CHEMICAL UPDATE

July 2006 

The McIlvaine Company

NORTH AMERICA

United States

Praxair Introduces a Remote Monitoring System for Cryogenic Containers

Praxair, Inc. has introduced a new, patented remote monitoring system developed for worldwide monitoring of cryogenic containers. The patented monitoring system will detect liquid level, temperature and pressure data in both the insulating layer of nitrogen and helium inner vessel to ensure optimal cryogenic properties during shipment. This new technology allows remote readout and potential control of the container's arrival conditions during various stages of the transport process. It directly benefits customers because it ensures reliability at the end of the delivery process.

"We are now monitoring our high-value helium containers during worldwide transport, utilizing Global Positioning System (GPS) coordinates that verify timely shipments and improve container utilization," said Tom Bulin, global helium supply manager. "This one-of-a-kind system also gives us flexibility to monitor and proactively control helium product while in transit, increasing reliability of supply and proper helium arrival conditions for our customers."

Container information is stored in an on-board computer database that transmits the data via wireless communication modems such as cellular or satellite back to logistics planners on a regular basis. As a result, time-dated information can be used to accurately determine the condition of the liquid helium throughout the length of the trip. In addition, an accelerometer is used to monitor the high G-force loads, which can determine when damage occurred to the container. Praxair is also working on an applications software package, which would be capable of combining and delivering various data reports as one total business solution.

Praxair is the largest industrial gases company in North and South America, and one of the largest worldwide, with 2005 sales of $7.7 billion. The company produces, sells and distributes atmospheric and process gases, and high-performance surface coatings.

Eastman Agrees to Sell Arkansas Chemical Manufacturing Plant

Eastman Chemical Company today announced it has entered into a definitive agreement with Viceroy Acquisition Corporation for the sale of its Arkansas-based wholly owned subsidiary, Eastman SE, Inc., which includes Eastman's Batesville, Ark., manufacturing facility and its related assets and product lines. The sale is for a purchase price of $75 million at closing. Subject to regulatory approval and customary conditions, the sale is expected to close in fourth quarter 2006.

Eastman SE manufactures specialty organic chemicals products for the company's performance chemicals and intermediates segment, which is part of the chemicals and fibers business group. The facility has approximately 408 employees and also manufactures and markets bio-diesel fuels.

Rogers said that other Eastman sites will continue to manufacture and market products that are used in the global fine chemicals marketplace. These include complex organic molecules for fibers and food and beverage ingredients, as well as personal care and pharmaceutical ingredients. The company also provides custom manufacturing on a customer-by-customer basis.

GE's Rail Services Unit Appoints VP for Petrochemical Sales

GE today announced that Timothy R. Schitter has been named Vice President for Sales, overseeing all petrochemical sales and services activities for the company's Rail Services unit. Mr. Schitter will be responsible for providing commercial leadership and driving customer loyalty programs for this growing segment of the railcar leasing and services business.

Mr. Schitter will also be responsible for expanding Rail Services' presence throughout North America as well as providing value-added products and services to customers. These services include new offerings presently available or under development by GE such as RailWise(TM), a multisensor network that tracks cargo and monitors temperature and other environmental conditions of railcar contents, and Maintenance Max(TM), a suite of maintenance and administrative management services.

Success in Southeast Texas Petrochemicals despite Market Setbacks

The high cost of raw materials used by petrochemical companies is affecting companies industry-wide. Despite the costs, the Southeast petrochemical companies continue to perform at the same levels due to large investments and qualified workers.

According to Greg Albert, manager of Invista’s plant in Orange, TX, "Raw material costs are high now and most people tend to not understand that high oil prices are not always something we're thrilled with.” He adds that although high oil prices are causing problems for the petrochemical companies, they are also dealing with logistical problems due to a short supply of rail cars.

Despite these difficulties, plants in the region, such as Total’s Port Arthur refinery, are expanding. In Port Arthur, they are building a coker unit with a projected cost of about $1 billion.

Texas Petrochemicals Responds to Union Claims

Texas Petrochemicals acquired a Port Neches plant and is now dealing with union claims that they reduced and otherwise negatively changed the employee benefits including pensions, vacation time, and insurance. The following is their response to the United Steelworkers Local 4-228 claims:

"Since the acquisition, TPC has found our employees at the Port Neches Operations to be very responsive and we have been impressed with their dedication thus far.

"Yes, they are in fact new employees to TPC, as they have never worked for our Company before. The Company has offered, and is paying the same wages they had with their prior employer. We have actually mirrored and duplicated their healthcare benefits and other insurance coverage and even duplicated their previous employer’s sick leave schedule. We’ve also agreed as part of the purchase of the Port Neches location to provide comparable benefits in the aggregate.

"To the point that TPC did not honor the United Steelworkers labor contract - we do not have a Collective Bargaining Agreement (CBA) with the United Steelworkers. This union claims to have a CBA with TPC; we have asked that they provide a copy of the CBA – they have not provided it and cannot provide it, as one does not exist.

"The United Steelworkers have filed a lawsuit to which we are preparing a response. We have not filed a lawsuit against the United Steelworkers or any of the other unions. We have agreed to recognize the unions within the parameters of the Purchase and Sale Agreement. Thus far, the United Steelworkers have refused to bargain with the Company and negotiate a CBA.

"There were a few employees to which we did not extend offers of employment. However, since acquiring the Port Neches Operations the Company has not ‘let go’ of an employee.

"Again, the effort of our employees at the Port Neches Operations to make this transition as seamless as possible has been and continues to be much appreciated."

Geometric Process Control Judged to be Best Technology for Chemical Industry

The Chemical Industries Association judged Curvaceous Software to be the Innovator of the Year 2006 in recognition of their business enhancing Geometric Process Control technology. Judges deemed the Curvaceous patented Geometric Process Control (GPC) technology to be of prodigious business enhancing capabilities.

Over 90 blue-chip companies currently apply GPC to their processes with exceptional results - unparalleled efficiency, increased throughput, reduced product variability and operating costs all commonplace.

The pioneering approach of GPC is based around the capability to view a countless number of process variables in a single graph.

One controller is immediately able to identify interactions, flaws and hazards within their process without the use of multiple two or three variable plots, or complex statistics.

GPC technology achieves this by applying n-dimensional space mathematics, which is used to offer a simple data visualization and analysis tool able to model any process operating envelope to heighten performance for no capital investment.

Verdant Technology Corporation Acquires SynChem Technologies L.L.C.

Verdant Technology Corporation, an energy technology company that develops innovative solutions for the global energy industry, is pleased to announce its acquisition of SynChem Technologies L.L.C., a developer of chemical formulations for the Oil and Gas industry.

Previously, Verdant held an exclusive global rights license to SynChem's proprietary formulations and expertise.

SynChem Technologies L.L.C. has developed a family of chemical solvents known as V003 that address problems associated with deposits of paraffinic and asphaltic compounds in the production, storage and refining segments of the petroleum industry.

The V003 technology is a breakthrough application that increases production on restricted or plugged wells and is far faster acting than current competitor solutions. The V003 solvents are non-corrosive showing no negative effects on plant operations and processes and are also completely biodegradable with a high flash point, making them safe for the environment and personnel.

V003 was originally developed as an alternative to traditional solutions designed specifically to address paraffin related problems. After extensive testing in oil and gas wells throughout Tennessee, Kansas, Texas, Oklahoma, and Louisiana, as well as fields in Trinidad, Peru and Venezuela, the solvent was found to work for both paraffinic and asphaltic buildup. The V003 solvent has been shown to create production increases of between 100 and 700%.

Chemical Projects in the United States

*Source: Hydrocarbon Processing, June 2006

Canada

NOVA Chemicals Announces Inadvertent Production Stoppage at Ontario Ethylene Facility

NOVA Chemicals Corporation today announced a temporary production interruption at its Corunna, Ontario, manufacturing facility. The interruption was the result of the inadvertent activation of a process shutdown switch, apparently caused by a contractor employee installing structural steel platforms. The facility sustained only minor damage during the shutdown and the company expects to be back in full production within two weeks.

As a result of the shutdown, the company has declared Force Majeure on propylene, crude C4's and other pipeline-delivered co-products. The Force Majeure is expected to remain in place until the plant returns to normal operating rates and inventory levels. The outage and associated loss of sales is expected to reduce second-quarter net income by approximately U.S. $8 million with an additional third-quarter impact of up to U.S. $3 million. This incident is unrelated to the extended outage in late 2005 and early 2006.

NOVA Chemicals produces plastics and chemicals that are essential to everyday life. Our employees develop and manufacture materials for customers worldwide that produce consumer, industrial and packaging products. NOVA Chemicals works with a commitment to Responsible Care® to ensure effective health, safety, security and environmental stewardship. Company shares are traded on the Toronto and New York stock exchanges as NCX.

