Chemical industry weekly news roundup, 30 May
9:30 AM MDT | May 30, 2014 | By LINDSAY FROST
This Week in CW:
Several key changes happened this week. Mosaic announced that its president and CEO James Prokopanko is taking a medical leave of absence for surgery to treat his previously disclosed cancer. The board has named CFO Lawrence Stranghoener interim CEO during Prokopanko’s absence, effective 1 June. Mosaic also announced that Stranghoener intends to retire at the end of 2014 and the board has named Richard Mack executive v.p. and CFO, also effective 1 June. Sadara Chemical Co. (Dhahran, Saudi Arabia), a joint venture between Saudi Aramco and Dow Chemical, has appointed Massimiliano Leopardi, as CFO. BASF says that Ralf Spettmann, currently senior v.p./pigments & resins Europe, will become president of the construction chemicals division headquartered at Ludwigshafen, Germany, effective 1 September 2014. International Flavors & Fragrances (IFF), the leading global creator of flavors and fragrances used in consumer products, says that Doug Tough will be stepping down as CEO, effective 1 September. The company’s board of directors has selected Andreas Fibig, a senior Bayer executive and a member of IFF’s board since 2011, to succeed Tough as of that date.
Flint Hills Resources, a subsidiary of Koch Industries, has reached a deal to acquire propylene maker PetroLogistics for $2.1 billion. PetroLogistics is a major producer of propylene with operations in the Houston Ship Channel. The company owns the only propane dehydrogenation facility currently operating in the United States. The facility began operations in 2010 and has a production capacity of approximately 1.45 billion lb/year. The facility employs about 100 people. The facility was developed and built on the site of a former ethylene cracker and related infrastructure acquired from ExxonMobil in March 2008. Under the terms of the deal, Flint Hills Resources will acquire all of PetroLogistics’ outstanding common units for $14.00/unit in cash except for those common units owned by private equity firm Lindsay Goldberg; York Capital Management; as well as units owned by Petrologistics executive chairman and its CEO, which will be acquired for $12.00/common unit in cash.
Westlake Chemical Corp. announced that it has signed a definitive agreement to acquire Vinnolit Holdings (Ismaning, Germany) and its subsidiary companies from Advent International, a private equity firm. Vinnolit is an integrated, global leader in specialty polyvinyl chloride (PVC). The acquisition price of €490 million ($666.8 million) will be financed using existing Westlake cash and credit facilities. The transaction is expected to close in the third quarter of 2014, subject to standard closing conditions, including regulatory review. Vinnolit has six production facilities located in Gendorf, Burghausen, Cologne, Knapsack, and Schkopau, in Germany; and Hillhouse, UK. These operations have combined annual capacities of 780,000 m.t./year of PVC, including specialty paste and suspension grades; 665,000 m.t./year of vinyl chloride monomer (VCM); and 475,000 m.t./year of membrane-grade caustic soda.
ACC released its monthly chemical activity barometer (CAB)—with the indicator reaching its highest peak since February 2008, and its highest year-over-year (YOY) gain since September 2010. Measured on a three-month moving average basis (3MMA), the CAB posted a 0.8% gain over April and is up 4.1% YOY. The data reflects upwards revisions for the previous five months, suggesting more than just a rebound from adverse winter months, ACC says.
Around the Web:
CIO magazine writes that technology today, particularly big data and analytics, is disrupting roles throughout the enterprise, whether it's the CIO that needs to seek new ways to be a strategic partner to the business or the CMO constantly faced with decisions about technology that can make the marketing function more data-driven and efficient. Even the CFO role is not immune. "The CFO doesn't really have to be a technologist, but they have to understand how the power of technology can help them do their job," says Nicole Anasenes, CFO of enterprise software solutions specialist Infor. "The pressures on the CFO are not terribly different than they've always been, but the interconnectedness of the world and the rate of change adds to it. They need to react to change quickly with speed and flexibility."
The US economy shrank in the first quarter for the first time in three years as businesses increased inventories more slowly than initially believed, and bad weather hampered activity, according to USA Today. In the first three months of 2014, the nation's gross domestic product fell at a 1% annual rate, versus the 0.1% increase first estimated, the Commerce Department said Thursday. Economists expected the report to show that the nation's output declined about a half a percentage point compared with the fourth quarter. The last time the economy contracted was in the first quarter of 2011.
The Harvard Business Review writes this week why Germany dominates the US in innovation. Germany does a better job on innovation in areas as diverse as sustainable energy systems, molecular biotech, lasers, and experimental software engineering. Indeed, as part of an effort to learn from Germany about effective innovation, US states have encouraged the Fraunhofer Society, a German applied-science think tank, to set up no fewer than seven institutes in America. True, Americans do well at inventing. The US has the world’s most sophisticated system of financing radical ideas, and the results have been impressive, from Google to Facebook to Twitter. But the fairy tale that the US is better at radical innovation than other countries has been shown in repeated studies to be untrue. Germany is just as good as the US in the most radical technologies. For more on this, check out this week’s cover story.
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