ExxonMobil to acquire 50% share in CIPEN
ExxonMobil Chemical announced its plans to acquire Basell’s 50 percent share in the Compagnie Industrielle des Polyéthylènes de Normandie (CIPEN) plant in Notre Dame de Gravenchon, France, giving it 100 percent ownership of the facility. The plant manufactures linear low-density polyethylene (LLDPE) resins. The acquisition is effective as of October 1, 2004.
According to the company, market acceptance of metallocene-based polyethylene resins continues to grow rapidly and by this acquisition, ExxonMobil can extend its global supply capability.
Comments: CIPEN was established in 1989/1990 as a joint venture between Exxon Chemical Polymers SNC and Shell Chimie SA to produce C4-based LLDPE products. The 220 KT LLDPE plant started up on May 7, 1992. Under the terms of the agreement, the plant was to be operated (for an initial term of 15 years from the date of start-up) by Exxon Chemical Polymers SNC. Feedstock for the venture was supplied by the partners with Exxon primarily responsible for the ethylene and Shell for the butene-1. The products manufactured by the joint venture were sold independently by the two partners. This facility represented one of the first Unipol-based LLDPE plants in the European Community. Since its start-up, this facility has been used to make butene-based LLDPE, and more recently metallocene-based LLDPE. With metallocene polyethylene still experiencing double-digit growth in Europe, the acquisition of the remaining 50% share from Basell seems to be a strategic fit for ExxonMobil.
Borealis sells its Portugal petrochemicals site to Repsol YPF
Borealis announced the signing of an agreement with Repsol YPF’s Chemicals Division to purchase Borealis Polímeros Lda including all assets of the petrochemical complex at Sines, Portugal. The completion of the transaction is subject to authorization by the European Commission.
Based on 2003 capacities, the site comprises a cracker with a volume of approximately 350,000 MT of ethylene and 180,000 MT of propylene and two polyethylene plants, a low-density plant with a production capacity of 145,000 MT, and a high-density plant of 130,000 MT.
his agreement strengthens Repsol YPF’s strategic lines and allows for new development in two core businesses, olefins/base petrochemicals and polyolefins. This purchase gives Repsol YPF a stronger presence in European markets and complements its product portfolio with new applications currently not manufactured at the Puertollano and Tarragona complexes in Spain.
The implication of this deal is a 38% increase in Repsol YPF’s cracker production capacity. In addition, it means a 28% increase in production capacity in total polyolefins and a 55% increase in polyethylene.
Comments: In mid-2000, Borealis and Repsol signed a letter of intent that would have established one of the largest polyolefins companies in Europe by combining Borealis’ and chemical Repsol YPF’s assets on the Iberian Peninsula. Assets in question included Repsol YPF’s polyolefins assets in Puertollano and Tarragona, Spain, and Borealis’ petrochemical site in Sines, Portugal. In March 2001, after having carried out due diligence and various feasibility studies, the two parties agreed not to pursue negotiations to establish the joint venture company. This recent announcement seems to be a direct result of the previous events.
The implication of this deal is a 38% increase in Repsol YPF’s cracker production capacity. In addition, it means a 28% increase in production capacity in total polyolefins and a 55% increase in polyethylene. For Borealis, the deal represents a 24% reduction in olefins capacity and a 12% reduction in polyethylene capacity. The polypropylene capacity will remain unaffected.
Reliance selects Dow’s UNIPOL™ process for the PP plant
The Dow Chemical Company announced that Reliance Industries Limited, Mumbai, India, has selected the UNIPOL™ PP Process for a new polypropylene production facility at its Jamnagar complex. The plant will be the fourth line at this site to use the UNIPOL™ PP Process. Reliance operates two additional units using the UNIPOL™ PP Process at its Hazira complex and is the largest producer of polypropylene in Asia. The startup is scheduled for late 2005. Kvaerner and Reliance will jointly engineer and construct the plant. The new plant will produce a full range of polypropylene homopolymers. Its output will supply the growing markets in India and China.
Licensees of the UNIPOL™ PP Process operate more than 35 production lines, accounting for more than 5.5 million metric tons of polypropylene production worldwide.
Comments: Reliance is one of the largest producers of polypropylene in Asia. With a combined capacity of over 1 million tons, Reliance is amongst the Top Ten PP producers in the world. In the Indian market, Reliance holds a 70% market share, whereas on a global basis accounts for 3% of the world’s consumption.
Reliance commissioned its first Unipol-based PP plant with a capacity of 350 KTA in October 1996 at Hazira Petrochemical Complex. This was followed by the commissioning of two more Unipol PP lines of 200 KT each at its Jamnagar Petrochemical Complex in May 1999. The third line, also Unipol PP, at Jamnagar of 200 KTA was commissioned in Dec 1999.
Unipol PP process fits all the requirements of Reliance: (1) large-scale reliable technology, (2) the need for more homo and copolymers for growing film and fiber applications, compared to their already existing strength in impact copolymers, and (3) future market focus on the Far East and Western markets for finished goods.
IOC to license LLDPE/HDPE technology from Nova Chemicals
Indian Oil Corp (IOC) announced the selection of Nova Chemicals as the technology licensor for its swing linear-low density polyethylene (LLDPE)/high-density polyethylene (HDPE) project at Panipat in Haryana, India.
The 350,000 MT/year swing plant along with the 800,000 MT/year cracker and other downstream plants are scheduled for completion in October 2007.
IOC has also selected ABB Lummus to provide technology for the cracker and Basell’s technology will be used at the 600,000 MT/year polypropylene (PP) plant at the same site.
Comments: IOC is influenced by IPCL and its good experience with Nova technology. IPCL as an organization has contributed more to the innovations of Nova than any other client – per Paul Clark of Nova.
Atofina Petrochemicals changes its name to Total Petrochemicals & Total names its new chemicals business unit Arkema
Atofina Petrochemicals Inc. has changed its name to Total Petrochemicals USA Inc. to more closely align the petrochemicals business with its parent company, Total S.A. Total S.A. is the world’s fourth-largest integrated petroleum company with major operations in exploration and production, trading and shipping, refining and marketing, and petrochemicals.
Total also announced its plans to name its newly created vinyl products, industrial chemicals, and performance products business Arkema. The new entity began operating on October 1. Total announced plans earlier this year to split off the vinyl products, industrial chemicals, and performance products operations of the company’s Atofina chemicals subsidiary into an independent company.
Arkema will be one of three business units that make up the chemicals division of Total Petrochemicals. The other units are Total Petrochemicals, consisting of the former petrochemicals activities of Atofina, and fertilizer business Grande Paroisse; and specialties. The specialties unit is comprised of five businesses: Atotech (electroplating); Bostik (adhesives); Cray Valley and Sartomer (resins); and Hutchinson (rubber products).
Comments: Total’s move to consolidate and realign a number of its operating divisions is common with other trends in the petrochemicals industry. Other integrated oil companies have done and are doing the same thing, not unlike BP’s spin-off of a number of its chemical businesses and the realignment by Shell/BASF of Basell. Note that the first step Total is taking is to set up 4 divisions aligned by market position; (1) Arkema, (2) Total Petrochemicals, (3) Fertilizer, and (4) Specialties.
With the AtoFina name disappearing completely, the result is a tighter organization that can be better aligned to take advantage of global changes in the marketplace and maximize shareholder value. Total Petrochemicals USA produces base petrochemicals, derivatives like styrene, and transportation fuels from its Port Arthur Refinery. With sales exceeding $5B, Total Petrochemicals is certainly a larger division of Total’s consolidated chemical operations.
Basell names new presidents for North America and International regions
Basell announced the appointments of two regional presidents. Randy Woelfel is the new president of Polyolefins North America and Ian Dunn is the new president of Polyolefins International, succeeding Woelfel. In North America, Woelfel succeeds Chuck Platz, who is retiring after a 34-year career with Basell and two predecessor companies, Montell and Himont. Both Woelfel and Dunn are also members of Basell’s global management team.