Chemical Projects in Canada

*Source: Hydrocarbon Processing, June 2006

ASIA

China

SINOPEC and BASF Sign Agreement to Expand Nanjing Petrochemical Project

China Petroleum & Chemical Corporation (SINOPEC) and the world chemical industry leader BASF has signed a 500 million U.S. dollars agreement to expand their joint chemical project in Nanjing, capital of east China's Jiangsu Province.

The site, namely BASF-YPC Co. Ltd., is one of the largest Sino-foreign petrochemical joint venture projects in China with a total investment of 2.9 billion US dollars in the first phase.

Following last year's smooth and successful start-up, SINOPEC and BASF jointly decided to extend their joint operations by expanding the capacity of their steam cracker and investing in additional downstream plants to further strengthen synergies at the site, according to company sources.

Under the new agreement, the joint venture will expand the steam cracker from 600,000 to around 750,000 metric tons of ethylene p.a.; expand the ethylene oxide (EO) plant and develop EO derivatives to strengthen the ethylene value chain; develop the C4 value chain; and expand the acrylics value chain. The new activities are expected to come on stream in 2009.

Both companies also agreed to integrate their second joint operation Yangzi-BASF Styrenics (YBS) in Nanjing into BASF-YPC Co. Ltd to increase efficiency and make full use of existing synergies.

Sinopec and PetroChina to Build 6 Ethylene Plants

The country's top two oil firms, Sinopec and PetroChina, have obtained governmental approval to build six ethylene plants in China to meet surging domestic demand. The projects mean capacity will be doubled to 15 million tons a year by 2010.

Sinopec will set up three new ethylene crackers in Tianjin, Quanzhou in Fujian Province and Zhenhai in Zhejiang Province. They will have a combined capacity of 2.8 million tons a year, according to a senior official in charge of the oil refiner's petrochemical business.

The other three will be built by PetroChina in Chengdu in Sichuan Province, Dushanzi in Xinjiang Uygur Autonomous Region and Fushun in Liaoning Province. The three plants will expand PetroChina's ethylene production capacity by as much as 2.6 million tons a year.

All the six new crackers will produce more than 800,000 tons per year, the source said.

Furthermore, Asia's biggest oil refiner Sinopec also plans to build another two crackers in Shanghai and Wuhan of Central China's Hubei Province. These are still waiting for approval from Beijing.

"The two in Shanghai and Wuhan are planned for the more distant future, and there is much uncertainty," the source said, without specifying a timetable.

The Shanghai plant was designed with a 1-million-ton-per-year capacity and the one at Wuhan would be able to produce 800,000 tons a year.

Sinopec currently runs two ethylene production facilities in Shanghai, one of which is a 50-50 joint venture with global oil giant BP and has a capacity of 900,000 tons a year.

With the operation of the six new plants and the expansion of existing facilities by 2010, China will have an ethylene production capacity of 15 million tons a year, about 68 per cent of which will come from Sinopec, the Sinopec official said.

Sinopec last year produced 5.6 million tons of ethylene while PetroChina's production stood at 1.89 million tons.

PetroChina's Dushanzi plant will be the first of the six new plants to begin production, expected as early as next year, the industry source said.

"The remaining five will be put into operation between 2008 and 2010," he said.

Sinopec yesterday started building its 26-billion-yuan (US$3.25-billion) petrochemical complex in Tianjian in North China. The Beijing-based refiner will build a new 1-million-ton-per-year ethylene plant and expand its refinery in Tianjin to 12.5 million tons per year, and construction is expected to be completed by September 2009.

The Tianjin cracker is part of several huge projects aimed at building up the city's government-approved new development zone, Binhai New Area, dubbed the "Pudong of North China" by international investors.

Sinopec's Quanzhou ethylene plant is part of combined investment between Sinopec, ExxonMobil and Saudi Aramco, which also includes crude oil processing facilities with an annual capacity of 12 million tons.

China now relies on imports for more than half of its ethylene consumption.

"The current ethylene production facilities under construction are far from enough to meet soaring demand in China," said Hou Jixiong, a senior oil analyst with Beijing-based Guotai Jun'an Securities Co Ltd.

China plans to spend 180 billion yuan (US$22.5 billion) in the oil refining and petrochemical sector in the next five years, Xinhua reported in March.

Duan Wende, vice-president of PetroChina, earlier this year said China aimed to build five 10-million-ton-per-year oil refining bases, two aromatic hydrocarbon production bases, four chemical fertilizer production bases and six large-scale ethylene production bases by 2010.

