Monday, 30 November 2009

BASF in talks to JV styrene - IPIC a good fit

BASF is in talks to joint venture its styrene business before exiting the market, Bloomberg reported last week. Abu Dhabi's IPIC (International Petroleum Investment Company) could be a strong contender for this transaction. I recently interviewed its managing director, Khadem Al Qubaisi, who told me he was close to a deal in Europe (pictured).

IPIC wants to expand its aromatics operations in the Chemaweyaat development and would be looking for technology to achieve that. It has a track record of acquiring companies for their technology, such as Austria's Borealis and Canada's Nova Chemicals.

Here is an excerpt from the Bloomberg article:

Nov. 26 (Bloomberg) -- BASF SE, the world’s biggest chemical company, is in talks to form a styrene joint venture as a prelude to exiting the market, a company official with knowledge of the situation said.

Negotiations are at early stages and may be prolonged by antitrust concerns, said the person, who declined to be identified as discussions are private. BASF is still pursuing a sale of styrenics generating 3 billion euros ($4.5 billion) in sales, and Middle Eastern and private equity buyers are the most likely candidates, the person said.

The talks signal BASF is willing to accept a compromise after failing to find a buyer for factories that make styrene, used in CD cases and televisions. An earlier attempt to sell the unit to Rotterdam-based LyondellBasell Industries fell through after the financial crisis and slumping demand forced the chemical maker to seek bankruptcy protection.

Friday, 27 November 2009

Total trip to Qatar yields great images

Just back from a trip to Qatar with French chemical major, Total. We toured the Ras Laffan cracker, saw the inauguration of Qatofin's new lldpe plant at Mesaieed, and had an update on Total's global petrochemical strategy.

Here are some images from the trip

Journalists in hot, bumpy, minibus

Total Petrochemicals CEO Francois Cornelis

Qatofin opening ceremony

Incense at the Qatofin opening ceremony

Qatofin opening ceremony

Qatar skyline

Thursday, 19 November 2009

Poland chemical privatisation faces more delays

Close-up of stacks of bank notes
It's perhaps not surprising that bidders are to be given extra time to submit binding offers for the package of Ciech, fertilizer, caprolactam and polymer producer Zaklady Azotowe Tarnow (ZAT) and nitrogen fertilizer, plastics and oxo alcohols producer Zaklady Azotowe Kedzierzyn (ZAK).

Poland's chemical industry privatisation, Polish state company restructuring agency Nafta Polska revealed the news on Thursday, as reported on ICIS news. The move was necessary, the agency said, because some of the six shortlisted potential buyers had requested more time to examine the financial condition and investment strategy of each of the firms in the package.

None of these companies is in particularly good shape financially and all will require further restructuring to bring them up to world-class standards. Central Eastern Europe is being hit really hard by the economic downturn too with financial instability at state level still a real concern.

Tuesday, 17 November 2009

IPIC names Bayer MaterialScience on list of possible acquisitions

International Petroleum Investment Company (IPIC) is in talks with five major petrochemical players in the US and Europe, including Bayer MaterialScience, and expects to close a European acquisition by the first quarter of 2010, the managing director of the Abu Dhabi-based company said on Tuesday.

Khadem Al Qubaisi said technology from the new company would be used to develop petrochemical projects in Abu Dhabi. The purchase would also continue IPIC’s geographical expansion, he said.

“It’s a big deal. We’re looking to buy a very big petrochemical company in Europe. It’s in petrochemicals and specialities also. Bayer MaterialScience is one of the companies we’ve been talking to,” Al Qubaisi said. To read the full story click here.

I interviewed Al Qubaisi and was really impressed by his ambitious expansion plans for IPIC. Watch out Europe and the US, this company is on course to become a world leader in petrochemicals.

I also liked Al Qubaisi's interview style. He was very relaxed and spoke excellent English. I hope to keep in touch with IPIC and build much closer links to ICIS.

In Europe, IPIC already owns a 48% stake in Spanish energy and chemical group Cepsa, 64% of Austria-headquartered polyolefins group Borealis and a 19% stake in Austrian oil and chemical group OMV.

This year it acquired 100% of Canada’s NOVA Chemicals.

Tuesday, 10 November 2009

Allandis a new force in European polymer distribution

Allandis, a new pan-European leader in polymer distribution, is to be launched in the first quarter of 2010, according to Peter Fields, its creator.

Financing is in place and a series of acquisitions over the next 18 months will create a major player in European polymer distribution, said Fields, formerly chief operating officer at European distributor Azelis.

Fields told ICIS he aims for sales of E300-E400m within 2-3 years. It may contain Azelis Plastics, the polymers arm of Azelis, which is currently conducting a strategic review of its organisation. “The Azelis review has a number of options one of which is to divest its polymers,” said Fields, adding that Allandis has separate funding and will be independent of Azelis.

Polymer distributors exist on wafer-thin margins so it will be fascinating to see if this is a successful venture. Fields certainly sounded confident when I interviewed him this morning.

Friday, 6 November 2009

Brenntag ipo could stir up chemical distribution merger activity

BC Partners' impending initial public offering of German chemical distribution group, Brenntag, could excite further merger and acquisition (m&a) activity across this sector. Azelis, IMCD and Univar could all be sold or IPO'd by their private equity owners if the Brenntag deal is successful.

But this is a big "if". Owners BC Partners have a big job on their hands repackaging the debt used to fund the Brenntag acquisition to make the group saleable. And the capital markets may not yet be ready for a E1.5bn floatation.

Brenntag is in surprisingly good financial shape for a company operating in commodity chemicals during this downturn so BC Partners' decision to IPO may make sense.

Photo from

Wednesday, 4 November 2009

Poland chemical privatisation moves a step closer

The boards of Ciech, Tarnów and Kędzierzyn are to present the financial situation and investment strategies of their companies to potential investors from the short-list this week, according to Adam Leszkiewicz, deputy treasury minister, told the Polish News Agency (PAP), quoted in Polish Market Online.
‘Investors interested in the privatisation of the first group of chemical plants have scheduled meetings this week with the boards of Ciech, Tarnów and Kędzierzyn plants, which will present their financial situation and strategy’ Leszkiewicz said.

The six short-listed companies are: an American private equity investment fund Bain Capital Ltd; a consortium of a British investment fund Cinven Ltd and an international advisory company Kolaja & Partners Ltd; private fund NQI (National Qatar Industries Company), specialized in oil, gas and petrochemical investments; German capital group PCC SE; Lithuanian UAB Achema Group and capital group I Fund Mistral SA.

The Polish Treasury would prefer to sell all three companies to one investor by the end of 2009. However, the companies may be sold separately.

Nafta Polska, a state-owned company set up to handle the privatisation
The companies are due to be privatized by the end of this year, but this is unlikely! The economic climate and collapsed demand in central and eastern Europe may jeopardise this.

(Image of Ciech HQ courtesy of Wikipedia)

Humet bids for Hungary chemicals company

Hungary's pharma company Humet is leading a consortium to make a buyout offer for a multinational chemicals company, according to the Budapest Business Journal.

The report says a consortium led by dietary supplement maker Humet has made a preliminary buyout offer for 100% of a Hungary-based multinational chemicals company with annual turnover of several billion forints.

Humet did not name the company. This must be in the pharmaceutical field as no mainstream chemical company I know of in Hungary would be a good fit. BorsodChem and TVK are certainly outside the sphere of interest. Any other ideas?

Humet already owns a combined direct and indirect 54% stake in chemicals company Reanal Finomvegyszergyár so it could be a buyout of this group..

Humet's biggest owner is Tyler International, with a 20.27% stake.
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