Chemical industry weekly news roundup, 6 June
9:33 AM MDT | June 6, 2014 | By LINDSAY FROST
This Week in CW:
A huge explosion and fire on 3 June at a Shell chemical plant at Moerdijk, Netherlands, has injured two employees. An explosion occurred at about 11:00 pm local time at Shell’s MSPO-2 plant, which produces styrene monomer and propylene oxide, and was followed by a fire, according to Shell. The injuries are not believed to be life threatening, Graham van't Hoff, executive v.p. for Shell Chemicals, said in comments at the ACC annual meeting, held earlier this week in Colorado Springs, CO. The fire and incident were fully under control by 6:00 am local time on 4 June and Shell is working with local authorities, he adds. Other facilities at the Moerdijk site are operating normally, Shell says.The impacted plant, which is a 50-50 jv with BASF, has styrene capacity of 550,000 m.t./year of styrene monomer and 250,000 m.t./year of propylene oxide capacity.
Trinseo, formerly Styron, on Monday launched an initial public offering, aiming to raise $170–190 million through the sale of 10 million common shares. The company has also applied to have its shares 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 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.
A. Schulman has agreed to acquire Ferro’s specialty plastics business, a maker of engineered plastic compounds, colorants, and liquid coatings mostly for thermoset plastics, for $91 million, the companies announced on Wednesday. The deal is expected to close by 31 August. It includes four Ferro plants located in the United States and operations in Spain but excludes one specialty plastics facility in New Jersey and operations in Venezuela. The deal is expected to generate $5.5 million in synergies within 18 months, Schulman says. The acquired businesses generated $154 million in sales during 2013, with about two thirds of that coming in the United States. The US focus of the business expands Schulman’s presence in specialty plastics in the country, which has been a goal for the company.
The Competition Tribunal of South Africa on Thursday imposed a combined 534-million South African rand ($49.9 million) penalty for excessive pricing of propylene and polypropylene (PP) from January 2004 to December 2007. The tribunal has found Sasol Chemical Industries (SCI; Johannesburg), a subsidiary of Sasol, guilty of charging domestic customers excessive prices for purified propylene and PP and has imposed a penalty of R205.2 million in the case of propylene and R328.2 million for PP. The tribunal has also imposed remedies in respect of SCI’s future pricing of both products that will lower the prices of both products. The tribunal concludes that SCI’s exercise of market power and excessive prices have stunted innovation and development for domestically manufactured downstream plastic goods.
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US employers kept up a solid pace of hiring in May, returning employment to its pre-recession level and offering confirmation the economy has snapped back from a winter slump, Reuters says. Nonfarm payrolls increased 217,000 last month, the Labor Department said on Friday, in line with market expectations. Data for March and April was revised to show 6,000 fewer jobs created than previously reported. 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.
Chinese officials are ramping up political and economic pressure on the United States government and large technology companies following the Justice Department’s announcement on 19 May of indictments against five members of the Chinese Army on charges of economic cyberespionage, according to the NY Times. Prominent Chinese officials, agencies and commentators have announced or called for measures that are widely seen as retribution for Washington’s latest charges as well as earlier related accusations, raising the specter of a trade war and stoking anxiety among American companies that do business here. At the same time, Chinese technology companies are seizing on the tensions to press state agencies to mandate the use of domestic technology. Some American executives say the Justice Department’s move took them by surprise. They are now nervous over a 22 May announcement by China’s State Internet Information Office that the government has established procedures to gauge potential security risks of Internet technology and services.
Citing unclear records, redundant and uncoordinated work, overstaffed meetings and exorbitant travel expenses, a federal bankruptcy judge has disallowed or delayed hundreds of thousands of dollars in fees and expenses requested by Freedom Industries’ coterie of lawyers and advisers, according to the West Virginia Gazette. Since so many of the lawsuits against the bankrupt company are on hold and the company will cease to exist once it winds up its operations, US Bankruptcy Judge Ronald Pearson ordered Tuesday that much of Freedom’s legal work needs to stop. Freedom, the company whose faulty chemical tank contaminated the Elk River and the water supply of 300,000 West Virginians with its leak of the coal-cleaning chemical Crude MCHM on 9 January, is paying five law firms, as well as a financial adviser and a special environmental consultant. Those firms requested more than $1.8 million in fees and expenses for work performed from 17 January, the day Freedom declared bankruptcy, through the end of March.