Nova Chemicals announces profitable third quarter results
NOVA Chemicals Corporation announced net income of $56 million ($0.60 per share diluted) for the third quarter of 2004. This compares to net income to common shareholders of $27 million ($0.30 per share diluted) in the second quarter of 2004.
In the third quarter of 2003, NOVA Chemicals reported a net loss to common shareholders of $65 million ($0.75 per share diluted). Net income to common shareholders in the third quarter of 2004 rose $121 million compared to the third quarter of 2003.
Net income from our Olefins/Polyolefins and Styrenics businesses was up sharply from $36 million in the second quarter to $68 million in the third quarter, despite higher feedstock costs.
The Olefins/Polyolefins business reported net income of $78 million in the third quarter, $19 million higher than the second quarter. Polyethylene sales volumes were up, prices increased and contributions from co-products remained strong. The Styrenics business reported a net loss of $10 million in the third quarter, versus a second quarter net loss of $23 million.
Both North American and European polymer results improved as prices outpaced rising feedstock costs. Styrene monomer margins held steady on slightly higher volumes despite the flow through of much higher benzene costs.
Comments: NOVA Chemicals has seen operating results improve steadily from the third quarter of 2003. This results from a trend of improving demand and increasing prices. Polyolefin margins improved before styrenics margins. North American and European polymer results improved as prices have finally outpaced rising feedstock costs, particularly in styrenics. The major drag on NOVA’s earnings can be perhaps summed up in one word…..BENZENE.
The olefins side of their business has faired far better than the styrenics because of resistance to pass-through in costs has been stronger in Another Unique Service From Chemical Market Resources, Inc. 1120 NASA Parkway, Ste 340, Houston, TX 77058 USA; Tel: 281-333-3313 Email: POE-SNA@CMRHouTex.Com Copyright © 2003 Page 3/26of Issue 21 – Volume 2 polystyrene. In the third quarter, this roadblock in styrenics has eased and benchmark prices of polystyrene improved more than in any recent quarter. Should the earnings trend continue, NOVA should be in for some very good quarters if history can repeat itself in this cycle.
Pemex picks partners for Project Phoenix – selects NOVA Chemicals as partner for proposed world-scale ethylene & polyethylene complex in Mexico
NOVA Chemicals confirmed it has been selected by Pemex Petroquímica (Pemex) as a partner in a feasibility study for a potential world-scale ethylene and polyethylene complex in Mexico.
This confirmation follows Pemex’s announcement naming NOVA Chemicals and two Mexican companies – Grupo Idesa and Indelpro – as its strategic joint-venture partners in the proposed ethylene-based petrochemicals and plastics complex known as Project Phoenix. The partners have committed to a feasibility study that aims to confirm the project will deliver a globally competitive ethylene cracker and key derivatives, initially including two world-class polyethylene plants.
Nova expects to develop a world-scale facility that is globally cost competitive, will produce a wide range of high quality products and will target start up in 2009 or 2010, depending on market conditions.
Comments:NOVA has practiced a winning formula for decades in the North American market place by having a cost advantaged manufacturing and logistics position adjacent to the major US markets in Alberta, Canada. Now it appears that they are about to redouble this formula with the “Phoenix” project with Pemex in Mexico. Mexico’s new position will allow cost advantaged service to the North American, growing Mexican and South American markets from a great central location. Undoubtedly, NOVA’s marketing expertise in polyolefins was also a major factor in selection as well as their SCLAIRTECHTM technology licensing base, catalyst capability and their demonstrated ability to manage and execute major ethylene cracker and polyethylene facility building projects. This project can be viewed as pure NAFTA and Mercosur trade agreements at work. Reportedly, there were many international integrated companies, including SABIC, Dow, Repsol and Mitsui.
