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Chemical industry weekly news roundup, 13 June
1:44 PM MDT | June 13, 2014 | By LINDSAY FROST
This Week in CW:
Navigating the growing pains that accompany the unprecedented US capital build was a primary theme at ACC’s annual meeting at Colorado Springs, CO, on 2–4 June. Strains are already showing on early US Gulf Coast expansion projects, producers say. Producers are also turning attention to challenges associated with getting material to market once production comes online. “We are in the middle of a variety of expansion projects,” says Jim Gallogly, LyondellBasell Industries CEO and current chair of ACC’s executive committee. “The strategy was to begin very, very early, and we are glad we did. At this point in time, we see labor costs increasing and productivity decreasing—and this is at an early stage when permits are just being issued for the larger projects.” Heavier strains are expected as those greenfield projects ramp up over the next two years. “My view is that this will become more acute and you will see increasing costs and delays in the coming years,” Gallogly says.
Bayer’s supervisory board has made a number of changes to the company’s management board. Meanwhile, the tenure of Marijn Dekkers as chairman and CEO has been extended by just two years, until the end of 2016, from the end of his initial five-year period. Dekkers cites family reasons for the shorter-than-expected extension. Bayer says that, to ensure continuity in key aspects of the company’s future development, the supervisory board has appointed Werner Baumann, current CFO, as chief strategy and portfolio officer, effective 1 October 2014. Baumann’s existing contract runs until 31 December 2017. Also effective 1 October 2014, Johannes Dietsch, currently senior Bayer representative and CFO/Greater China and based in Shanghai, will assume the position of CFO. He will be appointed to the Bayer management board effective 1 September 2014.
Trinseo, formerly Styron, on 12 June completed its initial public offering, raising about $190 million through the sale of 10 million common shares. The company’s shares, which were initially priced at $19 each, are now listed on the New York Stock Exchange under the symbol TSE. Trinseo filed for an IPO in March. About 21% of the company’s shares will be public after the IPO. Trinseo is Dow Chemical’s former styrenics business, which was acquired by private equity firm Bain Capital (Boston) in 2010 for $1.63 billion. Bain owns 89.5% of the company, with Dow owning 6.8% and the remaining 3.7% owned by company management, including Trinseo CEO Chris Pappas. Trinseo recorded $5.31 billion in sales during 2013, not including the company’s 50% interest in the Americas Styrenics polystyrene joint venture with Chevron Phillips Chemical.
Occidental Petroleum has named Robert Peterson president of OxyChem, effective 1 August. Peterson succeeds Chuck Anderson, who will retire on 31 July. Peterson has served as senior v.p./basic chemicals since 2009. Peterson has been with OxyChem for 18 years, holding positions in manufacturing, sales, and marketing. He had served as v.p./vinyls from 2006–08 before his current position. Anderson began his career with OxyChem in 1981 and has served as president since 2006.
Around the Web:
According to the Carbon Brief blog, The government's new system to allocate green energy subsidies is called contracts for difference (CfDs). The government plans to use auctions to annually divide up a fixed pot of money to support established forms of renewable power. Different technologies will compete against each other for support. Other less mature technologies may not have to compete for money initially, on the basis that they need the support more.
CEO compensation has increased by 937% over the last three decades, according to a new study written about in Al Jazeera America. The rise compares with a dismal 10.2% hike for the average US worker over the same time frame, putting into stark contrast the relative fortunes of the superrich and everyday employees in an increasingly economically divided America. The report, released by the Economic Policy Institute (EPI) on Thursday, found that average CEO compensation, which includes stock bonuses, was $15.2 million in 2013, up 2.8% from 2012 and 21.7% since 2010. That increase follows a trend since 1978 of CEO pay outpacing other economic growth factors. EPI says the 937% rise in pay is more than double the rate that the stock market grew in the same years.
China’s new yuan loans and money supply topped estimates in May as the government supports economic growth while reining in shadow banking, according to Bloomberg News. Local-currency loans were 870.8 billion yuan ($140 billion), the People’s Bank of China said on its website yesterday, higher than 42 out of 43 analyst estimates in a Bloomberg News survey. M2, the broadest measure of money supply, rose 13.4%, compared with a median projection for 13.1%.