My Turn – Dr. Balaji B. Singh – Congratulations to Montedison-Himont-Montell-Basell – LionMont??? – for their perseverance and focus to be the best and biggest polyolefin company in the world
The first time I came across Montedison was in 1982-83, an impressive organization dedicated to polypropylene. It was also humbling to visit their Ferrara facility in 1993 and see in-person the word polypropylene scribbled on the working desk of Prof. Natta.
Over the years, we had the opportunity to track the organization and its technologies starting from third generation high activity PP catalysts that did not need APP separation to co-monomer, incorporations, to two-phase reactor systems – the famous Valtec resins, RAO-60, which later became Catalloy; Hivalloy; RGT-Reaction Granule Technology – a direction which stuck to their strong belief in Z-N catalysts while whole rest of the world spent billions of dollars on Metallocenes only to produce differentiated commodities.
We have seen the formation of Himont and then Montell – an organization with two diverging philosophies – the technology route and the business route. We witnessed Shell owning and putting up Montell for sale – “Come join me in my boat – but I warn you, part of it – not on my side, of course, leaks”. Look and behold – BASELL was born.
The newer generational thinking of commodities being akin to popular four-letter words – resulted in Basell being sold to their prince in shining armor – Access Group. Basell (still the Montedison group) proved yet again that superior technology is far more important to polyolefins than just Stack ‘em High and Sell ‘em Cheap… commodity mentality. Basell under the Access group had a turn-around and superior performance.
This acquisition of Lyondell essentially gives an opportunity for Basell to be the undisputed leader in polyolefins.
Do good guys always win in the end??? Or is it just the beginning????
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
Comments: Please find enclosed the brochure for FlexPO2007 & Workshop. For more information, please call us at 281-557-3320.
Basell to acquire Lyondell Chemical Company for $48 per share
Basell announced that they have signed a definitive agreement pursuant to which Basell will acquire Lyondell’s outstanding common shares for $48 per common share in an all-cash transaction with a total enterprise value of approximately $19 billion, including the assumption of debt.
The purchase price per share represents a 45% premium to Lyondell’s closing share price on May 10, 2007, the day before the disclosure by Access Industries, the industrial group that owns Basell, of its potential interest in Lyondell, and a 20% premium to Lyondell’s closing share price on July 16, 2007. The transaction was unanimously approved by the Boards of Directors of Basell and Lyondell.
The transaction will create one of the sector’s largest companies. Lyondell’s three business segments — ethylene, co-products, and derivatives; propylene oxide and related products; and refining — will complement and significantly strengthen Basell’s polyolefins business. Basell and Lyondell together would have had combined 2006 revenues of approximately $34 billion and 15,000 employees around the world. The transaction is subject to customary closing conditions, including regulatory approvals and the approval of Lyondell shareholders. This transaction is expected to close within the next several months and is not subject to financing.
Comments: Please find attached our analysis of Lyondell’s acquisition by Basell. For more information please contact us at 281-557-3320.
Huntsman accepts Hexion’s $28.00 per share bid and terminates the merger agreement With Basell
Huntsman Corporation announced the termination of the merger agreement with Basell AF and agreed to a definitive merger agreement with Hexion Specialty Chemicals, Inc., an Apollo Management, L.P. portfolio company, pursuant to which Hexion will acquire Huntsman in a transaction with a total value of approximately $10.6 billion, including the assumption of debt.
Under the terms of the agreement, Hexion will acquire all of the outstanding common stock of Huntsman for $28.00 per share in cash. The agreement also provides that the cash price per share to be paid by Hexion will increase at the rate of 8% per annum (inclusive of any dividends paid) beginning 270 days from July 12, 2007. +
The Hexion Transaction was deemed to be a superior proposal to the Basell Agreement and was unanimously approved by the Board of Directors of Huntsman. Huntsman’s Board of Directors approved the agreement for the Hexion Transaction at the recommendation of a Transaction Committee comprised solely of Huntsman independent directors. Hexion’s Board of Directors also has approved the agreement.