Tianjin One Million tpa Ethylene Project Launched

In the morning of 26 June 2006, Tianjin Binhai New Area saw the opening of a ceremony in celebration of the launch of the one million tpa ethylene and associated facilities project, which marked that this world-class integrated project of ethylene refining and petrochemical production has been jumpstarted.

This Tianjin-based one million tpa ethylene and associated facilities project comprises three parts, which are respectively ethylene project, revamping of refinery and thermal power generation facilities. Once this project is completed in 2009, Sinopec Tianjin Company will then see its aggregate ethylene production capacity reach 1.2 million tpa, and its oil refining and comprehensive processing capacity account for 12.5 million tpa, thus becoming one of the country’s 10-million-tonnage oil refining bases and also one of China’s 1-million-tonnage integrated ethylene production bases. By then, the company will be able to produce 12 million tpa of petroleum, petrochemical and chemical fiber products of superior quality and higher grades, which are available in a wide variety.

This project will be constructed in adherence to its guiding principles of “regionalization, world scale, integration, specialization”, while featuring such advantages as uniformly designed & deployed supporting facilities, compact and rational layout, streamlined technological flow, mutual supply of materials intramurally, occupancy of limited land resources, a controlled sum of investments and reduced costs, etc. Besides, this project meets the requirements under a scientific development principle and conforms to the creed of sustainable growth of economy; in practices, all those land sections acquired newly for this project have been alkaline wastelands; and most of the water additionally required by this project has been desalted seawater and recycled intermediate water. In addition, this project has selected advanced pollution-free production techniques and highly efficient equipment items from both home and abroad, and taken stronger measures in sorting out and disposing of its generated pollutants as well as making integrative use of such pollutants, in an aim to become an exemplary project which is energy saving, eco-conscious and environment friendly, too. On top of that, as a pilot player in producing ethylene based on domestic production techniques, this project will also exert a positive influence for the sakes of disseminating more giant-sized, domestically manufactured ethylene facilities, helping ethylene facilities manufacturers upgrade their technologies, as well as giving a boost to the development of those downstream sectors of the petrochemical industry.

The petrochemical industry, which is characterized by the ethylene sector, is a significant pillar of national economy. As ethylene is a knockout product and fundamental raw material in the petrochemical industry, its production output has now become an indicator standing for the degree of development of a country’s petrochemical industry. The launch of Tianjin one million tpa ethylene and associated facilities project is of great significance for adjusting the structure of China’s petro-chemical industry, reinforcing the international competitiveness of China’s petrochemical industry, and promoting the economic growth in the Pan-Bohai Sea area. As competent authorities in Tianjin Municipality and Sinopec Corp. have both remarked, hard efforts shall be made to enable this project to become the most competitive petrochemical player, and contribute heavily into the growth of national economy, by means of following out the creed of scientific development and bring into full play the advantages of all parties.

China Regulates Coal-Chemical Industry

The Chinese government has just issued a circular on regulating the coal-chemical industry, urging local governments to tighten control of new projects.

The government will not approve coal Liquefaction projects with an annual production capacity under three million tons, methanol or dimethyl ether projects under one million tons and coal-to-alkene projects under 600,000 tons, said a circular released by the National Development and Reform Commission (NDRC).

Experts said the move aims to contain possible overheating in the coal-chemical industry. According to the NDRC, constantly rising oil prices on the world market have prompted the development of the coal-chemical industry in trying to find alternatives for petroleum in China.

China's methanol production capacity reached 5.36 million tons by the end of 2005. According to incomplete statistics, current methanol production capacity under construction is nearly nine million tons, with over 10 million tons under planning.

According to the NDRC, as the technology is still in experimental phase, coal liquefaction projects should not be approved until a national development program for the industry is completed.

Coal-chemical projects must meet environmental requirements and those that fail to meet the safety requirements in transportation should not be allowed, said the NDRC.

In the five-year period from 2006 to 2010, China will encourage the development of coal-based chemical fertilizer. The industries of coal liquefaction and coal-made alternatives for petroleum should be developed steadily while the traditional coal-chemical industries that have seen overproduction such as calcium carbide and coke should be kept under control.

China's Anti-Dumping Investigations Focus on Chemical Industry

China's chemical industry is the sector that is most vulnerable to dumping from foreign exporters, with 68.8 percent of the country's anti-dumping investigations focusing on this area. Song Heping, deputy director of the Industrial Damage Investigation Department of the Ministry of Commerce, said China had launched a total of 45 anti-dumping investigations from January to May. Thirty-one related to the chemical industry with the remaining 14 cases scattered in light industry, iron and steel, textiles, telecommunications, medicines and farm produce.

