Asahi Kasei to build S-SBR plant in Singapore
Asahi Kasei Chemicals held a groundbreaking ceremony in Jurong Island, Singapore, for the first phase of construction of a new plant to produce solution-polymerized styrene-butadiene rubber (S-SBR). Asahi Kasei Chemicals is expanding S-SBR operations as a world-leading business, with the new plant in Singapore representing a major step in diversifying its operation base for enhanced stability of supply to meet growing demand and customer needs.
Keyuan Petrochemicals and Hangzhou Zhongce Rubber to cooperate on SSBR
Ningbo, China -Keyuan Petrochemicals a leading merchant manufacturer of various petrochemical products in China, announced that Keyuan and Hangzhou Zhongce Rubber have formally agreed to jointly develop commercial applications for solution polymerization styrene butadiene rubber. “This agreement is another example of our ongoing commitment to develop new products using our innovative technologies,” began Chungfeng Tao, chairman and chief executive officer of Keyuan. “Hangzhou Zhongce is a proven leader in tire production with strong R&D capabilities. Sales of car tires worldwide were $140 billion in 2010, which is the largest user of SSBR today, especially for high gear radials. By engaging early in this technology, we expect to gain an advantage by developing commercial applications for SSBR in new markets and capitalizing on a significant growth opportunity.” Keyuan is working with researchers from Hangzhou Zhongce Rubber Company Limited to develop SSBR over the next several years. The companies will sharethe rights to products and technologies developed from this cooperation. Upon successful development of SSBR, Keyuan will be able to produce this new product using the same facility of styrene-butadiene-styrene that is currently under construction.
Eastman to acquire Sterling Chemicals
Eastman Chemical has entered into a definitive merger agreement to acquire Sterling Chemicals for $100 million in cash, subject to modest deductions at closing as provided in the merger agreement. The transaction includes Sterling’s plasticizer and acetic acid manufacturing assets in Texas City, TX. Eastman plans to modify and restart Sterling’s currently idled plasticizer manufacturing facility to produce non-phthalate plasticizers, including Eastman 168 non-phthalate plasticizers. This additional capacity will enable the company’s Performance Chemicals and Intermediates (PCI) segment to serve the growing market demand for non-phthalate alternatives. In the North American and European non-phthalate plasticizers markets, total sales volume is expected to increase at a compounded annual rate of approximately 7 percent over the next five years. The acquisition also includes Sterling’s acetic acid production facility and its supply to BP AmocoChemical under a long-term production agreement.
W.R. Grace looks to make large strategic buy
Chemical maker W.R. Grace & Co (GRA.N), which is operating under Chapter 11 bankruptcy protection, wants to make an acquisition that would “significantly” bolster its business.
The company’s board started investigating a “highly confidential potential strategic transaction” last month, according to a filing with U.S. Bankruptcy Court. Grace is now asking the court to seal any disclosure of the seller. The company needs the court’s permission to do anything outside normal business operations, including acquisitions.
“The board determined in its business judgment that this proposed transaction would significantly enhance Grace’s business plan and growth strategy in coming years,” the company said in the filing. In a statement to Reuters, W.R. Grace declined to elaborate. “If we are successful, we will announce the transaction publicly,” spokesman Greg Euston said.
Grace makes specialty chemicals used in catalytic converters and construction products. At Monday’s close, its stock had jumped 76 percent in the past year, largely due to strong emerging market sales.
The shares were up 5.4 percent at $44.04 in midday trading on Tuesday. Given the recent strong results and stock appreciation, it was not immediately clear why the company needs to alter its business model.
The company’s first-quarter results widely beat Wall Street’s expectations. Chief Financial Officer Hudson LaForce told Reuters that sales in W.R. Grace’s construction-related businesses are the strongest they’ve been in three years.
The Columbia, Maryland-based company will ask a U.S. District Court judge on June 28 to approve its exit from bankruptcy protection.
W.R. Grace has taken care of nearly all claims related to its 2001 bankruptcy. The company initially filed due to the large number of claims against its asbestos business. In 2008 it set up a trust fund to pay for victims’ health claims.W.R. Grace’s largest shareholders include Peninsula Capital Advisors, Fidelity, Vanguard and BlackRock Inc (BLK.N).
Russia’s Sibur sets ambitious goals for China
Russian petrochemical giant Sibur has announced plans to ‘significantly’ increase salesto the Chinese market this year –by 5-7%.The company says it will focus on increasing sales of polyethylene, butadiene-acrylonitrile rubbers and butyl rubber. At present the bulk of sales of Sibur in China are plastics, caprolactam and synthetic rubber.Last year, sales to China totaled €312m, 14% of Sibur’s total. In the mid term, Sibur hopes to increase sales to China by 20%.
Vice president Oleg Makarov says the company will sell most of its range through its own Shanghai-based company, Citco Trading,which was established by Sibur last year.
The company will also supply PP from its Tobolsk-Polymer company to China from 2013.
Sibur has not ruled out the possibility of building its own production capacities in China in cooperation with local petrochemical and plastics producers, and is in talks with several large state-owned firms.The majority of production will be sold within the Chinese market.
German packaging industry critical of proposed Europe-wide bag ban
The German association for plastic packaging and films, IK Industrievereinigung Kunststoffverpackungen, has responded disparagingly to the possible Europe-wide ban on plastic carrier bags proposed by European Commissioner for the Environment, Janez Potocnik.
The IK was especially critical of the Europe-wide bag ban survey currently being conducted, which the organisation says contains “incomprehensible claims”.“According to the survey, each and every EU citizen is supposed to be using up to 850 plastic bags per year,” said the IK in a statement. “However, no statistical proof for this is given. Inadequate knowledge is also shown by the fact that EU experts are assuming a plastic bag rapidly degrades in nature and they are therefore demand a differentiation between biodegradability and compostability.
