011 GROWTH FORECAST
Germany's chemical industry has doubled its 2011 production growth forecast to 5.0% following a strong first quarter, said the German Chemical Industry Association (VCI). It said growth was "unusually strong" in early 2011, with producers running plants at close to full capacity. ¬"Irrespective of potential risks for the global economy, we remain optimistic and we are ¬expecting the good demand for chemical products to last - both at home and abroad," said VCI president Klaus Engel, who is also CEO of Germany-based ¬specialty chemicals firm Evonik Industries. In the three months ended March, Germany's chemical ¬production rose by 3.2% sequentially from the 2010 fourth ¬quarter - marking the eighth ¬consecutive quarter of ¬volume ¬increases for the industry.

DOW EYES COMMERCIAL START AT THAI ELASTOMERS
US-based Dow Chemical expects to start commercial operations at its new worldscale polyolefin elastomers plant at Rayong province, in Thailand, on June 1. The facility will increase Dow's global capacity for polyolefin elastomers to more than 800,000 tonnes/year. The chemical plant is a joint venture between Dow and Thai conglomerate Siam ¬Cement Group.

LANXESS ON THE HUNT FOR CHINA ACQUISITIONS
Germany-based chemical firm LANXESS is looking for acquisition opportunities in China as part of its long-term efforts to increase global sales revenues by €500m-1bn ($714m-1.43bn).

By: Joseph Chang
+1 713 525 2653

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly