My Turn – Dr. Balaji B. Singh
THREE TOP REASONS FOR YOU TO ATTEND FLEXPO – OCT 17-19 in Bangkok
Number 3 – First opportunity to meet major suppliers, Government, and downstream processors in Thailand- the Gateway to China;
Number 2 – Come and Meet your future customers – the downstream converting industry in Thailand, and ASEAN Countries;
Number 1 – Bangkok – Hospitality, Food, Tourism; The Future Growth and an Opportunity to meet future growth region.
For more information visit www.CMRHouTex.com
FlexPO2007 on October 17-19th, 2007 and Polyolefins; Downstream Processing Workshop- October 16th Bangkok, Thailand
CMR is pleased to announce that we will be hosting a conference & polyolefins and downstream processing workshop in Bangkok, Thailand. The conference will be held from October 17-19 at Shangri La Hotel and the workshop will be held on 16th October. Please plan on attending.
Comments: Please find enclosed the brochure for FlexPO2007 & Workshop. For more information, please call us at 281-557-3320.
Dow Chemical and Shell Chemical Company consider developing a petrochemical complex in Iraq
Royal Dutch Shell is said to be in talks with Dow Chemical to develop an Iraqi petrochemical plant for $2.1 billion, in an attempt to gain a strong foothold before the hoped-for opening up of the country’s broken oil industry. The plant is to be based in the southern city of Basra, and would therefore rely on the city’s 120,000 barrels-a-day refinery for its feedstock.
The real value of the reported project may therefore be political rather than financial. After all, the revelation that Shell and Dow Chemical were in talks over the joint venture came from Iraqi Industry Minister Fawzi Hariri, who said that the upgrade would help “the local market and beyond.”
A spokesperson for Shell said that the company was in talks with the Iraqi government “on a range of issues,” but would not elaborate on the specific petrochemical plan.
Although any real long-term profitability for the petrochemical project will depend on the reconstruction of Iraq’s security and industrial infrastructure, the real advantage for Shell and Dow lies in getting a favorable position ahead of the passing of the country’s notorious oil law. The law will be the foremost issue to address when the Iraqi parliament reconvenes in September, and companies are hoping that the plan to unlock over two-thirds of the country’s reserves of 112 billion barrels will finally get approval.
Comments: Iraq and Iran together have equal to or more oil and natural gas than all of the rest of the world put together – a catch-22 at best.
Both Shell (with or without the rumored BP merger) and Dow Chemical Company have the capacity, and capability to handle a situation such as this.
GE Plastics acquires Bayer MaterialScience’s share of the Exatec joint venture
Exatec, LLC announces that GE Plastics agreed to acquire Bayer MaterialScience’s share of the Exatec joint venture, which provides advanced glazing systems to the automotive industry.
Under the terms of the deal, which is subject to regulatory approval, GE Plastics will acquire Bayer’s 50 percent share of the joint venture, thereby increasing its equity interest in Exatec to 100 percent.
Exatec was founded in 1998 as a joint venture between Bayer MaterialScience of Leverkusen, Germany, and GE Plastics, part of General Electric Company, Pittsfield, Mass., USA. Exatec is a global company with a technical development center in Wixom, near Detroit, MI, and a European subsidiary based in Bergisch Gladbach near Cologne, Germany. The company has successfully developed new technologies and met numerous milestones related to regulation and testing over the past eight years. The company plans to fully commercialize and industrialize its technologies for a broad range of automotive OEMs and tiers.
Exatec’s automotive glazing system covers all processes and manufacturing steps, including molding with added functionality, 3D printing, decoration technologies, and plasma-enhanced chemical vapor deposition (PECVD) hard coats. The wholly owned Exatec will continue to serve its customers across the globe in developing advanced glazing technology applications. Bayer MaterialScience will proactively develop and expand its automotive glazing business independent of the JV.
Comments: EXATEC was founded in 1998 as a 50:50 joint venture of Bayer MaterialScience and GE Plastics with the mandate to develop polycarbonate glazing systems for the automotive market. Bayer, the parent company of Bayer MaterialScience has been seeing weak polycarbonate business mainly due to price pressures and hence lower margins.
Bayer’s MaterialScience division is focussing on improving its growth mainly in the polyurethanes business. In 2003, Bayer reorganized its business and combined its polymers and chemicals units into one division MaterialScience. Bayer MaterialScience could be eventually divested by Bayer as the company’s main focus is on healthcare and life sciences.
