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Business Concentrates

August 30, 2004 | A version of this story appeared in Volume 82, Issue 35

Thailand shuffles petrochemicals

The board of directors of Thailand's PTT has approved plans to build an ethylene cracker and a polyethylene plant, acquire an existing polyethylene plant, and buy a refinery. Shareholder approval is pending. PTT, which until 2001 was the state-owned Petroleum Authority of Thailand, will form a 50-50 joint venture with National Petrochemical to build a 410,000-metric-ton-per-year ethylene cracker and a 300,000-metric-ton low-density polyethylene plant in Thailand's Map Ta Phut industrial park. The projects, which PTT estimates will cost $444 million, are scheduled to go onstream in 2008. PTT and sister company Thai Olefins will jointly acquire Bangkok Polyethylene, a Map Ta Phut maker of high-density polyethylene, for less than $82 million. Finally, PTT will spend $10 million to acquire Shell International's 64% stake in Rayong Refinery, an indebted oil refinery that is also in Map Ta Phut. Thailand's petrochemical industry is in flux. Earlier this month, conglomerate Siam Cement offered to buy 72.5% of National Petrochemical for $420 million. Siam Cement already owns 25% of National Petrochemical.


China cracker project advances

Sinopec, ExxonMobil, and Saudi Aramco will fund further development work on an integrated refinery and petrochemical complex in China. For several years, the three giants have been quietly studying the feasibility of tripling capacity at an oil refinery on the southeast coast of China owned 50-50 by Sinopec and the government of Fujian. The partners would also build an 800,000-metric-ton-per-year ethylene cracker as well as polyethylene, polypropylene, and p-xylene units. Although the three have not yet committed to the project, the cost is estimated at $3.5 billion, and the work would be completed in 2008. The venture would be owned 50-25-25 by Sinopec, ExxonMobil, and Saudi Aramco, respectively.


Siegfried plans cost reductions

Fine chemicals maker Siegfried has hired McKinsey & Co. to help it improve profitability. The firm recently reported a 48% decline in first-half operating profits to $17 million on a 2% sales decline to $125 million. The company is targeting $20 million in cost savings, half of which will be achieved through the elimination of 130 positions at sites in Zofingen, Switzerland, and Pennsville, N.J.


BASF launches citral plant


As part of a $370 million investment in fine chemicals at its Ludwigshafen headquarters complex, BASF last week inaugurated a citral plant. The company figures that the plant's capacity of 40,000 metric tons per year represents some 75% of the world output of synthetic citral. BASF considers citral the center of its vitamins and fine chemicals operations. Some of the product is sold as an aroma chemical; the remainder is used in-house to make a variety of products, including vitamins A and E, carotenoids, and a range of other aroma chemicals.

Akzo, BASF in coatings deals

Akzo Nobel and BASF are fine-tuning their coatings portfolio in two transactions with each other. Akzo Nobel is selling its liquid coatings for agricultural and construction equipment to BASF. The business had sales of about $11 million in 2003. BASF is selling its wood construction coatings business to Akzo Nobel. That business had $21 million in sales in 2003.


Novo Nordisk, Schering-Plough license drugs

Novo Nordisk has licensed technology from Transition Therapeutics for the treatment of diabetes by regenerating insulin-producing cells in the body. The agreement includes a $5 million equity investment up front, milestone payments potentially totaling $48 million, and commercial payments. Meanwhile, Schering-Plough has exercised an option to license ViroPharma's pleconaril, a small molecule being developed for the treatment of the common cold. Schering-Plough will pay an initial license fee of $10 million and up to $65 million in milestone payments to ViroPharma.


Kuraray in EVOH boost

Evalca, the U.S. ethylene vinyl alcohol resin arm of Japan's Kuraray Co., is doubling EVOH capacity at its Pasadena, Texas, unit to 47,000 metric tons per year by March 2006. The company says the $150 million project is a response to 10%-plus annual growth for the polymer. EVOH's high gas impermeability--10,000 times that of polyethylene--makes it a natural in applications such as food packaging, fuel tanks, and pipes. Global demand for EVOH--73,000 metric tons in 2003--is projected to reach 130,000 metric tons in 2010.


Crompton cuts production ...

Despite cost-cutting efforts, raw material and energy cost increases have led Crompton to reduce production of an antiozonant used to prevent rubber from cracking. Prices for the antiozonant, Flexzone, continue to decline, so Crompton plans to close certain Asia-Pacific facilities and reduce production of Flexzone in other regions by 20,000 metric tons per year. In addition, the firm will reduce production of a Flexzone precursor, 4-alkylated diphenylamine, by 13,000 metric tons in Geismar, La. Crompton says that fewer than 50 employees worldwide will be affected.


