This week's world news

20 October 2008 00:00  [Source: ICB]

ECE EYES SOUTHEAST US ETHANOL MARKET

US-based East Coast Ethanol (ECE) plans to build a 110m gal/year (416m liter/year) ethanol plant in the US state of Georgia. ECE said three other plants with the same capacity would be built in Florida, South Carolina and North Carolina. The total investment will be $871m (€645m).

 

LUBRIZOL BUYS TWO BUSINESSES FROM SK

US engineered polymers producer Lubrizol has bought the thermoplastic polyurethane (PU) and conductive polymer businesses of South Korean producer SK Chemicals for an undisclosed sum. The two businesses, which reported annualized revenues of roughly $30m (€22m) in 2007, will be incorporated under Lubrizol’s Estane engineered polymers line.

 

SINKHOLE IN RUSSIA NEARS POTASH RAIL

A sinkhole in Berezniki, Russia has moved three meters (10 feet) closer to a rail bypass used by Russian producer Silvinit. It is threatening to disrupt potash shipments, according to International Potash, also of Russia, which markets potash for Silvinit.

 

IMERYS TO SHUT UK CALCIUM CARBONATE

France-based Imerys plans to close its Salisbury ground calcium carbonate plant in the UK early next year because of lower demand. “The significant reduction in paper production capacity within the UK, combined with a slowdown in the economy, has led to a decline in overall demand,” the pigment maker said in a statement.

 

CIECH, TWO OTHERS TO BUY ORLEN’S ANWIL

Poland’s largest chemical group, Ciech, and two nitrogen fertilizer firms have signed a letter of intent to purchase a majority stake in Anwil, the polyvinyl chloride (PVC) and nitrogen fertilizer subsidiary of Polish state giant PKN Orlen. The deal will cost the companies approximately zlotych 1.7bn ($669m, €488m), Ciech said.

 

OLIN HIT BY $26.6M IMPAIRMENT CHARGE

US-based chlor-alkali maker Olin expects its third-quarter earnings to be hit by a $26.6m (€19.4m) impairment charge on its investment in corporate debt securities. “On October 1, 2008, the issuer of these debt securities announced it would cease trading and appoint a receiver as a result of financial market turmoil,” the company said without revealing the name of the issuer.

 

ECONOMY THREATENS POLAND PRIVATIZATION

Global economic turmoil could derail Poland’s revived chemical industry privatization. “I think that in the current global environment, it could be difficult to find investors for Polish chemical companies,” analyst Kamil Kliszcz of Poland’s BRE Bank said. “The chemical industry will be hit early on by the world slowdown and even the international giants will have limited financing for acquisitions.”

 

PACIFIC ETHANOL STARTS CALIFORNIA PLANT

US-based Pacific Ethanol has begun production at a $150m (€111m) ethanol plant in California, its second production facility there and the largest ethanol plant in the state, the company said. The 60m gal/year (227m liter/year) mill increased Pacific’s total output to 220m gal/year, the company reported.

 

EC ADDS VITAMIN A, CARBON, GRAPHITE TO REACH

Vitamin A, carbon and graphite have been added to the list of substances subject to registration under the chemical legislation Reach. “Insufficient information is known about these substances for them to be considered as causing minimum risk,” said the European Commission. Some other substances will no longer need to be registered under Reach, including certain vegetable oils, fats and waxes and animal oils obtained from natural sources.

 

TEIJIN DOWNGRADED

US credit ratings agency Moody’s Investors Service has downgraded Japan-based chemical firm Teijin’s yen 15bn ($149.5m) series 4 unsecured straight bond to A3 from A1. “The rating action reflects that the quality of asset… has deteriorated more than Moody’s original expectation in the current turmoil in financial markets around the world,” Moody’s senior analyst Noriko Tanaka said in a statement.

 

ROSNEFT PLANS HUB

Russia’s state-run oil company Rosneft plans to build a 1m tonne/year polyolefins complex, centered on a 20m tonne/year refinery, in Nakhodka, in the country’s far eastern Primorie region, according to local authorities. A feasibility study should be completed in May. The first phase of the petrochemical hub, with refining capacity of 10m tonnes/year, could come on stream in 2013.

 

BASF BUILDS CELLASTO PLANT IN SHANGHAI

German petrochemical major BASF plans to build a plant in Shanghai, China, that will manufacture automotive spring aids made from the company’s Cellasto cellular polyurethane (PU)-based elastomer. “This investment will considerably expand our position in Asia,” said Jacques Delmoitiez, who is president of BASF Polyurethanes.

