Chemical Update

CHEMICAL UPDATE

January 2008

TABLE OF CONTENTS

UNITED STATES

Multi-Chem Group to Build New Headquarters in San Angelo, Texas

Dow Ethanolamines Confirms Expansion Plans In Louisiana

Hexion Specialty Chemicals Receive $5.9 M Tax Credit for Expansion in Columbus, OH

Gentek Inc. Announces Acquisition of Bay Chemical and Supply Company

ExxonMobil Chemical Upgrades LaGrange Oriented Polypropylene Film Mfg. Facility

INTERNATIONAL

NOVA and SEEA Polymers to Build EPS Plant in Romania

Dorf Ketal Chemicals to Expand Plant in Taloja, India

DSM Announces New High-performance Nylon

Multi-Chem Group to Build New Headquarters in San Angelo, Texas

Multi-Chem Group LLC, a global-oilfield production chemical company, is expanding into a new 65,000 square foot facility located in San Angelo, Texas. Multi-Chem has signed a seven-year lease on the space.

The new facility will include several amenities including a cafeteria and gym for employees. Kinney Architects is leading the design of the new headquarters location. Construction is slated to begin in early 2008 and be completed by mid-summer 2008.

Multi-Chem’s current headquarters is on Knickerbocker Road and houses 32 employees. The new space will handle the 175 to 200 employees the company anticipates having over the next five years.

“As we continue our growth, both domestically and internationally, we need headquarters that will accommodate our expanding team. We’re committed to remaining in San Angelo,” said Jorge Velarde, CFO of Multi-Chem. “We worked for several months to find a location that supported our needs.”

Earlier this month, the San Angelo City Council unanimously approved a $1.45 million incentive package for Multi-Chem recommended by the City of San Angelo Development Corp. The incentive will help fund positions in the company’s executive group, accounting, finance, IT, and human resources departments.

Worldwide, the production chemical company serving the oil and natural gas industry currently employs about 475 people in 43 locations in the U.S., Canada, the United Kingdom, France, and Trinidad and Tobago.

“Our success is because of the quality of the people that work at Multi-Chem,” said Velarde. “We will be embarking on a large-scale recruitment initiative over the next several years. It’s important that our new facility reflects our global reach and is able to support an international operation with over 2,500 employees by 2013.”

Multi-Chem moved to San Angelo in 2004 pursuant to a grant by the City of San Angelo Development Corporation. Since then, the company has more than quadrupled in size, and expects to continue an average growth of 50 percent per year.

Dow Ethanolamines Confirms Expansion Plans In Louisiana

Midland, MI - The 100-million pound (45,000 metric ton) ethanolamines nameplate capacity expansion planned at the St. Charles Operations (SCO) site, owned by Union Carbide Corporation (UCC), a wholly owned subsidiary of The Dow Chemical Company, in Hahnville, Louisiana that was announced in October 2006 for completion in 2007, will be delayed until the second half of 2008. The decision to delay the project is due to tight labor supply throughout the Gulf Coast. Kevin Dillan, global business director for Amines at Dow, comments, “As a global leader in ethanolamines, Dow is very committed to the expansion in Louisiana. We are currently evaluating the best options to complete the expansion as soon as possible. Expanding our facilities is consistent with our strategy to invest in our business, to support the growing global demand for these products, and to continue to be a low cost provider of ethanolamines. In addition, this strategic investment further demonstrates our dedication to servicing the needs of our customers.”

When completed, this expansion will increase the company's total Ethanolamines nameplate capacity on the US Gulf Coast to nearly 800 million pounds (358,000 metric tons). Dow also participates in the Asia-Pacific region via the 165 million pounds (75,000 metric tons) ethanolamine unit at OPTIMAL Chemicals (Malaysia) Sdn. Bhd, a joint venture of Union Carbide and Petroliam Nasional Berhad (Petronas). When completed, Dow will have nearly 1 billion pounds (454,000 metric tons) of nameplate capacity to serve the growing needs of customers worldwide.

Hexion Specialty Chemicals to Receive $5.9 Million Tax Credit to Support Expansion in

Hexion Specialty Chemicals Receive $5.9 M Tax Credit for Expansion in Columbus, OH

Hexion Specialty Chemicals, Inc. (Hexion), located in Columbus (Franklin County), has been awarded a 60 percent credit for a ten-year term to expand operations. The value of the tax credit is estimated at $5,928,346 over the term, and the company would be required to maintain operations at the project site for 20 years. Hexion is the world's largest producer of thermosetting resins, or thermosets.

The company serves the global wood and industrial markets through a broad range of thermoset technologies, specialty products, and technical support for customers in a diverse range of applications and industries. Hexion presently operates four segments: Epoxy and Phenolic Resins, Formaldehyde and Forest Products Resins, Coatings and Inks, and Performance Products. Headquartered in Columbus, Hexion employs approximately 6,900 people worldwide.

The company proposes to invest leasehold improvements and lease approximately 54,000 square-feet of additional space in Downtown Columbus for headquarters and administrative operations. Ohio is in competition with Texas for this more than $1.6 million project, which is expected to create 200 jobs and retain 241 positions within the first three years of the project's initial operations.

