Exxon to sell Tonen stake in retreat from Japan
Exxon Mobil plans to sell most of its 50 percent stake in Japanese refiner TonenGeneral Sekiyu KK and unload other assets in Japan in a roughly $5 billion deal, sources with knowledge of the matter said.
The deal will mark a retreat from the world’s third-largest economy by the U.S. oil giant, which is focusing its resources globally on exploration and production and shifting away from so-called downstream assets, such as its sales network in Japan.
Exxon currently owns 50.02 percent of TonenGeneral, a stake worth 238 billion yen at the latest closing price on December 30. TonenGeneral is one of Japan’s top refiners, importing and distributing oil from the Exxon group.
Exxon is in talks to sell most of that stake and its sales network and other assets to TonenGeneral for a total of about 400 billion yen, according to the sources, who spoke on condition of anonymity.
While holding on to a reduced stake, Exxon plans to keep supplying oil to TonenGeneral, the sources said.
TonenGeneral plans to borrow money from several banks to finance the purchase of its shares from Exxon, the sources said.
The companies could make an official announcement of the deal as early as this month, to finalize the deal this spring, the sources said.
Dow expected to claim US$2.5 bln in compensation for scrapped K-Dow Project
Dow is expected to claim US$2.5 bln in compensation for a scrapped joint venture in Kuwait. However, the compensation is subject to the verdict of the court, which is currently reviewing whether the Gulf state has breached the contract or not. On December 1, 2008, Dow Chemical and Petrochemical Industries Company, a wholly owned subsidiary of Kuwait Petroleum Corporation (KPC), signed a US$17.4 bln Joint Venture Formation Agreement regarding the formation of K-Dow Petrochemicals, a 50:50 joint venture, which was touted to emerge as the leading global supplier of petrochemicals and plastics.
The new company was expected to be operational by January 1, 2009. Petrochemical Industries Co was also set to pay Dow US$7.5 billion for its stake in the project. However, the deal was scrapped at the eleventh hour by the Kuwaiti government without any prior notice. The main reason cited for the termination of the deal was the plunge in oil prices from the rich levels that they were trading when the K-Dow Petrochemicals joint venture was announced.
Total Buys ExxonMobil out of Fina Antwerp Olefins
Total announced today that through its wholly owned subsidiary PetroFina, it signed an agreement with ExxonMobil Petroleum & Chemicals under which ExxonMobil will transfer to Total its 35% stake in Fina Antwerp Olefins, a major producer of petrochemicals. The transaction, subject to the approval of the European competition authorities, will make Total the sole owner of Fina Antwerp Olefins. The company, formed in 1951, is the second-largest producer of base chemicals in Europe. It can produce 1.415 million m.t./year of ethylene, 710,000 m.t./year of propylene, 90,000 m.t./year of benzene, 90,000 m.t./year of cyclohexane, and 50,000 m.t./year of toluene. Some of the complex’s output is used by Total’s operations, particularly at Antwerp and Feluy, Belgium, to produce polymers. At Antwerp Total operates a 510,000 m.t./yer high-density polyethylene (HDPE) plant and at Feluy it operates plants with a total capacity for 930,000 m.t./year of polypropylene, 170,000 m.t./year of HDPE, and 160,000 m.t./year of polystyrene.
The transaction consolidates Total’s Antwerp operations, which also include the Total Raffinaderij Antwerpen refinery and the HDPE plant operated by Total Petrochemicals Antwerpen. The acquisition will create new opportunities and strengthen the competitiveness of the assets through integration, Total says.
ExxonMobil’s operations at Antwerp include plants producing low-density polyethylene, ethylene vinyl acetate copolymer resins as well as aromatic and hydrocarbon solvents.
Shale Gas Developments in North America (Combined articles)
Marubeni Acquires Stake in U.S. Shale Project
Marubeni (Tokyo) says it has agreed with energy company Hunt Oil (Dallas, TX), to acquire a 35% stake in the Eagle Ford shale oil and gas play covering about 52,000 net acres of oil and gas leases located in Texas. The project has plans for several hundred wells to be sequentially drilled for 5 years–10 years, with total development costs, including acquisition costs for Marubeni’s share, of about $1.3 billion, Marubeni says. Marubeni and Hunt Oil have also agreed to jointly acquire additional acreage in the Eagle Ford shale oil and gas area.
The Eagle Ford oil and gas shale play currently produces light crude oil, and is one of the most attractive and promising shale oil and gas resource plays in the U.S., Marubeni says. “We believe that this project, including future expansion and the potential new businesses associated with it, will become a solid base for Marubeni providing a strong cash flow and profit on a mid-to-long-term basis. Our acreage position in the Eagle Ford is believed to be prospective, and Hunt Oil, the operator of this project, has extensive experience and expertise in the development and operation of several oil and gas shale plays including the Bakken located in North Dakota,” Marubeni says.
Marubeni has positioned its energy and mineral resources business, including oil and gas exploration and development, as a strategically important business area, and has been involved in projects in the Gulf of Mexico, the North Sea, India, Qatar, and the Niobrara Shale Oil in the U.S., which started its initial oil production in October 2011, the company says. With the new project, Marubeni’s total acreage for shale oil play is about 72,000 net acres, which makes Marubeni the largest acreage holder among Japanese firms, the company adds.
