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Chemical industry weekly news roundup, 10 May
12:56 PM MDT | May 10, 2013 | By LINDSAY FROST
This Week in CW:
The final resolution has been completed in the K-Dow arbitration between Dow Chemical and the Petrochemical Industries Company (PIC; Kuwait City, Kuwait), with Dow confirming on Tuesday that it has received a direct cash payment of $2.2 billion from PIC. The money was awarded to Dow by the International Chamber of Commerce's international court, which last year ruled against PIC for pulling out of the $17.4-billion K-Dow petrochemical joint venture in 2008 amid the global economic crisis. Dow says the cash payment includes damage as well as recovery of its costs.
The Asia Petrochemical Industry Conference (APIC) began Friday at Taipei, Taiwan—covering the region’s huge growth potential. APIC, whose theme this year is feedstock transition, is addressing opportunities and challenges facing the region. The conference, attended by some 1,200 delegates, began with marketing seminars, including IHS Chemical. The conference began with delegates debating a range of topics, including challenges facing the global petrochemical industry, the advent of cheap shale gas in the United States, and the need to develop technologies that do not rely entirely on fossil fuels. Asia is still the bright spot in the global economy with China and India the growth engines, delegates were told. China’s economy is expected to grow 8.1% this year and pick up steam after that while India should grow at 6.1–6.7% in 2013–14. Check back next week for more coverage of APIC 2013.
Ferro has reached an agreement with FrontFour Capital and Quinpario Partners over nominees to Ferro’s board by support for election two out of three of the shareholder group's board nominees. The agreement comes after months of sparring between Ferro and the two investment groups, who have positioned themselves as dissident shareholders. Under the agreement, FrontFour’s David Lorber and former Solutia CEO Jeffry Quinn will stand for election at Ferro’s annual meeting next week, replacing Ferro nominees Richard Brown and Gregory Hyland.
The West Fertilizer Co. plant that exploded on 17 April—killing 14 people, injuring over 200 others, and causing millions of dollars in damage—was recently found to be holding only $1 million in liability insurance coverage, as well as having a history of ammonia leaks caused by numerous burglaries. Reuters reports that the plant was a repeat target of theft by intruders who tampered with the ammonia tanks, causing leaks. According to 911 dispatch logs and criminal offense reports, police responded to at least 11 reports of burglaries and 5 separate ammonia leaks at the plant over the past 12 years. The Associated Press expects the owner to ask a judge to divide the $1 million in insurance money among the plaintiffs and then file for bankruptcy.
Oil field chemicals maker Flotek Industries says it has signed a definitive agreement to acquire Winter Haven, FL–based Florida Chemical Co., the world's largest processor of citrus oils and a "pioneer," according to the announcement, in solvent, chemical synthesis, and flavor/fragrance applications from citrus oils. Under the terms of the agreement, Flotek will pay approximately $102 million—$49.5 million in cash and 3,284,180 shares of Flotek common stock—for the outstanding shares of privately-held Florida Chemical.
Around the Web:
Reuters reports that Federal Reserve chairman Ben Bernanke said on Friday that the shadow banking system still poses a threat to financial stability, and funding markets might still not be able to cope with a major default. In a wide-ranging speech explaining the Fed's role in monitoring the health of the banking system, Bernanke also laid out how the central bank was closely looking at asset markets for signs of excessive risk taking.
Carbon dioxide (CO2) levels in the atmosphere have hit their highest point in 3–5 million years, according to daily measurements from Friday recorded at a US government agency, reported in BBC News. Measurements have exceeded 400 parts per million for the first time before humans existed. The station, which sits on the Mauna Loa volcano, in Hawaii, feeds its numbers into a continuous record of the concentration of the gas stretching back to 1958. The usual trend seen at the volcano, BBC says, is for the CO2 concentration to rise in winter months and then to fall back as the northern hemisphere growing season kicks in and pulls some of the gas out of the atmosphere. This means the number can be expected to decline by a few ppm below 400 in the coming weeks, but the long-term trend is upwards—indicating warming of the planet.
According to Market Clouds financial blog, the S&P500 has recently broken above the highs set in the dot-com bubble and the highs before the housing bubble burst, and investors are debating whether this is good news or bad news for the global economy. On one hand, the case has a lot to do with how cheap money is, how valuations are not completely crazy, and how the global economy is doing okay, but on the other hand, some say the money being pumped into the system is causing, or is going to cause, very negative side effects for the world economy and the markets. Some of these concerns include the economic slowdown in Asia, the patches of economic depression that appear to be dragging the European economy down, and the fate of Japan and the final results of its grand experiments in monetary policy.