... and Dow Corning ups it

Strong global demand for building and infrastructure products is leading Dow Corning to increase production of polydimethyl siloxanes at its Barry, England, facility by 15%. Installation of new equipment will be done by early October, and the firm is planning a "major expansion" at the site in 2006. The firm says it also plans a world-class manufacturing facility in China by the end of the decade and is "exploring supply options in India."


Solutia makes PCB payouts

The judge supervising Solutia's bankruptcy reorganization case has approved payouts by the firm to satisfy environmental obligations and responsibilities to residents of Anniston, Ala., who were exposed to polychlorinated biphenyl. Judge Prudence Carter Beatty authorized the firm to pay $5 million, due under a $550 million settlement with 20,000 Anniston residents. She also allowed Solutia and Monsanto to go forward with construction of a $14 million slurry wall in Sauget, Ill., that will prevent contaminated water from a plant there from leaking into the Mississippi River. Solutia, spun out of Monsanto in 1997, filed for bankruptcy at the end of 2003.


Bayer creates biologics firm

Bayer HealthCare's pharmaceuticals arm has spun off its business in biologic products for respiratory diseases as a new company, Aerovance. The new firm has raised $32 million through financing by investors Apax Partners, Lehman Brothers, NGN Capital, and Burrill & Co. Bayer will retain a 19.9% stake. Aerovance was formed to develop and commercialize two lead products: an IL4/13 receptor antagonist for severe asthma, now entering Phase II studies, and Bikunin, a recombinant therapeutic protein for cystic fibrosis and chronic obstructive pulmonary disease. Bayer also included additional research-stage and preclinical programs in respiratory disease in the deal.


Prices rise again in July

July marked the eighth straight month of rising chemical prices, according to data from the Labor Department. The producer price index for all chemicals increased 0.8% from June to 172.8 (1982 = 100). The index was up 7.4% from July 2003. At the same time, the index for the important industrial chemical segment rose 1.6% between June and July to 158.9. Compared with July 2003, the industrial chemical index was up a huge 14.0%.


Lion moves in cheminformatics

Pushing into cheminformatics, Lion Bioscience is launching an analytics product and fostering two partnerships. The product, LeadNavigator, is software developed originally for Bayer to broaden chemical spreadsheets and make the analysis of data in medicinal chemistry more effective. Lion's new partnerships are linked to the software. BioByte is offering software that will work with LeadNavigator to help direct synthesis by assessing structures and their activity. ChemNavigator, a provider of chemical structure databases and cheminformatics algorithms, will also be integrating software into Lion's package.


More expansion in flat panels

Matsushita and Toray will increase production at their existing plasma display panel plant earlier than planned. The two companies had intended to lift output some 40% to 130,000 panels per month early next year, but they now expect to complete the expansion before the end of 2004. The two are also building the world's largest plasma display panel plant by late next year (C&EN, May 24, page 15). Separately, Asahi Glass will invest $125 million in a plant in Takasago, Japan, that will produce large glass panels used by makers of thin-film transistor liquid-crystal displays. The plant will open in October 2005. The company says the LCD industry is growing 25% annually.


Agilent acquires Silicon Genetics

Agilent Technologies will acquire Silicon Genetics, a bioinformatics company with genomics data analysis and management products. With the purchase, Agilent plans to intensify its informatics efforts for DNA, RNA, protein, and pathway applications. The tools under development are intended for data visualization and management of gene expression, genotyping, and protein identification experiments.


  • Sasol will double its capacity for the polyethylene comonomer 1-octene to 196,000 metric tons per year by 2006. Sasol says the Secunda, South Africa, project will raise its output to one-third of the global market, which is 500,000 metric tons per year and growing at 6 to 8% annually.  

  • Hercules' insurer, Equitas, will pay the chemical producer $30 million to resolve asbestos claims and will place an additional $67 million into a trust to resolve future claims. Other insurers have agreed to pay asbestos claims, and the company says it is in talks with additional insurers.  

  • Chemical Diversity Labs and Yale University have been awarded a joint NIH grant to discover small-molecule inhibitors of a G-protein coupled receptor, the melanocortin-2 receptor. ChemDiv will be responsible for chemistry and for screening using assays developed at Yale.  

  • SNPE has combined its Neosystem and Multiple Peptide Systems units into a single organization called NeoMPS with annual sales of about $17 million. SNPE signaled its plans for the peptide merger last year.  

  • Nanophase Technologies has withdrawn a shelf registration under which it planned to raise additional funds from the stock market. The move follows the recent decision by fellow nanotechnology firm Nanosys to cancel an initial public offering of stock.


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