“We will continue to expand our business by acquiring quality shale oil and gas assets in the U.S. as well as other countries leveraging our experience and know-how gained through the Niobrara Shale Oil project and the Eagle Ford project. We strongly believe that the shale oil and gas play will be spreading all over the world,” Marubeni says.
Total Forms Shale JV with Chesapeake
Total says its subsidiary Total Exploration & Production USA (Total E&P) has entered into a joint venture with Chesapeake Exploration to acquire a 25% share in Chesapeake’s liquids-rich area of the Utica shale play located across 10 counties on the eastern side of Ohio. Total has paid Chesapeake and its affiliate EnerVest (Houston) about $700 million in cash for acquiring the assets.
The JV covers 619,000 net acres, of which 542,000 net acres are owned by Chesapeake and 77,000 net acres are owned by EnerVest. Total will acquire its 25% share from each of Chesapeake and EnerVest on identical terms, giving a total of 155,000 net acres. Chesapeake will operate the JV acreage.
The deal is consistent with Total’s strategy to “develop positions in unconventional plays with large potential and, in this case, with value predominantly linked to the oil price,” says Yves-Louis Darricarrère, president of Total E&P. “This joint venture will provide us with a material position in a valuable long-term resource base under attractive terms. Total is conscious of the environmental aspects linked to developing shale acreage and is confident in Chesapeake’s capacity to manage the Utica shale operations responsibly.”
Total will also be committed to pay additional amounts up to $1.63 billion over a maximum period of seven years in the form of a 60% carry of Chesapeake and EnerVest’s future capital expenditures on drilling and completion of wells within the jv.
Chesapeake Exploration is a subsidiary of Chesapeake Energy (Oklahoma City, OK).
Shell Chemical to invest US$2 bln in a gas cracker in either West Virginia, Pennsylvania, Ohio
In a bid to tap shale gas deposits, Shell Chemical is finalizing plans to build a US$2 bln cracker complex in either West Virginia, Pennsylvania, or Ohio, three states that overlay ancient shale beds rich in natural gas. While Ohio is a relative newcomer to the shale gas industry, with production levels well below those established in Pennsylvania and West Virginia, the state’s re-emerging auto industry and its well-established polymer and chemical industries pose ready markets for the new petrochemical plant.
Sinopec Enters U.S. Shale Market in Deal with Devon Energy
Sinopec says it will enter the U.S. shale market by buying a one-third interest in Devon Energy’s (Oklahoma City, OK) assets in several shale plays. Sinopec will acquire about 406,300 net acres in the Utica Shale play in Ohio, the Tuscaloosa Shale in Louisiana, the Niobrara Shale in Wyoming and Colorado, and tight-oil deposits in Michigan and Oklahoma.
Sinopec will pay $900 million at closing and will also pay $1.6 billion to drill wells in the acreage over the next three years.
Celanese Completes Acquisition of Ashland’s PVA Homopolymer and Copolymer Business
Celanese has completed the previously announced acquisition of Ashland’s polyvinyl acetate (PVA) homopolymer and copolymer business. The financial terms of the deal were not disclosed. The transaction includes the PVA business, inventory, and related technology, but does not include any manufacturing facilities. The acquisition includes the Vinac and Flexbond brands, which will support the strategic growth of the emulsion polymers business of Celanese, the company says. The products will be temporarily toll manufactured by Ashland for Celanese.
“This acquisition will accelerate the growth of the emulsion polymers business in the Americas region,” says Phillip McDivitt, general manager, of Celanese Emulsion Polymers
The new state-of-the-art pilot facility at Mt. Vernon to streamline polymer research and product development
SABIC’s Innovative Plastics business has inaugurated a new, state-of-the-art pilot facility that will allow chemistry and process development for its high-performance polymers (HPP) – Ultem*, Siltem*, and Extem* resins – product line. The new 3,000 sq.ft., world-class facility is an innovative resource that will enable SABIC to produce new polymers – particularly custom formulations – for customers. It will also significantly increase customer access to SABIC research scientists, product development specialists, and the intricate application development process. Previously, piloting was done externally; now this work will be seamlessly integrated into product research and development and scale up to commercial production. The new facility demonstrates SABIC’s ongoing commitment to true innovation, working side-by-side with customers to provide high-performance, tailor-made solutions for greater end-product differentiation and business success.
“This is a critically important addition to our capabilities in Mt. Vernon and is the latest in a history of new investments to this site, which has long been a hub for major innovation breakthroughs and the source of 500 patents,” said Sanjay Mishra, global high-performance polymers technology leader, Specialty & Performance, Innovative Plastics. “Mt. Vernon is the ideal location for the new pilot facility because it takes us to a new level of high-performance polymers technical innovation and dedicated support that our customers expect of us, especially those in growing, high-demand sectors like aerospace and healthcare.”
The new pilot facility becomes a critical enabler for new material development, production support of the Mt. Vernon commercial plant, and customer application testing. The pilot facility will begin operations in the first quarter of 2012.
Tasnee, Sahara sign SR5.25 bln financing deal with Saudi banks to support 3 JV petchem projects
The National Industrialization Co. (Tasnee) and Sahara Petrochemical Co. have inked an SR5.25 bln financing deal with 9 Saudi banks to support three petrochem joint venture projects: Saudi Acrylic Acid Co., Saudi Acrylic Monomers Co., and Saudi Polyolefins Co. As per ArabNews,
“The agreement is signed for 16 years as the two will pay back the amount in half-yearly installments for providing finance required for their acrylic acid project in the petrochemical complex of the Jubail Industrial City.”
