Tuesday, 29 September 2009

Chemicals journalist clears scrub for National Trust

The blog spent last Friday working with fellow Reed Business Information staff to maintain a rare chalk meadow habitat at Box Hill, Surrey, UK

Look out for a fellow wearing a dandy flat cap!

RBI Volunteer Day at Box Hill from Adam Tinworth on Vimeo.

Thursday, 24 September 2009

Bidders shortlisted for Poland chemical privatisation

Close-up of the flag of Poland

Poland's privatisation agency, Nafta Polska, has unveiled its shortlist for the chemical sell off it is planning.

According to ICIS news, US-based private equity firm Bain Capital; London-based private equity firm Cinven in a consortium with Polish human resource and interim management services company Kolaja & Partners; German chemical company Petro Carbo Chem (PCC); National Qatar Industries Company; Lithuanian chemical, logistics and cargo group UAB Achema; and Polish investment fund Mistral have been shortlisted.

The government is selling off Ciech group and a second sector comprising fertilizer groups Zaklady Azotowe Pulawy (ZAP) and Zaklady Chemiczne Police (ZChP).

It is interesting to note that no large multinationals have chosen to participate in this sell-off. Poland is a huge and potentially fast-growing market. Can these companies be in such bad shape that they are of no interest? Or are they just too small to be worth the bother?

Tuesday, 22 September 2009

Poland's construction chemical market falls

Bad news for construction chemical manufacturers serving the Poland according to a new report. Annual declines in demand of 5% are forecast for 2010 and 2011. The only surprise here here is that the falls are not more severe.

"After an excellent 2004-2008, a much slower development of the Polish economy as well as drying up financial sources for buildings projects, especially in the residential sector, will give a rise to a certain correction in the Polish construction chemicals market between 2009 and 2011. The report estimates that in 2009-2011 the market’s average annual rate of change, measured in sales value, will equal -5%. The market will report the steepest declines in 2010.

The condition of the construction chemicals market could undoubtedly be enhanced by investments in new public utilities. The report suggests that constructing and further expanding schools, university campuses, libraries, sports halls, swimming pools, hospitals, museums or civil administration offices will be the most dynamically developing arm of the non-residential sector and, to a large extent, will compensate for the loss in the property developing residential construction."

Picture attribution http://www.flickr.com/photos/17989497@N00/

Monday, 21 September 2009

Poland runs out of gas for chemicals?

Poland may have to cut chemical production if supplies of natural gas run out later this year, according to a Reuter's report. This could have a big impact on chemical producers such as Police, Pulawy and Anwil which were affected last year during the Ukraine gas dispute.

"Poland's gas monopoly PGNiG estimates it will be short 0.5 billion cubic metres of gas in the fourth quarter and may be forced to reduce supplies to large industrial clients, PGNiG deputy head was quoted as saying on Monday.

"We estimate the fourth quarter deficit will reach 0.5 billion cubic metres. We cannot rule out that deliveries to our industrial clients will be reduced," Dudzinski told Puls Biznesu daily.

Poland, which was not receiving all the contracted gas from Russia for nearly six months this year, is currently in talks with Russia to increase gas supplies to make up for shortages in 2009 in 2010.

Radoslaw Dudzinski added the monopoly might be short 2.3 billion cubic metres next year, should the government fail to amend a deal with Russia and increase natural gas supplies.

During the gas row between Russia and Ukraine in January, PGNiG was forced to reduce supplies to its biggest clients including chemical makers Police PICE.WA, Pulawy PULW.WA and Anwil. (Writing by Patryk Wasilewski; Editing by Kim Coghill)"

Arkema upskales carbon nanotube technology

French chemical group, Arkema, are pushing further into nanotechnology by building a 400 tonne/year plant, scheduled for startup in 2011. Together with BayerMaterialScience, DSM and others, Europe is really pushing forward with this technology.

Here is some of the press release: "Arkema announced the construction of a carbon nanotube (CNT) pilot production plant at its Mont site (France, Pyrénées-Atlantiques). The 400 ton/year plant, scheduled for startup beginning of 2011, will operate an innovative process and will be the only CNT production plant in the world to use an entirely bio-sourced raw material.

In 2003 Arkema launched a research project to study CNTs and their applications. In 2006 Arkema started up at its Lacq facility the first pilot laboratory capable of producing some 20 ton/year of CNTs, sampled under the trademark Graphistrength®. Arkema in particular developed a range of innovative masterbatches that are easy to process within various thermoplastic, elastomer and, more recently, thermoset matrices. These high-tech masterbatches help optimize the application properties of end-products.

Arkema put in place from the very launch of the project a CNT-specific health-safety-environment initiative to ensure the protection of its employees, users, and the environment. Its code of conduct is based on three principles: prevention, permanent knowledge acquisition, and transparency with stakeholders in accordance with the advice of the January 2009 French Public Health Council.