“The EU commission does not seem to be aware of the fact that currently there are no plastic bags available which dissolve within a short period of time without any outside influences. On the contrary, these plastic bags only dissolve in the course of a specific industrial composting process. This raises the question whether the term ‘biodegradability’ should be defined more precisely.”
According to the IK the best approach would be to “enlighten the population to collect carrier bags and recycle them correctly. This is also valid for all other product areas,” it added.
“We can only protect the environment and save resources if we collect as many products as possible and recycle them. Europe’s population should be made aware of this. In addition, plastic bags can be used several times without any problems.”
PetroLogistics in talks to acquire Bayer’s property in West Virginia for Marcellus Shale gas
PetroLogisticsis in talks with Bayer Corp. about acquiring some of its property in West Virginia to develop a facility to convert ethane from Marvellus Shale gas and turn it into ethylene. PetroLogistics currently operates the world’s largest propane dehydrogenation plant on the Houston Ship Channel. The plant converts propane into propylene, which is used in such products as paint, solvents, and various automotive products.
Nova Chemicals planning major PE plants
Nova ChemicalsCorp. will build two new, major polyethylene production lines in Canada to take advantage of newfound supplies of oil and natural gas in the region.
Officials with Calgary, Alberta-based Nova said in a June 29 news release that the firm will build a world-scale plant making high density and linear low density PE and a similar plant making linear low density PE.
Nova produces ethylene feedstock in Corunna, Ontario, and Joffre, Alberta, but officials declined to say where the PE plants will be built. The new plants —as well as a capacity addition at a low density PE plant in Mooretown, Ontario —are set to be completed between late 2014 and 2017.
The HDPE/LLDPE unit will use Nova’s Advanced Sclairtech technology, while the new LLDPE line will use the firm’s Novapol-brand technology.
“We are committed to leadership in the markets we serve,” Nova CEO Randy Woelfel said in the release. “Our ability to meet our customers’ needs for higher performance polyethylene products is fundamental to this commitment.”
International Petroleum Investment Co., theAbu Dhabifirm that owns a majority stake in Nova, “fully supports these plans that will enhance Nova Chemicals’ leading technology and market position,” IPIC managing director Khadem Al Qubaisi said in the release. Al-Qubaisi also serves as Nova’s chairman.
Nova officials declined to provide a cost estimate or new jobs estimate for the new expansions. To meet the needs of the projects, Nova also is expanding its ethylene cracker in Corunna and increasing utilization of a similar cracker in Joffre. Officials said the ethylene increases “will be supported by emerging, cost-competitive feedstock supply…linked to both shale oil and shale gas development.”
Nova is one of several plastics and chemicals firms to announce expansion plans this year based on new feedstock supply, but they’re the first to announce specific resin projects. Shell Oil recently announced plans to build a new ethylene cracker in the Appalachian region of the U.S. that would include new PE production, but the firm supplied no details.
Dow ChemicalCo., Westlake Chemical Corp. and Chevron Phillips Chemical Co. LP also have announced ethylene expansions, but have not confirmed plans for similar resin moves.
Mexichem and Pemex seek OK for USD 556 million vinyl chloride joint venture
Mexichem SAB de CV, Latin America’s largest producer of PVC pipe, said Wednesday it has asked Mexico’s antitrust authority to approve a $556 million vinyl chloride monomer-producing joint venture with state oil monopoly Petróleons Mexicanos (Pemex).
“We hope to have authorization for the deal by mid September,” Mexichem’s investor relations director Enrique Ortega Enrique Ortega told Plastics News.
The authority is the Federal Competition Commission (Comisión Federal de Competencia). Pemex made a similar announcement to Mexichem’s on Tuesday. Neither company has specified how much money each would put into the new company.
Ortega was reluctant to add anything to the official announcement, posted on the Mexican Stock Exchange’s Web site, for fear of jeopardizing the deal.
But he did say that part of the investment would be for a new plant.
Mexichem, headquartered in the municipality of Tlalnepantla, a few miles north of Mexico City, said in the official announcement that the plan is to produce 24,000 metric tons of VCM in the company’s first year of operation, 146,000 metric tons in the second year and 217,000 metric tons in the third.
“The vertical integration of the vinyl chain will allow us to compete in a global market and to exploit the advantages that this industry offers the country,” Ricardo Gutiérrez, chairman of Mexichem’s executive committee, said in the statement.
Pemex monopolizes crude oil and gas production in Mexico but not petrochemicals, an area in which its presence is increasing.
In March 2010, Brazilian petrochemicals giant Braskem SA and Mexico’s Grupo Idesa SA de CV formalized an agreement with Pemex subsidiary Pemex Gas y Petroquímica Básica to build a $2.5 billion petrochemical complex in Coatzacoalcos, Veracruz state, to include an ethylene cracker and three polymerization plants.
Pemex Gas y Petroquímica Básica will supply the cracker’s feedstock. The cracker alone will cost $1 billion.
In its stock exchange announcement, Mexichem said the new company would allow it to strengthen its competitive position in the production chain by reducing its reliance on raw material supplies from foreign competitors.
SKC Plans MajorPO and Derivatives Capacity Expansion; Aims to be Leading PO Producer in Asia
SKC (Seoul) is planning a major increase in capacity of its hydrogen peroxide-propylene oxide (HPPO) plant at Ulsan, Korea. SKC’s president Park Jang-suk said recently that the company will raise its combined propylene oxide (PO) capacity to 600,000 m.t./year by 2016, with the aim of becoming the leading PO producer in Asia.
The expansion will be carried out in stages starting with an addition of 30,000 m.t./year PO capacity at the HPPO plant, raising the total to 130,000 m.t./year of PO by the first half of 2012.SKC plans to start work on another revamp by end of next year, which will raise PO capacity by 70,000 m.t./year by end of 2012, giving SKC a total of 200,000 m.t./year of PO capacity, based on the HPPO process by 2013.The existing unit started production three years ago, using the Evonik Industries/Uhde HPPO technology. It was the first unit to commercialize the process.
