This week's world news

09 January 2012 00:00  [Source: ICB]

AMERICAS

BASF INVESTS IN NON-EDIBLE BIOMASS PROCESS

Germany's BASF is investing $30m (€23.1m) in US technology firm Renmatix, which is developing a process to produce industrial sugar from woody (lignocellulosic) biomass. BASF led a $50m financing round for Renmatix, whose Plantrose technology platform should make it possible for the first time to produce industrial sugar in large quantities and at a competitive cost from non-edible biomass, BASF said.

SHELL TAKES US CRACKER DOWN FOR MAINTENANCE

Anglo-Dutch energy and chemical major Shell has taken one of its US crackers down for planned maintenance, the company said, without providing further details. According to sources, the unit undergoing maintenance is Shell's Norco OL-5 cracker in Louisiana. It was unclear how long the 862,000 tonne/year unit would be off line, but sources said the planned stoppage referred to routine maintenance rather than a major turnaround. One market participant predicted a two-to-three shutdown. A Shell spokesperson declined to comment on the length of the outage, but said no impact on supply arrangements is expected.

CPCHEM PLEASED WITH OVERTURN OF VERDICT

US-based Chevron Phillips Chemical (CPChem) said it is pleased that a Mississippi judge overturned a $322m (€248m) verdict in an asbestos case against it and US-based Dow Chemical's Union Carbide business. A jury in Smith County, Mississippi, US, awarded $322m to Thomas Brown on May 12, 2011. Brown claimed he developed asbestosis - a lung disease caused by exposure to asbestos - as a result of his work on drilling rigs. The asbestos was used in a drilling mud additive, according to Brown.

TOTAL BUYS INTO CHESAPEAKE SHALE PLAY

France-based energy firm Total agreed to buy a 25% stake in both US-based natural gas production firms Chesapeake's and EnerVest's liquids-rich area of the Utica shale play for $2.3bn (€1.8bn). The area is is located across 10 counties on the eastern side of the US state of Ohio. Total has paid Chesapeake and EnerVest about $700m in cash and has committed to pay additional amounts of up to $1.63bn over a maximum period of seven years for future capital expenditures on drilling and the completion of wells.

DUPONT SELLS LIQUI-BOX TO PE FIRM STERLING GROUP

US-based DuPont has sold its Liqui-Box packaging business to US private equity firm Sterling Group for an undisclosed sum. DuPont had acquired Liqui-Box in 2002 in a $333m (€256m) deal. Worthington, Ohio-based Liqui-Box is a supplier of flexible packaging to the global dairy, beverage and bulk food markets. Houston-based Sterling Group has interests in manufacturing, distribution and services companies.

DUPONT INKS DEAL TO DEVELOP SORGHUM

US-based chemical major DuPont has agreed to work with US biofuels firm NexSteppe on developing sweet sorghum and high biomass sorghum hybrids as feedstocks for bio-based products. Under the deal, DuPont made an equity investment in NexSteppe and will provide resources to help NexSteppe breed and commercialize new hybrids of sorghum crops in the US and Brazil. With DuPont's research and development capabilities, NexSteppe will be able to rapidly improve the crop to produce feedstocks for the biofuels, bio-power and bio-based products industries, said Anna Rath, CEO of NexSteppe.

INDORAMA ACQUIRES FIBERVISIONS

Thailand-based Indorama Ventures Ltd. (IVL) has agreed to buy US-based FiberVisions Holdings, a global manufacturer of polypropylene (PP) fibers, for an undisclosed sum. The products made by FiberVisions are used in nonwoven industries and used for various applications in hygiene, wipes, and the construction, automotive and textile sectors. "The acquisition of FiberVisions will significantly enhance IVL's position in the world's most specialized fibers business for hygiene products, and complements IVL's strength as the world's largest polyester producer with FiberVisions as the largest producer of polypropylene fiber," said IVL.

CELANESE COMPLETES ASHLAND EMULSIONS BUY

US-based Celanese has completed its acquisition of certain emulsion product lines from US-based Ashland for an undisclosed sum. The deal involved Ashland's polyvinyl acetate (PVA) homopolymer and copolymer business, including the Flexbond and Vinac emulsions. Celanese and Ashland announced the deal in November 2011. Phillip McDivitt, general manager of Celanese's emulsion polymers business, said the acquisition will accelerate Celanese's growth of emulsion polymers in the Americas.