Combination of Nova, Basell-Grupo Idesa and PEMEX will address both polyethylene now and polypropylene in future. The major concerns include: (1) is the dismal performance of Nova for 13 quarters in a row; (2) Basell’s future, (3) continuing delays political situation in Mexico and PEMEX and last, but not the least, (4) rising oil prices and their impact on polyolefins.
Iranian firm NPC, Blackstone and Bain Capital in the first round of bidding for Basell
Iranian petrochemicals group NPC and two consortia of financial investors have bid EUR 3-4 billion for the 50/50 petrochemicals joint venture Basell, which belongs to BASF AG and Royal Dutch/Shell Group. Blackstone and Apollo are leading one consortium, while Bain Capital is leading the other.
Comments: In July 2004, Shell and BASF announced that they were reviewing strategic options for Basell including private sale or selling to the equity market. In the last couple of months, many olefins/polyolefins companies have considered acquiring Basell, but so far only three groups have submitted bids. Smaller companies lack the resources to make such an acquisition and the players who can afford Basell could possibly face antitrust issues. In addition, Basell could be difficult to integrate because it relies on products from Shell’s and BASF’s oil refineries.
As a result of the recent DSM acquisition, SABIC may not be in the best position to bid for Basell. However, other cash-rich Middle Eastern polyolefins companies would be. NPC is one such player who could leverage Basell’s polyolefins expertise and channels to market to become a significant player in the global polyolefins industry.
This is a low probability event because Iran is a prominent member of President Bush’s “Axis of Evil” and Basell has a major presence in North America and W. Europe and no significant role in Asia.
Thai companies, Petroleum Authority of Thailand & National Petrochemical Company to jointly construct polyethylene plant
Petroleum Authority of Thailand and National Petrochemical Company (NPC), both of Thailand entered the Shareholder Agreement for the joint establishment of PTT Polyethylene Co., Ltd which will operate the Ethylene Cracker Project and the Low Density Polyethylene (LDPE) Plant with the capacity of 410,000 tons and 300,000 tons per year respectively.
The Ethylene Cracker and LDPE Plant will be located in Mab Ta Phut Industrial Estate Zone in Rayong Province. The $ 444 million investment will be equally (50:50) invested by PTT and NPC which will carry a 1:1 debt to equity (D/E) ratio. The plant will take 530,000 tons per year of ethane as feedstock from PTT Gas Separation Plant in Rayong. The construction is expected to be completed by 2008. The new project operates under PTT’s strategic move for the establishment of value creation through Gas Based Petrochemical. The fully utilization of natural gas also helps increase PTT’s competitiveness in its petrochemical group.
Comments: Thailand has been the hotbed of Asian investment outside of China, primarily due to its low gas cost position. Many projects which had been planned earlier and then shelved due to the world petrochemical recession (which had ended about one year ago), have since been quickly ushered through the planning and design phases, with the hopes that some projects will come on stream within the current recovery.
Along with these aggressive project plans has come the beginning of realignment in Thailand, with two producers, PTT and Siam Cement, taking more ownership in the many intertwining joint venture companies. Privately owned Siam Cement, in particular, is likely to increase investment substantially over the next few years.
Borealis considers construction of a new PP plant in Germany
Borealis announced that the company is studying the construction of a new 330,000 MT/year polypropylene plant to be located at the Burghausen site in Germany. The investment for the new plant will be about EUR 300 million. The unit would use Borstar multi reactor technology and start up in 2007/08 if the project gets the go-ahead.
The group already has two polymer plants making HDPE and polypropylene at the site, which lies in the Bavarian petrochemical triangle; it still needs to resolve feedstock supply issues for a new plant.
Comments: Polypropylene demand is expected to outpace capacity additions for next few years. Polypropylene has been at growing globally at approximately 7% per year and is projected to grow at 5% to 6% for next few years. In recent years capacityadditions for polypropylene have decelerated and are projected to grow at 4% to 5% for the next few years. The combination of lower capacity additions and moderate growth are expected to drive the operating rates for polypropylene above 90% by 2005. Polypropylene is in an upcycle and is expected to peak by 2006.