Woelfel, who has served as president of Polyolefins International since the formation of Basell in October 2000, will be based in the company’s regional center in Elkton, Maryland. Dunn, who comes to his new role after serving as president and CEO of Basell’s SunAllomer joint venture in Japan, is relocating from Tokyo to Brussels.
Woelfel has a management team responsible for global corporate development and communications. He joined Shell Oil Company in 1978, where he held several roles including process manager for chemical manufacturing and distribution units, business manager for chemical intermediates, and manager of refining/oil planning activities. In 1990 he was appointed team leader for a strategic review of Shell’s USA refining/oil products marketing business. In 1992 he was named the project leader for the Shell-Montedison project that led to the formation of Montell. He then became senior vice president for business development of Montell’s International Division.
In 1985 Dunn joined the customer service division of Shell in London. From 1986 to 1994, he held several roles in business analysis, management, and marketing with Shell Chemicals sectors of LDPE, solvents, base chemicals, and polypropylene. He was also involved in developing a global PET strategy following Shell’s PET acquisition in North America. In 1995 Dunn joined Montell as asset director for advanced polyolefins in Europe. In 1998 he became the UK country representative and commercial director of packaging in Europe. Subsequently, he moved to Brazil to lead the company’s international division in South America, his assignment before assuming leadership of SunAllomer in Japan.
Dow introduces new grades of Inspire-based resins for the rigid packaging market in Europe
The Dow Chemical Company announced the launch of a suite of new advanced resins based on Inspire technology in Europe.
In the family of INSPIRE® Performance Polymers, two new homopolymers provide higher stiffness with excellent optics and create opportunities for innovative product development.
A developmental advanced technology polystyrene grade provides a unique combination of high-clarity and high-toughness properties, without any additional blending needed. This is a direct response to trend research that identifies high transparency in food packaging as an increasingly important factor in consumers’ purchasing behavior, particularly for dairy, desserts, snacks, and fresh food products. VERSIFY® Plastomers and Elastomers are a breakthrough family of versatile specialty propylene-ethylene copolymers providing films, fibers, and molded parts with an outstanding combination of excellent optics, sealing and hot tack performance, plus elasticity, flexibility, softness, and compatibility in blends.
For thermoformed, INSPIRE 213 allows downgauging, with improved clarity and gloss, superior heat resistance for microwave ability and hot filling, as well as reduced cycle time. Applications include plastic trays for dried goods and fresh food and microwaveable ready-meal packaging. For injection molders, INSPIRE 215 has superior top load, improved gloss, superior heat resistance for microwave ability and hot filling, and reduced cycle time. For filled compounds, it offers benefits in terms of lightweight and high gloss. Applications include thin-wall injection molded food containers.
The newest developmental grade of polystyrene from Dow is a high-clarity, high-toughness resin with high heat and high hoop strain resistance capabilities. Based on advanced rubber technology, it is particularly attractive for the form fill seal (FFS) market where current solutions based on expensive block copolymers and exotic polymer structures are difficult to blend, process, and recycle efficiently. To FFS converters and brand owners, clear technology polystyrene offers simple and fast processing and does not require any additional blending or a capping gloss layer. This is particularly relevant to applications such as clear FFS cups and trays, dairy cups, or clear disposable applications, which require high clarity and gloss, high toughness, and consistent quality.
Comments: INSPIRE Performance Polymers are a family of single-site catalyst propylene-based products. The INSPIRE line of products leverages Dow’s capability to enhance melt strength and processing characteristics of polypropylene at the molecular level. In 2001, Dow started to produce polypropylene resins and INSPIRE Performance Polymers at the Freeport facility in Texas. Initial production for sampling purposes was done at Dow’s Freeport pilot and mini-pilot plants.
In 2002, Dow introduced INSPIRE HMS 112 for blown film applications. This grade was designed to be used in LLDPE-rich blends to enhance bubble stability, durability, and other final film characteristics. The latest grades continue to take advantage of Dow’s strong position in single-site catalysis and further open doors for polypropylene in melt strength-based applications.
NOVA Chemicals introduces two grades of SURPASS™ resins for roto molding applications
NOVA Chemicals announced the commercialization of two new grades for roto molding applications in its SURPASS® line of polyethylene resins. SURPASS resins, including the new RMs539 for custom applications and RMs244 for industrial applications, are produced with NOVA Chemicals’ Advanced SCLAIRTECH™ technology using a proprietary single-site catalyst.
According to Nova, SURPASS RMs539 is a high-flow grade for custom applications that combines processability with increased stiffness and superior toughness to create the highest-performing roto molding grade in the market. This SURPASS grade is ideal for custom components, marine products, and recreational equipment. Its processability makes RMs539 the resin of choice for molding intricate parts while reducing cycle times and the energy costs of production. SURPASS RMs244 is an ultra-rigid grade for industrial applications. The stiffest material available for industrial products in which part toughness is still required, RMs244 creates new possibilities for lightweight parts. Its superior whiteness provides exceptional aesthetic qualities for non-pigmented industrial-grade applications.
Comments: Nova continues to focus on higher margin PE grades for its AST line in Joffre. By utilizing their proprietary single-site technology and dual reactor configuration, Nova intends to provide converters with products that are not only easier to process, but have enhanced final end-use performance characteristics.
Bangkok Polyethylene to expand polyethylene capacity
Thai polyethylene producer Bangkok Polyethylene announced its plans to increase its polyethylene production capacity by 25% to 250,000 metric tons per year. The company plans on investing about $15 million in capacity expansion.
The company plans to bring the additional capacity on-stream by 2006.
Comments: Bangkok Polyethylene is one of the largest producers of HDPE in Thailand. It has a total HDPE capacity of 250 KT. The other suppliers of HDPE in Thailand include NPC, TPE, and TPI. The total capacity for polyethylene in Thailand is 1,085 KT and Bangkok polyethylene accounts for 23% of the total capacity.
The total demand for HDPE in Thailand is a little over 500 KT with a project growth rate of around 7% to 9%.
Thailand has enough capacity to satisfy the needs of the domestic demand. The new capacity will most likely be exported to other Asian countries such as China that have supply-demand imbalances. The majority of the HDPE is used for film, blow molding, and injection molding applications.
Shell merges its chemicals & oil products business under a single management
Shell announced that it has combined its chemicals and oil products businesses under a single management team. Rob Routs, CEO of Shell Chemicals, has been named CEO of the merged business. According to the company, this move should lead to improved performance in chemicals and oil products through greater operational integration. It is part of a recently announced group-wide restructuring at Shell. The restructuring includes the previously announced divestment of Basell, Shell’s polyolefins joint venture with BASF.
Comments: It seems as though Shell has changed its strategy from “cracker plus one” to “refinery plus one”. Shell has underperformed against major competitors such as ExxonMobil in both refining and petrochemicals at various times over the past two years. One major disadvantage of Shell has been the lack of higher-performing aromatics chemicals in its portfolio, which also happen to be more closely related to refining. Combining the two groups would naturally bring some fixed cost savings, but does bring into question how it will affect Shell’s gas-based chemicals plans, such as in ethane cracking, especially when it comes to future investments in stranded gas regions.
If Shell’s chemicals strategy becomes “refining centered”, then further chemical investment at Shell would be expected in high fuels growth areas. The Shell, Nanhai, China project, scheduled for start-up in the first half of 2005, is a good example of a refinery-petrochemical joint plan. On the other hand, since Shell has been trying to divest refining assets in several parts of the world, there may be a shedding of chemical assets associated with those refineries.
Korea Petrochemicals to increase propylene capacity using metathesis
Korea Petrochemical Industry Co. announced its plans to construct a plant to produce an additional 110,000 MT/year of propylene at its Onsan, Korea naphtha-cracking complex. It will employ ABB Lummus Global’s metathesis Olefins Conversion Technology to convert ethylene and butylenes to propylene.
The current capacity at its Onsan complex is to produce 400,000 MT/year of ethylene and 210,000 MT/year of propylene. KPIC also produces 310,000 MT/year of polypropylene at Ulsan, Korea, and has to procure about 100,000 MT/year of propylene to meet its feedstock requirements.