SKC plans to construct another HPPO plant with a capacity of 200,000 m.t./year of PO by 2016. The projects will add to SKC’s existing 200,000 m.t./year PO plant at Ulsan, which uses the company’s own propylene oxide-styrene monomer (POSM) technology. The combined 600,000 m.t./year PO capacity will make SKC the leadingproducer in Asia by 2016, Park Jang-suk says.
The company is also planning a major expansion of polyols and propylene glycol (PG) capacity as well as additional system houses. SKC will double PG capacity to 200,000 m.t./year and raise polyols tonnage fromthe current 135,000 m.t./year to 400,000 m.t./year by end 2016.
The HPPO process will dominate PO production in the future, Park Jang-suk says. Conventional PO plants, mostly in China, are not environmentally-friendly, due to chlorine emission, while PO/SM plants may encounter “trouble with a fluctuating styrene monomer prices and high sewage costs.”
The HPPO plant sources its hydrogen peroxide (H2O2) fromEvonik Degussa Peroxide Korea’s H2O2 plant at Ulsan. SKC acquired a 45% stake in Evonik Degussa Peroxide Korea, the biggest manufacturer of H2O2, last year.
SKC sources its propylene supplies from its Ulsan based cracker and fluid catalytic cracker, which have combined capacity for about 1 million m.t./year of propylene.
SKC to expand HPPO plant, set up 600,000 tons of propylene oxide (PO) capacity
SKC announced that it will set up production capacity of 600,000 tons of propylene oxide (PO) by expanding its hydrogen peroxide propylene oxide (HPPO) plant.
SKC plans to double production capacity of the HPPO plant from the current 100,000 tons to 200,000 tons by 2013 after completing the construction of an additional PO production capacity of 30,000 tons by H1-2012.
Bain Capital’s Styron Files for IPO
Styron today filed with U.S. regulators for a proposed initial public offering (IPO), seeking to raise as much as $400 million. The filing is under the company name Trinseo, which will be the name of the company by the end of this year. The number of shares to be offered, price range, and timing have not yet been determined. Styron is controlled by private-equity firm Bain Capital (Boston), which purchased it from Dow Chemical last year for $1.63 billion. Bain currently owns 92% of Styron, Dow has a 7% stake, and company management owns about 1%. The company plans to list as Trinseo on a U.S. stock exchange.
Styron product lines include styrene-butadiene latex, styrene-butadiene rubber, polycarbonate, acrylonitrile butadiene styrene/styrene acrylonitrile resins, expandable polystyrene, polystyrene and styrene monomer units. The company recorded a loss of $9.3 million on sales of about $1.54 billion in the first-quarter of this year, the regulatory filing says. High raw material prices, interest expenses and a charge related to debt refinancing contributed to the loss. The company will use net proceeds for debt repayment and general corporate purposes, Styron says. It had about $1.4 billion borrowed under a term loan and $85 million borrowed under a credit facility as of April 22, according to the regulatory filing.
Styron posted $5 billion sales in 2010, with net income of $56.7 million. Styrenics accounted for 38% of 2010 sales; styrene-butadiene latex, 30%; engineering plastics, 21%; and synthetic rubber was 11%. A majority of sales are in Europe and the Middle East, which accounted for 56% of sales in 2010. Asia was 24% of 2010 sales; U.S. and Canada, 15%; and Latin America was 5%.
Styron says its growth strategy includes targeted capital investments in the most attractive part of its business as well as expansion of market share in emerging markets. The company recently announced plans for a new solution styrene butadiene rubber (SSBR) production line in Schkopau, Germany, that is expected to come on-line in 2012, and expansion of latex production capacity in Zhangjiagang, China, also expected on-line in 2012. The company says it will expand share in emerging markets and pursue acquisitions. “We believe that a long-term trend toward consolidation in our markets will continue, which given our scale and geographic reach, will create opportunities for our business,” Styron says.
Styron obtains 45%-50% of its raw materials from Dow, including benzene, ethylene, butadiene and bisphenol-A, according to the filing. Dow today supplies 100% of Styron’s benzene and ethylene under a 10-year contract. Pricing is tied to price indices for each region and includes large-buyer discounts. The company says it has the flexibility to buy 25% of its benzene from alternative sources. Styron says Dow is its largest butadiene supplier in Europe, but that it also has other supply sources. Butadiene supply in North America and Asia, apart from a transition period away from Dow in North America, is from third-party producers via supply contracts, Styron says.
Pricing for its key raw materials has been volatile, Styron notes in the filing. “However, we have contractual provisions in place intended to substantially reduce Styron’s exposure to such price volatility and protect Styron from extreme price increases in its key raw materials,” Stryon says.
Styron announced plans in April to change its name to Trinseo. Most operations currently use Styron and will be renamed Trinseo in the coming months, the company says.
The IPOs lead underwriters are DeutscheBank and Goldman Sachs.
La Seda Sells Portuguese PET Plant
La Seda de Barcelona has agreed to sell its ArteniusPortugal polyethylene terephthalate (PET) resins plant to Control PE, SGPS, a unit of Imatosgil and Banco Espirito Santo (Lisbon). The divestment forms part of La Seda de Barcelona’s restructuring plan announced two years ago. The 70,000 m.t./year PET plant is based at Portalegre, Portugal and has not been operating since the end of 2010. It was originally a polyester fiber production facility, which was converted to make PET resins, using batch production technology.
Control PET SGPS will pay La Seda €5,6 million ($8 million) between 2011 and 2015, a price that may increase, according to Artenius Portugal’s performance, under the terms of the deal. The buyer plans to re-start the facility next month.
