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Business
Business Concentrates
June 13, 2005
| A version of this story appeared in
Volume 83, Issue 24
Following a $4 billion repurchase program and the announced separation of its chemical business, moves meant to placate financier and minority shareholder Carl Icahn, Kerr-McGee has revealed plans for an initial public offering of the chemical business. In a preliminary registration statement filed with the Securities & Exchange Commission, the company says it is seeking to raise $300 million in an offering for the company, so far dubbed New-Co Chemical. The purchase price, the number of shares, and the ticker symbol for New-Co, which will trade on the New York Stock Exchange, are yet to be determined. Kerr-McGee says it will maintain voting control of the company, which claims to be the third-largest titanium dioxide producer in the world, behind DuPont and Lyondell Chemical. Some 93% of the chemical business's annual sales of $1.3 billion come from TiO2; the balance comes from electrolytic materials and other chemical products.
Innovene sets Saudi venture
Innovene, the BP olefins and derivatives unit slated for spin-off, has signed a memorandum of understanding with Delta International, a privately owned Saudi Arabian development firm, for a $2 billion ethylene cracker and derivative complex to be built in Jubail, Saudi Arabia. The companies say they will ink a final contract by year's end, start construction next year, and complete the project in 2008. For BP, the project will provide a foothold in the region to complement its base of North American, European, and Asian assets.
Two firms sign solar cell pact
Konarka Technologies and Solaris Nanosciences have agreed to evaluate the performance and efficiency of solar cells that combine Konarka's light-activated power plastics with Solaris' "nano-antenna" structures. Because the Solaris structures are shorter than the wavelength of light, they can transfer light more efficiently. "Our nano-antennas enhance the absorption of the solar spectrum much like a conventional antenna enhances the reception of a radio receiver," says Robert Afzal, Solaris' vice president of R&D.
Employment declines in May
U.S. chemical employment fell in May, according to the latest seasonally adjusted data from the Labor Department. The government data show that the chemical industry employed 876,100 in May, down 1,900 from the previous month and off by 12,900 from the comparable month last year. The number of hourly production workers also declined--by 1,000 from the previous month and 9,100 from May 2004 to a total of 511,100. Meanwhile, the average workweek dropped to 42.2 hours from 42.4 hours in April and 42.9 hours in May of last year. Thus, the government's index of aggregate workhours--a product of the number of production workers and the average workweek--dropped to 95.9 (2002 = 100) from 96.6 in the previous month and from 99.3 in May 2004.
Pharma pact for BASF, Seppic
BASF and Air Liquide's Seppic unit will jointly develop and market film coating systems for drug tablets. The pact will target a new range of colored Sepifilm brand coating systems based on BASF's Kollicoat polymers. "We will combine BASF's know-how in polymer chemistry with Seppic's expertise in pharmaceutical coating systems to provide optimal solutions for our customers," says Eckart Stein, head of strategic marketing for BASF's fine chemicals unit.
Firms invest in flame agents
Albemarle plans to convert a former zeolite plant in Pasadena, Texas, into a 25,000-metric-ton-per-year fine precipitated alumina trihydrate plant. The project is expected to boost Albemarle's capacity for the flame retardant 20% in 2006. An Albemarle joint venture in Breitenau, Austria, is doubling capacity for magnesium hydroxide flame retardants with 10,000 metric tons of new capacity in 2006. Separately, J. M. Huber has acquired the alumina trihydrate business of Cincinnati-based AluChem. Huber says it will incorporate AluChem equipment and other resources into its own plants in Illinois and Georgia.
New Grace asbestos mess
New Jersey environmental regulators have filed a lawsuit against W.R. Grace and two employees for falsely claiming that the firm had completed a cleanup of asbestos contamination at a former plant in Hamilton Township. Between 1963 and 1994, the plant made vermiculite-based spray-on fire protection products that were contaminated with asbestos. In February, a federal grand jury issued an indictment against Grace and former executives, charging them with endangering residents of Libby, Mont., and concealing health risks from asbestos-contaminated vermiculite.
Cargill slates biodiesel plant
Cargill will build a plant in Iowa Falls, Iowa, with annual capacity for 37.5 million gal of biodiesel and 30 million lb of USP-grade glycerin. The company says the plant will open in April 2006, initially using soybean oil as a feedstock but eventually having the capability to use animal fat or waste grease. Cargill says the plant reflects ongoing government support for renewable fuels.
ISP to close alginate unit
International Specialty Products will close its San Diego alginate products plant early next year and move most production to its Girvan, Scotland, site, which it calls the world's largest algin facility. The San Diego plant employs 125 people. ISP says products not transferred will be manufactured under license.