Therefore this capacity addition should be absorbed by the market without any major impact on price or operating rate. The majority of capacity additions are in Asia or the Middle East.
In Europe, approximately 750 KT/year of new polypropylene capacity additions have been announced. The capacity is being added by (1) Stavropolpolimer, (2) Slovnaft, (3) Basel Orlen, and (4) Tobulsknefetkhlm. Borealis will be the fifth producer to add capacity in Europe bringing the projected capacity addition to over 1000 KT/year. Borealis has 190 KT/year of PP capacity at Burghausen. Its current capacity is based on Himont technology. The total capacity for PP in Germany is approximately 1,850 KT/year. The major suppliers for polypropylene in Germany include: (1) Basell, (2) BASF, (3) Borealis, (4) BSL Olefin, (5) Dow, and (6) Sabic EuroPC.
BP’s Amoco Fabrics & Fibers purchased by AFFC Holdings
AFFC Holdings, Inc., a newly formed company sponsored by an investor group comprised of The Sterling Group, L.P., Genstar Capital, L.P. and Laminar Direct Capital, L.P., announced it has reached an agreement with a BP company to acquire BP’s Amoco Fabrics and Fibers subsidiary and its associated assets.
As with other Sterling, Genstar and Laminar Direct Capital investments, management of the purchased company will also be participating significantly in the ownership of the newly independent organization. AFFC Holdings has not yet selected a name for the business. The transaction is expected to be finalized in the fourth quarter of 2004.
Headquartered in Austell, Georgia, BP’s Fabrics and Fibers subsidiary is a leading producer of synthetic fabrics throughout the world. It is the world’s number one producer of primary carpet backing and secondary carpet backing and also is a leading producer of synthetic fabrics for use in furniture, bedding, automotive, geotextile, and other industrial fabrics applications. The company also operates manufacturing facilities in five locations in the southern United States and internationally in Mexico, Germany, Hungary and Brazil.
Comments: Amoco Fabrics and Fibers Company, a business unit of British Petroleum (BP), is headquartered in Atlanta, GA. The company is one of the world’s largest producers of polypropylene-based woven and non-woven fabrics for carpet backing, geotextiles, and industrial applications. This business unit of BP employs approximately 5,000 people worldwide, with 4,450 in North America alone. The company’s major end use markets include: include (1) geotextiles, (2) furniture fabrics, (3) protective apparel, (4) medical disposables, (5) agricultural fabrics, (6) packaging, (7) filtration, (8) automotive, (9) industrial, and (10) diapers.
Amoco entered the PP fibers business in 1968 through acquisition of Avisun Corp. and Patchogue-Plymouth. The company then grew over the years via several acquisitions such as roll goods manufacturer Phillips Fibers (1993), industrial fabrics manufacturer Bemis-Craftil (1998). The company then became part of BP during the merger of BP and Amoco Corp in 1998.
In 1999, Amoco sold its Fibers & Yarns business to Monitor Clipper Partners. In 2001, BP Amoco announced its plans to sell its Fibers & Fabrics unit in order to adapt a strategy to focus on chemical portfolio.
ExxonMobil announces new HDPE & Vistamaxx® grades
New HDPE Grade
A new high-density polyethylene grade, ExxonMobil HDPE HTA108, for excellent stiffness and barrier properties in coextrusion or polyethylene film blends has been introduced by ExxonMobil Chemical. When blended with linear low-density polyethylene (LLDPE) or metallocene linear low-density polyethylene (mLLDPE) the new grade also improves processability.
Exhibiting properties such as excellent stiffness and water vapor barrier, controlled gel levels and ease of processing, the new grade has been specifically designed for use as a blend partner in transparent coextruded film structures, conventional coextruded film structures or in monolayer film structures.