 

HUNTSMAN LIFTS MDI FM

US producer Huntsman has lifted a force majeure (FM) for all methyl di-p-phenylene isocyanate (MDI) products made at its plant in Geismar, Louisiana, US. Huntsman declared force majeure on September 4, following Hurricane Gustav. FM remains in effect for polyols manufactured at Geismar.

 

AKZO, KAO AGREE ON FATTY AMINES BUY

AkzoNobel has agreed to acquire part of Japan-based Kao Chemicals’ fatty amine business in Europe, for undisclosed terms. “This transaction is in line with our strategy to focus on core markets and optimize the use of our manufacturing capacity,” said Tommy Ohlin, general manager of the Netherlands-based coatings manufacturer’s surface chemistry business in Europe.

 

INDIA LEVELS PLAYING FIELD FOR BIG CHEMS

India will allow medium-sized and large enterprises to manufacture chemicals and plastic products now reserved for small-scale industries, the government said on last week. The move is intended to improve the competitiveness of domestic industry against imports by enabling economies of scale, boosting innovation and creating new jobs.

 

BAVC: GERMAN CHEMS OUTLOOK DARKENS

The outlook for Germany’s chemical industry keeps worsening as increasingly negative impacts from the global credit crunch add to challenges from feedstock and energy costs, a strong euro and weak European industrial demand, according to the German chemical employers’ group Bundesarbeitgeberverband Chemie (BAVC). Earlier this year, the industry had hoped for 2.5% overall production growth in 2008, but a rate of only 1% is more likely, the Wiesbaden-based group said last week.

 

AGRIFOS REOPENS TEXAS FERTS PLANT

US phosphate fertilizer producer Agrifos has restarted production at its 625,000 tonne/year Pasadena, Texas, facility after being flooded by Hurricane Ike on September 12. Total phosphate fertilizer losses were estimated at 75,000 tonnes. The firm expects full output to be restored in the next two weeks.

 

AIR PRODUCTS PLANS PROJECTS IN E. EUROPE

US industrial gases supplier Air Products plans several new projects in Eastern Europe to capitalize on the region’s high-growth markets. They include two high-purity nitrogen generators to supply US aluminum producer Alcoa’s plant in Samara, Russia. Due to be completed in 2009, the

units would replace the site’s existing generator.

 

PAKISTAN APPROVES $340M DAP SUBSIDY

The Pakistani government has agreed to provide importers and producers with a Pakistan rupees 27bn ($340m) diammonium phosphate (DAP) fertilizer subsidy. The date for beginning the subsidy has not been announced.

 

POLAND’S ORLEN DELAYS STRATEGY RELEASE

PKN Orlen may delay the release of its revised business strategy because of the instability in world financial markets, the Polish refining, chemical and petrochemical group said. The new strategy is scheduled for publication at the end of October or in early November, but Orlen said it would probably be published two weeks later.

 

DOW AWARDS SUPPLY DEAL TO HUASHENG

Dow Chemical subsidiary Dow Epoxy has awarded a 10-year, $400m (€296m) feedstock contract for its new liquid epoxy resin plant and glycerin-to-

epichlorohydrin facility to Shanghai Tian Yuan Huasheng Chemical, which will provide caustic soda and anhydrous hydrogen chloride for the Shanghai-based plant. The facility is Dow Epoxy’s biggest investment in China, and is expected to come on stream in phases between 2010 and 2011.

 

PANAMA CANAL GETS $2.3BN FOR EXPANSION

Panama has lined up $2.3bn (€1.7bn) in financing for the $5.25bn expansion of the Panama Canal from five agencies in Latin America, Europe and Asia. The centerpiece of the project, which began in September 2007, is a third set of locks to handle post-Panamax-sized ships carrying up to 12,000 shipping containers at a time.

 

IRFA: ETHANOL HELPS EXTEND CORN SUPPLY

The US ethanol industry – although a major consumer of corn – also helps extend the US corn supply by producing large quantities of livestock feed, the Iowa Renewable Fuels Association (IRFA) said last week. The statement is part of an ongoing campaign to fend off assertions that the US ethanol industry’s growing demand for corn is driving up the cost of food. “US ethanol plants produce enough grains to feed all the cattle in Texas, Nebraska, Kansas and Colorado,” IRFA said.