"All chemical products involved in anti-dumping investigations are relatively new in China and have a brisk market demand. This has lured foreign companies to go all out to expand their market share in the country," Song said.

He noted that it would take time for domestic manufacturers to meet the country's potent market demand, especially in terms of high value-added petrochemical products.

Another reason for the clustering, as Song pointed out, was the "cohesive force" of this sector. "When foreign competitors dump their products in China, the industry always takes swift, coordinated action," he said.

Song stressed that winning or losing a market competition would only be decided by a company's comparative advantage. "The purpose of anti-dumping investigations is not to protect domestic industries but to provide a fair market environment," he said.

Air Products Starts Up New Oxygen Plant in China for Largest Fiberglass Manufacturer in Asia

Air Products a globally diversified gases and chemicals company - has brought on-stream a new air separation plant in Tongxiang, Zhejiang Province, Eastern China to supply gaseous oxygen to the Jushi Group, a global leader in the manufacture of fiberglass and the largest producer in Asia. Air Products was awarded this long-term contract in November 2005. The plant will also produce 300 tons per day of liquid products to supply the local market, further expanding Air Products' capacity to meet the growing liquid demand in Eastern China.

Jushi, located in the Tongxiang Economic Development Zone, has built the world's largest fiberglass furnace, and Air Products' oxygen will be used in the glass melting process to have both an environmentally friendly and high energy efficient production.

"Air Products has been supplying Jushi since 2004. We are satisfied with their technology and services and awarded them a new long-term oxygen supply contract for our second phase of operation in November 2005, and we have also fully discussed the third phase supply recently. We believe Air Products will live up to our expectations by bringing this new ASU plant on-stream both on time and safely to provide a reliable supply for our production," said Zhang Yu Qiang, chairman of Jushi Group.

"Air Products is honored to play a role in supporting the growth of Jushi and to strengthen our relationship. The liquid produced from this plant will enhance our leading position by linking a network of cost-effective liquid product sources in Eastern China, which is one of the world's fastest growing manufacturing bases," said Wilbur Mok, president of Air Products China. "This plant, which was designed and manufactured by our local teams, also represents a key milestone of the progress we have made in our localization strategy."

Air Products was one of the first international industrial gas companies to enter China with a joint venture in 1987 and has established leading positions in key industrial markets in China.

Chemical Projects in China

*Source: Hydrocarbon Processing, June 2006

Indonesia

Indonesian Government to Build 8 Biofuel Factories    

The Indonesian government is preparing to build eight biodiesel factories in the country in a move to provide an alternative to expensive fossil-based fuels. Each of the factories would be built with a production capacity of 3,000 tons to 6,000 tons per year. However, the locations for the factories have not been determined yet.

He said the determining factors in selecting the locations would include close proximity to oil palm plantations, or other commodities such as cassava and sugarcane that can be used for biodiesel production.

"The construction of the planned factories, which are estimated to cost about 60 billion rupiahs (about 649,000 U.S. dollars), will be financed from the 2006 national budget."

Part of the funds, Fahmi said, would be used for operating the factories, and they would be handed over to local administrations within a year.

"In operating the factories, the local administrations will be helped by their enterprises, local cooperatives or other business units," he said.

He said that private companies would be invited to construct the factories.

Separately, State Minister for Research and Technology Kusmayanto Kadiman said that he has provided the results of his research on the right locations for factories to Fahmi.

"If a factory will be built in West Sumatra, for example, then palm oil can be used for biodiesel production," he said.

"The best locations for the factories are marginal areas so that their operations can help the areas to grow," he added.

A concerted movement for the use of biodiesel has emerged in the wake of skyrocketing oil prices. Biofuel is renewable and based on such crops as castor-oil plants, oil palm, cassava and sugarcane, which can all be grown in the country.

Most importantly, biofuel production is highly labor intensive and the renewable fuel burns cleaner.

Energy and Mineral Resources Minister Purnomo Yusgiantoro has announced earlier a crash program to build 11 biodiesel plants, with production targets of 187 million liters next year and 1.3 billion liters by 2010, or equivalent to 3 percent of the country's total fuel consumption of 41 million kiloliters in 2005.

Chemical Projects in Indonesia

*Source: Hydrocarbon Processing, June 2006

India

Government Slashes Excise Duty on Textile Intermediates

The Indian government has revised the excise duty rates on specified textile intermediates subsequent to the trade and industry’s demand indicating the problem of unutilized credit with the manufacturers of fibers and filaments.