Tasnee and Sahara have already signed agreements to start engineering, procurement, and early construction works at their US$1.07 bln acrylic acid project. The deals were signed with the consortium of Germany’s Linde and South Korea’s Samsung. The technology transfer and marketing contracts have already been signed with US-based Rohm and Haas Co., a fully-owned unit of Dow Chemical Co., which owns 25 percent of the project and is expected to start operations in the first quarter of 2013. The project has a designed annual capacity of 145,000 MT of crude acrylic acid, 145,000 tons of butyl acrylate, and 85,000 tons of pure acrylic acid, the two companies said.
Tasnee has a 52.3% stake in Saudi Acrylic Acid Co. while Sahara holds 43.16 percent of its shares. Tasnee and Sahara have 39.2% and 32.37% stakes respectively in Saudi Acrylic Monomers Co. and Saudi Polyolefins Co. Sahara had earlier awarded a contract to South Korea’s Daelim Industrial Co. to construct a caustic soda and diethylene chloride project at Al-Jubail. The project, when completed and on stream by Q3- 2012, will produce 250,000 tpa of concentric caustic soda and 300,000 tpa of diethylene.
Tasnee produces propylene and polypropylene through Saudi Polyolefin Company, it’s subsidiary. The company has 450,000 mt of annual capacity each for propylene and polypropylene. SPC is a joint venture owned 75% by Tasnee and 25% by Basil International Company (LyondellBasell’s affiliate). SPC’s key end markets are Saudi Arabia, the Middle East, Europe, and Asia.
Samsung Total to invest US$1.72 bln in aromatics, EVA plants
Samsung Total Petrochemicals Co. plans to spend 2 trillion won (US$1.72 bln) to build a new aromatics complex and an ethylene-vinyl acetate copolymer plant in its Daesan complex in South Korea. Capacities will include 1 mln tons of paraxylene and 420,000 tons of benzene, and 240,000 tpa of EVA. The ethylene-vinyl acetate copolymer plant is to be located at the Daesan petrochemical complex by April 2014.
Westlake Makes Unsolicited Bid to Buy Georgia Gulf
Westlake Chemical today announced an unsolicited $1.1-billion bid for rival vinyl maker Georgia Gulf. The $30/share all-cash offer is 22% above Georgia Gulf’s closing share price on Thursday, January 12. The deal would make Westlake the second-largest U.S. producer of polyvinyl chloride (PVC), behind Shintech.
Westlake says it first presented the offer to Georgia Gulf on September 20, 2011, but “Georgia Gulf has been unwilling to provide us with information that would allow us to explore these opportunities or to enter into substantive discussions.” A Georgia Gulf spokesperson says the company “is aware of the offer and will respond in due course.”
Georgia Gulf shares soared 35% in early trading this morning to above $33/share, 10% above Westlake’s bid.
Westlake says the proposal represents a 51% premium to Georgia Gulf’s 30-day volume-weighted average share price of $19.82. Westlake noted that it has acquired approximately 4.8% of Georgia Gulf’s outstanding shares.
“As we have stressed since our initial correspondence in September, we very much prefer to negotiate a transaction with Georgia Gulf, but we have determined that making your stockholders aware of our proposal is necessary,” Westlake president and CEO Albert Chao said in a letter to Georgia Gulf’s board. Westlake has hired Deutsche Bank and Morgan Stanley as financial advisors, and Vinson & Elkins and Morris, Nichols, Arsht & Tunnell as legal advisors.
North American PVC capacity totaled about 8.5 million m.t. in 2011, according to IHS Chemical. Georgia Gulf accounts for about 14% of the North American market share, while Westlake holds about 9%, IHS Chemical says. If the deal proceeds, Westlake will become the second-largest PVC producer in the U.S. behind Shintech, which accounts for 31% of the market share. OxyChem and Formosa Plastics round out the top North American PVC producers, holding 20% and 16% of the market share, respectively.
ENI to Invest €1.6 Billion in Revamped Chemical Operations, Could Launch IPO After 2015
Energy group ENI (Rome) presented its newly configured chemical operations to the public for the first time this week at the Plast 2012 plastics and rubber exhibition, being held near Milan. At a press conference yesterday, the CEO of the newly named Versalis, previously Polimeri Europa, Daniele Ferrari, admitted that the company is about 10 years behind its rivals with regard to investment and international expansion, but that it is intent on expanding and differentiating its product portfolio, creating more integrated production sites, and maximizing the benefits of its intellectual and physical assets.
The current four-year business plan, running until 2015, calls for a total investment, mostly in Italy, of about €1.6 billion, Ferrari says. Much of this, about €500 million, will be absorbed by the conversion of operations in Sardinia into the Matrìca “green” chemicals operation at Porto Torres, in partnership with Novamont. The construction of seven production plants that will use renewable feedstocks is planned in three phases over the next five years, together with a research center that was opened in February. A new biomass power station nearby will be operated by ENI Power, and another ENI subsidiary, Syndial, will carry out land reclamation. The total investment is put at €1.2 billion.
“We are certain that Versalis will become a leader on a global level at the end of this plan,” Ferrari says. His objective is to double the company’s revenues, increasing the current 15% margin to 30% in the next five years.
