IHS Chemical Week


Chemical industry weekly news roundup, 23 May

9:20 AM MDT | May 23, 2014 | By LINDSAY FROST

This Week in CW:

DuPont CFO Nicholas Fanandakis said during an investor conference today that the company would consider a Reverse Morris Trust (RMT) transaction or outright sale of its performance chemicals business. The company announced last October that it would divest its $7-billion/year performance chemicals segment by mid-2015 through a tax-free spin-off to shareholders as a part of the company’s transformation to a “higher growth, less cyclical company.” The business includes titanium dioxide, fluoroproducts, and industrial chemicals. “We are open to the possibility of someone coming in with a potential RMT [transaction] or even a sale. I believe there are hurdles in those options that [make it] difficult for someone to offer a value that would make me excited,” Fanandakis says. “It’s got to be of sufficient value to offset the risk and the uncertainty … versus continuing down the spin path.”

Mitsubishi Chemical is to become the majority shareholder of industrial gases producer Taiyo Nippon Sanso (Tokyo), according to a filing by Mitsubishi to the Tokyo Stock Exchange (TSE). Mitsubishi had held a 15% stake in Taiyo Nippon Sanso until December last year, when the former company increased its stake to 27% via a private placement of new shares. Mitsubishi now plans to launch a public tender offer to up its stake in Taiyo Nippon Sanso to 51% in a deal valued at about ¥107 billion ($1.05 billion), the filing says.

BASF’s board members at 22 May’s investor day in London outlined the company’s plans for the chemicals segment, which last year accounted for 23% of the company’s €74 billion ($101 billion) sales and 28% of the €10.4 billion Ebitda. The segment is the core of the company’s integration concept, Verbund, and the start of the added value chain. Kurt Bock, CEO; and board member Wayne Smith have also talked about the recently announced methane-to-propylene (MTP) project planned on the US Gulf Coast, the ammonia joint venture project with Yara at Freeport, TX and the bright prospects the company sees for methylene di-para-phenylene isocyanate (MDI). Smith announced today that BASF, Huntsman and their Chinese partners have received a permit to double MDI capacity at Caojing, near Shanghai from 240,000 m.t./year to 480,000 m.t./year, which should be onstream in the next two years. The jv, Shanghai Lianheng Isocayanate is owned 35% each by BASF and Huntsman. Chinese partners have the remaining share. However, Smith confirmed that BASF’s stand-alone 400,000 m.t./year MDI facility at Chongqing, China, will be delayed because, following the Chinese government’s decision to raise gas prices to the chemical industry, BASF’s suppliers of chlorine will be unlikely to meet the original completion deadline of 2014. The MDI plant is now scheduled on stream in the second quarter of 2015.

The main day of this year’s Asia Petrochemical Industry Conference (APIC), that took place at Pattaya, Thailand, last week, dealt with changes the industry currently faces and their impact on Asian players. The theme of this year's APIC is Transformation, A map redrawn. The proceedings commenced with introductions by the chairmen of the petrochemical industry associations of APIC’s members, Thailand, Japan, India, South Korea, Malaysia, Singapore and Taiwan. In his opening remarks, Ekarat Thongtawach, chairman of the Petrochemical Club, Federation of Thai Industry, said that the global petrochemical industry has changed significantly. Geopolitical uncertainty is impacting economies in some parts of the world as are high petrochemical feedstock costs, particularly in Asia. Petrochemical players, particularly in North America, have an immense competitive advantage. These changes are not all negative, however, and will provide opportunities. “We cannot simply ignore the changes but embrace and understand them,” he says.

Around the Web:

New-car sales in the United States are expected to rise more than 7% in May and continue the strong spring selling season, since the month includes five weekends, two industry research firms said on Thursday, as reported by Reuters. With the help of the Memorial Day holiday weekend, total US sales are expected to finish at more than 1.5 million vehicles, with the month's annual selling rate topping 16 million vehicles for the third straight month, according to J.D. Power and LMC Automotive. Sales to only retail customers are increasing even more strongly, up more than 8%.

A handful of the major economies around the world have released their Flashes, their preliminary purchasing managers index reports, which are reliable indicators of GDP growth, according to Business Insider. Markit economist Chris Williamson sums up the eurozone story with one sentence: "Of greatest concern is France, living up to its moniker of 'sick man of Europe' by sliding back into contraction as Germany continues to enjoy robust growth and the rest of the region experiences its best expansion since mid-2007." The eurozone's recovery continues to be very uneven, with Germany driving most of the gains as the rest of the region struggles.

The past two decades have been brutal for American manufacturing, since companies have shifted production overseas and introduced high-tech systems that eliminated jobs, CNN Money reports. Many of these once-thriving hubs have been idle for years—but this situation is starting to change. "Demand for closed factories has picked up since the recession," says Stuart Lichter, president of Industrial Realty Group, which works with defunct commercial property. This resurgence is largely triggered by US companies bringing production back home. There has also been a boom in international firms, especially from China, shifting production to the United States as a way to grow their business and cut costs.

contact us | about us | privacy policy | sitemap

ihsCopyright © IHS, Inc.All rights reserved.Reproduction in whole or in part without permission is prohibited.

North Asia Russia Southeast Asia China India/Pakistan Middle East Eastern Europe Western Europe Central America Canada USA Australia/New Zealand South America Africa