This week's world news

17 January 2013 19:50  [Source: ICB]

AMERICAS

AXIALL NEW NAME FOR MERGED GEORGIA GULF
US-based Georgia Gulf's pending commodity chemicals business merger with US-based PPG will be named Axiall. Announced in July, the $2.1bn deal is expected to close by the end of January. Axiall will trade on the New York Stock Exchange under the ticker symbol AXLL. The combined company is expected to have annual revenues of around $5bn and be the third-largest chlor-alkali producer and second-largest vinyl chloride monomer (VCM) producer in North America.

PPG, ESSILOR MAY CHANGE STRUCTURE OF OPTICAL JV
US-based paintings producer PPG Industries said it and Essilor may change the structure of their joint venture. Currently, PPG holds a 51% stake in Transitions Optical, which makes photochromic lenses for optical manufacturers. Essilor is the joint venture's largest customer. PPG may sell part or all of its interest to Essilor, or Essilor may sell part or all of its interest to PPG. Discussions could continue over the next several months.

DUPONT TITANIUM PICKS OMYA AS DISTRIBUTOR
DuPont Titanium Technologies has signed a distributor agreement with Omya. Through its subsidiaries Durr Marketing, Azalea Color and Lipscomb Chemical, Omya will become a national distributor and represent DuPont Titanium Technologies' products in the US and western Canada. Switzerland-headquartered Omya is a global producer of industrial minerals and a worldwide distributor of chemical products.

OVERSUPPLY LEADS TO 400 HEMLOCK LAYOFF
Hemlock Semiconductor will lay off about 400 employees because of oversupply in the polysilicon industry and possible tariffs on products sold in China. The workforce reduction affects about 300 employees at its Tennessee site, which will maintain the minimum workforce needed when construction of its new plant is complete. The Michigan site will have 100 layoffs and continue to reduce production to current demand.

OXEA TO FURTHER BOOST CAPACITIES AT TEXAS SITE
Germany-based oxo intermediates and derivatives producer Oxea plans to further expand ­capacities at its site in Bishop near Corpus Christi, Texas. The expansion would add significant volumes, beyond already announced capacity increases for potassium formate and trimethylolpropane (TMP), the company said, without disclosing capacity, financial or other details.

CLARIANT OPENS NEW $20M SITE IN MEXICO
Swiss specialty chemicals maker Clariant has inaugurated a new production site for its industrial and consumer specialties business unit in Coatzacoalcos, Mexico. Clariant has invested more than $20m in the site, which will produce several chemical specialties and technological solutions for markets including personal care, crop protection, metalworking, construction and painting.

BRAZIL BANK GRANTS LOAN TO ADECOAGRO
Brazil's national development bank BNDES said it would lend Brazilian reais (R) 488.6m ($240.7m, €180.5m) to agricultural firm Adecoagro for the construction of a sugar and ethanol plant in southwest Brazil. Located in Ivinhema, Mato Grosso do Sul, the plant will process an estimated 4.1m tonnes/year of sugarcane. The plant is expected to begin operations in 2014 and will include a 120-megawatt (MW) biomass power plant.

ENERKEM TO COMMISSION WASTE-TO-CHEMS PLANT
Enerkem expects to begin commissioning its Edmonton renewable chemicals and biofuels plant in Alberta this summer, the Canadian renewable chemicals firm said. The plant will use municipal non-recyclable and non-compostable waste to produce renewable fuels and chemicals. It will have a total capacity of 38m litres/year to produce ethanol and methanol. Enerkem closed a Canadian dollar (C$) 37m ($37m) deal with two investors, Waste Management of Canada and EB Investments, to help finance the project. Enerkem is developing a similar project in Pontotoc, Mississippi.

LSB TO RESUME AMMONIA PRODUCTION
US-based LSB Industries expects ammonia production to resume in early February at its Pryor plant in Oklahoma, following unplanned maintenance on a compressor and the installation of a new converter. Announced on 21 November, LSB estimated that the maintenance period would last for six to eight weeks at a cost of $2m per week in lost revenue. However, completion was pushed back as a result of delivery delays for some of the converter parts.

US TO BE 99% ENERGY SELF-SUFFICIENT BY 2030
The US will be nearly energy self-sufficient by 2030 while global production of energy will increase steadily in the next two decades to meet the world's consumption needs, said BP's Energy Outlook 2030. Growing production of resources such as tight oil and shale gas will lead US production to reach 99% of domestic consumption by 2030, up from 70% in 2005. China will match Europe as the world's leading ­energy importer by that time, the report stated, and will replace the US as the world's largest oil ­importing nation by 2017.