In transparent coextrusion film structures, ExxonMobil HDPE HTA108 can be added to a middle layer of LLDPE, mLLDPE or LDPE to increase the stiffness of a film. Additionally, with the use of Exceed™ mLLDPE both the excellent transparency and outstanding mechanical properties are maintained.
In conventional coextrusion film structures, ExxonMobil HDPE HTA108 can be used as the main component in one layer to increase modulus and barrier properties of various coextruded structures where other layers may contain LDPE, LLDPE, mLLDPE or HDPE.
In monolayer extruded film structures, ExxonMobil HDPE HTA108 can be added to LLDPE or mLLDPE films to increase stiffness when high transparency is not required.
The best downgauging opportunities for conventional PE films are obtained when ExxonMobil HDPE HTA108 is combined with Exceed mLLDPE. ExxonMobil HDPE HTA108 maintains the stiffness of the thinner film, while the outstanding mechanical and optical properties of Exceed mLLDPE retain the desired film strength and clarity. Such film structures can contribute to significant downgauging opportunities in applications such as heavy-duty sacks, freezer films and lamination films.
New Vistamaxx Grades
ExxonMobil Chemical introduced high melt-flow-rate (MFR) grades of Vistamaxx™ specialty elastomers designed to meet the needs of nonwovens converters using melt-blown technology. Vistamaxx products are derived from the company’s Exxpol™ metallocene catalyst technology and polymerization processes.
Since the successful startup of its new metallocene elastomer plant in February 2004, ExxonMobil Chemical has produced and sold commercial quantities of Vistamaxx. Numerous customers in North America, Europe and Asia, including nonwovens producers, are assessing Vistamaxx specialty elastomers across a wide range of applications.
According to the company, Vistamaxx products can improve the elasticity, softness, adhesion, strength and durability of customers’ products.
Recognition of the special processing needs of melt-blown processors and intense interest from those customers convinced the company to make high-MFR grades the first addition to the Vistamaxx line. These new grades are currently available to customers for development work, and are expected to be available commercially before the end of the year.
Comments:ExxonMobil has done a tremendous amount of work in developing meltblown technology and continues to make improvements. The latest Vistamaxx products are claimed to provide enhanced elasticity, softness, adhesion, strength and durability, which are all key attributes for polypropylene nonwoven manufacturers, especially for meltblown fabrics.
The melt blown process is typically used for producing fibrous webs or articles directly from polymers or resins using high-velocity air to attenuate the filaments. The main technical requirements for an ideal meltblown resin includes: (1) consistent MFR, (2) minimal stearates, (3) melt strength, (4) low smoke resins, (5) narrow MWD, (6) end breakage (runnability) and (7) consistent pellet size. High melt flow rate and melt strength are the most important technical requirements in the manufacture of melt blown fibers. Minimal stearate additive is preferred in order to avoid its condensation on the equipment. The melt flow rate of PP resin for a meltblown fabric typically ranges from 100-1600.
Filtration media continues to be the largest single application for meltblown nonwoven fabrics.
The best known application is surgical face mask filter media. Other applications include both liquid filtration and gaseous filtration. Some of them are found in cartridge filters, clean room filters and others. The second largest meltblown market is in medical/surgical applications. The major segments are disposable gown and drape market and sterilization wrap segment.
More information on nonwoven market and technology trends can be found in CMR’s latest multiclient study Global Polypropylene Nonwoven Fabrics 2003-2008.
Borealis announces new PP grade for pipe applications
Borealis introduced new grade of polypropylene random copolymer, Beta-PPR™ RA7050 for pipe applications. The significant improvement with more than 50% in long-term strength offered by Beta-PPR enables a step-change in design strength at 70°C/50years as used in existing standards with a move from 3,21MPa for the standard PP-R to 5MPa for the Beta-PPR RA7050. Of key importance to plumbers is that a greater inside pipe diameter results in less pressure drop or a higher hydraulic capacity than can be achieved with standard PP-R materials.