What happens to Versalis at the end of the four-year plan remains to be seen. “At the end of the 2012-15 plan we have several options: an initial public offering [IPO], an alliance, or acquisitions,” Ferrari says. But, when asked if ENI could sell the business, he said: “I don’t see a sale.”
The new company name is needed to remove the impression that its activities are restricted to polymers in Europe, Ferrari says. He points out that Versalis has licensees for its technologies in various polymers, chemicals, and catalysts around the world, but that not enough had been done in the past to extract value from these deals. He says he wants to build more joint ventures, especially in India and Asia, and also South America. Versalis is already in advanced discussions with potential partners in several countries.
Versalis re-entered China last February with Eni Chemicals Shanghai, directly distributing products in the Chinese market, and with Versalis Pacific, which also has offices in Shanghai and operates in all Asian markets. ENI had not had a chemical present in China since 2001, Ferrari says.
The group’s chemicals operations have, since the beginning of this year, been divided into four market-focused business units, covering chemical intermediates, polyethylenes, styrenics, and elastomers. Within polyethylenes, Versalis will concentrate more on specialty products, Ferrari says. The company is Europe’s second-largest producer of ethylene vinyl acetate (EVA), ranks second in Europe in styrenics, and is first in elastomers, but only seventh in the world.
There will also be some downsizing. There have been losses of “hundreds of millions of euros per year” at operations at Porto Torres and Priolo, Sicily, and there is a need to “transform” both sites, Ferrari says. Versalis is closing a 150,000-m.t./year linear low-density polyethylene line at Priolo, and renovating and reconfiguring its 760,000-m.t./year ethylene plant there. Capacity is being halved, and output will be diverted more toward C5 and C9 fractions, targeted at elastomers. More than €350 million will be invested at Priolo to build capacity for producing tackifying resins and isoprene.
Versalis is considering redimensioning a newer steam cracker at Brindisi in southeastern Italy, “but we are not sure if it is necessary to increase capacity there,” Ferrari says.
Other future investments include €350 million on elastomers–solution styrene butadiene rubber (SSBR), thermoplastic elastomers, and polyisoprene–at Ravenna; €135 million in ethylene propylene diene monomer rubber production at Ferrara; €80 million in butadiene production at Dunkirk, France; and €50 million in SSBR at Grangemouth, U.K. The new butadiene line at Dunkirk is said to be “fundamental” to the supply of raw materials to Versalis’s elastomer production sites, particularly in the U.K.
Cytec to Sell Pressure Sensitive Adhesives to Henkel
Cytec has reached an agreement to sell its pressure-sensitive adhesives (PSA) product line to Henkel for $105 million, the company says. The deal is expected to close in the third quarter of this year. Cytec’s PSA product line recorded $94 million in sales in 2011. It has 80 employees.
The product line includes emulsion-based and polymer-based PSAs for use in several industrial and consumer applications. These include tapes, labels, graphics, and transdermal medical applications.
Cytec is “seeking to drive a greater amount of organic and inorganic growth from our specialty growth platforms. We continue to make meaningful progress with our ongoing evaluation of the remaining Coating Resins business and are on track to announce our decision this quarter,” says CEO Shane Fleming. The deal is expected to be neutral to Cytec’s 2012 earnings per share (EPS).
“The product range to be acquired is complementary to Henkel’s well-established high-performance PSA business and is expected to strengthen our position in this field,” says Jean Fayolle, corporate senior v.p./packaging adhesives at Henkel.
Last month, Cytec agreed to acquire composites maker Umeco (Leamington Spa, U.K.) for $439 million. The deal enhanced Cytec’s presence in engineered industrial materials, analysts say. It is expected to close in the third quarter.
Auto industry avoids shutdowns from nylon 12 shortage
LEXINGTON, MASS. (May 10, 1:10 p.m. ET) — The global auto industry appears ready to avoid any shutdowns due to the shortage of nylon 12, with procedures in place to replace the resin when needed, says an industry watcher.
Automotive forecasting group IHS is unaware of any scheduled closures due to a disruption in nylon 12 supplies, said Jim Dorsey, spokesman for the Lexington, Mass.-based group.
Global supplies of nylon 12 were running short following a fatal fire on March 31 at Evonik Industries AG’s plant in Marl, Germany, which destroyed the plant making the feedstock cyclododecatriene.
In North America, the Automotive Industry Action Group worked with automakers and suppliers to streamline the approval process for alternative resins, which should speed up the development of new parts in the product pipeline.
The response in other regions has not been as visible, IHS noted, but daily calls between carmakers and major suppliers are providing needed management of resources.
The industry still has a lot of ground to cover before it can put the shortage behind it, Dorsey noted, adding that the group will continue to monitor the situation.
PFB buys Nova Chemicals’ performance styrenics business
CALGARY, ALBERTA (May 9, 5:05 p.m. ET) — A plastics materials deal has taken shape on the streets of Calgary, with resin maker Nova Chemicals Corp. selling its performance styrenics business to building products maker PFB Corp. for an undisclosed price.
Both firms are based in Calgary. The deal includes Nova’s expandable polystyrene resins and Arcel-brand styrene copolymers.
As part of the deal, Nova will acquire an equity stake in PFB and will hold two seats on the firm’s board of directors. Robert Snyder, Nova performance styrenes vice president, will become PFB’s chief operating officer.
