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Chemical industry weekly news roundup, 21 June
11:12 AM MDT | June 21, 2013 | By LINDSAY FROST
This Week in CW:
Private equity firm Cinven (London) has won the bid to acquire CeramTec (Plochingen, Germany) from Rockwood Holdings (Princeton, NJ) for €1.49 billion ($1.98 billion), subject to adjustments, Rockwood announced on Monday. Cinven beat out competition from two other private equity firms, BC Partners and Bain Capital. CeramTec accounts for 16% of Rockwood’s sales. The transaction is expected to close in the third quarter of this year, following regulatory approvals, including from the European antitrust authorities. Cinven has obtained fully committed financing from the banks.
Shin-Etsu says its US subsidiary Shintech will invest $500 million to expand chlor-alkali, vinyl chloride monomer (VCM), and polyvinyl chloride (PVC) at production sites in Louisiana. Project completion is targeted for 2015, the company says. Shintech produces chlor-alkali, VCM, and PVC at an integrated vinyls complex in Plaquemine, LA, and also operates a PVC unit at Addis, LA. Shin-Etsu says the investment will boost PVC and VCM capacities each by 300,000 m.t./year and caustic soda capacity by about 200,000 tons/year. The investments will lift Shin-Etsu’s US PVC capacity to 2.95 million m.t. across sites in Louisiana and at Freeport, TX.
OCI Partners, established in February by Orascom Construction Industries (OCI; Sittard, Netherlands) on 14 June filed with the SEC to raise up to $480 million in a previously announced initial public offering. The company expects to list its common units on the New York Stock Exchange under the symbol OCIP. Bank of America Merrill Lynch, Barclays, and Citi are the joint bookrunners on the deal. The company operates a methanol plant at Beaumont, TX, with an annual capacity of about 730,000 m.t., making OCI the largest merchant methanol producer in the United States, according to a preliminary prospectus filed on Friday.
Russia's Nizhnekamskneftekhim (Nizhnekamsk), one of the country’s major producers of petrochemicals and synthetic rubbers, plans to make a final investment decision on its previously announced world-scale cracker project and downstream units during this year, according to Igor Laryonov, head of strategy at the company. The company last year signed technology and basic engineering contracts for the project, which will be designed to produce 1 million m.t./year of ethylene; 600,000 m.t./year of polyethylene (PE); and 400,000 m.t./year of polypropylene (PP). The complex, requiring an estimated capital expenditure of $3 billion, is set to be completed by 2016 and forms part of the company’s plan to double the size of Nizhnekamskneftekhim by 2020.
Around the Web:
The Dow Jones Industrial Average fell over 350 points on Thursday—making it the biggest one-day slide of the year as anxiety mounted over the potential for the Federal Reserve to pull back its stimulus efforts, The Wall Street Journal says. Worries about the Fed rattled across other markets, with gold dropping and yields on Treasury bonds marching to nearly two-year highs. The Standard & Poor's 500-stock index lost 40.74 points, or 2.5%, to 1588.19. The Nasdaq Composite Index fell 78.57 points, or 2.3%, to 3364.63. Stocks began their decline at the opening bell on Thursday, extending losses first kicked off after Fed Chairman Ben Bernanke reiterated Wednesday that the central bank could start winding down its $85-billion-a-month asset-purchase program later this year.
According to Phys.org, Scottish-based company Celtic Renewables is looking to use waste materials from the whiskey production process to make biobutanol, which can be used to power engines. The process, called acetone-butanol-ethanol (ABE), is based on using the bacteria Clostridium acetobutylicum to break down materials in the waste. Eager to reduce their costs, whiskey distilleries are open to the idea, Phys.org says.
The Fitch Ratings agency says in The Daily Telegraph that the China baking system is “out of control” and under mounting stress as borrowers struggle to roll over short-term debts. The agency said the scale of credit was so extreme that the country would find it very hard to grow its way out of the excesses as in past episodes, implying tougher times ahead. While the non-performing loan rate of the banks may look benign at just 1pc, this has become irrelevant as trusts, wealth-management funds, offshore vehicles and other forms of irregular lending make up over half of all new credit, the agency says.