Due to the excellent strength properties of Beta-PPR, a given installation can use both thinner pipes and a higher share of smaller pipes. This enables also the use of smaller fittings, generates savings for insulation materials and allows faster installation due to less space required. Dendrit design software models the effect on a typical house installation. The performance level of Beta-PPR materials provides for higher safety, gives improved oxidation resistance at elevated temperatures and greater long-term durability to pipe system installations. Downsized pipes allow higher extrusion speed and improved utilization of existing extrusion lines.
Comments: Although the use of plastic pipes (PE, PP, and PVC) for cold water distribution is widespread, traditional piping materials such as copper and steel have kept their dominant position for hot water applications because of the extreme performance requirements. One of the first plastic materials to penetrate the hot water market was cross-linked polyethylene (PEX). Soon thereafter random polypropylene (r-PP) was introduced, which continues to find broad market acceptance for hot water applications.
Polypropylene random copolymers have been successful used in many domestic piping applications due to PP-R’s high internal pressure resistance and longevity at elevated temperatures. Other advantages of PP-R include (1) lower density, (2) chemical/corrosion resistance, (3) impact strength and (4) overall economics. The better melt strength characteristics of PP-R also provide processing advantages.
Advanced Elastomer Systems introduces new grades for outdoor electrical applications
Advanced Elastomer Systems (AES), an affiliate of ExxonMobil Chemical Company, introduced new Santoprene™ thermoplastic vulcanizates (TPVs) for outdoor electrical applications.
This series of TPVs, the first of their kind in the marketplace, use proprietary technology developed by AES and ExxonMobil Chemical Company to achieve wet electrical stability with no lead-based chemicals added to the materials. They meet stringent new regulations worldwide aimed at reducing or eliminating lead content in products and materials.
These Santoprene TPVs meet current and prospective regulations, including Directive 200/53/EC, European End of Life Vehicle (ELV), Restriction on Hazardous Substances (RoHS), and Waste Electrical and Electronic Equipment (WEEE); and Emergency Planning and Community Right to Know (EPCRA) and Proposition 65, California, Consent Judgment for wire and cable manufacturers, in the United States.
Primarily for extruded applications, the new Santoprene TPV grades are UL-listed. They are suited for wet electrical uses in wire and cable applications including flexible cords, ignition and battery cables, marine and outdoor construction wiring and submersible pump cable. They are offered as flame-retardant and non-flame-retardant grades, in 45 and 87 Shore A durometers.
In addition to wet electrical stability, the grades possess good dielectric strength, low-temperature flexibility and chemical resistance. They are also recyclable.
Comments: TPVs because of tensile strength, environmental resistance and electrical properties, is used as jacketing and insulation materials for applications such as (1) power cables (2) instrumentation cables, (3) audio & video cables, (4) multicoax & antenna cables, (5) electronic-ribbon cables, (6) telecommunication cables, (7) control cables and (8) some fiber optic cables.
TPV’s generally compete with (1) f-PVC, (2) EP(D)M rubber, (3) crosslinked polyethylene and other thermoplastic elastomers in wire and cable applications. TPV’s advantages over f-PVC include (1) heat resistance, (2) ESCR, (3) lower density, (4)chemical resistance, (5) better low temperature properties, (6) absence of plasticizers, (7) clean incineration (non-halogen flame retardants) and (8) lower scrap rates. f-PVC has better flame retardant properties, UV resistance and lower cost.
TPV’s advantage over EP(D)M (1) lower density, (3) low temperature properties, (4) comparable heat properties, (5) processability and (6) recyclability. The major disadvantages of TPOs compared to EP(D)M include: (1) durability, (2) weatherability, (3) flexibility and (4) chemical resistance. TPV compete with other TPEs such as TPUs, SBCs and COPE to a lesser extent in niche applications.
