This week's world news

27 February 2012 00:00  [Source: ICB]

AMERICAS

WESTLAKE Q4 NET INCOME FALLS SHARPLY
US-based Westlake Chemical's fourth-quarter 2011 net income fell sharply year on year to $26.4m (€20.1m) from $84.1m, primarily as a result of lower sales prices for most of the company's major products. Westlake said earnings were lower as a result of higher feedstock costs, which were only partially offset by higher building products and caustic sales prices. Net sales for the fourth quarter were $859.2m - an increase from $795.4m in the same period of 2010, primarily because of higher sales volumes for polyethylene (PE), styrene and polyvinyl chloride (PVC) resin, as well as higher prices for building products and caustic soda, partially offset by lower building products volumes.

SHELL YET TO DECIDE ON US CRACKER SITE
Anglo-Dutch energy and petrochemical firm Shell still expects to decide on the site for a new cracker in the northeast US early this year, spokeswoman Kayla Macke said. "We expect to make the decision on the site selection in early 2012/Q1," she said. Shell is considering Ohio and West Virginia as possible sites for its project. Shell expected to make an announcement on the site in January, but in the middle of the month, the company said an announcement could come after the release of its fourth-quarter earnings on February 2.

COCA-COLA TO STICK TO BIOPLASTIC GOAL
US beverage company Coca-Cola will maintain its course towards using 100% bio-based polyethylene terephthalate (PET) in its PlantBottle packaging, even if natural gas prices become cheaper, said Shell Huang, director of packaging research. "Coca-Cola's initiative towards bioplastic is not purely cost-driven or capital-driven," she said. "It is really part of the corporate responsibilities. Somebody needs to lead this [initiative], and the leader sometimes has to pay more." Huang participated in a panel discussion at a bioplastic seminar hosted by US consulting firm Jim Lunt & Associates in Orlando, Florida.

TRONOX SWINGS TO Q4 NET PROFIT ON HIGHER PRICES
US-based titanium dioxide (TiO2) producer Tronox reported a fourth-quarter 2011 net profit of $66.2m (€50.3m), compared with a loss of $39.5m in the same period a year earlier, aided by higher prices. The company's sales rose by 17.4% year on year to $382.6m, despite a decline in sales volume. "The fourth quarter of every year is typically a lower sales volume period, which was compounded last year by reductions in sales volumes resulting from customer inventory management, the government-led slowdown of the rate of economic activity in China and the tragic flood in Thailand," said Tom Casey, CEO of Tronox. "We continue to believe that TiO2 demand will grow at rates roughly correlated to GDP growth over the long term, and that incremental supply at both the pigment and ore levels of our supply chain will remain limited."

NEW PETCHEM PROJECT POSSIBLE IN VENEZUELA
Venezuela president Hugo Chavez has announced that the country may build a petrochemical plant at the Santa Ines industrial complex. The industrial complex is an agro-industrial project in the Barinas province of Venezuela, the country's ministry of communication and information said. Chavez also presented proposals for the construction of a pipeline from the Orinoco oil-producing region to Barinas and a railroad line to the complex. "Here we could even install a petrochemical plant," Chavez said.

LANXESS TO INVEST $10M IN BIOAMBER
Germany's LANXESS is investing $10m (€7.6m) in US-based renewable chemicals company BioAmber. As part of the investment, LANXESS will receive a minority shareholding in Minnesota-based BioAmber and a seat on the board of directors. "Our investment in BioAmber shows our commitment to launching a new generation of plasticizers that meet regulatory requirements and can also score in terms of sustainability," said Jorge Nogueira, head of LANXESS' functional chemicals business unit. In October 2011, LANXESS agreed a deal with BioAmber jointly to develop succinic acid-based plasticizers.


EUROPE

INEOS DECLARES FORCE MAJEURE ON PROPYLENE
Switzerland-headquartered INEOS has declared force majeure on propylene supplies at its site in Cologne, Germany, following an unplanned shutdown at its No. 4 cracker. There was a leak on the superheater, which forced the cracker to shut down. Initial indications suggest that it is likely to be off line for around 21 days. INEOS has two crackers at the Cologne site, which have nameplate capacities of 450,000 tonnes/year and 660,000 tonnes/year.