RENTECH NITROGEN FINISHES UREA EXPANSION
US-based Rentech Nitrogen has completed a 15% urea capacity expansion at its plant in East Dubuque, Illinois. Capacity increased by 21,900 tonnes/year. The additional urea will be converted into diesel exhaust fluid (DEF) and sold to Yara North America, which has exclusive rights under a long-term agreement to purchase DEF produced at the facility. Rentech began supplying Yara with DEF last year. The total capital cost of the expansion project was about $7m.

BRAZIL 2012 CAUSTIC SODA CONSUMPTION DROPS 1.0%
Brazil consumed 2.483m dry metric tonnes (dmt) of liquid caustic soda in 2012, down by 1.0% from the 2.509m dmt consumed during 2011, the country's association of chlor-alkali industries, Abiclor said. Brazil's domestic production of liquid caustic soda in 2012 was 1.375m dmt, 1.6% higher than the 1.353m dmt produced in 2011. Liquid caustic soda imports were 1.126m dmt in 2012, down by 4.1% from 1.174m dmt imported in 2011. The US was Brazil's principal source.

EUROPE

NAPHTACHIMIE CRACKER ISSUES COULD LAST A YEAR
Naphtachimie's cracker at Lavera in the south of France may not run at full rates for up to 12 months following a fire at one of the unit's main compressors, market sources said. The Naphta-chimie cracker, which has a nameplate capacity of 120,000 tonnes/year of butadiene (BD), 775,000 tonnes/year of ethylene and 540,000 tonnes/year of propylene, is a 50:50 joint venture operation between Switzerland-headquartered INEOS and France-based Total. The fire on 22 December led to a complete shutdown of the facility, which also includes polyolefins, ethylene oxide (EO) and ethanolamines production.

EVONIK INVESTS IN EMERALD CLEANTECH FUND III
Evonik Industries is investing an undisclosed amount in the Emerald Cleantech Fund III of Switzerland-based Emerald Technology Ventures, the German specialty chemicals maker said. "Through the investment in Emerald, ­Evonik gains access to innovative start-up companies with disruptive technologies in new materials and specialty chemicals ­including energy technologies and resource efficiency," it said in a statement. The term disruptive technology refers to an innovation that can radically transform markets.

CLARIANT ACQUIRES COSMETIC RAW MATERIALS
Clariant has signed an agreement to acquire France-based Cosmetic Raw Materials (CRM) International for an undisclosed fee, the Swiss specialty chemicals group said. The transaction is expected to close by the end of March 2013. The acquisition of CRM International, a manufacturer of natural cosmetic ingredients, is part of Clariant's strategy to develop and strengthen its industrial and consumer specialties business' portfolio, it added.

BERNSTEIN MAKES TOP 2013 STOCK PICKS
Netherlands-based paintings and coatings company AkzoNobel, France-headquartered industrial gases major Air Liquide and Norwegian fertilizer producer Yara are the listed companies most likely to outperform the wider European chemicals market in 2013, Bernstein Research said. The US financial analyst added that the chemicals sector was one of the strongest-performing European markets in 2012, with the Dow Jones Stoxx 600 Chemicals (SX4P) index returning 29.5% during the year, compared to 14.4% for the broader Stoxx ­Europe 600 Price (SXXP) index.

EUROPE CHEMS THREATENED BY WEAK ECONOMY - HSBC
The European chemical sector's current outperformance of general markets may be threatened by the sluggishness of wider macroeconomic growth, HSBC said. The sector outperformed the general European market by 12% in 2012, also beating the US and Asian chemicals sectors, despite the region's economic woes during the year. However, the global macroeconomic environment will need to rally this year to maintain the current rate of growth, according to the bank.

ECHA EXAMINES ­CADMIUM RESTRICTION CASE
The European Chemicals Agency (ECHA) is examining the case for expanding the restriction on cadmium in certain plastics, it said. "Following a request from the ­European Commission, the ECHA is examining the case for expanding the restriction on cadmium in plastics from the current 16 specific plastic materials listed in Annex XVII of Reach [Registration, Evaluation, Authorisation and Restriction of Chemicals] to all plastic materials." The agency is also asking for evidence to help identify the impact of this potential expansion, it added.