Comments: Korea Petrochemical Industry’s Onsan project to produce an additional 110,000 MT/yr of propylene from a Lummus metathesis unit is a strategic move being followed by many others globally at this point. Propylene is just going to stay tight for the foreseeable future due to higher growth rates in its derivatives so propylene projects are at a premium. This project is one of perhaps up to 10 world-scale incremental propylene additions planned for the coming investment cycle.
Titan Petrochemicals to merge its three subsidiaries for efficiency & cost savings
Malaysian polyolefins producer, Titan Petrochemicals & Polymers Bhd announced its plans to merge its three primary operating subsidiaries to improve efficiency and save on costs. Under the merger, Titan PP Polymers (M) Sdn Bhd (TPP) will acquire the businesses and assets of Titan Petrochemicals Sdn Bhd (TPC) and Titan Polyethylene (M) Sdn Bhd (TPE).
TPC owns and operates two crackers, a benzene, toluene, and xylene unit, two co-generation plants, tank farms, and utilities. It provides feedstock, electricity, steam, and services to TPE and TPP.
Titan, a joint venture between PNB Equity Resource Corp (a wholly-owned subsidiary of Permodalan Nasional Bhd) and Chao Group International, operates 10 plants on two integrated sites in Pasir Gudang and Tanjung Langsat, both in Johor.
It operates two principal business units, namely polyolefins and olefins, and aromatics. It has an annual olefins production capacity of one million MT/year and a polymer capacity of 900,000 MT/year.
Comments: The operating subsidiaries of Titan Petrochemicals and polymers include: (1) Titan Petrochemicals, (2) Titan Polyethylene, and (3) Titan PP Polymers.
Titan groups are the original petrochemical divisions of Westlake Group Companies before their North American operations – TT Chao group family operations. Recently, The Westlake Group announced a highly successful IPO.
Titan Petrochemicals: TPC was incorporated on 10 June 1988, and is primarily involved in the production of ethylene and propylene. TPC owns and operates the two naphtha/LPG crackers which were completed in March 1994 and September 1999, respectively, and have a combined nameplate capacity of 630 KTA of ethylene and 334 KTA of propylene.
Titan Polyethylene: Titan Polyethylene (Malaysia) Sdn Bhd (TPE) was incorporated on 27 April 1988. TPE is primarily involved in the production of all three types of PE resins: LDPE, LLDPE, HDPE, and mLLDPE.
TPE owns and operates the swing line HDPE/LLDPE plant (TPE 1), employing Union Carbide’s Unipol™ process technology, and has a current nameplate capacity of 205 KTA. TPE also owns and operates an LDPE plant (TPE 2), which was constructed by Mitsui Engineering & Shipbuilding Co. Ltd, using Exxon’s tubular technology. The LDPE plant located at Tanjung Langsat commenced commercial production in January 2000 and has a current nameplate capacity of 220 KTA. A 105 KTA HDPE plant (TPE 3) was later constructed at Tanjung Langsat using the low-pressure liquid slurry process from Mitsui Chemicals.
Ethylene feedstock for these three plants is provided by pipeline directly from the Group’s crackers or the Group’s cryogenic storage facilities adjacent to Johor Port.
Titan PP Polymers: Titan PP Polymers (TPP) was incorporated on 1 August 1986. TPP is primarily involved in the production of homopolymer and copolymer polypropylene resins. TPP owns and operates two PP plants that have a combined nameplate capacity of 370 KTA of PP. The first PP plant was completed in December 1991 and the second plant commenced commercial operation in September 1999. Both plants utilize Basell’s Spheripol™PP process technology. Both plants produce homopolymers, random copolymers, and block copolymers. The PP plants obtain most of their propylene by pipeline from TPC whilst the balance is imported
All three wholly owned subsidiaries will be merged under the new plan. Titan Petrochemicals & Polymers is expecting that the merger of these three subsidiaries will result in cost savings and efficiency. All three subsidiaries can share overheads and that should help in reducing the per pound cost of its products. In the next few months, the companies are expected to undergo restructuring and the restructuring could result in savings for the parent company.