The government had trimmed the rates of excise duty to 8% from 16% in the Budget 2006-07.

Excise duty on Paraxylene, Dimethyl terephthalate (DMT), Pure terephthalic acid (PTA), Polyester chips, and Acrylonitrile has been slashed to 8% from 16%. While, for Mono Ethylene glycol (MEG) it is maintained at 12% from 16%.

The step of the government is believed to restrict the credit flow with the manufacturers. This slash in the excise duty of raw-materials is hoped to reduce the production cost leading to cheaper products and reduced unutilised credit in hand (due to 8% excise on finished goods).

Chemical Projects in India

*Source: Hydrocarbon Processing, June 2006

Taiwan

Ultimus Software Increases Efficiency with Automation of Customer Inquiries in Chemical Industry

Ultimus, the #1 provider of Business Process Management (BPM) and workflow software and solutions, with more than 1,600 customers worldwide, today announced that Lee Chang Yung Chemical Industry Corporation (LCY) is using the Ultimus BPM Suite for process automation and improvement.

LCY is a leading global thermoplastic elastomer manufacturer that is listed by Forbes Asia as one of the 200 most successful public companies in Asia and the Pacific. Headquartered in Taiwan, its principal activities are the production and distribution of chemicals such as methyl alcohol, formic acid, acetic acid, petroleum gas and others.

LCY selected Ultimus to streamline its customer inquiry process. In the past, when an LCY salesperson received an inquiry, it was documented and routed manually through multiple internal departments. Over time, however, the paper-driven process created a number of inefficiencies such as unwanted bottlenecks that slow down the completion of a customer request. The Ultimus BPM Suite has allowed LCY's customer inquiries to be processed faster, creating new levels of organizational efficiency.

Due to the initial success LCY has experienced with Ultimus, the company plans to automate additional processes such as product pricing, request for materials and asset management.

Iran

Borzuyeh to Develop 11 Units for Textile Raw Materials

Borzuyeh Petrochemical Complex (BPC) has initially invested around US$880 million to establish 11 factories with the production capacity of 4.4 million tons per year.

The units set to be operational within next 6-8 months, will consume over 120,000 barrels of gas condensate as feedstock from phases 1-3 of South Pars.

Borzuyeh units are expected to produce 430,000 tons of benzene, 100,000 tons of ortho-xylene, 750,000 tons of Paraxylene, and 3.5 million tons of side products per year that will be mainly used in ethyl-benzene, fabric, fennel, polyester, pesticides, PTA and PET industries.

These products will be worth more than $1.260 million, including two million tons of products to be exported through pipelines.

Chemical Projects in Iran

*Source: Hydrocarbon Processing, June 2006

ExxonMobil now Marketing Own Compounds

ExxonMobil Chemical announced it would market a line of compounded polypropylene for the automotive industry. ExxonMobil Performance Polyolefins are available from ExxonMobil Chemical facilities in North America, Europe and Asia.

These compounds are in addition to the neat and impact copolymer polypropylenes ExxonMobil already supplies. The firm's Exxpol Enhance PP and thermoplastic polyolefins (TPOs) are used in applications such as bumper fascias, step pads, and pillar trim. Other PP grades see use in door and quarter-panel trim, lift-gate trim, consoles, fender liners, fan shrouds and other applications. The supplier also owns the Santoprene line of thermoplastic elastomers and Vistalon EPR and EPDM elastomers, supplies Jayflex PVC plasticizers and HDPE, as well as other related materials.

In related news, the supplier transferred, for an undisclosed price, its interest in polypropylene (PP) compounder Mytex Polymers Inc. to a Mitsubishi Chemical Co. (MCC) affiliate in the U.S. and ExxonMobil Asia Pacific Private Limited will transfer its interest in Mytex AP to Mitsubishi Chemical Singapore PTE Ltd. Most of Mytex's compounds go into automotive applications.

Chemical Projects in other Asian Countries

*Source: Hydrocarbon Processing, June 2006

Chemical Projects in Other Middle Eastern Countries

*Source: Hydrocarbon Processing, June 2006

EUROPE

Finland

Kemira Acquires Cytec's Water Treatment Business

Kemira Oyj is acquiring Cytec's water treatment chemical business. The seller is an American chemical company, Cytec Industries Inc. In 2005, the revenue of the Cytec water treatment chemical business totaled approximately EUR 270 million. The purchase price is approximately EUR 190 million. The acquisition will have an EPS enhancing effect starting 2007. With this acquisition, Kemira's revenue in the water treatment chemical business will almost double and total approximately EUR 650 million.