The transaction is subject to customary closing conditions, including regulatory approval in the U.S. and Europe, as well as the approval of Huntsman shareholders. Hexion funded $100 million of the Basell break-up fee while Huntsman funded the remaining $100 million.
Comments: Worldwide chemical industry is mature and is constantly being impacted by Global product migration issues. The growth potential worldwide versus newly attractive regions such as China and the Middle East has grabbed most of the attention. From an average growth perspective, the North American/European chemical industry is lagging, providing more opportunities for financial buyers rather than strategic buyers.
In North America, Huntsman will be an excellent fit for Hexion because Huntsman’s current and past strategies will enhance both the organizations’ positions, and in the end, all three would benefit.
For more information, please read our analysis enclosed in Global Polyolefins & Elastomers Newsletter – Volume 5, Issue 14.
Dow introduces HYPOD™ polyolefin dispersions
The Dow Chemical Company today introduced HYPOD™ Polyolefin Dispersions, propylene- and ethylene-based dispersions that combine the performance of high-molecular-weight thermoplastics and elastomers with the application advantages of a high-solids waterborne dispersion. These dispersions are the first in a family of products made possible by Dow’s proprietary BLUEWAVE™ Technology, a mechanical dispersion process technology that enables the production of waterborne dispersions of polymers that are not possible via emulsion polymerization.
According to Dow, HYPOD™ Polyolefin Dispersions provide converters an opportunity to introduce olefinic performance benefits to latex applications. This creates the potential for converters to reduce the number of process steps during conversion, lower systems costs, develop entirely new product offerings, and positively address solvent-related environmental and regulatory issues. The advantages of HYPOD™ Polyolefin Dispersions include heat stability, low-temperature flexibility, and water and chemical resistance of polyolefins; as well as the application benefits of waterborne systems, such as thin coatings and the ability to formulate with other additives and fillers.
HYPOD™ Polyolefin Dispersions can be applied via traditional low-viscosity coating techniques including printing/coating processes, dipping, frothed foams, and spray applications. Compared to extrusion techniques, the dispersions can offer thinner coatings Back to Headlines Another Unique Service From Chemical Market Resources, Inc. 560 Blossom Street, Ste C, Houston, TX 77598 USA; Tel: 281-557-3320 Email: POE-SNA@CMRHouTex.Com Copyright © 2007 Page 17/24of Issue 15 – Volume 5 and higher line speeds using existing converting equipment. They also provide converters the opportunity to coat complex geometries, coat in pattern, coat at low temperatures, and penetrate porous and fibrous webs.
Comments: Emulsion polymers have always been a way to extend polymer use over large surfaces. Latex emulsions (starting from the natural rubber emulsions) have played a critical role in all coating applications on various surfaces – including paper, carpet, walls, metal surfaces, and other cellular structures. SB latex rubber, imitating natural rubber would probably be the first man-made polymer invented after World War II.
Since most of the activity in the emulsions was limited to the solution process where the solvent could be naturally or artificially evaporated away, many of the thermoplastics and/or thermoset materials that required additional melt processing could not be used. The development of dispersible polyolefin powders opens up the doors for several newer developments.
This is great news for the carpet industry, especially for carpet backing providers who have been searching for a facile process to apply thermoplastics using the conventional coating technique. To date, melt extrusion coating is the only way to apply thermoplastics – LLDPE, PP, EVA, PVC, and plastomers as carpet backing that can be recycled along with carpet fibers during the disposal stage. Also, the water dispersion technology may be cost advantageous with less energy consumption and using existing equipment vs. the melt extrusion coating that requires high energy and expensive extruders. Hopefully, this new process will open other new end-use applications.
Repsol to license Innovene G technology for LLDPE plant from Ineos Technologies
NEOS Technologies has licensed its Innovene G process for the manufacture of Linear Low-Density Polyethylene to Repsol Polimeros LDA, the Repsol YPF Chemicals site located in Sines, Portugal.
The 300ktpa plant will produce a full range of Ziegler-Natta and metallocene High-Performance Linear Low-Density products. INEOS’ technology will complement Repsol YPF’s existing range of polyethylene and will also expand its manufacturing capacity, ensuring a competitive long-term position and helping increase Repsol YPF Chemicals’ market share in polyethylene.