Indian Company Launches Huge PET Project in Egypt
An Indo-Egyptian joint venture, The Egyptian-Indian Polyester Co., is today launching a $160-million polyethylene terepththalate (PET) resin project in the private free zone area at Ain Sokhna, Egypt. The company, owned 70% by Dhunseri Petrochem & Tea Ltd., (Kolkata, India), 23% by Egyptian Holding Company for Chemicals (Echem, Cairo), and 7% by the engineering group Enppi (Cairo), will build a plant designed to produce 1,200 m.t./day of PET chips. Output will be used in the production of packaging, including bottles, food containers as well as containers for personal care products and cosmetics.
The ground breaking ceremony is being attended by Egypt’s Petroleum MinisterMohamed Abdel Moniemalong with the governor of Suez and R. Swaminathan, India’s ambassador to Egypt. Production is expected to begin in December 2012. The plant will be the first of its kind in North Africa and one of the largest such units in the Mideast. The facility will meet Egypt’s domestic demand, currently covered by imports, and will facilitate exports of PET.
Gevo produces fully renewable and recyclable polyethylene terephthalate with Toray (29-6-2011)
Gevo Inc. has successfully produced fully renewable and recyclable polyethylene terephthalate (PET) with its potential customer, Toray Industries, Inc. (Toray). Toray is one of the world’s leading producers of fibers, plastics and chemicals, while Gevo is a leading renewable chemicals and advanced biofuels company. In April 2010, the two companies signed a non-binding letter of interest for the future supply of renewable paraxylene derived from Gevo’s isobutanol sometime in 2012 or thereafter.
Working directly with this important potential customer, Gevo employed prototypes of commercial operations from the petrochemical and refining industries to make paraxylene from isobutanol. This renewable paraxylene was sent to Toray for conversion into biobased PET articles. Toray employed its existing technology and new technology jointly developed with Gevo and used Gevo’s para-xylene and commercially available renewable mono ethylene glycol (MEG) to produce fully renewable PET (all of the carbon in this PET is renewable). The next step in this collaboration between Gevo and Toray is to move from lab-scale “proof of concept” to establishing commercial-scale operations. Gevo is currently working with partners to optimize the process technology needed to produce para-xylene from isobutanol at commercial-scale and competitive economics.
“We believe there is strong customer demand for fully renewable, non-petroleum derived PET and we are working to fill that demand as soon as possible. Last month, we disclosed that we had provided renewable para-xylene to international brand owners for evaluation and the production of a fully renewable bottle from PET,” said Christopher Ryan, Ph.D., President and COO of Gevo. “We are pleased to have validated this technology with Toray and look forward to building a market for fully renewable PET as soon as possible.” “Companies today are looking for ways to introduce new products and packaging that helps meet the growing consumer demand for environmentally friendly products while at the same time, contributing to the sustainability goals of their companies,” said Chiaki Tanaka, Executive Vice President and CTO of Toray. “Our partnership with Gevo and our internal progress to date suggest we are on track to help our customers fulfill these needs.”
Lotte Pakistan PTA mulls 1m tonnes new capacity by 2014
Lotte Pakistan PTA (Lotte PPTA) plans to triple its purified terephthalic acid (PTA) nameplate capacity to 1.5m tonnes/year by late 2014 to meet the growing domestic and regional demand, a company executive said on Thursday.
The company has a 500,000 tonne/year plant located at Port Qasim, 50 km (31 miles) outside the industrial port city of Karachi.
“The cost of expansion will be between $450m(€320m) to $500m,” said Asif Saad, CEO of Lotte PPTA, the only PTA manufacturer in the country.
“If it goes according to plan, it [the new capacity] should start up by the end of 2014,” Saad told ICIS in an email from Karachi.
Lotte, the South Korean conglomerate, acquired the majority share holding in Pakistan PTA Limited (PPTA) in September 2009. The name of the company was subsequently changed to Lotte Pakistan PTA, according to company’s website.
According to the website, Lotte PPTA has made the single largest foreign direct investment to date of $490m in Pakistan’s petrochemical industry.
The PTA output from the company’s existing 500,000 tonne/year plant is sold in the domestic market. However, a small quantity is exported every year, mainly to the Middle East and India and occasionally to China, Saad said.
Pakistan, which has a large downstream textile sector along with a fast growing polyethylene terephthalate (PET) market, has an annual PTA consumption that is estimated at 650,000 tonnes, Saad said, adding that Lotte PPTA produces 500,000 tonnes/year, so the country has to import the balance to meet demand. Saad said Pakistan’s polyester market growth has been at 7-8% annually, a trend likely to continue in years ahead.
The PTA expansion plans run parallel to Byco Oil Pakistan Ltd’s (BOPL) construction of the country’s first aromatics facility, expected to come on line by the middle of 2013.
The aromatics facility will produce about 100,000 tonnes/year of benzene, 92,000 tonnes/year of paraxylene (PX), 80,000 tonnes/year of isomer-grade mixed xylene (MX) and 50,000 tonnes/year of orthoxylene (OX).
When asked if Lotte PPTA will be buying feedstock PX from Byco after the completion of its aromatics facility, Saad said: “It is too early to consider purchasing PX from Byco.”He said Lotte PPTA will be purchasing approximately 1m tonnes of feedstock PX after the start-up of its new capacity. “This means [the] bulk of product [PX] will continue to be sourced from overseas, until such time that Lotte PPTA feels ready to put up its own PX plant in Pakistan. The company plans to use its footprint in Pakistan to become a regional petrochemical player,” Saad added.
Total To Acquire 60% Stake In SunPower
French oil major Total SA (TOT, FP.FR) said Thursday it plans to acquire a 60% stake in SunPower Corp. (SPWRA, SPWRB), a deal that values the U.S.-based solar-panel maker at $2.3 billion.