The deal represents an upstream integration move for PFB, which operates in Canada as Plasti-Fab Ltd. Its primary products are insulating building products made of materials ranging from EPS to concrete to wood.
Nova “has long been a leading North American producer of moldable foam resins with a diverse product portfolio serving the construction, packaging, and global cup and container markets, “ PFB chief operating officer C. Alan Smith said in a May 9 news release. “Together we have the opportunity to better serve customers – providing outstanding products to the market.”
PFB posted sales of $89.2 million in 2011 — an increase of more than 25 percent vs. 2010. Nova — one of North America’s largest polyethylene makers – rang up sales of $5.2 billion last year, up 13 percent from 2010. Nova is wholly owned by International Petroleum Investment Co., a state-owned firm based in Abu Dhabi, United Arab Emirates.
Sabic upgrading Dutch olefins cracker
RIYADH, SAUDI ARABIA (May 9, 10:15 a.m. ET) — Saudi Basic Industries Corp. (Sabic) will spend about $175 million to make improvements to its olefins cracker in Geleen, the Netherlands.
In a May 9 news release, officials with Sabic in Riyadh, Saudi Arabia, said that the goal of the investment “is to ensure a safer, more competitive and more energy efficient cracker that is better for the environment.”
The improvements will be made over the next 18 months at the cracker, which makes plastics feedstocks ethylene and propylene. A “substantial maintenance turnaround” also is scheduled for the site beginning in September 2013.
Officials added that customers will not be affected by the improvement project, which aims to reduce the cracker’s energy consumption by eight percent. Improvements are intended to modernize the plant, which was built in the 1970s so that it can compete with the firm’s younger plants.
The project was launched on April 11 and is expected to “transform the [cracker] into one of the best crackers in Europe, in terms of safety, durability and cost efficiency,” officials said.
“We believe in the future of Sabic in Geleen,” manufacturing vice president Henny Egberink added in the release.
Sabic is majority owned by the Saudi government and ranks as one of the world’s largest producers of polyethylene, polypropylene, and several specialty plastics.
Braskem plans investment of US$100 mln in green PP plant
Braskem has confirmed plans for a US$100 mln expansion in Brazil in a move that will ramp up the company’s efforts to curb its environmental footprint. Braskem, the world’s first producer of green plastic produced from 100% sugar cane derivatives, plans to fund a new plant to produce 30,000 tpa of polypropylene, dubbed Green PP, from ethanol. The new plant will be built adjacent to Braskem’s existing 200 tpa green PE facility, at its 60 km sq site in Rio Grande do Sul, and is expected to be completed in 2013.
Currently, green PE is available at a premium of about 20% compared to conventional PE, but reduces the carbon impact by 2.3-kilo tons of CO2 per ton, vs gas or naphtha-based PE.
Perstorp and PTT Global Chemical Sign JV Agreement; Plan Major Investment in Asia
Perstorp says it has today signed an agreement with PTT Global Chemical (Bangkok) for its previously announced isocyanates joint venture. PTT Global reached an agreement last month to acquire a 51% stake in Perstorp’s isocyanates business for €114.8 million ($149 million). The JV includes the former coating additives business of Perstorp, which has manufacturing sites at Pont-de-Claix, France; and Freeport, TX. The JV will produce toluene diisocyanate (TDI), isophorone diisocyanate (IPDI), hexamethylene diisocyanate (HDI), and derivatives. PTT Global will hold 51% of the new jv and Perstorp will hold the remaining 49%.
The JV is planning a major investment to strengthen competitiveness, research and development, and to increase market offerings and the investment will focus on expanding capacity at the manufacturing plant in Pont-de-Claix, and on building new capacity in Asia, Perstorp says. The JV will initially invest in a new production facility for HDI derivatives in Asia.
“We believe in a promising future for polyurethanes. Perstorp’s expertise in manufacturing, research and development, sales and marketing of isocyanates, coupled with PTT Global’s position as a major Asian chemical player, gives the joint venture a unique opportunity to establish leading positions in the worldwide polyurethane market,” says Veerasak Kositpaisal, CEO of PTT Global and Martin Lundin, president, and CEO of Perstorp.
Huntsman Acquires Turkish Polyurethanes Systems House
Huntsman has acquired EMA Kimya Sistemleri Sanayi ve Ticaret (Istanbul), a polyurethanes systems house in Turkey. The EMA systems house, which had 2012 revenues of $17 million, can manufacture polyester polyols and blend methylene di-para-phenylene isocyanate (MDI) polyurethane systems used primarily in the insulation, automotive, adhesives, coatings, elastomers, and furniture industries.
“In 2010, Turkey’s MDI polyurethane systems grew at a rate of 13%-15%,” says Anthony Hankins, president of Huntsman’s polyurethanes division. “We look forward to leveraging this demand and providing a broader product offering to customers in this region.”
DSM Dyneema closing Swiss tape plant
DSM NV’s Dyneema high-performance fiber unit plans to close its facility in Flaach, Switzerland.
Herleen-based DSM acquired the site in 2007 as part of the acquisition of Pamako AG. The plant employs about 25 and develops and produces tape made from ultrahigh molecular weight polyethylene.
The company announced the plan to close the plant on Dec. 21.