PFLEIDERER SELLS PLANTS TO PANELES ARAUCO

Germany-based engineered wood and laminated flooring firm Pfleiderer has agreed to sell its medium density fiberboard (MDF) and particleboard facilities at Moncure, North Carolina, US, to Chilean manufacturer Paneles Arauco for about $62m (€48m). Pfleiderer said the divestment is part of a restructuring under which it will also seek to sell the production sites of its Uniboard Canada subsidiary. Pfeiderer has six production sites in North America. Pfleiderer became a big buyer on US melamine markets following its acquisition of laminated flooring firm Pergo 2007, just before the collapse of US housing. Melamine provides the tough finish that extends the life of laminated flooring.

EUROPE

GERMANY MANUFACTURING CONTRACTION SLOWS

Germany's manufacturing output contracted again in December 2011, but at a slower pace than in November, noted global economics research group Markit. Its purchasing managers' index for Germany was 48.4, up slightly from 47.9 in November but still below the neutral "no-change" mark of 50.0. December data pointed to a slower and only modest decrease in German manufacturing output. This was despite a relatively sharp fall in new orders, which led to further backlog clearance and efforts by firms to lower their inventories. "Germany's manufacturing sector ended the year with another modest reduction of production, alongside a drop in new orders for the sixth consecutive month," said Markit senior economist Tim Moore. A "sustained moderation" in export sales was the main drag on the manufacturing sector during recent months, he added.

GERMANY LIKELY TO SLIP INTO SHORT RECESSION

Germany will likely slip into a short-term recession in the first half of 2012, as companies are curbing investments amid weakness in the global economy, unfavorable sale prospects and uncertainties in the eurozone, said economics research group DIW Berlin. "Germany's export-dependent economy cannot escape impacts from a weaker world economy," it said in a report. However, it said that in the second half of 2012, Germany's economy would recover because of rising exports and stronger domestic demand. For 2012, DIW expects Germany's GDP to grow by 0.6% year on year, compared with the 3.0% growth seen in 2011.

Europe petchem groups to feel credit pinch

Global credit ratings agency Fitch Ratings believes it is likely that access to bank funding this year will worsen and become more expensive for independent European refining and petrochemical groups as banks optimize their credit portfolios. "The highly cyclical nature of the refining industry, European refiners weak cash flows since 2009 and the persistent overcapacity make the refining industry one of the corporate sectors to which European banks are likely to reduce credit exposure this year," said Arkadiusz Wicik, director in Fitch's European energy, utilities and regulation team. "Fitch believes that the lower availability of credit will particularly affect leveraged independent refiners, especially those who rely on uncommitted lines or have large debt refinancing plans in 2012."

PETROPLUS TO HALT PRODUCTION AT REFINERIES

Switzerland-based refiner Petroplus will temporarily halt production at three of its five European refineries after banks froze $1bn (€770m) in credit lines. Petroplus plans to shut down in January refineries at Petit Couronne, France; Antwerp, Belgium; and Cressier, Switzerland. "The restart of the refineries is dependent on economic conditions and credit availability," the company said. Petroplus also said it had "open and constructive" discussions with all of its lenders in a meeting in Zurich in December.

RAIFFEISEN EXPECTS EUROZONE RECESSION

A recession can be expected to register in the eurozone from the end of 2011 to mid-2012, said Peter Brezinschek, chief analyst at Raiffeisen Bank International. Eurozone GDP can be expected to fall by 1% in 2012 year on year, with the turbulence of financial markets and political disputes in many countries and at the pan-European level affecting the real economy, he noted. "A clear solution to the [eurozone debt] problem has yet to be found, and this is reflected unequivocally by the global markets," said Brezinschek. "The distinct reticence of companies with regard to new investments and the increasingly gloomy prospects for exports are the primary reasons behind modest forecasts for the next six months."