Total, which focuses on the exploration and production of oil and natural gas, said it would pay $23.25 for each Class A and Class B share it intends to acquire. The offer price presents a 46% premium over Wednesday’s closing price of SunPower’s Class A shares. The investment is worth about $1.37 billion.
Under the agreement, Total will provide SunPower with up to $1 billion of credit support over the next five years.
The deal signals growing confidence among conventional energy players that solar power is likely to become a viable energy source, despite its current smallsize. The global solar-panel market, worth about $71 billion in 2010, according to research firm Clean Edge, is widely expected to continue growing, driven by government policies favoring clean energy and lower manufacturing and development costs.
SunPower’s Class A shares were up 39% to $22.36 in after-hours trading and spurred a broad rally among other solar companies. Shares of Suntech Power Holdings Co. Ltd. (STP) were up 7% at $9.68 while First Solar Inc. (FSLR) shares were up 5.9% at $146.53 in after-hours trade. Total’s American depositary shares were recently down 13 cents at $63.67.
Total, which has had an active solar focus since 1983, decided to invest in SunPower after a two to three-year search “for a strategic partner in the solar business,” Philippe Boisseau, head of Total’s gas and power division, said in an interview. He added that solar power will become a crucial energy source in Europe and North America and that Total intends to become a global leader in the solar industry, in addition toits core oil and natural gas businesses.
“Solar will gradually take its share” of the world’s energy market, Boisseau said. “We want to be there when this happens.”
Total plans to keep SunPower’s management team in place and continue investing in the business, Boisseau said. He declined to provide further details.
Total’s acquisition of a majority stake in SunPower will allow the California company to “radically accelerate” its plans to expand manufacturing of solar panels and develop large solar farms, said SunPower Chief Executive Tom Werner. In addition to expanding its existing business, SunPower will work to commercialize thin-film solar-power technology that Total has developed and may use other materials made by Total in solar power generation, Werner said.
“This is a transformational investment…that will allow SunPower to accelerate its plan,” Werner said in an interview. “Post close, we’ll form a collaborative effort to focus activities on a joint roadmap.”
SunPower’s remaining shares will continue to trade, Werner said. Total will select six new members for SunPower’s board, adding to five existing board members, including Werner, who is chairman. Werner said he plans to keep his position at the company and that SunPower’s headquarters would remain in San Jose, Calif.
The boards of both companies have approved the transaction.
Werner would not say how much SunPower would expand its operations over the next few years, but said that Total and SunPower aim to be one of the world’s top three solar energy companies over the next five to 10 years.
SunPower was not among the world’s top 10 solar-panel suppliers by market share, according to data from Navigant Consulting.
In February, SunPower reported 2010 net income of $179 million on revenue of $2.2 billion, up from a 2009 annual profit of $32.5 million on revenue of $1.5 billion. The company has continued to expand into the profitable solar-power generation business, while also continuing to manufacture solar panels in an increasingly cost-competitive market. SunPower also has started leasing its solar panels to residential and commercial customers in the U.S., a more downstream business that includes customer management and project finance.
SunPower said its deal with Total would likely lower its cost of capital and increase its access to uncollateralized debt financing. Some analysts have expressed concern about SunPower’s cost structure relative to industry peers.
Total will release its first-quarter earnings Friday at 0600GMT.
Sasol Completes Talisman Shale Deal
South African petrochemicals group Sasol Ltd. (SSL-Analyst Report)has closed its previously announced deal with Canadian energy explorerTalisman Energy Inc (TLM-Analyst Report)to buy a 50% stake in the latter’s prolific Montney Basin shale natural gas assets in western Alberta and north-eastern British Columbia for approximately C$1,050 million (R7,413 million).
The transaction –which was declared in March and the second between the two companies in recent times –was completed following regulatory and shareholder approvals. Per the agreement, Johannesburg-based Sasol and Alberta-based Talisman will split ownership in 57,000 acres of Talisman’s Cypress A properties that are estimated to contain 11.2 trillion cubic feet of natural gas.
In the first strategic partnership –signed in December 2010 and concluded in March –Sasol entered the North American shale gas market by agreeing to pay C$1,050 million to acquire a 50% interest in another of Talisman’s Montney shale properties, Farrell Creek, which holds an estimated 9.6 trillion cubic feet of gas.
The co-operation with Talisman is part of Sasol’s previously laid out plans for a significant outlay in upstream shale gas resources associated with its gas-to-liquids (“GTL’) projects in North America apart from unlocking additional value in the world-class Montney shale play.
In recent times, Sasol –a pioneer in the area of synthetic petroleum alternatives –has continuously focused on the commercialization of its GTL technology by constructing plants in gas-rich regions of the world that will strengthen its position in the industry in the coming years.
The company, which constructed the world’s first commercial-sized GTL plant in Qatar, plans to leverage the opportunity to arbitrage between gas and oil prices. Under normal circumstances, the ratio of the price of oil (measured in $ per barrel) to the price of natural gas (in $ per million British thermal units) fluctuates between 6 and 12. However, in recent times, this has decoupled to an unprecedented degree, up at around 20.
With gas prices remaining at depressed levels and thereby diverging significantly from high oil prices, Sasol is looking to utilize the spread by using its GTL technology that is expected to be more profitable than the company’s traditional business of producing motor fuels from coal.
Even though Sasol has a Zacks #4 Rank (Sell rating) in the short run, we are Neutral on the ADRs in the longer term.
Industry vows fight on styrene designation
The U.S. styrene industry will “contest vigorously” the U.S. Department of Health and Human Services’ listing of styrene in its 12th Report on Carcinogens, Jack Snyder, executive director of the Styrene Information and Research Center, said in a statement.
“The designation is completely unjustified by the latest science and resulted from a flawed process that focuses on only those data that support a cancer concern,” Snyder said.
The comments come in response to Friday’s announcement that styrene is one of eight substances newly listed in the report.
