July 2009 Archives

WITH A relentless focus on the bottom line by company managements and the financial community, it's easy to lose sight of the human side of the chemical business.

Our industry has a tremendous capacity to benefit human life. And importantly, we should showcase that at every opportunity.

The RPM International annual meeting at the New York Stock Exchange last week following the announcement of its fiscal fourth-quarter and 2009 results mixed both business and a major humanitarian effort.

The Medina, Ohio, US-based coatings and sealants company, invited local officials from Greensburg, Kansas, US, to speak about its rebuilding efforts following a devastating tornado that ripped through the town on the night of May 4, 2007.

A record 1.7 miles wide (versus an average width of 75 yards), the Category 5 tornado destroyed 95% of the town, including all churches, schools and downtown businesses. Eleven of its 1,400 residents were killed and most left homeless as 961 homes were destroyed.

RPM has been instrumental in the massive reconstruction effort, providing building expertise and materials, noted Daniel Wallach, executive director of Greensburg GreenTown, a nonprofit organization dedicated to help rebuild the town sustainably.

Greensburg will emerge as a different place altogether, as a "model green community," he said.

"We needed to do something different to attract businesses and families," added Darin Headrick, Superintendent of Schools. "Sustainability is providing new hope."

The goal is to have all city structures built to top level LEED (Leadership in Energy and Environmental Design) certification standards.

The construction of the first LEED Platinum critical access hospital is now under way in Greensburg, noted Mary Sweet, administrator at the Kiowa County Memorial Hospital (below).

"We just didn't know how to rebuild sustainably. That's where RPM stepped in, with a focus on the building envelope design and construction to maximize energy efficiency and sustainability," she said.

The K-12 (kindergarten to 12th grade) school is also being rebuilt to LEED for Schools Platinum status.

"People say building sustainably takes time - until disaster strikes," said RPM chairman and CEO Frank Sullivan. "We were uniquely positioned to respond and now we are helping Greensburg build an eco-town."

The reconstruction of Greensburg is being documented on a television show on Planet Green TV (affiliated with The Discovery Channel) called "Greensburg: A story of community rebuilding." The executive producer? - actor Leonardo DiCaprio, who highlighted the town's plight in 2007.

Photo credits: Jaime Oppenheimer/The Wichita Eagle (first), Greensburg GreenTown (second)

By Anna Jagger/London

Brazil's chemical sector is better positioned than most to weather the financial slump. Producers were hit badly by the collapse in global demand at the end of last year, but they have reason to be optimistic about the year ahead. There are signs that domestic chemical demand is picking up, helped by government investment in infrastructure projects and a growing middle class.

Following a contraction this year, the Brazilian economy is expected to rebound in 2010. Some Brazilian economists are predicting GDP growth of 4.5%.

The country, which is the world's 10th-largest economy, is already self-sufficient in oil, and new hydrocarbon discoveries should improve the availability of petrochemical feedstocks in the long term. The discoveries will complement already available feedstock from the Campos Basin, which will feed a major new refinery and petrochemical complex in Rio de Janeiro (see page 18).

Another reason for optimism is the untangling of the Brazilian chemical industry's complicated ownership structure to create two large players: Braskem and Quattor. Braskem CEO Bernardo Gradin is cautious about predicting a recovery, but says the company is progressing on new projects in Latin America, and will explore opportunities in the US. A US production base would help Braskem become a truly global player.

A US production base would help Braskem become a truly global player.

Nowhere is the global tectonic shift in chemical manufacturing more apparent than in the largest chemical company's latest restructuring and expansion moves.

Germany's BASF, which acquired Swiss specialty chemical giant Ciba for $5.1bn in April, laid out its massive restructuring plan last week. The bottom line - 23 out of 55 acquired production sites will be closed or sold, while the remaining sites will be "optimized" or restructured.

About 3,700 jobs will be cut, and the company will aim to achieve annual cost synergies of €400m by 2012.

The former Ciba sites are concentrated in Switzerland and elsewhere in Europe, with some plants in North America and Asia.

But also last week, BASF announced that the Chinese government has given the go-ahead for the company's $1.4bn expansion of its BASF-YPC joint venture site in Nanjing with state-operated energy and chemicals firm Sinopec.

The investment includes an expansion of the existing steam cracker and three existing plants, and the construction of 10 new chemical plants. The expansion will produce specialty chemicals for the Chinese market in areas such as construction, electronics, pharmaceutical, automotive and chemical manufacturing.

The trend reflects some of feedback from our very first ICIS Chemical Business US Advisory Board meeting held in New York on June 30.

Comprised of industry senior executives and analysts, the group took note of our weekly New Projects section listing all the projects announced for a week - in particular, how few were in North America and Europe.

Among the 12 new projects announced for the seven days of June 16-22, five were in Asia and two in the Middle East. Five were in Europe and the US, but among that latter group, two were storage facilities.

One week does not a trend make, but we suspect that new project announcements in Asia, the Middle East and Latin America well outpace those in the traditional manufacturing bases of the US and Western Europe.

But new projects only tell part of the story. The board indicated that they would also like to see a list of plant shutdowns and where these were taking place as well. We hear you - please stay tuned!

Photo credit: Ciba