Cytec's water treatment chemicals product line consists primarily of products in industrial and municipal waste water treatment. The acquisition includes five production plants located in the US, the Netherlands and England, with businesses in the US, South America, Asia and Europe. The total number of employees is approximately 480, including sales, marketing, manufacturing, R&D and technical services personnel.

Kemira's water treatment chemical business is the leading global supplier of inorganic coagulants. It offers customized solutions for water treatment and sludge treatment for municipal and private water treatment plants and industry. In 2005, Kemira's water treatment chemical business had revenue of EUR 353 million and a payroll of approximately 1,500 people. It is present in 30 countries.

Germany

Cognis Becomes First Excipient Producer to Obtain GMP Compliance

Specialty chemicals firm Cognis has received good manufacturing practice (GMP) certification for its production of pharmaceutical excipients in Germany, the first chemical company in the world to do so but certainly not the last.

After an audit carried out by the German Association for Certification of Quality Management Systems (DQS), the company's Dusseldorf site was certified GMP-compliant based on the guidelines issued by the International Pharmaceutical Excipients Council (IPEC).

Cognis requested the audit in response to an EU directive which will soon see certain excipients produced under GMP standards, albeit not the same GMP as for active pharmaceutical ingredients (APIs).

In its consultations with the industry, the European Commission is currently focusing on the following categories of excipients: those derived from human and animal materials with a potential viral contamination risk, especially blood products, those of animal origin subject to transmissible spongiform encephalopathy (TSE) risks, those claiming to be sterile and are used with no further sterilisation, those which are pyrogen/endotoxin controlled, propylene glycol and glycerin.

In addition, excipients used for parenteral administration already have to be made under API GMP while more and more pharma companies require tests for excipients described by pharmacopeial monographs (USP–NF, European Pharmacopoeia, and Japanese Pharmacopoeia).

As an excipient provider of nine of the top ten pharma companies, Cognis decided to address these issues and incorporate the GMP criteria into its own quality management system.

“The trend in the excipient market is towards GMP and if other chemical firms want to remain in the pharma business they will also have to move towards this direction.”

Indeed, since pharmaceutical excipient manufacture is usually less than 10 per cent, and often less than 5 per cent, of the total production of a particular material, it remains to be seen how many specialty chemical companies stay with pharma as the law tightens.

IPEC's guidelines include transparency in manufacturing processes, adherence to strict guidelines in the area of hygiene and comprehensive documentation of production processes.

Cognis says that in order to achieve GMP compliance it had to implement even stricter standards in training and hygiene, pest control, cleaning of production equipment, documentation of individual process steps, traceability of intermediate products and raw materials, and supplier auditing.

Chemical Projects in Germany

*Source: Hydrocarbon Processing, June 2006

United Kingdom

Work Starts on Scotland's £50m Specialist Chemical and Manufacturing Park

Work has commenced to develop what will become one of Scotland's most advanced and integrated specialist industrial parks for chemical, technology and manufacturing companies.

Earls Gate Park, a £50m joint-arrangement development between Scottish Enterprise Forth Valley and international chemical company KemFine, will provide unique accommodation for up to 20 businesses in Grangemouth area.

The first phase of infrastructure work is starting this month with a new site access road being built. The £1.2m contract to construct the road has been awarded to Realm Construction Ltd. of Lochgelly, part of the Purvis Group of Companies and work is expected to be complete by October 2006, paving the way for the next phase of construction to begin.

The 30 acre development has been hailed as a unique offering in Scotland due to utilities which will be available to tenants such as KemFine's state of the art effluent treatment plant and combined heat and power station with motorway, rail and sea access.

Industrial Biotechnology Corporation Expands Technology Available to Chemical Industry

Industrial Biotechnology Corporation, a company dedicated to new biotechnologies and innovations in the chemical industry, today announced the expansion of their License Agreement with Isis Innovation Limited, the technology transfer company of Oxford University. The new agreement now incorporates IBC's exclusive use of the Cytochrome P-450 technology to the majority of all industries and applications worldwide and includes two additional patented technologies that substantially strengthen IBC's marketing and development capabilities.