Repsol YPF becomes the 29th licensee of the Innovene G gas-phase technology. The Sines plant will incorporate the latest developments in the technology including the Clean Loop design, Enhanced High Productivity, and the newest Ziegler-Natta and metallocene catalyst platforms. Both companies have now begun the engineering phase of the project and the plant is scheduled to start up in mid-2010.
Comments: This is good news for both companies. INEOS’ technology will complement Repsol YPF’s existing range of PE, and will also expand its manufacturing capacity, ensuring a competitive long-term position and helping increase Repsol YPF Chemicals’ PE market share. Repsol YPF becomes the 29th licensee of the Innovene G gas-phase technology. Both companies have begun the engineering phase of the project and the plant is scheduled to start up in mid-2010. We understand that the Sines plant will incorporate the latest developments of the Innovene G technology that has undergone substantial development in recent years. It seems that this award by Repsol, after a thorough and detailed evaluation, is a recognition of the value that INEOS technology offers its licensees and their customers.
BASF considers selling selected styrenics businesses
BASF Aktiengesellschaft (BASF) announced that it is evaluating strategic options for selected parts of its styrenics activities. In parallel with the evaluation process, BASF has received an initial offer for selected parts of its styrenics activities and plans to start discussions with the interested party.
BASF’s activities under consideration include its styrene monomer (SM), polystyrene (PS), styrene-butadiene copolymer (SBC), and acrylonitrile butadiene styrene (ABS) businesses with plants in Antwerp, Belgium; Altamira, Mexico; São José dos Campos, Brazil; Ulsan, South Korea; and Dahej, India. These activities posted sales of about EUR3.2 billion in 2006 and have approximately 1,000 employees.
BASF will ensure that customers will not face any supply disruptions during the evaluation process. Employees will be informed about developments regularly. Lazard is acting as an advisor to BASF in connection with a potential transaction.
Comments: There have been several consolidations in the industry in styrenics to improve profitability. BASF’s decision to sell certain styrenic businesses is no different. Recently, Lanxess made a deal with Ineos under which it will sell its ABS business after two years. Nova Chemicals and Innovene combined their styrenics assets to form Nova Innovene. In order to be competitive in styrenics with increasing prices of benzene, consolidation becomes the key.
LANXESS and DuPont joint venture to increase PBT production
Chemical companies LANXESS and DuPont have expanded their joint venture for the production of plastics. The two partners have invested more than EUR 10 million in the site in Hamm-Uentrop, which is operated by the joint company DuBay Polymer GmbH. Eleven new jobs have been created as a result of the expansion of the production facility. A total of about 70 people now work for DuBay Polymer GmbH.
The production plant, which went on stream in 2004, produces the basic plastic material polybutylene terephthalate (PBT) for the joint venture partners.
The main areas of application for PBT are the electrical and electronics industry and automotive construction, where it is used, among other things, for the production of headlamp bezels and distributor housings. The material exhibits high heat resistance, stiffness and strength, low surface friction, high wear resistance, low moisture absorption, and good dielectric properties. LANXESS is one of the leading European chemical suppliers, with 2006 sales of EUR 6.94 billion and more than 16,000 employees in 18 countries. The company is represented at around 50 sites worldwide. The core business of LANXESS is the development, manufacture, and sale of chemicals, rubber, and plastics.
Comments: Lanxess has been evaluating its business and continuing its restructuring efforts. The company has been focusing on polyamide and PBT within its engineering plastics division. The company has announced investments in China in polyamides and now PBT.
DuPont’s decision to increase the capacity of this joint venture is part of its previously announced plans to invest in engineering plastics.
Mitsui Chemicals Expands TAFMER Production Capacity in Singapore
Mitsui Chemicals (MCI) announced its plans to establish a new plant to increase production capacity for TAFMER, to be managed by Mitsui Elastomers Singapore Pte. Ltd. (MELS), a subsidiary of MCI which manufactures and sells TAFMER®.
