November 2010 Archives

ECHA and Cefic interviews should reveal Reach sentiment

By Will Beacham on November 24, 2010 3:45 PM | No Comments | No TrackBacks
Ahead of the impending 30 November deadline for Europe's Reach regulation I have lined up interviews with the European Chemicals Agency's executive director, Geert Dancet, plus industry trade body Cefic's Reach expert Erwin Annys. 

Europe's chemical industry has been rushing towards this deadline because failure to comply will mean producers or exporters are doing business illegally. There have been all sorts of problems in the run up including the prospect that supply chains could be broken if key raw materials become unavailable. 

I will be asking Cefic and ECHA about their experiences so far. The disastrous IT issues during the preregistration phase do not seem to have been repeated. But how well is ECHA coping with the flood of applications at this stage? Is it resisting calls from industry to keep the names of registrants confidential on its website? 

And how satisfied are Cefic's members with the costly registration process? The operation of the data-sharing Substance Information Exchange Forums (SIEFs) has also been fraught with danger. 

On 1 December we move to the next phase of Reach - evaluation. What is the timetable for this? How long before we see the first prosecution of an illegal producer/importer from a policing authority such as the UK's Health and Safety Executive?

Upbeat CIA dinner but costs of Reach revealed

By Will Beacham on November 19, 2010 11:01 AM | No Comments | No TrackBacks
man on money.jpgThe annual Chemical Industries Association (CIA) dinner took place in London last night with a much more optimistic atmosphere than for the last couple of years. Many of us trade journalists were guest either of the CIA or chemical producers themselves.

With the 30 November deadline approaching, Europe's chemical legislation Reach was a hot topic. I got talking to the CEO of a medium-sized UK-chemical manufacturer who revealed that he was preparing to pay over £100,000 to register just one substance. To him this is worthwhile because there is only one other player in the UK market and he doesn't want a monopoly to develop. He calculated it would take two years to earn back this investment and seemed not at all upset about this level of payment.

A lot of people, particularly the Chinese, have dropped out of the Substance Information Exchange Forum (SIEF) for this product leaving just the two remaining participants to share all the costs.

If this level of investment is required for a single substance the mind boggles at costs for producers with a broad portfolio.

Earlier this week I heard that BASF has spent E700m on administering Reach. If this is true it is a staggering amount. I will try to find out. 

Oltchim privatization plans unveiled

By Will Beacham on November 17, 2010 3:51 PM | No Comments | No TrackBacks
After intervention from the International Monetary Fund (IMF), Romania's economy ministry aims to sell its 54.79% majority stake in loss-making chemical producer Oltchim, according to ICIS news. 

Germany's Petro Carbo Chem - an activist shareholder is likely to be interested. Economy mnister Ion Ariton is also revealed that Oltchim's creditors, including Erste Group's Banca Comerciala Romana could convert debt into shares. 

Karoly Borbely, state secretary at the economy ministry, said that two investment funds are interested in buying the state's stake. I've previously reported that these are thought to be US groups.

Letter reveals PCC and Oltchim are at loggerheads

By Will Beacham on November 12, 2010 10:44 AM | No Comments | No TrackBacks
Thumbnail image for oltchim.jpgWe at ICIS felt a bit of the heat generated from an antagonistic shareholder/owner relationship this week. An e-mail arrived from Romania's Oltchim complaining about our coverage of statements made by Germany's Petro Carbo Chem, which holds a 12% stake in Oltchim.

The company complained about our coverage (also reported on this blog), of PCC's renewed interest in making a bid for the troubled company. They did not accuse us of inaccuracy, but were upset by the prominence we gave to to PCC's views. 

To redress the balance we published another story highlighting Oltchim's determination to restart the Arpechim unit which had been shut down due to a lack or working capital for feedstocks plus a refurbishment. 

PCC and Oltchim have been involved in a long-running dispute. Perhaps it is time for me to speak to both parties to try and get to the bottom of this issue. This could make interesting reading.

New ICIS global ethylene projects map free to download

By Will Beacham on November 9, 2010 9:43 AM | No Comments | No TrackBacks
ICIS has just published an update to its global map of major ethylene projects. The map shows the continued dominance of the Middle East and China in the next wave of new cracker expansions. The two countries will add 17.7m tonnes/year out of a total global increase of 30.5m tonnes/year. Combined they represent 58% of new capacities.

It is interesting to compare the next wave with the first wave which has been coming onstream during 2010. Between August 2009 and now a total of 15.21m tonnes/year were added. So the figures show that the expansion is accelerating with an almost doubling of ethylene capacity additions between now and 2016. We also publish a table of  these existing additions as part of the map. 

Germany's PCC renews interest in Romania chemical group Oltchim

By Will Beacham on November 3, 2010 9:23 AM | No Comments | No TrackBacks
oltchim.jpg
As predicted in last week's blog post, Germany's Petro Carbo Chem (PCC) has restated its interest in buying out the state's remaining 54.79% stake in Romania's Oltchim. 

PCC currently holds a 12.16% stake in Oltchim and now an activist shareholder has restated its interest in examining a bid for the financially-troubled company following pressure from the International Monetary Fund (IMF) for the privatisation of the Romanian state's 54.79% stake in the firm, according to ICIS news.

Oltchim is in a terrible financial state. On 1 November, Oltchim announced it had been unable to raise the working capital to buy the raw materials needed to restart its Arpechim petrochemical unit, the closure of which has led to severe shortages of feedstock at the firm. It also announced increasing losses.

Oltchim's main products are polyvinyl chloride (PVC), polyols, dioctyl phthalate (DOP) and caustic soda.

The IMF discussed the merits of privatising Oltchim during October talks on Romanian economic matters with the country's economy and finance ministries.

The management of the company has been involved in a long-running disagreement with PCC over how best to restore its fortunes.



China to Russia crude pipeline starts operating

By Will Beacham on November 2, 2010 11:03 AM | No Comments | No TrackBacks
To ease the chronic shortage of crude oil in China, trial operations began on 1 November at the recently completed 1,030km-long Sino-Russian crude pipeline, Chinese state-run media Xinhua News Agency said on Tuesday.
oil rexfeatures_1064666ar.JPG
Crude was injected into the pipeline from the Russian section on Monday afternoon and is scheduled to arrive in China today.

China plans to import 250,000 tonnes of crude oil in November and a further 300,000 tonnes in December, Xinhua quoted an official from China Customs as saying. Beginning from next year, Russia will supply 15m tonnes/year of crude oil to China for the next 20 years under a deal inked between the two countries in early 2009.

Meanwhile, Xinhua said the maximum transport capacity of the pipeline could be raised to 30m tonnes/year, if necessary. Construction of the crude pipeline began in April 2009 and was completed on 27 September this year, according to the media report.

Meanwhile ICIS news reports that oil consumption in China is expected to continue growing at a strong pace, backed by a superior economic growth, firming up the country's ranking as the world's top energy consumer, as defined by the International Energy Agency (IEA).

"China's economic growth level is continuing at this very high growth. It means much more rapid growth in energy consumption compared to OECD countries in general," said IEA's executive director Nobuo Tanaka in an interview on Tuesday.
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