The Cytochrome P-450 Designer Enzyme Technology, developed by Oxford University Chemistry academic and IBC Scientific Advisory Board Member Dr. Luet Wong, applies to the application of specific enzymes as biocatalysts to efficiently carry out the necessary molecular transformation to enable relatively low-value substrates to be converted into high-value chemicals, often in a single step. The technology provides a cost-effective, environmentally friendly method for existing chemical companies to streamline production steps while also decreasing or eliminating toxic byproducts and emissions. Preliminary market analysis shows that this technology can biologically manufacture over 15,000 commercially available chemicals. These include a variety of alcohols, aldehydes, ketones, and carboxylic acids with certain characteristics.

IBC now retains the exclusive rights to utilize this advanced technology for all applications and industries, worldwide, for the life of the patents, with the exclusion of one non-core application that is being retained by the University. Through their ALCHEMx Production Platforms(TM), which incorporate the Cytochrome P-450 Biocatalytic and FPP Biosynthesis science, IBC can biologically produce chemicals for the flavors and fragrances, fine chemicals, bio-fuel, pharmaceuticals, agricultural, bio-pesticides, cosmeceuticals, bio- materials and bio-polymer industries.

Additionally, the new agreement incorporates two new complementary patented technologies: Oxidizing Aromatic Compounds, which is effective in the production of pharmaceutical intermediates and detoxification of bio-hazardous materials (including PCBs), and Oxidation by Hydrogen Peroxide, which enhances core technology, allowing for more efficient production by the Cytochrome P- 450 Designer Enzyme.

"This license expansion provides IBC with tremendous additional value by expanding our capability to increase partner and customer relationships well beyond our previous potential. The new agreement also includes additional licensed technology that further strengthens IBC's ability to lower costs, increase margins and provide our chemical industry partners with additional compounds to include in their product line, therefore giving them a significant competitive advantage in the marketplace," said Andy Badolato, CEO of IBC.

France

Rilsan^® PA11 Bio-plastic for Gas Pipe Receives Award

The “Rilsan^® PA11 for Gas Pipe” project has been selected from among 41 projects and has been awarded an “Innovation for the Environment” medal by the French Ministry of Industry.

Rilsan^® Polyamide 11, a unique high performance bio-plastic, has been developed by Arkema into natural gas transportation and distribution piping applications. Rilsan^® PA11 Gas Pipes are replacing high density polyethylene (fossil based) and metal pipes when pressure, corrosion or cost of installation constraints are not met by these materials. Rilsan^® PA11 allows companies to use a gas pressure which is 50% higher than for high density PE, and to reduce methane emissions by a factor of 30 thanks to its superior barrier properties. Additionally, Rilsan^® PA11 Gas Pipes offer all the low-cost benefits of plastic pipe versus steel pipe, thanks to lower installation costs and higher corrosion resistance (excellent slow crack and rapid crack propagation resistance; no cathodic protection needed).

Rilsan^® Polyamide 11 is produced from renewable, non-fossil castor seeds, through a unique process developed by Arkema. Widely used in the most demanding markets, Rilsan^® PA11 provides an outstanding level of safety, durability and versatility for highly technical applications.

Arkema’s Technical Polymers serve the global transportation, electrical and electronics, sports, oil and gas, and other industrial and consumer markets.

A global chemical player, Arkema consists of 3 coherent and balanced business segments: Vinyl Products, Industrial Chemicals, and Performance Products. Present in over 40 countries with 18,400 employees, Arkema achieves sales of 5.7 billion euros. With its 6 research centers in France, the United States and Japan, and internationally recognized brands, Arkema holds leadership positions in its principal markets.

Chemical Projects in Other European Countries

*Source: Hydrocarbon Processing, June 2006

AFRICA

Nigeria

Ethanol-fuel project begins in Nigeria

According to the Nigeria National Petroleum Corporation, Nigeria plans to implement an ethanol program to better use the agricultural products of the country. The plans set out by the NNPC outline the creation of the new fuel for the population and save the country money, approximately N16.9 billion ($130 million) per year off the cost of importing fuel.

The first phase of the project includes a goal of 100 million liters of ethanol. This goal also means an annual production of 80,000 metric tonnes of sugar cane to use as raw materials.

The project will create a mixture of 10% ethanol and 90% petrol at the beginning and will increase the precentage of ethanol to 25% by 2008. There is also the potential to create 15 MW of electricity from a “biogas-fed cogeneration plant” while producing the ethanol. This would be then recycled to power parts of the plant. 

Article summary from Africa News Dimension article, “Nigeria to save N17bn annually from ethanol production” July 21, 2006

Chemical Projects in Other African Countries

*Source: Hydrocarbon Processing, June 2006

SOUTH AMERICA

Venezuela

Chemical Projects in Venezuela

*Source: Hydrocarbon Processing, June 2006

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