With an investment of 19 billion yen ($160 mil), the production capacity of the new plant will be 100Kt per year, raising MELS’ total production capacity to 200Kt per year. Construction will start in March 2008 with completion scheduled for August 2009.
TAFMER, a flexible and light resin modifier, dramatically improves impact resistance for molding materials such as automobile bumpers and sealability for packaging materials, when blended with a thermoplastic resin such as polyethylene or polypropylene.
The material is also applied to midsoles of athletic shoes, thanks to its property as an excellent flexible molding material. TAFMER is expected to cover a wide range of applications such as automotive, industrial, and packaging materials. Aiming to realize the Grand Design, the basic framework for the MCI group’s management, MCI established a business portfolio consisting of three business domains (Performance Materials, Advanced Chemicals, and Basic Chemicals) with the Long-term Management Target upheld.
Comments: Mitsui is one of Asia’s largest ethylene elastomers producers. The increase in capacity indicates the growth in the demand for ethylene elastomers in the region in response to the growing economy. These elastomers are commonly used as an impact modifier in polypropylene to make TPOs. Ethylene elastomers compete well against EPM where they impart (1) superior Izod impact, (2) knit line strength, and (3) low-temperature ductility. When blended with conventional random polypropylene copolymers, ethylene elastomers increase toughness without compromising clarity. The other added benefit is that they improve the low-temperature-drop resistance of polypropylene.
Ethylene elastomers have seen rapid growth in recent years, currently with a demand of close to 400 million pounds globally and growing at 12% per annum. These elastomers find use in a number of markets that include (1) polymer modification (TPO/TPV and others), (2) wire & cable, (3) foam, (4) industrial and construction, (5) footwear, and others. Elastomers used in thermoplastic polyolefin elastomers (TPO/TPV) are the single largest end-use application for ethylene elastomers.
Degussa starts PMMA facility in Taiwan
RAG subsidiary Degussa GmbH started up a new production facility for PMMA (polymethyl methacrylate) molding compounds in Taichung, Taiwan, together with its joint venture partner Forhouse Corporation. Degussa holds a 51% share and Forhouse a 49% share in the joint venture Degussa Forhouse Optical Polymers Corporation, launched in January 2006. The construction project for the new plant, which manufactures high-quality PMMA for optical applications in flat-panel displays was implemented quickly after a short planning phase.
The plant will have an initial annual capacity of some 40,000 MT and is designed for “over-the-fence” production. Apart from PMMA manufacture, the further processing of lighting modules (backlight units) for flat-panel displays will also be located at this site. The integrated supply chain ensures the continuous supply of ultra-high purity optical-grade material to customers. The PLEXIGLAS® molding compound used to manufacture optical light guides in TFT-LCD (Thin-Film-Transistor Liquid-Crystal Display) flat-panel displays has to meet the most stringent quality requirements to enable perfect illumination of the displays.
Degussa is a leading global manufacturer of PMMA molding compounds, with production facilities in Europe, North America, and Asia. With its wide product portfolio for all extrusion and injection-molding applications and its strong applications know-how, the Molding Compounds Business Line offers customer-specific solutions for a multitude of demanding applications.
Forhouse is one of Taiwan’s leading companies in its field, with substantial expertise in manufacturing and developing lighting modules for flat-panel displays, and operates several production facilities in Taiwan and mainland China. As one of the leading suppliers of backlight unit modules, Forhouse possesses excellent knowledge of the market and outstanding technical support skills. In 2006, Forhouse achieved sales of some EUR 492 million with around 6,000 employees. By combining their strengths, the two partners will not only be able to cooperate successfully in their existing business but also develop innovative products for the expanding market.
Comments: This is a mutually beneficial situation for both Degussa and Forhouse. Forhouse will achieve backward integration into PMMA and help them secure the PMMA supply and better cost economics. For Degussa, this plant enhances its position in the Asian market which is growing significantly.
The demand for PMMA molding compounds mainly in liquid-crystal flat-panel displays is growing at a very high rate. For more information on PMMA, please refer to our recently published multi-client study. For pricing and prospectuses, please call us at 281-557-3320.