ASIA

DOW-SIAM HPPO PLANT FINALIZES START-UP

US-based Dow Chemical's joint-venture 390,000 tonne/year propylene oxide (PO) plant with Thailand's Siam Cement Group (SGC) has completed a full capacity performance test, finalizing its start-up. The plant near Map Ta Phut, Thailand, operates on hydrogen peroxide to propylene oxide (HPPO) technology. Dow and SGC began feeding raw material into the plant in September 2011. The facility reached stable production levels in October, they said in a joint statement.

CHINA MANUFACTURING TO BE STABLE IN 2012

China's manufacturing sector showed stable growth in 2011 and the next year's prospects seem positive too, industry sources said. The purchasing managers' index (PMI), a measurement of the monthly performance of China's factories, averaged at 51.4% in 2011, according to data from China Federation of Logistics and Purchasing (CFLP). December PMI increased by 1.3 percentage points from November to 50.3%, according to the data. Going into 2012, CFLP analyst Zhang Liqun expects manufacturing growth will remain stable to positive based on healthy monetary policies.

TIANJIN RENTAI STARTS UP NEW POLYSTYRENE UNIT

China's Tianjin Rentai Chemical started up its new 140,000 tonne/year polystyrene (PS) unit in Tianjin last Wednesday, a company source said. The unit will initially produce general purpose PS (GPPS) but it will go on to also produce high-impact PS (HIPS) once fully operational, the source added. Tianjin Dagu Petrochemical's 500,000 tonne/year styrene monomer (SM) unit will supply the feedstock to Tianjin Rentai's PS facility, the source said. The PS unit is a joint venture between Tianjin Rentai Asset Management and Tianjin Dagu Petrochemical.

SHANGHAI PETROCHEMICAL TO RESTART CRACKER

Shanghai Petrochemical is expected to restart its 150,000 tonne/year naphtha cracker in Jinshan, China, around January 10-15 following a month-long turnaround, sources close to the company said. The company also operates another 700,000 tonne/year naphtha cracker at the site.

CHINA FIRMS SIGN JV TO BUILD MTO PROJECT

China's Baotailong has signed a joint venture with Heilongjiang LongMay Mining Group to build a 1.2m tonne/year coal-based methanol project and a 600,000 tonne/year coal-based olefins project, a company source said. Feedstock coal to the project located in Shuangyashan in north-eastern Heilongjiang province will be supplied by LongMay to the venture, the source said.

HANWHA TO SHUT PA PLANT IN APRIL, OCTOBER

South Korea's Hanwha Chemical plans to conduct two turnarounds of its 80,000 tonne/year phthalic anhydride (PA) plant in Ulsan this year, a company source said. The company plans to shut the PA plant for seven days of maintenance in April and for 15 days in October. Hanwha has been experiencing mechanical problems at its PA plant and was forced to shut the facility on December 22. The plant was restarted on December 28, the source said, without detailing the reasons for the shutdown. The plant has been running at around 60% of capacity since the restart, said the source.

HANWHA POSTPONES 2-EH/NBA SHUTDOWN TO MARCH

South Korea's Hanwha Chemical will postpone the shutdown of its 2-ethylhexanol (2-EH)/normal butanol (NBA) swing plant in Yeosu from March 13, to March 27, a company source said. "Hanwha Chemical has decided to postpone our shutdown schedule, so that we can coincide with Yeochun NCC's (YNCC) maintenance schedule," said the source. YNCC is planning to shut one of its 578,000 tonne/year naphtha crackers from March 20 to April 19. The source has estimated that Hanwha will be able to resume production on April 15. Hanwha's 2-EH/NBA swing plant can produce 110,000 tonnes/year of 2-EH and 10,000 tonnes/year of NBA.

CPC EYES TURNAROUND FOR PX UNIT IN AUGUST

Taiwan-based petroleum and chemical firm CPC is eyeing a month-long turnaround for its 260,000 tonne/year No. 3 paraxylene (PX) unit in Kaohsiung in August, a company source said. Meanwhile, the company has scheduled its 250,000 tonne/year No. 2 PX unit at the same site for a turnaround from mid-February to mid-April. No maintenance has been scheduled for its 150,000 tonne/year No. 1 PX facility in 2012.