“It is with regret that we have taken this decision today for the people involved,” said Gerard de Reuver, President DSM Dyneema, in a news release. “We have invested considerable resources in improving the technology and capabilities of the people involved over the last few years. With great support from our R&D team, the crew in Flaach has worked exceptionally hard to commercialize new products. The economics of the site was always a challenge. It is a very small site and the operational costs for a separate development facility have become unacceptable, especially in the current economic circumstances.”
The company added that since acquiring the business, DSM Dyneema commercialized the first UHMWPE tape grade for ballistic applications in 2008, with more recently developed products for telecommunications applications.
DSM Dyneema is preparing to open a new tape manufacturing facility in Greenville, N.C.
India lifts anti-dumping duty on import of polypropylene from Saudi Arabia
India has lifted an anti-dumping duty imposed on polypropylene imported from Saudi Arabia. No reason has been given for this amendment. In November 2012, India imposed a 6.5% anti-dumping duty on polypropylene imports from Saudi Arabia, Oman, and Singapore. The statement does not mention the tax on polypropylene imports from Singapore and Oman.
The change is effective from the day the notification is published in the Gazette of India, the official record of government rules, the Central Board of Excise and Customs said in a statement dated Dec. 30 on its website.
Qatar Petrochemical defers restart of polyethylene 3 plant to Q2 2012
Qatar Petrochemical Company has deferred the launch date of its 310,000 tpa polyethylene 3 plants to Q2 2012 from the end of 2011, as per Reuters. The plant is built at an estimated QAR 2.2 bln and will boost Qapco’s total production to 720,000 tpa of polyethylene. The company aims to eventually produce 1.2 mln tpa of low-density polyethylene.
Seattle passes ban on single-use plastic carryout bags
Seattle has become the third largest city in the United States to ban single-use plastic carryout bags.
The nine-member city council passed the ban unanimously on Dec. 19. It is scheduled to go into effect on July 1.
It is the second time the city has attempted to regulate the use of plastic carryout bags. The 20-cent fee Seattle council placed on plastic bags in 2008 was overturned before it went into effect by an August 2009 voter referendum.
“We are disappointed, but not surprised by the result of today’s vote by the Seattle City Council to rush toward a plastic bag ban and impose a paper bag tax,” said Mark Daniels, vice president of sustainability and environmental policy for the nation’s largest plastic bag manufacturer, Hilex Poly Co. LLC, which is based in Hartsville, S.C.
“By voting to implement a ban on plastic bags, the city of Seattle misses the opportunity to lead the way toward the meaningful reduction of litter through increased statewide recycling efforts,” said Daniels, who is also chairman of the Progressive Bag Affiliates unit of the American Chemistry Council.
That PBA unit will become part of the Society of the Plastics Industry Inc. on Jan. 1 and will be renamed the American Progressive Bag Alliance.
“A statewide solution that includes recycling is more comprehensive [because it would encompass] not just a single product but all plastic bags, wraps, and films,” Daniels said. “Increased plastics recycling provides a more effective solution for consumers and the environment. It also supports an American industry that provides tens of thousands of jobs.”
Hilex Poly operates a plastic recycling plant in North Vernon, Ind., that the company said will recycle 25 million pounds of plastic bags and plastic film in 2011.
Seattle is the 23rd largest city in the U.S. with an estimated population of 610,000. The largest city that has passed a plastic bag ban is San Jose, which is the 10th largest city in the U.S. with an estimated population of 950,000. That ban goes into effect on Jan. 1.
San Francisco, the nation’s 13th-largest city with a population of 805,000, is the second-largest city with a plastic bag ban. That ban has been in effect since 2007. Altogether 35 communities in the U.S. have plastic bag bans and three more have placed fees on plastic bags handed out at carryout.
Three other cities in the state of Washington have a ban on plastic bags: Edmonds, Bellingham, and Mukilteo.
At least four other cities in the state of Washington and more than two dozen communities nationwide—including Los Angeles, Austin, Texas, and Eugene, Ore.—are considering measures to ban plastic bags.
The Seattle ordinance applies to all retailers and also requires them to charge at least five cents for paper bags handed out at retail. There is an exemption from the ban for bags passed out at farmers’ markets, and food banks and for take-out or take-home food from restaurants. Plastic bags used for produce, bulk foods, bulk candies, meat or fish, greeting cards, and prescription drugs are exempt from the ban, along with dry cleaning bags, newspaper bags, and door-hanger bags.
The Seattle plastic bag ban also applies to biodegradable and compostable single-use plastic bags.
The Seattle Public Utilities has estimated that only 13 percent of the nearly 300 million plastic carryout bags used annually in the city are recycled, but that more than 80 percent of paper bags are recycled.
The measure was supported by five environmental groups, the Northwest Grocery Association, and the Washington Restaurant Association.
DuPont sells Liqui-Box to investment firm
DuPont Co. has sold its Liqui-Box Corp. unit to Sterling Group LP, a Houston-based private equity firm.
The deal was finalized on Dec. 30. Terms were not disclosed.
Worthington-based Liqui-Box supplies bag-in-box flexible packaging to the dairy, beverage, and bulk food markets. The company also makes pouches and rigid plastic water bottles.
The acquisition is Sterling’s third investment in its third fund, an $820 million fund raised in 2010. In Sterling’s 30-year history, it has acquired four businesses from DuPont.
The sale was finalized on Dec. 30 but had not previously been announced. It was not a surprise, though — earlier this year Bloomberg News had reported that DuPont was looking for a buyer for the business. In 2006, the Daily Deal reported that J.P. Morgan Chase & Co. was advising DuPont on a possible sale of the unit.