In 1980, TPV was first commercialized by Monsanto (now AES owned by ExxonMobil) under the trade name Santoprene®. The company, headquartered, in Akron, Ohio, has manufacturing facilities located at Pensacola, FL and Wadsworth, OH in North America. The company’s’ Wadsworth, OH, facility is largely used for research and development of new grades of TPVs. AES has global presence with technical service centers in Brussels, Belgium, Santo Andre, Brazil, Tsurumi, Japan and Singapore. AES produces vulcanized and non-vulcanized blends of TPOs.
Advanced Elastomer Systems is the largest supplier of TPV in North America. The company markets TPO-based products under trade names such as Santoprene®, Geoplast®, Vistaflex®, Dytron®, Vyram® and Trefsin®.
AES’s new lead-free grade follows the industry trend in avoiding use of hazardous chemicals causing health problems. In 1st October 1992 California included lead as a cancer causing chemical in the list of hazardous chemical in proposal 65.
Shanghai SECCO ethylene project in preparatory stage of production
The 900,000 MT/year ethylene project in Shanghai has entered the preparatory stage of production.
As one of the largest Sino-foreign joint ventures, the project is jointly financed by Sinopec, Sinopec Shanghai Petrochemical Co Ltd., and BP East China Investment Co Ltd. with 2.7 billion dollars. The project is made up of eight major installations including 600,000 tons of polyethylene, 250,000 tons of polypropylene, 500,000 tons of aromatics, 500,000 tons of ethylbenzene and styrene, 300,000 tons of polystyrene, 250,000 tons of acrylonitrile, and 90,000 tons of butadiene.
Comments: BP has a 50% stake in this ethylene and derivative cracker. About two-thirds of the naphtha requirements will come from Gao-Qiao Petrochemical (a Sinopec subsidiary). This project has been the centerpiece of BP investment plans since its strategic move to defocus all other plans, such as possible Iran investments, and focus on China. Since BP decided to exclude aromatics (the company’s technology treasure) in the complex during the planning stage, the BP share of SECCO is likely to fall entirely within the new olefin & derivatives “spin off” of BP in 2005.
SECCO is one of three major ethylenejoint ventures under construction in China, all with European partners (BP, Shell and BASF). Dow and ExxonMobil plans have been warm and cold over recent years. However, the opportunity for further joint ventures is diminishing as indications are that future projects will be done by domestic producers (primarily Sinopec and Petrochina). However, the fact of limited partnering opportunities in the future may or may not be a good sign for the current participants.
Dow starts production of XLA elastic fiber in Spain
Dow Fiber Solutions opened the world’s first manufacturing facility dedicated to the production of DOW XLA® elastic fiber in Tarragona, Spain. The company is promoting XLA fiber as a value-added material for high-end designer clothing.
Dow plans to grow XLA into a $200 million to $300 million business by 2010. Dow is marketing XLA as a high-end, value-added fiber that offers performance superior to polyester and spandex. XLA is the first elastic olefinic-based fiber introduced into the global textile market. It is resistant to extreme chemicals and heat, including chlorine and temperatures of up to 220°C.
Comments:Dow Fiber solutions, a business unit of Dow Chemical introduced XLA in early 2000. DOW XLA is an olefinic-based fiber based on Dow’s INSITE technology & a specially-modified, cross-linked polymer. The fiber is a melt-spun monofilament that has stretch properties along with high heat (>220°C) and harsh chemical resistance. This property will allow mills to have consistent product when dyeing, bleaching, mercerizing and weaving stretch fibers.
The US Federal Trade Commission awarded DOW XLA its own fiber subclass with the generic name Lastol. For mills, this means consistent, high-quality results when dying, bleaching, mercerizing and weaving stretch fibers with no special conditions or treatments required. For consumers, this means they can follow the same care instructions as their 100 percent cotton, polyester or cotton-poly blend garments.
Dow’s XLA elastic fiber competes with other elastomeric fibers such as spandex and is currently used in apparel applications such as men’s and women’s suits, suit separates, tailored sportswear, formal wear, swim wear and others. Famous garment makers such as Perry Ellis have picked DOW XLA in their menswear collection.