On May 26, the Styrene Information and Research Center notified the Health and Human Services legal counsel of its intent to seek a preliminary injunction if styrene was listed.
Styrene, used in the building of fiberglass boats, is listed as “reasonably anticipated to be a human carcinogen based on limited evidence of carcinogenicity from studies in humans, sufficient evidence of carcinogenicity from studies in experimental animals and supporting data on mechanisms of carcinogenesis.”
Snyder said research from European Union regulators determined that styrene does not represent a human cancer concern. EU scientists reviewed the full styrene database, weighing all of the available data in reaching their conclusion, he added.
“It is important to note that the reports do not present quantitative assessments of carcinogenic risk. … Listing in the report does not establish that such substances present a risk to persons in their daily lives,” he said. “In plain language, this statement means that [the National Toxicology Program] has not concluded that styrene presents an actual human cancer risk or a risk from any of the thousands of products made with styrene.”
A coalition of groups, including theNational Marine Manufacturers Association, had fought against including styrene in the report, saying additional reviews were needed using a “rigorous unbiased transparent process.”“We are disappointed that HHS has made this decision based solely on its own limited and misguided studies,” NMMA president Thom Dammrich said when the report was released. “[The National Toxicology Program’s] deficient scientific process, combined with their limited breadth of study in the face of a number of outside studies that were not evaluated demands that the listing be carefully examined.”
Enterprise to Build Sixth NGL Fractionator at Mont Belvieu, TX
Enterprise Products Partners says it will build a sixth natural gas liquids (NGL) fractionator at its Mont Belvieu, TX facility that will increase capacity by 75,000 barrels per day (bpd), to more than 450,000 bpd of NGLs at the site. The new fractionation unit will accommodate continued growth of liquids-rich natural gas production from the Eagle Ford Shale basin in South Texas. Start-up is expected in early 2013.
Enterprise’s net fractionation capacity will increase to more than 780,000 bpd when the sixth unit comes onstream. Enterprise recently announced plans to bring onstream a fifth NGL fractionator at the site later this year. The company currently has four NGL fractionators operating at Mont Belvieu with a nameplate capacity to produce 305,000 bpd; its most recent fractionator, with the capacity to produce 75,000 bpd, came onstream in late November of last year.
“As with our fifth Mont Belvieu fractionator, which is currently under construction and scheduled to be completed in the fourth quarter of 2011, the sixth unit is expected to be fully contracted when it begins service,” says Jim Teague, executive v.p. and COO of Enterprise. “From a demand perspective, a persistent and significant differential between natural gas and crude oil prices continues to favor NGLs over heavier crude oil derivatives as feedstocks for the petrochemical industry.”
Petrochemical facilities have responded with announcements of planned new construction or modifications to make greater use of NGL feedstocks, Teague says. “In the last 12 months alone, approximately 100,000 bpd to 150,000 bpd of heavy cracker feedstocks have been replaced with light-end feedstocks,” he adds.
Enterprise’s additional fractionation capacity provides a new source of NGL supplies on the U.S. Gulf Coast, helping to position U.S. petrochemical companies as one of the lowest cost producers of ethylene globally.
Based on public drilling and production data, activity in the Eagle Ford Shale continues at a brisk pace. About 170 rigs are currently working in the play and more than 900 wells are on production with about 1,400 additional wells in various stages of drilling and completion. Current production from the play is estimated at approximately 850 million cubic feet per day (MMcf/d) of natural gasand 140,000 bpd of crude oil and condensate.
Evonik Sells Acrylate-Based Additives and Plastisols Business to Kaneka
Evonik Industries has signed a contract to sell its acrylate-based plastic additives and plastisols business to Kaneka Corporation. The business includes two production plants at Wesseling, Germany. The 30 employees at the Wesseling site will be offered the option to stay on with the business, Evonik says. The transaction is subject to approval by the anti-trust authorities. Financial details were not disclosed.
The additives are used as processing aids or impact modifiers in polyvinyl chloride (PVC) and in engineering plastics. Plastisols are used in the automotive industry as a PVC substitute for underbody protection and as sealants.
Abu Dhabi’s Takreer Selects UOP Process for Big Propane Dehydrogenation Plant
UOP has been selected by the Abu Dhabi Oil Refining Co. (Takreer) to provide technology for a new propane dehydrogenation (PDH) plant in Abu Dhabi. The new facility will use UOP’s C3 Oleflex technology to convert propane to propylene. It will be designed to produce 500,000 m.t./year of propylene.
UOP will provide engineering design, technology licensing, catalysts, adsorbents and equipment for the project, which is expected to start up by the end of 2013. “This is the world’s first PDH unit to be implemented within a refinery, a significant milestone that indicates refineries are moving toward production of higher-value petrochemical products to achieve the most value from their operations,” says Pete Piotrowski, senior v.p. and general manager/process technology and equipment at UOP.
The facility will help meet the world’s growing demand for propylene and it will help strengthen Takreer’s business, says Jasem Al Sayegh, general manager at Takreer. UOP says that the Oleflex process provides the lowest cash cost of production and the highest return on investment compared with competing technologies.
UOP was recently selected by Takreer to provide technology for its carbon black and delayed coker project, using the Uninfining process at Ruwais, Abu Dhabi. The latest contract builds on Takreer’s earlier awards to UOP for thesupply of technology and engineering services for the expansion of the Ruwais refinery.In addition to propylene, the refinery will produce unleaded gasoline, naphtha, liquefied petroleum gas, aviation turbine fuel, kerosene, gas oil, bunker fuel and other hydrocarbon derivatives. The refinery is expected to be completed in 2014.
ExxonMobil Delays Start-up of Singapore Cracker Until 2012
ExxonMobil is delaying the start-up of its 1 million m.t./year ethylene plant on Jurong Island, Singapore into next year from the end of 2011 due to longer-than-expected safety checks needed for its petrochemical projects, local reports say quoting an ExxonMobil official. Georges Grosliere said that the cracker will be the last of the projects to be started up within the new complex and the start up will take place sometime in 2012.