DSM to expand nylon capacity and considers construction of the facility in China
DSM Engineering Plastic announced its plans for a significant expansion of capacity for its high-temperature nylon Stanyl 46. The company is considering setting up a plant in China.
The Dutch polymer maker has started engineering work on a second Stanyl line that will double its existing capacity. It has a target start-up of 2007.
Although the preferred location for the new unit is alongside its existing facility at Geleen, DSM said it was evaluating an alternative site in China. It will make a final decision in the second half of next year.
Meanwhile, the company will complete a debottlenecking of its existing plant in the fourth quarter of this year; this is providing an additional 20% capacity of the material which DSM claims outperforms other high-heat materials such as PPS and LCPs.
Comments: In anticipation of continued demand DSM is planning to expand the capacity for Nylon. DSM is still evaluating locations for expansions. It will increase 20% of the current capacity in phase 1 at the current location while the other expansion will increase capacity by 100%. The location for the second expansion could be China or Geleen.
The properties of Nylon 6 are similar to those of nylon 6/6, but not the same. As engineering thermoplastics, they offer a combination of properties including high strength (especially at elevated temperatures), toughness at low temperatures, stiffness, wear and abrasion resistance, low coefficient of friction, and good chemical resistance. Nylons exhibit toughness at relatively high and low temperatures, resistance to repeated impacts, resistance to abrasion and wear, and resistance to attack by organic solvents, oils, and gasoline. Nylon 6 has greater impact resistance than nylon 6/6 and greater elongation. Nylon 6/6 has a higher modulus, lower creep, and a higher melting point.
The total North American demand for nylon in 2004 was close to 1,400 million pounds. Nylon is used for various end-use applications including automotive, electrical and electronic, appliances, film and coating, wire and cable, industrial and machinery, consumer, and others. Automotive applications are the largest market for nylon followed by industrial and machinery, and films and coating. Consumer goods include housewares, brushes, combs, sporting goods, cameras, toys, and others. DuPont is the largest supplier of nylon in North America.
INVISTA to construct Spandex® production facility in China
INVISTA announced its plans to construct a new Spandex production facility in Foshan, Guangdong, Province of China.
The planned expansion will increase spandex capacity initially by 12 thousand metric tons with the potential for doubling to a 24 thousand metric tons expansion in the next year. The US 100 million dollar plus project is expected to be complete in mid-2006. Construction will begin this fall as soon as all commercial agreements with local entities are in place.
INVISTA currently has 32 manufacturing sites worldwide — nine of which are in Asia – as well as 20 sales locations, and research and development facilities in Taiwan, Shanghai, and Singapore.
Comments: Until recently, DuPont produced and marketed spandex fibers under the trade name Lycra®. DuPont recently sold its textiles business to INVISTA, a subsidiary of Koch Industries.
The major global producers of spandex include (1) RadiciSpandex, (2) Dorlastan Fibers, (3) Hyosung, and others. The demand for spandex is increasing in Asia, especially China, and to capture the growing market, Invista has announced its plans to construct a new facility in China. The demand in China is expected to grow at about 12-15% for the next five years. Moreover, the applications of spandex are also increasing. Synthetic fibers are finding increasing use in personal care markets.
Recently, Hyosung constructed a spandex plant in China with a capacity of 18 thousand metric tons making it the largest spandex producer in China. There are several other local producers such as Jinzhou Tiangong, Taiwan Shinkong Synthetic Fiber, Liaoyuan Deheng, Henan Xinxiang Chemical Fiber, Yantai Spandex, and others.
Mitsui Chemicals to cease acrylonitrile production and sale
Mitsui Chemicals announced its plans to exit from the production and sale of acrylonitrile and to secure its internal requirements through toll production by Asahi Kasei Chemicals.
Mitsui will close down its acrylonitrile production unit having a 59,000 MT/year capacity at its Osaka plant in May 2005. Under the new toll production arrangement, Asahi Kasei will manufacture the entire quantity, with the raw material ammonia to be supplied by MCI.