ASIA

CONSTRUCTION DATE FOR VIETNAM'S $9BN COMPLEX
Construction of Vietnam's new $9bn (€6.75bn) refinery and petrochemical complex in Nghi Son will start in the second quarter of the year, said a spokesperson for Japan's Mitsui Chemicals, which has a 4.7% stake in the project. "Commercial operation will be in the second quarter of 2017," he added. The project is expected to have a 200,000 bbl/day refining capacity and will produce 500,000 tonnes/year of liquefied petroleum gas.

JIANGSU SANDING STARTS BUILDING $4BN PROJECT
China's Jiangsu Sanding Petrochemical and Technology has started building its planned yuan (CNY) 25bn ($4bn) petrochemical and specialty materials project in Yancheng, a company source said. Construction of a 1m tonne/year caprolactam (capro) project at the site at Jiangsu province in eastern China commenced following a groundbreaking ceremony held on 1 January, the source said. The project will roughly double China's annual capro ­capacity, which stood at 1.115m tonnes/year in 2012.

QILU TO START UP NEW HDPE/LLDPE SWING PLANT
China's Qilu Petrochemical plans to start up its new 250,000 tonne/year high density polyethylene (HDPE)/linear low density polyethylene (LLDPE) swing plant at Zibo in Shandong province this week, a company source said. The company completed the construction of this plant on November 2012. Qilu Petrochemical is a subsidiary of state-owned oil giant Sinopec.

MITSUBISHI CHEMICAL PLANS MIBK PLANT OVERHAUL
Japan's Mitsubishi Chemical plans to shut its 20,000 tonne/year methyl isobutyl ketone (MIBK) plant in Mizushima in early June for annual maintenance, a company source said. The plant's turnaround is scheduled to last approximately five weeks, the source added. Mitsubishi Chemical is one of the three MIBK makers in Japan. The other producers are Mitsui Chemicals, whose plant has a nameplate capacity of 30,000 tonnes/year, and KH Neochem, which can produce 15,000 tonnes of MIBK annually.

KUOKUANG TO COMPLETE MALAYSIA PROJECT STUDY
Taiwan's Kuokuang Petrochemical Technology is conducting a feasibility study on its proposed project in Malaysia that is expected to be completed by the middle of this year, an industry official said. "A feasibility study on the project will be concluded by end-June 2013," said Jack Shieh, executive director of the Petrochemical Industry Association of Taiwan (PIAT). The project, which was originally planned to be built at Changhua County in Taiwan, may fare better in Malaysia, where a major regional petrochemical hub is being developed, said Shieh.

FPC TO START COMMERCIAL OPS AT NEW SAP UNIT IN FEB
Taiwan's Formosa Plastics Corp (FPC) is likely to start commercial operations at its new 60,000 tonne/year super absorbent polymer (SAP) plant located at Mailiao in February, a source familiar with the matter said. Trial runs are being conducted at the plant, the source said, without further elaboration. "If nothing goes wrong, commercial operations are likely to begin by February," the source added. SAP is primarily used in the production of diapers and feminine hygiene products.

INDIA SHELVES PROPOSED IMPORT DUTY REVAMP
India has decided to shelve a proposed rationalisation of its inverted import duty structure on chemicals and petrochemical products for now, fearing the measure would translate to lower government revenues, a senior official from the Ministry of Chemicals and Fertilizers said. "The Ministry of Finance has indicated that [a] reduction in peak import duty of 10% has been ruled out since revenue collections were depressed on this account," the official said.

HONG KONG PETCHEM TO SHUT PS UNIT IN FEBRUARY
Hong Kong Petrochemical plans to shut its 140,000 tonne/year polystyrene (PS) facility in early February for maintenance, a source close to the company said. The plant, located in Yuen Long Industrial Estate in New Territories, is scheduled to shut for around one week. The facility produces both general purpose PS (GPPS) and high impact PS (HIPS) resins. PS is a plastic resin used in packaging and the manufacturing of toys, utensils, consumable items and consumer electronics.

ASIA TO RECEIVE 500,000 TONNES NAPHTHA SUPPLY
Asia will receive at least half a million tonnes of deep-sea naphtha from northwest Europe, the Mediterranean and the US from the second half of February, traders said. The incoming flows are already pressuring down prices, they said. Some market participants said the arbitrage volume of at least 500,000 tonnes is mainly heavy naphtha and the market still faces a shortfall of open-spec naphtha.


By: Will Beacham
+44 20 8652 3214



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