APOLLO COMPLETES TAMINCO BUYOUT
Private equity firm Apollo Global Management has completed its acquisition of Belgium-based alkylamines and derivatives producer Taminco for around €1.1bn ($1.5bn). US-based investment bank Young & Partners served as financial advisor to Apollo in the transaction. "We are pleased to have worked with Young & Partners in this transaction," said Scott Kleinman, lead private equity partner at Apollo. "Taminco is an excellent addition to Apollo's private equity portfolio and furthers our commitment to the chemical industry."

TAIF EYES $14BN INVESTMENT IN PETCHEMS
Russia-based holding company TAIF plans to invest rouble (Rb) 425bn ($14bn, €11bn) to modernize its refining and petrochemical units and build new production facilities. TAIF CEO Albert Shigabutdinov said a key project of the company's modernization programme is to construct a new 1m tonne/year ethylene unit at the premises of its subsidiary Nizhnekamskneftekhim (NKNKh). TAIF also plans to build new refinery units and infrastructure projects, he added, but declined to provide details. Based in Tatarstan, central Russia, TAIF controls Russia's leading petrochemical producers, Kazanorgsintez and NKNKh, as well some other refineries and assets.

BRENNTAG 2011 PROFIT SURGES ON VOLUMES
Germany-based chemical distributor Brenntag posted a surge in its profit after tax for the full year 2011 to €279.3m ($367.5m) from €146.6m in the previous year on the back of higher sales and strong volumes. Sales in 2011 increased by 13.5% year on year to €8.7bn on higher selling prices and stronger volumes. "With the expectation of a slower but nevertheless growing world economy and the continuation of the positive trends in the chemical distribution industry, excluding exchange rate effects, Brenntag expects a continued positive earnings development in 2012," it said.


ASIA

CHINA CHALLENGED TO BUILD CHLORIDE TIO2 PLANT
China-based competitors in the titanium dioxide (TiO2) industry are finding it hard to build a chloride-process TiO2 facility, as underlined by recent allegations of intellectual property theft, said Tom Casey, CEO of US-based producer Tronox. He said that many attempts to build a chloride-process TiO2 plant in China in past years failed because of the sophisticated and demanding intellectual property necessary to build such a facility. Recent reports about an alleged theft of DuPont TiO2 intellectual property involving a Chinese firm showed China's great interest in a chloride-process TiO2 plant, but it also underlined the degree to which Chinese firms lacked confidence in their ability to build such a plant on their own, Casey said.

RELIANCE, SIBUR FORM INDIA BUTYL RUBBER JV
India-based petropchemical firm Reliance Industries has agreed to form a 100,000 tonne/year butyl rubber joint venture with Russia's SIBUR. The $450m (€342m) joint venture, called Reliance Sibur Elastomers, will be located at Jamnagar in India's western Gujarat state. After start-up, expected for mid-2014, Reliance Sibur Elastomers will be India's first butyl rubber manufacturing facility, Reliance said. The plant would meet demand from India's automotive sector, replacing imports, the company added. Reliance will hold 74.9% in the venture, with SIBUR holding the remaining 25.1%.


MIDDLE EAST & AFRICA

Q-CHEM RAMPS UP MESAIEED HDPE UNIT
Qatar Chemical (Q-Chem) is in the process of ramping up production at its 450,000 tonne/year high density polyethylene (HDPE) unit at Mesaieed after restarting the unit, a source close to the company said. The unit was shut for a turnaround in early February. Q-Chem's 250,000 tonne/year HDPE facility at the same site was operating at normal rates during the shutdown of the bigger unit. "Supply [of HDPE] will still be a little tight for the rest of February up until [the] first half of March," the source close to the company said. "Regular shipments should resume by end March." Q-Chem is a joint venture between US-based Chevron Phillips Chemical and state-owned Qatar Petroleum.


By: Joseph Chang
+1 713 525 2653



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