The XLA fibers, in general fall into the category of “stretch fabrics”, a market need/product created by DuPont’s Lycra/Spandex that revolutionized the consumer thinking – just like Dupont’s other innovative products – Nylon, Kevlar, Nomex, Polyester etc.,
XLA fibers will compete in the “unmet needs” of Spandex family of products, which prevented them from entering the casual /business dress applications – because of Spandex’s lack of soft feel and controlled stretch. These two unmet needs so far limited Spandex/Lycra to athletic and undergarments markets.
Spandex had a continuing research program to address these unmet needs for the last ten years. Most of the new innovations to address “controllable stretch and natural feel” needs of Spandex were not cost effective. The major approach used to address these needs was to blend Spandex with other fiber/fabric materials including PP fibers.
The latest development from Dow takes the basic PP fibers to approach Spandex without the need for blending. The two factors that will determine the future whether Dow’s XLA can maintain its “specialty fiber/fabric” status include: (1) the cost of XLA fiber/fabric versus PP fiber/farci blended with Spandex and (2) XLA becoming a household name – wonder if people will warn “Don’t get caught without your Lycra “.
INEOS makes an offer to privatize PVC producer EVC International
Ineos is to make an offer for the outstanding shares in PVC producer EVC International, a move that if successful will de-list EVC from the Euronext Amsterdam stock exchange.
Ineos currently holds 85.9% of all EVC shares and is making a cash offer of E3.50 a share to buy out minority shareholders.
EVC management has decided unanimously and unconditionally to recommend the proposed offer. According to Ineos, there is very little liquidity in EVC – it perhaps is the logical step. Also, taking the company private would reduce costs and put Ineos in a better position to fund “innovative restructuring and investment plans”.
EVC manufactures vinyl chloride monomer, PVC resin, compounds, emulsions, suspensions, films and foils. The Ineos group has a EUR 5 billion turnover in specialty and intermediate chemicals, with 60 manufacturing plants in 16 different countries.
Comments: Ineos is planning to purchase all the shares of Ethylene Vinyl Corporation (EVC) through Hawkslease Finance Company Limited (HFCL). HFCL is finance company controlled by Ineos. EVC is a highly integrated company with manufacturing capacities for ethylene dichloride (EDC), Vinyl Chloride (VCM), PVC resins, compounds and rigid films.
Currently EVC has 1.4 million tons per year of PVC capacity and 1.1 million tons per year of VCM capacity. EVC’s activities are concentrated in Europe mainly in Germany, Italy, and UK. It has some presence in the US and India (51% owner of Caprihans India Limited). The company has 650 KT/year of PVC capacity in Germany, 485 KT/year of PVC capacity in Italy, and 270 KT/year of PVC capacity in UK. By privatizing the company Ineos is expecting to gain cost savings via restructuring.
Nova Chemicals to open Asian operating center
NOVA Chemicals announced plans to establish an Asian Operating Center in Shanghai, China, to support the company’s growth strategy for Asian markets.
With Shanghai’s access to emerging mCenter will be ideally located to provide improved support throughout Asia. The new office will be led by Chris Hogan, Director – NOVA Chemicals Asia, and will house sales, marketing and business development personnel.
The new center will support is current polymer business in the region & help accelerate sales of NOVA Chemicals’ performance products, including SURPASS® polyethylene, DYLARK® automotive engineering resins, and ARCEL® moldable foam for packaging.arkets as well as advanced business and communication capabilities, NOVA Chemicals’ Asian Operating
Comments: Nova has been a North American company since its formation in the late 80s and early 90s. Nova has a very small presence in Europe. Nova, with the recent injection of a top Dow Executive team, started to focus on Globalization – a major contributor of success for Dow.