 

TCL SHUTS PA PLANT ON DUMPING SURGE

India’s Thirumalai Chemicals has joined forces with domestic competitors to seek tariff protection from dumping of phthalic anhydride (PA) after suspending production on October 8. “This is a consequence of a vertical fall in demand and prices in India caused by a sudden surge in imports,” Thirumalai said. “This has resulted in serious market disruption.”

 

SUNDE DECLARES FORCE MAJEURE ON STYRENE

Norwegian expandable polystyrene (EPS) producer Sunde has declared force majeure on styrene effective immediately, owing to essential maintenance at its Alesund plant, a company source said. The plant will need to be shut down for three weeks, while force majeure is projected to last for around one month.

 

US GREASE PLANTS MAY CLOSE ON FEEDSTOCK

Five US grease plants have closed and the number is expected to rise as raw material costs escalate and as manufacturing moves to Asia, a supplier said last week. During the past five years, Brooks Technology, Fuchs, ExxonMobil, Southwest and Shell have closed grease plants, Paul Converso of US-based Battenfeld Grease & Oil said at a meeting of the Independent Lubricant Manufacturers Association in Scottsdale, Arizona.

 

AZELIS WINS JOHNSON MATTHEY CONTRACT

Azelis has won a contract to distribute Johnson Matthey’s catalysts in Europe, the Italy-based specialty chemical distributor said last week. Azelis will handle Johnson Matthey’s Vertec range of titanate catalysts and new zirconium catalysts in Benelux, Germany, Switzerland and Austria, as well as Central and Eastern Europe. The agreement takes effect in January 2009. Contracts already exist in France, Italy and the UK.

 

SHELL SUPPORTS SLOWER BIOFUELS TARGETS

A top executive from global oil major Shell has supported the UK government-commissioned Gallagher review, which advocates a cautious approach to European biofuel targets.

           

OXEA TO PRODUCE BUTYRIC ACID AT US SITE

OXEA plans to produce butyric acid at its site in Bay City, Texas, beginning late next year to meet rising demand, the Germany-based producer of solvents, polyols and oxo derivatives said. The company will upgrade its carboxylic acids plant at Bay City, with completion expected in the third quarter of 2009. OXEA currently supplies North American customers with butyric acid shipped from Europe.

 

TER HELL WINS BOREALIS DISTRIBUTION CONTRACT

Germany’s Ter Hell Plastics has won a contract with global plastics producer Borealis to distribute its polyethylene (PE) and polypropylene (PP) in France and Eastern Europe, and PP in Germany, Austria and Switzerland. The distribution agreement will focus on applications in thin wall packaging, house wares, caps and closures and the health care sector.       

 

ULTRAPAR COMPLETES UNIAO TERMINAIS BUY

Brazil’s Ultrapar has completed its purchase of terminal operator Uniao Terminais from petrochemical holding company Unipar. Ultrapar said it paid, through its Ultracargo subsidiary, reais 465m ($202m) for Uniao Terminais, which has operations in the ports of Santos, in Sao Paulo state, and in Rio de Janeiro.

 

FIRE STOPS TPC’S EVA/LDPE LINES

Thailand-based Polyethylene Company’s 70,000 tonne/year ethylene vinyl acetate (EVA)/low density polyethylene (LDPE) lamination lines on Jurong Island, Singapore, were shut down in early October following a fire, a company official said last week. “I doubt there will be any impact on the market as we have been selling very small volumes prior to the outage due to weak demand and ample stocks,” he added.

 

SIKA ACQUIRES PELPLAST

Swiss specialty chemical producer Sika has acquired Sweden’s Pelplast Utvecklings for an undisclosed amount. With this acquisition, Sika expands its technology offering in specialty epoxy resins for compact floors.

 

HUNTSMAN GETSINJUNCTION IN MERGER

US-based Huntsman has won a temporary injunction against Credit Suisse and Deutsche Bank in its Texas court fight over its merger with compatriot Hexion Specialty Chemicals. The injunction, which will expire on November 1, prevents global investment banks Credit Suisse and Deutsche Bank from filing any lawsuit seeking to declare that the Hexion/Huntsman merger is insolvent, or that the combined company would not be able to pay its debts.

 

GERMAN ECONOMIC SENTIMENT COLLAPSES

German economic sentiment has collapsed this month, the country’s ZEW Institute for European Economic Research said. The institute’s indicator of economic expectations for Germany dropped by 21.9 points in October, to -63.0, well below its historical average of 27.5 points. “The concerns of the financial market experts that the crisis on the financial markets might spill over to the real economy increased this month,” said ZEW president Wolfgang Franz.

ICIS Copyright © Reed Business Information 2009

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