Comments: Acrylonitrile is used in the manufacture of several intermediates including (1) adiponitrile, (2) ABS & SAN resins, (3) Acrylic & Modacrylic fibers, (4) acrylamide, and others. Mitsui’s decision to exit the manufacture and sale of acrylonitrile is based on multiple reasons. First, there is an excess ACN capacity in Asia, and second Mitsui has adopted the strategy to focus on more profitable acrylonitrile derivatives.
Mitsui Chemicals requires ACN for the production of acrylamide, polyacrylonitrile film, and others. The company will be able to suffice its ACN requirements from the toll production agreement with Asahi Kasei. Asahi Kasei has two acrylonitrile manufacturing locations in Japan having a total capacity of 400 thousand metric tons. The other ACN producers in Japan include Sumitomo, Showa Denko, Dia-Nitrix, and others.
In this latest move, Mitsui Chemicals, Inc (MCI) will shut down a small acrylonitrile unit which undoubtedly has less than world scale economics. This move by MCI is a strategic domestic consolidation not unlike moves in other base chemicals in Japan. Although acrylonitrile consumption for ABS and acrylic fibers, for instance, is growing well in Asia, most of this growth is China-centered and Japan has seen on the domestic front significant declines. MCI is endeavoring to further strengthen the profitability of the petrochemicals and basic chemicals sector by concentrating on internationally competitive core businesses through focus and selection. At the same time in certain Acrylonitrile derivatives such as acrylamide – one of MCI’s technological competencies, the company intends to continue strengthening and expanding such businesses based on acrylonitrile supply from Asahi Kasei Chemicals, one of the world’s largest acrylonitrile manufacturer marked by high competitive strength not achieved by MCI alone.
European Council votes unanimously on the ban of phthalate-based plasticizers
The European Council of Ministers voted unanimously for a permanent European Union (EU) ban on the use of six phthalate plasticizers in toys and child-care items intended for use by children under the age of three.
The proposed ban covers di(2-ethylhexyl) phthalate, di-n-butyl phthalate, and butyl benzyl phthalate in concentrations exceeding 0.1% in plastic items. It also applies to toys and child-care articles featuring plastic parts that contain diisononyl phthalate (DINP), diisodecyl phthalate, and dioctyl phthalate in concentrations exceeding 0.1% of the plastic material. The council says its decision is based on concerns that some of the phthalates may be toxic to human reproduction. The use of phthalates in soft polyvinyl chloride (PVC) toys and pacifiers is prohibited in the EU under a temporary ban imposed five years ago due to health concerns associated with children’s potential ingestion of the phthalates
The proposed ban requires approval from the European Parliament for it to become law.
Comments: This is an ongoing issue for the last few years. The European Union has been trying to establish a permanent ban on the use of phthalate-based plasticizers in toys for a long time now.
Phthalate plasticizers are the most commonly used plasticizers. They account for about 80% of the global plasticizer demand. The other types of plasticizers include: (1) aliphatic plasticizers (adipates, maleates, azelates, and sebacates), (2) trimellitate plasticizers, (3) epoxy plasticizers, (4) phosphate plasticizers, and others.
The proposed ban will face a lot of challenges from several industry groups including (1) the European Council for Plasticizers & Intermediates, (2) Toy Industry Association, (3) Phthalate plasticizer producers, and others. According to the toy industry association, there is no scientific justification for banning DINP, one of the phthalates most widely used in soft PVC toys.
Goodyear Tire & Rubber to reduce costs in its Engineered Products & Chemical business
The Goodyear Tire and Rubber Company announced that it’s Engineered Products and Chemical businesses are implementing rationalization programs to reduce costs in their operations. The company will record rationalization charges in the third quarter of 2004 in connection with these actions.
The company will record a charge of between $23.5 million and $27.5 million for programs in its Engineered Products business. It plans to reduce about 240 positions through these actions by the end of the third quarter of 2005. The company expects to make future cash expenditures of between $4.5 million and $6.5 million in connection with this action. Additionally, Goodyear plans to reverse between $4 million and $8 million of reserves related to previous Engineered Products programs.
Goodyear expects to record a charge of between $5.5 million and $6 million and reduce about 100 positions in the Chemical business by the end of this year. The company expects to make future cash expenditures of between $2 million and $2.5 million in connection with this action.
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