DuPont Dow & Bayer affected by price fixing lawsuits & settlements
DuPont Dow
DuPont Dow Elastomers has set aside about $36 million in an escrow fund to settle a number of civil lawsuits against it pertaining to alleged price fixing of polychloroprene. The settlement offer relates to an ongoing investigation by authorities in the US, Canada and the European Union into possible antitrust violations, according to DuPont Dow. The company said it is cooperating with antitrust authorities in their investigations.
The proposed settlement, filed in US District Court for the District of Columbia, is in response to a civil suit filed April 9 by Alco Industries Inc. of Trooper, PA.
The suit names DuPont Dow and co-conspirators, which it identifies as Bayer AG (including Bayer Corp. and Bayer Polymers LLC), Polimeri Europa SRL (including Polimeri Europa Americas Inc., Enichem SpA and Enichem Americas Inc.). Alco sought class-action status for the complaint, which it said occurred between Jan. 1, 1999, and Dec. 31, 2003. The proposed settlement calls for those entities with a claim against DuPont Dow to join the class action no later than Dec. 31. Claimants are asked to contact Gilardi & Co. LLC in Larksur, CA, to join the class.
Bayer
Bayer AG announced that it had reached an agreement with the U.S. Department of Justice to settle charges related to allegations that it engaged in anti-competitive activities from May 2002 through December 2002 involving acrylonitrile-butadiene rubber. Under the terms of the agreement, Bayer agreed to plead guilty and to pay a fine of $4.7 million. The company will set up a respective provision for the third quarter of 2004.
Bayer has cooperated with the Department during the investigation. The agreement, if approved by the court, resolves all criminal charges against Bayer in the U.S. for activities related to its acrylonitrile-butadiene rubber business.
Several price-fixing probes conducted by US Department of Justice
The Justice Department’s continuing investigation into price fixing in the chemical industry has resulted into three additional plea agreements in recent weeks. In late September, two former executives of Crompton Corp. pleaded guilty to taking part in an international conspiracy to fix prices in the rubber chemicals market. Earlier in the month, Degussa UK Holdings Ltd. reached a plea agreement in a price-fixing case involving organic peroxides.
In a pair of felony cases filed in federal court in San Francisco last month, the former Crompton executives were charged with fixing the prices of certain rubber chemicals sold in the US and elsewhere during 2000 and 2001. Under their plea agreements, which must be approved by the court, they also agreed to assist the government in its ongoing rubber chemicals investigation. They were charged with violating the Sherman Act and face maximum penalties of three years imprisonment and a $350,000 fine.
In March, Crompton was charged and pleaded guilty to participating in the international rubber chemicals conspiracy. The company was sentenced to pay a $50 million criminal fine. In July, Bayer AG was charged with participating in the same conspiracy. Bayer is awaiting sentencing, but has agreed to pay a $66 million criminal fine.
Bayer and Crompton were among several companies that sought to eliminate competition for rubber chemicals sold in the US from 1995 through 2001. Roughly $1 billion of rubber chemicals are sold annually in the US. According to Justice Department, the conspiracy involves other unnamed companies and centers on fixing prices for additives and fillers used to improve the elasticity, strength and durability of rubber products such as tires, outdoor furniture, hoses, belts and shoes.
Degussa UK Holdings also agreed to plead guilty and to pay a $1.5 million fine for conspiring to fix the prices of organic peroxides, specifically t-butyl perbenzoate and t-butyl peracetate, sold in the US and elsewhere from August 1997 until March 1998. Degussa UK Holdings Ltd, operated independently at the time of its offense, under the name Laporte PLC. Under the terms of the plea agreement, Degussa also agreed to cooperate with the ongoing federal investigation of anticompetitive behavior in the organic peroxides industry.
Degussa U.K. Holdings is the second company to agree to plead guilty to participating in the conspiracy. In March 2002, the French chemical company Elf Atochem pleaded guilty and was sentenced to pay a $3.5 million fine for its involvement. The company was also charged with violating the Sherman Act and faces a maximum fine of $10 million.
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