Borouge to invest in the automotive market with a new compounding facility in China
Borouge announced that it plans to develop a compounding facility in China for the manufacture of high-performance polypropylene compounds for applications in the automotive and electrical appliance sectors.
The new compounding facility will be constructed in the Shanghai area and will have an annual capacity of up to 50,000 tons with further expansion possibilities. It will be strategically located to take advantage of the supply of Borstar® polypropylene from its production plant in Ruwais, Abu Dhabi through an advanced logistics concept and to serve current customers such as VW, GM, and PSA in China, future customers in China and other Asian and Middle East markets.
The compounding facility will primarily provide polypropylene solutions for the automotive industry including endurance and high-impact interior and exterior applications such as dashboards, door panels and bumpers, as well as mineral-filled PP and glass fiber-reinforced PP for under-the-bonnet applications. Value-added compounds for electrical appliances will also initially be part of the manufacturing portfolio.
The new site complements Borouge 2, the major expansion of Borouge’s production facilities in Ruwais which will triple its annual capacity to two million tons of polyolefins and enable the production of for the first time of polypropylene matrix materials. The increased capacity is expected to come on-stream in 2010, in parallel to the start-up of the new polymerization units in the Borouge 2 project. It also complements the development of Borouge and Borealis’ network of Innovation Centres focused on customer applications. Borealis is together with the Abu Dhabi National Oil Company (ADNOC) a co-owner of Borouge and already markets its high-value polyolefins to the automotive markets in Asia through Borouge.
By locating this new facility in China, Borouge expects to take further advantage of the country’s status as the world’s fastest-growing automotive market and its drive to become the biggest car producer in the world within the next 10 years. Borouge’s investment in Shanghai, which builds on the know-how of Borealis’ European and Brazilian compounding assets, underlines the company’s commitment to serving the automotive and electrical appliance sectors.
Comments: This move by Borouge represents the two ongoing trends in the chemical industry: one is to invest in petrochemical complexes in regions with access to low-cost feedstock and the second is to invest in converting industry in Asia (specifically China). This will provide the company to compete in two stages of the value chain with the lowest cost. We will see many other investments of similar nature with an investment focus in these regions.
DuPont to expand engineering plastics capacity in South Korea
DuPont announced that it has enhanced its global manufacturing network in support of strong Asia demand for its engineering resins through a 20,000-tons-per-year expansion at its Ulsan, Korea, compounding facility for nylon resins.
The capacity expansion is in response to rapid growth in demand for DuPont™ Zytel® nylon resins in the region, particularly for automotive applications, and complements other recent engineering polymers investments in Singapore for DuPont™ Zytel® HTN high-performance polyamide and DuPont™ Vespel® parts and shapes. DuPont’s Engineering Polymers business also has a significant presence in the company’s Shanghai research and development center and the DuPont Nagoya, Japan, Automotive Center.
Comments: DuPont had earlier announced that it will invest in engineering thermoplastics for the next few years. This announcement is part of its investment strategy and by selecting South Korea as the location for its new compounding facility; the company is taking advantage of high growth. South Korea is one of the test regions for new electronic products and the automotive industry.
Celanese sells the films business of AT Plastics to BPI
Celanese Corporation announced that the company has sold the Films business of its AT Plastics subsidiary to British Polythene Industries PLC (BPI). The Films business manufactures products for the agricultural, horticultural, and construction industries.
The sale is part of Celanese’s ongoing plan to divest non-core businesses. The transaction includes the transfer to BPI of Films production assets, located in Edmonton and Westlock, Alberta, Canada, effective immediately.
The Specialty Polymers business of AT Plastics, whose production and support facilities are located in Edmonton, remains with Celanese. The Polymers business concentrates on the development and supply of specialty resins and compounds. Both lines of business remain in full production.
Comments: The films division produced greenhouse and overwintering films for the horticultural products industry. The business arm also produced a variety of silage plastic products. AT Films sold 12,500 tons of polythene film products with an annual value of US$35 million in the last financial year. The sale is part of Celanese’s ongoing plan to divest non-core businesses. The transaction includes the transfer to BPI of Films production assets, located in Edmonton and Westlock, Alberta, Canada, effective immediately. This $12 million deal is an all-cash transaction. This acquisition will allow British Polythene Industries (BPI) to compete in the North American market. BPI is one of the largest manufacturers of polythene films, bags, and sacks in Europe. The AT Films purchase brings with it a new product, a large agricultural bag used for storing grains for animal feed or that is subsequently used in the production of biofuels. Bio-fuels could become a lucrative area with high growth potential.