According to Sterling’s website, the company does not currently own any plastics businesses. Its previous holdings, however, have included Exopack Holding Corp., Pawnee Industries, and Vista Chemical.
“The entire Liqui-Box team is energized to partner with Sterling who has a proven track record of successfully transitioning unique, specialty businesses like ours to more nimble, stand-alone companies and equipping them for future growth. We look forward to executing several initiatives to expand our business and enhance our delivery of top-quality products to our customers,” said Roszann Graham, CEO of Liqui-Box, in a news release.
Greg Elliott, a Partner of Sterling noted, “Roszann and her team have done an exceptional job positioning Liqui-Box as a leading provider of bag-in-box packaging solutions. Over the past several years, Liqui-Box has streamlined its operations to focus on its core products. Our focus now is to expand our global footprint, invest in technology and expand our offering of solutions to our customers.”
Sibur to build the largest petrochemical complex in Russia
Russia-based Sibur Holding CJSC is considering building a petrochemical complex in Tobolsk, which is expected to be the largest in Russia and one of the largest in the world, according to CEO Dmitry Konov.
The new project, which is expected to be known as ZapSibNeftehim, involves the construction of a pyrolysis facility with a capacity of 1.5 million metric tons of ethylene. The company will also build several units to produce up to 2 million metric tons of polymers per year.
Konov said the project requires the approval of the company’s board and that the final decision will be made in 2012.
Sibur is considering using light hydrocarbons as raw materials; they are obtained in this region through gas processing plants and are derived from associated petroleum gas, gas condensate, and natural gas.
According to Konov, the Tobolsk project will be implemented “cautiously and carefully” so as not to cause any disruption to the company’s financial situation.
“This is a large project, even for a company of our size and financial condition,” he said.
The timing of the project and its financial details have not been disclosed. There is a possibility that it might be implemented by 2016-17.
Dow introduces microcellular PU to China
Dow Automotive Systems is introducing its Autothane microcellular polyurethane systems to the Chinese automotive market in early 2012.
High-performance Autothane, based on hybrid polyols and MDI (methylene diphenyl diisocyanate) technology from Dow Hyperlast, has been specifically developed for the management of impact, shock, and vibration in chassis and suspension uses (spring aids and components to cut noise, vibration, and harshness).
The NVH aids will be processed by Dow’s licensee partner Kumpulan Jebco of Malaysia and marketed globally by Dow Automotive Systems (DA). A new plant-based in Yangzhou, China, part of an $8 million investment by Kumpulan Jebco, will start operating in February. The plant will produce NVH components from Autothane, which has a largely closed-cell structure with an integral skin.
Dow says components made using the microcellular PU have “high abrasion resistance, excellent hydrolytic stability, resistance to microbial degradation, high damping characteristics, and longevity of on-vehicle performance.”
Design engineers have been making use of the unique mechanical and dynamic properties of high-density microcellular polyurethane elastomers for many years, in suspension systems or vibration isolation uses, where they are known to improve vehicle handling, comfort, and ride quality.
The Autothane team, which includes Dow Automotive Systems and Kumpulan Jebco, offers customers help in product design, prototyping, component characterization, durability testing, and validation.
The plant in China strengthens the Autothane manufacturing base which already exists in Europe, North America, India, Korea, and Malaysia. The plant will be operated by Jebco, an Autothane processing licensee that has been serving the ASEAN market since 1996.
ExxonMobil Affiliate to Expand Halobutyl Rubber Capacity in Japan
ExxonMobil Chemical says that Japan Butyl Co. (Kawasaki, Japan), in which ExxonMobil Yugen Kaisha, an ExxonMobil subsidiary, holds a 50% stake, will expand the capacity of its halo butyl rubber manufacturing plant at Kashima, Japan by 10,000 m.t./year to 80,000 m.t./year. The expansion is expected to be completed in 2012. This is the second capacity expansion in five years at the Kashima halo butyl rubber plant.
“Demand for halo butyl rubber is expected to grow at about 6%/year, mainly in the Asia/Pacific region,” says John Lyon, v.p./butyl polymers at ExxonMobil Chemical. “The expansion by our affiliate’s joint venture at Kashima will add 10,000 m.t./year of capacity in the region. This aligns with ExxonMobil Chemical’s long-term commitment to meet industry demand.”
ExxonMobil Chemical has more than doubled its global halo butyl rubber capacity since 1995, the company says.
“Auto production is growing at a rapid pace in Asia, especially in China. This has led to increased tire sales for new cars and trucks as well as the sale of replacement tires as these vehicles age. Halobutyl rubber holds air in tubeless radial tires for both passenger cars and heavy-duty trucks,” Lyon says.
Japan Butyl is a 50-50 joint venture of ExxonMobil Yugen Kaisha and JSR Corp. (Tokyo).
Japan Butyl’s butyl polymers manufacturing plant at Kawasaki also completed an expansion in 2010 to bring its total capacity to 98,000 m.t./year.