YANGQUAN CARBIDE PLANT TO START IN MARCH

China's Yangquan Coal Industry Group's 1m tonne/year calcium carbide project in Shanxi province will be operational in March 2012, a company source said. Construction work began at the end of 2009. "After the project is completed, the calcium carbide supply can meet the demand of its subsidiary company Yangquan Coal Industry, and another corporation company chlor-alkali plant and Sanwei Group to produce PVC [polyvinyl chloride] and PVA [polyvinyl acetate]," the source added.

ZHEJIANG TO DOUBLE CAUSTIC SODA CAPACITY

China's Zhejiang Jiahua Group is building a 200,000 dry metric tonne (dmt)/year ion-exchange membrane caustic soda unit that will come on stream in June 2012, a company source said. The company runs a 200,000 dmt/year caustic soda unit at Jiaxing in Zhejiang. Ningbo Donggang, another company in Zhejiang, is also planning to raise its capacity by 200,000 dmt/year by April-May. There are seven chlor-alkali factories in Zhejiang province, with a total capacity of 1.45m dmt/year. After the expansion, the total capacity will reach 1.85m dmt/year, according to industry sources.

SINOPEC TO RAISE ITS ETHYLENE OUTPUT BY 0.3%

China's state-operated refining and chemical producer Sinopec is planning to produce 9.9m tonnes of ethylene in 2012, up by 0.3% from the previous year, a company source said. The growth rate is down from the 8.7% year-on-year growth target for 2011. Sinopec lowered its targeted growth for its ethylene output, because of negative production margins for ethylene since the second half of 2011, the source said. Sinopec may import ethylene to feed its derivate plants, primarily polyolefins plants, if the import cost is lower than producing the feedstock itself, the source added.

FORMOSA RUBBER PLANT TO COME ON IN 2013

Taiwan's Formosa Plastics Group will complete the construction of its 50,000 tonnes/year isobutylene isoprene rubber (IIR) plant at Ningbo of Zhejiang province at the end of the second quarter of 2013, a company source said. The company, with a planned investment of yuan (CNY) 18bn ($2.84bn), started the construction of the plant in September 2011, according to the source. "Domestic IIR producers will facing a challenging market because IIR output is expected to exceed downstream demand in the future," a market player said.

AEKYUNG TO SHUT TWO OF ITS PA LINES IN APRIL

South Korea's Aekyung is planning to shut down two of its phthalic anhydride (PA) lines in Ulsan for 15 to 20 days in April, a company source said. "Both plants will be shut as we need to change their catalysts," said the source. Aekyung operates five fully-owned PA plants at it Ulsan petrochemical complex. The PA lines that will be shut are its 20,000 tonne/year and 50,000 tonne/year lines.

MIDDLE EAST & AFRICA

IDEA TO BUILD $300M SODA ASH PLANT IN SAUDI ARABIA

Saudi Arabia-based IDEA Soda Ash and Calcium Chloride Co. (ISACC) plans to build a $300m (€231m) soda ash and calcium chloride plant in Al-Jubail, Saudi Arabia, the first of its kind within the nations of the Gulf Cooperation Council, noted US-based contractor Jacobs Engineering. Commercial operations should start in the first quarter of 2015, said Jacobs, which won a contract to provide the engineering and project-management services for the project. The plant's products, which Saudi Arabia is now importing, are used in oil and gas drilling, Jacobs said. The products are also used to make glass and detergents. The feedstock for the plant will come from mines within Saudi Arabia.

HUNTSMAN ACQUIRES PU SYSTEMS HOUSE

US-based chemical company Huntsman has acquired Turkey-based polyurethanes (PU) systems house EMA Kimya Sistemleri Sanayi ve Ticaret for an undisclosed sum. The Istanbul-based EMA systems house has the capacity to manufacture polyester polyols and blend methyl di-p-phenylene isocyanate (MDI) PU systems used in the insulation, automotive, adhesives, coatings, elastomers and furniture industries. EMI's 2010 revenues were about $17m (€13m).

Rex Features

DuPont targets sorghum


By: Joseph Chang
+1 713 525 2653



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