Thailand’s PVC producer Vinythai to acquire Apex Petrochemical
In a bid to facilitate capacity expansion, Thailand’s second-largest polyvinyl chloride (PVC) producer – Vinythai PCL plans to buy assets of smaller rival APEX Petrochemical Co. for 3.25 billion baht ($94 million) to expand capacity.
The purchase, which would include a factory and machines, would raise Vinythai’s PVC annual capacity to 330 KT from 210 KT. Vinythai plans to seek loans to finance the purchase, expected to be completed by the end of Q3-2007
Comments: PVC is growing at a healthy rate in Asian countries such as Thailand, Malaysia, the Philippines, India, and China. In order to gain market share and better compete in this economy VinyThai acquired PVC producer Apex Petrochemical. After this acquisition, there will be two producers of PVC in Thailand: Thai Plastic Chemicals and VinyThai with a total capacity of 840 KT. The demand for PVC in Thailand is expected to grow at about 5.5-6.0% for the next few years.
European window profile maker Profine Group acquired by Arcapita Bank
Arcapita Bank, a leading international investment firm headquartered in Bahrain, today announces the signing of agreements to acquire Profine Group (also known as HT Troplast), the leading European developer, manufacturer, and marketer of PVC window and door profiles. Profine was previously owned by Advent International and Carlyle Group.
Profine, headquartered in Troisdorf (North Rhine-Westphalia, Germany) currently has a production capacity of more than 450,000 tons of high-quality plastic. The group employs a total of more than 3,700 employees in 26 locations in 21 countries. Around 2,250 of these employees are in Germany. Turnover in 2006 was EUR848 million. In addition to a strong position in Western Europe, the group is already well-established in the high-growth markets of Central and Eastern Europe (including Russia and Ukraine).where it generates more than 50% of its revenues.
Profine represents Arcapita’s third major investment in the building materials industry and its largest to date. It follows the EUR620 million acquisition of Paroc in Finland and the $514 million acquisitions of Tensar in the US and Tensar International in the UK, reflecting the strong interest of its investors and its increasing focus on this sector globally. In addition to today’s announcement and the Paroc investment, the past year has been busy for Arcapita and has included the sale of Roxar, the Norwegian oil and gas technology services company, to CorrOcean for $388m, the recapitalization of Vogica, the French manufacturer and retailer of kitchens and bathrooms, completed in April 2007 and the subsequent recapitalization of Paroc in June 2007. The year was also marked by the largest Arcapita investment to date in the form of the successful £1.62bn public-to-private acquisition of Irish energy business Viridian.
Comments: Profine Group is the largest window profile manufacturer in Eastern Europe. Arcepta’s decision of acquiring the Profine Group will take advantage of the growing housing market in Eastern Europe. The growth of window profiles in Eastern Europe is currently at close to 12% per year as the region catches up to Western European standards. Profine group has the largest market share in Russia accounting for about 15% of the total consumption.
PURAC introduces new solutions for PLA bioplastics industry
CSM subsidiary PURAC, the global market leader in lactic acid will extend its portfolio with Lactides, offering bio-plastics producers the technical and economical solutions that have so far restrained them from entering the Poly-Lactic Acid (PLA) bio-plastics market.
In addition to its patented Lactide solutions, PURAC will expand its product portfolio with D(-) technology. With compounded (D- and L+) PLA polymers it is possible to efficiently produce bioplastics that withstand temperatures of at least 175 °C, for diverse applications such as hot-fill bottles, microwaveable trays, temperature-resistant fibers, electronics, and automotive parts.
PLA is a raw material for bio-degradable plastics, an environmentally-friendly alternative to oil-based plastics. PLA is produced from lactic acid coming from agricultural products such as corn, sugar beet, tapioca, and sugar cane.
PURAC, together with leading plastics producers, is investigating the necessary investments to be able to meet future demand. Industry experts project a steady market growth as of 2010 when products will be available in sizeable volumes.
Comments: Polylactic acid or Polylactide (PLA) is a starch-based thermoplastic, aliphatic polyester. In its most common manifestation, it is the homopolymer of what is designated as the L enantiomer, which is produced from fermentation. Being a fermentation product, one would need enantiomerically pure lactide to get the right tacticity. The (L) PLA typically has crystallinity of around 37%, a glass transition temperature between 50-80 deg C, and a melting temperature of around 170 deg C.
The physical blending of (L) and (D) PLA is known to form a highly regular stereo complex with increased crystallinity, leading to improved thermal properties. An additional attraction is the transparency of the product. However, the increased crystallinity would mean that biodegradability will become slower, which indeed is the primary marketing appeal of PLA.