Arkema has already established a large number of partnerships in various sectors ranging from electronics and transport, to renewable energies (wind, photovoltaics) and energy storage (batteries, supercapacitors) for the development of applications requiring enhanced performance in terms of electrical conductivity, thermal conductivity, and mechanical strength."

Friday, 18 September 2009

Poland chemical privatisation deadline passes

Close-up of stacks of bank notes

This week the deadline for preliminary bids in Poland's chemical privatisation plan passed.

According to ICIS news, only Germany's Petro Carbo Chem (PCC) has publicly declared that it is a confirmed bidder for the package, which comprises Ciech, Zaklady Azotowe Tarnow (ZAT) and Zaklady Azotowe Kedzierzyn (ZAK).

The blog wonders whether the whole thing may fail if bids do not match up to the valuations privatisation agency, Nafta Polska, have in mind.

Wednesday, 16 September 2009

China's Yantai Wanhua pursues BorsodChem

View BorsodChem in Hungary in a larger map
BorsodChem's Kazincbarcika PVC plant

China's largest Methylene Diphenyl DiIsocyanate manufacturer, Yantai Wanhua, is in talks with Permira, the private equity group which owns Hungary's main PVC manufacturer, BorsodChem.

According to news service plasteurope.com, it has bought up the company's mezzanine debt to the tune of E200m.

An earlier report in portfolio.hu suggested it was not intent on a hostile takeover.

"Yantai Wanhua plans long-term in BC, aiming to become a strategic investor in the troubled Kazincbarcika-based (northeast Hungary) firm.

Yantai Wanhua is a market leader on its home turf on the MDI market and is the fifth largest in its global league behind BASF, Bayer, Hunstamn and Dwo Chemical.

It has three production bases with 2,000 employees. In 2008, it posted revenues of EUR 814 m with its profit exceeding EUR 170 m. The company's market capitalisation is around EUR 3 billion.

Napi said Yantai Wanhua's management has sat to the negotiating table with the senior leadership of Permira, BorsodChem's majority owner, discussing how they could enter BC as a strategic investor and how they could take part in the reorganisation of the company.

State bailout seen

Hungary's state-owned development bank MFB said at the end of July that it was in talks to bailout debt-ridden BorsodChem, owned by London-based buyout shop Permira that bought BC for EUR 1.6 bn in 2006.

While no details were brought to light, people familiar with the situation said the loan is in the region of EUR 100 million and is needed to complete a new chemicals plant.

The lenders include Royal Bank of Scotland PLC, Unicredit SpA and Lehman Brothers International Holdings Inc., people familiar with the matter previously told Dow Jones.

Permira has been in talks with the company's lenders and the Hungarian government for some time and is expected to inject around EUR 80-90 m of new capital into the Hungarian firm.

As part of the deal, mezzanine lenders are asked to swap EUR 200 m loans for equity, people familiar with the situation told Dow Jones at end-July.

The Hostiles

In mid-August, Büchele announced that uncertainties around BC could be traced back to an Asian investor who, according to available information, has bought a significant part of BorsodChem's mezzanine loans with the involvement of investment banks.

The Chairman-CEO noted the investor failed to inform BorsodChem in writing of its role therefore he sees “hostiles intentions" in the move, saying that “if interests were mutual, there would be no need to involve investment banks."

Büchele told local newswire MTI that BC disposes of cutting-edge technology and it has always strived to become one of the leading isocyanate producers of Europe. If this technology goes to Asia, Hungary would not only lose a production unit, but the chance of further developments, and ongoing investments would be halted. This could weaken the company's position in Europe.

The surfacing of a new investor could put in jeopardy the subsidies already agreed on, as well as the agreements about to be reached, Büchele added."

Yara takes part in Odessa, Ukraine privatisation

Cargo Ships Ply Their Trade At Odessa Port
Odessa port

Norway's Yara has applied for tender documents in Ukrainian privatisation. Brave western chemical companies are keen to enter fast-expanding eastern markets even if they are volatile. Yara is teaming up with the Libyan Government!

According to chemie.de, "Yara International ASA has, through a subsidiary, applied to the State Property Fund of Ukraine (SPFU) for receiving the documents for the tender announced by SPFU for the privatisation of Odessa Port Plant (OPP) to be held on September 29.

Yara has filed this application as a member of a consortium also comprising Kulczyk Holding S.A., representing a privately owned investment group, and the Libyan Investment Authority (LIA), an investment fund being 100% owned by the Libyan Government. The filing is only to pre-qualify the consortium for a possible participation in the tender and implies no binding obligations on any of the parties to the consortium. Should the consortium decide to participate in the tender, Yara will hold a minority position in the possible buyer of OPP.

OPP owns and operates two ammonia and two urea plants in Yuchny, Ukraine, with combined annual capacities of approx. 1.1 million tonnes of ammonia and 0.9 million tonnes of urea. In addition OPP owns and operates a major terminal for ammonia and urea, exporting products produced by other Ukrainian plants as well as by some Russian plants.
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