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Chemical industry weekly news roundup, 22 November
12:26 PM MST | November 22, 2013 | By LINDSAY FROST
This Week in CW:
The Gulf Petrochemical and Chemical Association’s (GCPA; Dubai) annual forum kicked off this week in Dubai, with industry coming together to address global issues. On Wednesday, the first day of the forum, the key topics included innovation and shortage of feedstocks in the GCC states. Mohamed Al Mady, chairman of GPCA and CEO of Sabic in his opening address said that the GCC states are behind other regions in innovation but this is slowly changing. Also on Wednesday in his keynote address, Stephen Pryor, president of ExxonMobil Chemical talked about feedstock innovation and its impact on the global chemical industry. Also announced during the forum, Dubai Gold & Commodities Exchange (DGCX) will launch a polypropylene (PP) futures contract on 28 February 2014. Hanwha Chemical Corp., (Seoul), a producer of chlor-alkalis, polyethylene and polyvinyl chloride as well as a major player in the solar energy, says it is planning to participate in a cracker project in the United States as well. HBG Petrochemical Holdings (HPHL), an Arabian Gulf based downstream petrochemical investment firm, Mackeen Age Investment Holdings and Ravago (Arendonk, Belgium) announced the formation of a joint venture during GPCA.
NACD’s annual meeting was also held this week at Marco Island, Florida. During the meeting, Todd Klessman, senior policy advisor for the infrastructure security compliance division at the Department of Homeland Security (DHS), told attendees that DHS is on track with inspections and auditing of facilities that qualify as high risk under Chemical Facility Anti-Terrorism Standards (CFATS). Klessman says the working group formed is "hard at work" on the deliverables required for Obama’s recently issued Executive Order. NACD also announced that it has named during this quarter the highest number of new members in a decade. The 18 new members and affiliates bring NACD participants to almost 420 companies. NACD also signed a memorandum of understanding (MOU) with the Canadian Association of Chemical Distributors (CACD; Ontario) with the goals of working together to mitigate issues within both their organizations, create events together in the future, and improve best practices. NACD also signed an MOU with Brazil's chemical distribution organization Associquim/Sincoquim (São Paulo) that includes a pledge to accept each other’s Responsible Distribution third-party verification requirement.
OCI N.V. (Geleen, the Netherlands) plans to build a greenfield 1.75-million m.t./year methanol plant in Beaumont, TX. OCI, which made the announcement on 21 November, says the methanol plant will be the largest in the United States. OCI filed for environmental permits in February 2013. The plant will occupy part of a 514-acre plot of land recently acquired by OCI, the company says.
Kuraray has reached a deal to acquire DuPont's glass laminating solutions and vinyls (GLS/vinyls) business, a leading producer of polyvinyl butyral (PVB), for $543 million. DuPont expects the deal to close during the first half of 2014. The DuPont business makes PVB and ionomer sheets for safety glass, as well as vinyl acetate monomer and polyvinyl alcohol (PVA) intermediates used in architectural, automotive and industrial applications. The unit's net sales totaled over $500 million in 2012. It has about 600 employees and six manufacturing sites in the United States, Europe and Asia.
Around the Web:
The Dow Industrials pushed to a record close above 16,000 on Thursday, lifted by better-than-expected weekly jobless claims and easing jitters over the Federal Reserve’s potential to taper its bond-buying program. It was its 40th record close of 2013, according to MarketWatch. The S&P 500 also on Thursday closed just shy of its own milestone level of 1,800. Futures for the Nasdaq 100 index rose 6.25 points to 3,406.75.
Coal is seen as the new tobacco—parking investor backlash in commodities, according to Bloomberg. About $8 trillion of known coal reserves lie beneath the earth’s surface and the companies planning to mine and burn them are being targeted by a growing group of investors concerned with the greenhouse gases that will be made. Storebrand ASA (STB), which manages $74 billion of assets from Norway, sold out of 24 coal and oil-sands companies since July including Peabody Energy Corp. (BTU), the largest US coal producer, citing a desire to cut fossil-fuel industry holdings. This month Norway’s opposition Labour Party proposed banning the country’s $800 billion sovereign wealth fund from coal investments.
The National Center for the Middle Market recently published a piece called “Making Sense of Moving Commodity Prices for Your Middle Market Business.” Most middle market companies are exposed to risk from changing commodity prices, whether they use commodities (raw materials like metals, chemicals, or agricultural products) directly as inputs in their production or rely on oil-hungry transportation for logistics and distribution. Changes in commodity prices can thus "have a direct impact on [your] profit margins" and overall bottom line, says a report from consulting firm PWC, because it's difficult to simply transfer your higher costs on to customers by increasing prices. In today's highly competitive business climate, many middle market companies absorb the cost by decreasing their margins, leaving them less money to invest in other areas.