The cracker is the core unit of ExxonMobil’s second petrochemical project in Singapore that includes associated derivative units for the production of polyethylene (PE), polypropylene (PP) and specialty elastomers, as well as an aromatics extraction unit, and an oxo alcohol expansion. The anticipated mechanical completion and start-up activities for the new facilities were due to be phased beginning in late 2010 through 2011. ExxonMobil says that major polymer units, such as the specialty elastomers, the PE, and PP plants have been mechanically completed and their commissioning has started. Commssioning of the downstream units will occur in phases through 2011 and 2012, the company says.
Canadian grocery chains to require clamshell suppliers to shift to PET
Canada’s top five grocery chains will require its suppliers to shift to PET for clamshell thermoformed packaging in a move designed to simplify the product stream and increase recycling.
Wal-Mart Canada Corp. officials are also talking to suppliers across national boundaries for the initiative, and expect it will expand as part of the increased emphasis on sustainability for the world’s biggest retailer.
“Right now, there are 5.8 billion pounds of [thermoformed] packaging going into landfills in North America each year. Our goal is to facilitate the recycling of that material,” said Guy McGuffin, vice president of sustainable packaging for Wal-Mart Canada of Mississauga, Ontario, during the Wal-Mart Sustainable Packaging Conference June 22 as part of PackEx Toronto.
“The idea is to move away from materials that are not easily recycled and into materials that are more easily recycled. If we work together, we believe we can recover that 5.8 billion pounds, which would be a fantastic result.”
PET is already widely recycled, with a recycling stream already in place for bottles. Pushing for PET and eliminating, as much as possible, “look-alike” plastics which complicate recovery —and discourage both municipal recycling collections and recyclers from taking clamshell containers —the retailers believe they will open the floodgates for more thermoformed PET collection and reuse.
Other materials may have their use, but the retailers believe PET can provide an adequate substitute. In those cases when PET is not viable, it will encourage polystyrene. Polylactic acid containers have their own “green” credentials, officials said, but using it in thermoforming just complicates an already overly-complex set of obstacles to recycling, so Wal-Mart and other stores preferred PET as the industry standard.
In addition, retailers are working with the Adhesive and Sealant Council and the Association of Postconsumer Plastics Recyclers on a set of guidelines for labeling adhesives that will eliminate contamination from glues and labels.
The Retail Council of CanadianGrocers will require all labels to meet APR-certified adhesives by Jan. 1, said Christian Shelepuk, waste reduction program manager for Wal-Mart Canada.
Canada’s biggest grocery store chain, Loblaws Inc. of Brampton, Ontario, first contacted the National Association for PET Container Resources in Sonoma, Calif., in summer 2010, wanting to eliminate unrecyclable packaging, said Mike Schedler, technical director for NAPCOR.
When it was told that its 1,400 stores still would not create enough critical mass to bring PET clamshell recycling into the mainstream, it began working with other Canadian firms —Wal-Mart, Safeway Canada, Metro and Sobeys —in a cooperative effort to bring about the change.
The companies have coordinated the project through the Retail Council of Canada’s grocery group, working with recyclers and recycled PET users to identify and solve issues that would derail its efforts.
Ontario’s extended producer responsibility regulations, which give companies more responsibility for their waste, is helping prod the move, Schedler said.
“There are a lot more market drivers in Canada than in the U.S. that are very visible and pushing this forward,” he said. “The amount of dollars they would have to pay for their unrecycled material would not be insignificant.”
Early on, the group came together around a bale of used thermoformed PET containers and got a quick lesson on one of the primary problems, said Leon Hall, manager of sustainable packaging for Wal-Mart Canada.
When they cut apart the bindings holding the containers together, the bale held its shape. Glue used on the labels was strong enough to hold the compacted plastics together —and contaminate the entire bale, Hall said. Even if separated, the glue would gum up machinery, and current washing methods used to separate labels from bottles in PET bottle recycling did not work with the adhesives used in thermoforming.
In November, the retailers began working with the Adhesive and Sealant Council to tackle the glue problem. The groups decided the best solution would be to adapt to sealants that already work on PET bottles, said Matt Croson, president and CEO of the Bethesda, Md.-based ASC.
Adhesive makers must register their products with the APR by July 15. APR will then test and certify those adhesives as working with existing cleaning systems already in place for PET bottles. By Jan. 1, the retailer’s group will require its suppliers to use thermoform packaging that meets APR guidelines.
“This one’s not complicated,” Hall said. “Choose materials that can be recycled and while you’re at it, fix the adhesive, because that [label] doesn’t need to stay on there forever.”
It is not just the adhesives getting extra attention, however. During testing, Wal-Mart discovered that the Chilean-based supplier of blueberries was using a fluorescent blue additive in its PET packaging to make the berries look better, he said. That produced a recycled flake that did not meet standards. Wal-Mart is now working on global specifications for those and other additives which contaminate the stream.
With those changes, recyclers should be able to loop thermoformed PET into its existing bottle feedstock.
“We have the capability to manage thermoforms if they’re mixed in with the bottle flow,” said Ryan L’Abbé, vice president and general manager of private label water bottler Ice River Springs Water Company Inc.’s PET recycling unit, Blue Mountain Plastics Division.
Ice River, based in Feversham, Ontario, opened its own PET recycling plant in Shelbourne, Ontario. It collects PET from municipal recycling programs in Ontario, Michigan and New York and sorts, cleans and grinds to flake. It then uses the flake in its in-house PET extrusion, pre-forms and blow molding.
“We need more recycled content,” L’Abbé said. “We want to put (PET) into a product that’s recycled again and again and again. We can really consume a lot of the thermoforms that are in the market currently, and that’s a big benefit.”
