Chemical industry weekly news roundup, 20 June
10:17 AM MDT | June 20, 2014 | By LINDSAY FROST
This Week in CW:
Chevron Phillips Chemical (CPChem; The Woodlands, TX) has broken ground on two 500,000-m.t./year polyethylene (PE) plants at its site in Old Ocean, TX. The plants are part of CPChem’s $6-billion US Gulf Coast Petrochemicals Project, which also includes a 1.5 million-m.t./year ethane cracker being built at the company’s Cedar Bayou facility in Baytown, TX. CPChem says the project will increase its global ethylene and PE capacity by about 40% when it is completed in 2017.
ExxonMobil Chemical says it has begun constructing a second steam cracker at its Baytown facility and two downstream PE lines at its Mont Belvieu, TX, plastics plant. EPA gave the project a final greenhouse gas Prevention of Significant Deterioration construction permit last month. The cracker will have the capacity to produce 1.5 million m.t./year of ethylene from ethane. Each of the new PE lines will have a capacity of 650,000 m.t./year.
Air Products has named Rockwood Holdings chairman and CEO Seifi Ghasemi as its next chairman and CEO, effective 1 July. He succeeds John McGlade, who will retire from Air Products on 30 June. Rockwood has named Robert Zatta as acting CEO effective 1 July in addition to his role as CFO. Ghasemi was appointed to the Air Products board in September 2013 as part of an agreement with activist hedge fund Pershing Square, its largest shareholder, that required the company to appoint three new board members and start a search for a new CEO. McGlade was scheduled to step down as chairman by 30 June under that agreement.
Engineering and construction firm KBR on 19 June announced a net loss and lower revenues year-on-year in the first quarter. It reports a net loss of $43 million, down from a net income of $88 million in the year-earlier period, while revenue was down 11%, to $1.6 billion. Gross profit shrank from $156 million to $39 million. Newly elected president and CEO Stuart Bradie, who joined KBR earlier this month from WorleyParsons, says that KBR will strategically review its operations.
Around the Web:
Earlier this month, when EPA announced plans to reduce power plant carbon emissions by 30%, critics were quick to argue, claiming that the new standards would wreck the economy. But, this time many businesses opposed these claims, writes the Huffington Post. An analysis released Thursday by Ceres, Calvert Investments, the World Wildlife Fund, and David Gardiner & Associates shows that clean energy is going mainstream in company circles, with 60% of the Fortune 100 firms having goals for renewable energy sourcing or greenhouse gas reductions. Fifty-three of the Fortune 100 reporting on climate and energy targets have collectively decreased their annual carbon dioxide emissions by about 58.3 million m.t.—the equivalent of retiring 15 coal-fired power plants.
BlackRock, the world’s biggest money manager, is encouraging regulators to scrutinize the risk of an investor flight from mutual funds and consider potential restrictions that would help prevent asset sales, according to Bloomberg. Regulators, seeking to avoid a replay of the 2008 financial crisis, are contemplating ways to reduce the likelihood that an exodus from funds could freeze financial markets during a sell-off. Much of the focus is on bond mutual funds and whether they might lose assets rapidly if interest rates rise. Investors poured $1 trillion into US bond funds from 2008 to 2012 and pulled $80.5 billion last year, according to data from the Investment Company Institute.
Across the board, the more CEOs get paid, the worse their companies do over the next three years, according to extensive new research. This is true whether they’re CEOs at the highest end of the pay spectrum or the lowest, according to an opinion piece in Forbes. The conventional wisdom among executive pay consultants, boards of directors, and investors is that CEOs make the best decisions for their companies when they have the most skin in the game, explaining why big chunks of the compensation packages for the highest-paid CEOs come in the form of stock and stock options.