Degussa moves on isophorone, PEEK projects
Following board approval, Degussa is proceeding on two previously announced projects. In one, the company will build a new plant in Herne, Germany, for the specialty solvent isophorone and derivatives including isophorone diamine and isophorone diisocyanate. The plant is set to begin operation in 2007 at a cost that Degussa puts in "the high double-digit million" euro range. Separately, Degussa is proceeding with a joint venture with Jilin University of North China to produce the engineering polymers polyether ether ketone (PEEK) and polyether sulfone (PES). Degussa will hold an 80% stake in the venture and finance it. The university will hold the balance and provide its technology in high-temperature polymers.
Elementis bows to shareholders
Pressure from shareholders has resulted in the resignation of Chairman Keith Hopkins and Senior Nonexecutive Director Edward Wilson from British specialty chemical company Elementis. The new chairman is Edward Bramson, a principal with Hanover Investors, a self-described "turnaround investment specialist" and holder of 15.2% of Elementis' shares. Other institutional shareholders supported the Hanover move. Three new nonexecutive directors also have been appointed, including Ken Minton, former CEO of Laporte. Geoff Gaywood, Elementis' CEO, remains, but financial industry observers note that he will now be under particular pressure to improve the firm's performance.
Dow adds to biocide line
Dow Chemical has added a new line of biocides to the 13 it already distributes. The new line of benzisothiazolinone in-can preservatives "fills a gap in our product portfolio," says Mark Henning, Dow Biocides' general manager. Dow will blend and package BIT-based preservatives provided by a third party and will ship them to customers under the Canguard preservative and Bioban antimicrobial labels. Introduction of the BIT line coincides with a Dow advertising campaign encouraging formulators to consider the firm a one-stop shop for biocide needs.
Potash Corp. buys share in Chinese firm
Potash Corp. of Saskatchewan has agreed to buy a 9.99% interest in Sinochem's fertilizer business, Sinofert, which recently went public on the Hong Kong Stock Exchange. Potash Corp. says the purchase is expected to occur next month at a yet-to-be-determined price. CEO Bill Doyle adds that the deal "extends our delivery pipeline directly into the world's largest fertilizer market." According to Potash Corp., Sinofert is a key customer of Canpotex, the Canadian potash export cartel, and is China's largest fertilizer importer.
Cell Genesys scales down
South San Francisco-based Cell Genesys has announced several moves aimed at refocusing its efforts on vaccine development programs, primarily for its GVAX vaccine for prostate cancer, now in Phase III clinical trials. CG0070, a treatment for bladder cancer, will be another priority. The firm says it will sell its San Diego plant and convert manufacturing operations in Memphis, Tenn., to product distribution. Cell Genesys, which is discontinuing some other development projects, says it will cut its workforce by a quarter, eliminating 95 jobs. The moves are expected to reduce operating expenses by 15%.
Biotage wraps Argonaut deal
Biotage has completed the acquisition of most of Argonaut Technologies, a provider of reagents and equipment for drug research, for $21.2 million. Biotage CEO Jeff Bork says the deal increases his firm's annual sales by about $17 million, or 30%, and strengthens its offerings in medicinal chemistry. Argonaut's CEO and chief financial officer are stepping down, and the company is winding up operations.
BUSINESS ROUNDUP
- Pioneer Cos. is selling its Canadian chlorinated paraffin business to Dover Chemical for an undisclosed sum. Pioneer will close its Cornwall, Ontario, plant, and Dover will serve customers from its Dover, Ohio, and Hammond, Ind., sites.
- InnoCentive has added Ciba Specialty Chemicals and Novartis as users of its online collaborative research service. Dow Chemical has also renewed its contract with InnoCentive.
- Arkema has started up a plant making 3-methylthiopropionaldehyde, an intermediate for the feed additive methionine, in Beaumont, Texas. Main customer Novus International says the $100 million facility will allow it to run its methionine plants at full capacity.
- ICI's National Starch & Chemical and Quest International units are contributing $500,000 to help fund a $10.8 million expansion of Philadelphia's Monell Chemical Senses Center. Monell recently opened molecular biology, genomics, and proteomics labs and now plans a human chemosensory research lab.
- Evotec OAI, formed in 2000 by the merger of Germany's Evotec and the U.K.'s Oxford Asymmetry International, will change its name to Evotec AG. The company recently repurchased Evotec Neurosciences and says it wants to reflect its growing emphasis on proprietary drug development.
- Occidental Chemical has completed its purchase of Vulcan Materials' chlor-alkali business. It has sold one former Vulcan business, the wood preservative pentachlorophenol, to KMG Chemicals. The business generates some $3 million in annual revenues.
- Wacker-Chemie is selling its liquid-crystal pigment business to Switzerland's Sicpa Group. Sicpa says it will use the pigments to apply optical effect and color-shifting technologies across its security business.
The power is now in your (nitrile gloved) hands
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