The project will also benefit more than bottlers or retailers. Shelepuk said Wal-Mart estimates the recycled content of mixed plastics now in thermoformed packaging is worth $120 a ton, but that should climb to $600 per ton as part of the PET stream. That kind of money at high volume will pay for the recycling process, he said.In addition, the companies estimate that PET packaging recycling across North American could create more than 20,000 jobs.“As an industry,” Hall said, “we can make this happen.”
Plastics News staff reporter Mike Verespej contributed to this report.
Berry Plastics buying Rexam closure business for $360 million
Berry Plastics Corp. has confirmed a deal to buy Rexam plc’s beverage and specialty closures business for $360 million in cash. The deal is scheduled to close in the third quarter.
Rexam SBC makes injection and compression molded specialty and beverage closures, jars, and other plastic packaging products for the food, beverage, industrial and household chemical, automotive and beauty end markets.
The business had 2010 sales of about $500 million and employs 1,500. It has eight manufacturing facilities —seven in the United States and one in Brazil. It also has joint venture plants in Malaysia and Mexico, and a technical center in Perrysburg, Ohio. Rexam purchased the business from Owens-Illinois Inc. in 2007.
Curt Begle, president of Berry’s Rigid Closed Top Division, said in a June 20 news release that the Rexam business will complement Berry’s operations, and will establish Berry “in markets where we do not have a significant presence today.”
As of Dec. 31, the business had gross assets of £280 million and liabilities of £50 million.
The sale, which is part of Rexam’s planned reorganization of its plastic packaging operation, will produce an exceptional charge of around £25 million, of which £15 million will be cash costs. The net proceeds will be used to reduce debt, said the company.
The deal had been rumored last week, and the London business newspaper City A.M. had reported June 17 that London-based Rexam was in exclusive negotiations with Evansville, Ind.-based Berry.
Rexam officials had confirmed in December that they were in talks to sell the closures unit. At its annual meeting in May, Rexam announced that for accounting purposes, it was reclassifying the largely North American closures unit as “discontinued operations.”
In 2008, Berry and Rexam were embroiled in a legal dispute over Berry’s hiring of former Rexam closures official John Whitehead; the case was settled out of court.
Vivanta moving US PVC plant to India
Vivanta Enterprises Ltd., a New Delhi-based manufacturer and importer of chemicals, is setting up a plant to make suspension-grade PVC in the western Indian state of Rajasthan.
“The new plant is strategically located near Udaipur, Rajasthan and about 160 kilometers from Kandla port,” said Dharam Goel, the company’s managing director. Vivanta is spending about $25 million to buy, move and set up the plant, a former Georgia Gulf Corp. plant in OklahomaCity that uses Ineos technology.
“This type of plants are not available in the India,” Goel said. Moreover, the cost is almost one-fourth of the cost of a new plant, Goel said.
The plant would likely to be operational in the middle of 2012.
“Currently, the PVC plant is getting dismantled at Oklahoma and it [will take] almost 10 months getting the plant dismantled, shipped, installation and operational in India. We would likely to commence production around middle of 2012,” Goel said.
Vivanta Enterprises isa major importer of synthetic rubber and polymers in India. The group has graduated from trading business and ventured into processing of polyethylene wax, polypropylene compounding, and reprocessed rubber and polymers by setting a factory in Delhi.
According to the company, there is a big demand-supply gap for PVC in India, which imports about 1 million metric tons of the resin annually.
Fluor Corp awarded contract by Dow for Freeport propane dehydrogenation expansion project
Fluor Corp. has been awarded a contract by The Dow Chemical Company to provide basic engineering and design services on its propane dehydrogenation (PDH) expansion project in Freeport, Texas. The undisclosed contract value will be booked in Q2-2011.
Fluor Corp. has been awarded a contract by The Dow Chemical Company to provide basic engineering and design services on its propane dehydrogenation (PDH) expansion project in Freeport, Texas. The undisclosed contract value will be booked in Q2-2011.
Celanese doubles vinyl acetate/ethylene (VAE) capacity at Nanjing integrated chemical complex
Celanese Corporation has doubled the capacity of its vinyl acetate/ethylene (VAE) unit at its integrated chemical complex in Nanjing, China. The expanded unit, which builds on Celanese’s advanced VAE technology, started production in Q2-2011, and is expected to meet the increased global demand for innovative specialty solutions in vinyl-based emulsions. Vinyl-based emulsion solutions span a broad range of end-use applications, including low VOC (volatile organic compounds) odor paints and coatings with Celanese’s EcoVAE(R) binder, specialty adhesives, and building and construction applications.
“This geographic expansion demonstrates the strength and vision of Celanese as a global emulsions leader applying regional resources to continually innovate and improve our technology in emerging economies to meet our customer’s business needs,” said Phil McDivitt, general manager, Celanese Emulsion Polymers. Celanese opened its integrated chemical complex in Nanjing, China, in September 2007. The complex, located at the Nanjing Chemical Industrial Park, brings world-class scale to one site for the production of acetic acid, vinyl acetate monomer, acetic anhydride, emulsion polymers, Celstran(R) long fiber-reinforced thermoplastic (LFRT) and GUR(R) ultra-high molecular weight polyethylene (UHMW-PE).
China Jilin inks JV deal with Evonik to build 300,000 tpa propylene oxide plant
Germany’s Evonik has signed a deal with officials from Jilin Province for a non-exclusive license to build and operate a 300,000 tpa propylene oxide plant in Jilin Province, Northeastern China, as per Platts. The plant will be run by a yet-to-be-established joint venture between Jilin Shenhua and Jilin North Chemical Company. It would take an estimated 2-3 years for a propylene oxide plant to be build after construction starts. Evonik will license the HPPO-process in which propylene is oxidized with hydrogen peroxide to produce propylene oxide.
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