Asahi Kasei to Build Second SSBR Plant in Singapore
Asahi Kasei Chemicals (AKC), an Asahi Kasei subsidiary, has confirmed its plans to build a second solution-polymerized styrene-butadiene rubber (SSBR) plant with a production capacity of 50,000 m.t./year at Jurong Island, Singapore. The planned second plant is expected to become operational in January 2015. AKC, in June 2011, broke ground on a 50,000-m.t./year SSBR plant at Jurong Island and the plant is expected to become operational in May 2013. The second plant will be built adjacent to the first plant. The company, in June, had tentatively announced plans for additional SSBR capacity in Singapore. With SSBR demand expected to increase further, AKC has decided to advance plans for a second plant in Singapore to meet customer needs and ensure stable supply, the company says.
AKC says it aims to expand its SSBR operations as a world-leading business. AKC will continue to study additional capacity expansion for SSBR in line with rising demand, to attain the leading position in the world in SSBR for fuel-efficient high-performance tires, the company says.
Asahi Kasei told CW in July 2011 that it is seeking a location in Asia, including in Southeast Asia, to build an additional SSBR plant after 2015. “We plan to add additional capacity somewhere in Asia after the second Singapore plant is completed,” Asahi Kasei tells CW. “We will [announce our plans for that project] when a formal decision has been made.”
AKC currently produces 105,000 m.t./year of SSBR at Kawasaki, Japan, and 35,000 m.t./year of SSBR at Oita, Japan. Japan Elastomer, an AKC subsidiary, operates the Oita plant. AKC owns a 75% stake in Japan Elastomer and Showa Denko holds the rest.
Braskem to focus on domestic projects in 2012
Braskem- Brazil’s petrochemical major plans to focus on investments in Brazil in 2012, planning to spend around US$5 bln on new production capacities in the country, the CEO told local paper Valor Econômico. Projects include a naphtha-based polypropylene (PP) plant at Camaçari; a second ethanol-based polyethylene (PE) plant, the company’s first green PP unit; and continued work on the Comperjpetrochemical complex in Rio de Janeiro. Braskem expects to invest a total of around US$4 bln in petrochemical plants at Comperj.
However, Braskem continues to eye opportunities in the US. The acquisition of PP assets in the US in 2010 and 2011, has consolidated its leadership in PP. Now Braskem is looking at business in PE. The firm continues to mull the size of the stake to acquire in the PetroquimicaSuape polyester and PET resin project currently being built in the northeast by federal energy company Petrobras.
BASF-Sinopec JV Completes Second Phase of Expansion; Outlines Further Investments
BASF-YPC Co. the 50-50 petrochemical joint venture between BASF and Sinopec at Nanjing, China, says the second phase of its previously announced $1.4-billion expansion has been completed. The expansion began in 2009 and the first phase was completed in October 2011. BASF-YPC also announced further plans for expansion at the site. The JV plans to build a previously announced superabsorbent polymers (SAP) plant, an acrylic acid facility, and a butyl acrylate plant, and to expand the capacity of 2-propyl-heptanol at the Nanjing site.
BASF and Sinopec agreed at the end of 2010 to study a further expansion of BASF-YPC with a total investment of about $1 billion. Construction of the SAP plant with a capacity of 60,000 m.t./year will begin in mid-2012, and commercial production is expected to begin by early 2014. “New projects to strengthen the C3 and C4 value chains include the construction of a new acrylic acid facility with a capacity of 160,000 m.t./year, a new butyl acrylate plant, as well as a capacity increase at the 2-propyl-heptanol plant,” the jv says.
The completion of the second phase of expansion paves the way “for further prosperous developments between BASF and Sinopec. We are confident BASF-YPC will continue expanding its product portfolio and providing crucial chemicals to the growing demands in China while contributing to a sustainable future,” says Dai Houliang, board member and v.p. at Sinopec.
The capacity of the existing ethylene plant has been expanded from 600,000 m.t./year to 740,000 m.t./year, and the capacity of the existing ethylene oxide (EO) plant was increased to 330,000 m.t./year. An EO purification unit with a capacity of 150,000 m.t./year was also built. New plants in the expanded EO derivatives value chain include a non-ionic surfactants plant with a capacity of 60,000 m.t./year; an amines complex with a capacity of 130,000 m.t./year for the production of ethanolamines, ethylene amines, and dimethylethanolamine; and the construction of a DMA3 plant with a capacity of 25,000 m.t./year. The site now has an integrated C4 complex comprised of a new butadiene extraction plant with a capacity of 130,000 m.t./year; a new isobutene extraction plant with a capacity of 60,000 m.t./year; a new plant for highly reactive polyisobutene with a capacity of 50,000 m.t./year; and a 2-propyl-heptanol plant with a capacity of 80,000 m.t./year. The existing oxo-C4 plant capacity has been expanded to 305,000 m.t./year.
“Through this successful partnership, we can bring vital chemical products and solutions to China that will directly support local industries as they strive to meet the needs of a rapidly developing population,” says Martin Brudermüller, vice chairman of the board of executive directors at BASF/responsible for Asia Pacific.
Mitsui and Sinopec team up on the EPT plant
Mitsui Chemicals Inc. and China Petroleum & Chemical Corp. (Sinopec) have formed a joint venture to build a specialty resin plant in Shanghai.
The plant will produce ethylene-propylene-diene terpolymer (EPT) and will begin commercial production in the first quarter of 2014, according to a Dec. 21 news release from Tokyo-based Mitsui and Beijing-based Sinopec.
EPT offers resistance to heat, cold, ultraviolet rays, and chemicals. The material is used in auto parts, electric cables, and other industrial products.
Officials said The plant is expected to be the world’s largest EPT production site.
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