Rohm and Haas introduces new impact modifiers for PLA-based polymers
Rohm and Haas improve the performance of green packaging with the launch of their new additive, PARALOID™ BPM-500, an impact modifier that broadens the usability of bioplastics by making them stronger without sacrificing clarity. PARALOID™ BPM-500 supports the packaging industry’s movement toward sustainability by enhancing polylactic acid (PLA) polymer, an innovative bioplastic derived from a renewable resource, such as corn, and used in some packaging applications.
The packaging industry’s move toward PLA resin has been hampered by unmodified PLA being somewhat weaker and more brittle than traditional materials. Previous attempts to strengthen PLA packaging have sacrificed transparency in their efforts. Rohm and Haas’ new PLA additive, PARALOID™ BPM-500, toughens PLA packaging while maintaining clarity, thereby fulfilling a key industry need.
Using dispersible nanoparticles that do not scatter light, PARALOID™ BPM-500 allows for the production of PLA packaging material that exhibits less than 10% haze at 5% loading, a significant advantage compared to other additives on the market. Combining this visual transparency with the stronger impact and tear-resistance achieved with PARALOID™BPM-500 creates an improved consumer experience and an eco-friendly product. In addition, PARALOID™BPM-500 complies with food contact requirements in Europe and with room temperature food contact requirements in the United States.
Comments: Impact modifiers are one of the key products for Rohm and Haas’ additives business lines. With the increasing acceptance of biopolymers, there will be a need for additives to enhance polymer properties. R&H’s introduction of this new product is one of the steps towards the introduction of additives compatible with polymers such as PLA.
This will also help the Company to maintain/increase its market share in the plastic additives industry. Plastic additives are part of its performance chemicals business unit which is comprised of 50-50 commodities to specialty products. By introducing new products, the company will also reduce its commodities portfolio and in turn increase its bottom line.
Total and Sonatrach to construct a petrochemical complex in Algeria
Following a call for tenders, Total has been selected to build a petrochemical complex in Arzew, near Oran, Algeria, in partnership with Sonatrach.
The project encompasses the construction of an ethane cracker and three product lines. The cracker will have a capacity of 1.4 million metric tons per year. The feed gas will come from southern Algerian fields. The cracker will produce around 1.1 million metric tons of ethylene per year, which will be processed into 410,000 metric tons of mono-ethylene glycol, 350,000 metric tons of high-density polyethylene, and 450,000 metric tons of linear low-density polyethylene, mainly for export.
The investment required is estimated at around $3 billion. Development design will be launched shortly, with the commissioning of the units scheduled in about five years.
The project is in line with Total’s strategy of expanding its petrochemical activities through world-class facilities and securing preferred access to feedstock. Present in Algeria since 1946, Total’s equity production was 80,000 barrels of oil equivalent per day in 2006 coming from Hamra and Tin Fouyé Tabankort fields as well as stakes in the Rhourde El Khrouf and Ourhoud fields through its interest in Cepsa.
Owens Corning sells its siding business for $371 million to Saint Gobain
Owens Corning announced that it has reached a definitive agreement to sell its Siding Solutions business to Saint-Gobain for $371 million. The sale includes the company’s Norandex/Reynolds distribution business with 153 U.S. distribution centers in 38 states. Three vinyl siding manufacturing facilities in North America located in Claremont, N.C.; Joplin, Mo.; and London, Ontario are also part of the transaction.
UBS advised Owens Corning on this transaction, which is expected to close by the end of the third quarter. Owens Corning’s strategic review of its Fabwel unit, the leading producer and fabricator of components and sidewalls for recreational vehicles and cargo trailers, continues. Fabwel is a unit within Owens Corning’s Composite Solutions segment.
Comments: Owens Corning has been considering the sale of its vinyl sidings business for some time now. It has one of the leading positions in the market along with other producers such as Ply-Gem, CertainTeed, and others. Vinyl siding has been facing strong inter-material competition from other materials such as stone, and fiber cement due to the aesthetic trends in the industry. Owens Corning’s future strategy is to focus on its core businesses.
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