All said and done, the impact of these novel bioplastic materials would be decided by their cost-to-performance ratio. The economics of PLA requires that a producer be vertically integrated from starch to fermentation to monomer production to polymerization. Energy and corn prices will have a large impact on their economies. PLA will largely remain a ‘boutique’ polymer at best for the foreseeable future. Further, it will also face increased competition from other bioplastic materials such as PHA which is being actively marketed by Metabolix and Archer Daniel Midland.
CB&I to acquire Lummus Global from ABB
CB&I announced that it has entered into a definitive agreement to acquire the Lummus Global business from ABB for an enterprise value of $950 million on a debt and cash-free basis, subject to adjustments at closing. The acquisition is expected to close in the fourth quarter of 2007, pending CB&I shareholder and customary regulatory approvals.
Lummus Global is a leading provider of process technologies used in the oil & gas and petrochemical industries, as well as a global EPC contractor. The company is widely recognized for its expertise in ethylene and olefins technologies, having licensed approximately 40 percent of all such projects worldwide over the last decade. It also holds a market-leading position in hydrocracking projects. With 2,400 employees worldwide, Lummus Global has 70 proprietary technologies, more than 1,000 patents, and an established global presence including Europe, the Middle East, Africa, China, Russia, and the U.S.
The combination of CB&I’s EPC experience and Lummus’ technology expertise creates a strategic advantage in the marketplace. The combined company will be able to provide clients with a full range of complementary services across the entire hydrocarbon value chain, from proprietary technology to engineering, procurement, fabrication, construction, and final commissioning.
CB&I estimates Lummus Global will have revenues of approximately $1.0 billion in 2007, and expects the opportunities provided by the acquisition to drive substantial revenue and earnings growth in 2008 and beyond. The acquisition will be funded using a combination of cash and debt, with a possible subsequent issuance of common stock following the closing.
Comments: Chicago Bridge & Iron Co. N.V. (CBI) is a leading Engineering, Procurement, and Construction (EPC) firm, specializing in lump-sum turnkey projects. It offers a complete package of conceptual design, engineering, procurement, fabrication, field construction, mechanical installation, and commissioning. The firm serves the oil and gas, petrochemical and chemical, power, water, and wastewater, as well as metals and mining industries. It also provides a wide range of maintenance and repair services, including turnarounds for petroleum refining and petrochemical plants. Based in The Netherlands, it has operations spanning more than 60 locations.
ABB has been trying to sell its Lummus Global division for a long time now and finally, it has been successful. The company had identified Lummus as its non-core activity and hence the decision.
Mattel’s Fisher-Price toys producer Lee Der Industrial to close three factories
Lee Der Industrial Co Ltd is closing three factories in China, laying off 5,000 workers, following the disclosure that the company was responsible for 1.5 million Fisher-Price plastic toys that had lead paint.
The world’s largest toy maker Mattel Inc announced a worldwide recall of 18.2 million toys with magnets that could come loose and be swallowed by children, as an expansion of a November 2006 recall. The company also issued a new global recall of 436,000 die-cast cars with components coated with lead paint.
While the news was widely reported as yet another problem with Chinese-made products, the magnet-related recall was not a problem with the manufacturer’s quality control.
Lee Der is headquartered in Hong Kong and has three toy factories in Foshan: Lida, Shuaimeng, and Hengjing. Lee Der is one of Mattel’s “dozens of vendors” in China and half of Mattel’s products from China are made by vendors and half by the company’s plants in Guangdong province. About 65 percent of the toys Mattel sells worldwide are made in China.
Lee Der stopped production in late May when an excessive amount of lead paint was found in its exports, according to Chinese newspapers. The factories have been paralyzed ever since, but the co-owner Zhang still paid the 5,000 workers. Before he hung himself in the warehouse of the Shuaimeng factory, he visited all three factories, chatted with workers, and checked with payroll to make sure all employees received paychecks.
Comments: This is a sad event overall – both for the industry and the consumers. We hope that some learning and follow-up remedies will come out of this unfortunate turn of events. When everything is said and done, it is safety that matters! There should be a check and balance system not merely for the end product but for all the material components that are being used to fabricate the product. If someone took time and measures to check out the paint for “lead-free” before its use in toy production, it could have prevented this huge financial and human loss. Also, this disaster could have been prevented by screening the end product (toys) for safe use even at the pilot production level rather after the final manufacturing. Let us hope that safety is not compromised for a quick profit by short-circuiting the proper manufacturing guidelines.
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