The Job Creation Tax Credit is a refundable tax credit against the business corporate franchise or income tax. The credit equals a percentage of new state income tax withheld on new, full-time employees in Ohio. The Job Retention Tax Credit provides corporate franchise or state income tax credit for businesses that commit to retain a significant number of full-time jobs.

The Ohio Tax Credit Authority is a five-member independent board consisting of taxation and economic development professionals from throughout the State that is responsible for reviewing and approving applications for state tax credit assistance. The Authority also has oversight responsibilities that include monitoring and reporting the progress of approved tax credit projects.

Gentek Inc. Announces The Acquisition Of Bay Chemical And Supply Company

Gentek Inc. Announces the Acquisition of Bay Chemical and Supply Company

GenTek Inc. announced recently that its wholly-owned subsidiary, General Chemical LLC, has acquired Bay Chemical and Supply Company, a producer of water treatment chemicals in Odem, Texas.

The purchase price of the transaction is $7M before any working capital adjustments.

Commenting on the transaction, Vincent J. Opalewski, Vice President and General Manager of General Chemical LLC, noted, "This transaction expands our customer base in the Texas market, adds new products to our portfolio of water treatment chemicals and allows us to drive incremental savings through our raw material sourcing arrangements." William E. Redmond, Jr., GenTek's President and Chief Executive Officer, added, "This acquisition fits well with our stated objective to invest in the company's core assets, chemical and auto/truck valve train systems, to accelerate GenTek shareholder value creation."

ExxonMobil Chemical Upgrades LaGrange Oriented Polypropylene Film Mfg. Facility

The Films Business of ExxonMobil Chemical recently announced the successful start up of its upgraded specialty oriented polypropylene (OPP) film production line in LaGrange, Georgia.

The multimillion dollar investment in upgraded production processes at the LaGrange facility has significantly increased the company's North American capacity for multi-layer OPP films. The upgraded line is running at full design capacity in its first full week of production and will provide the company greater flexibility to meet customer expectations for a secure and undisrupted supply of specialty OPP films from its global manufacturing base.

"This was a significant rebuild of one of our most critical OPP film production lines," said Paul Payne, global manufacturing manager, ExxonMobil Chemical Films Business. "We are pleased that we were able to complete the work on schedule and safely, without injury to any of our employees or contractors. In addition, maintaining supply commitments to our customers throughout the construction period was a critical success factor."

The upgraded line helps position ExxonMobil Chemical to meet the rapid growth in demand for specialty multi-layer OPP films, including OPPalyte white opaque film for candy cold-seal applications, OPPalyte WOS-2 and STW white opaque films for ice cream novelty applications and Label-Lyte films for wet glue and pressure sensitive labeling.

ExxonMobil Chemical's white opaque OPP films, each specifically tailored for targeted applications, have earned a reputation for outstanding performance that continues to fuel growth in the confectionery and ice cream markets. OPPalyte HM film, which utilizes a proprietary multi-layer technology to achieve exceptional cold seal adhesion, will be produced at the upgraded LaGrange facility. The company's OPPalyte WOS-2 and STW films use proprietary multi-layer designs to provide optimal performance on multilane packaging machines commonly used for ice cream novelty.

This recent upgrade is a continuation of ExxonMobil Chemical's strategy to invest in specialty assets for its OPP films business. Since 2002, the company has added two new state-of-the-art orienters, a new coater and two new metallizers in its affiliated worldwide OPP film manufacturing facilities.

NOVA and SEEA Polymers to Build EPS Plant in Romania

INEOS NOVA and SEEA Polymers recently announced they have signed a letter of intent to form a 50/50 joint venture to build and operate a new expandable polystyrene (EPS) plant in Romania. The proposed facility will have production capacity of 100 KT per year and is expected to start operations by late 2009.

“This new plant will be located in the heart of one of the highest growth areas for EPS in the world,” said Martin Pugh, Managing Director Europe for INEOS NOVA. “We expect this plant to manufacture a full range of products and be the lowest cost producer of EPS in Europe.”

Florin Andrei, CEO of SEEA Polymers said, “We are pleased to bring the plastics industry expertise of our fast growing Romanian based company to this joint venture with INEOS NOVA, the European EPS market leader. We believe the combination will enable the new joint venture to quickly establish leadership in the region.”

Growth rates for EPS consumption in the region are projected to continue to be more than 10 percent per year. The proposed plant will be located on a site owned by SEEA Polymers in Medgidia, Romania, near the Black Sea. The location will enable the new plant to enjoy reliable, low-cost logistics.

Following completion of final market and capital plans the two companies expect to negotiate and finalize a binding agreement by the end of the first quarter of 2008.

SEEA Polymers is an entrepreneurial plastics manufacturing and processing company created by a group of Romanian investors led by Florin Andrei. Mr Andrei has extensive experience in the domestic and regional petrochemical market in his previous position as CEO of Rompetrol Petrochemicals. Before joining Rompetrol he held a number of positions over 10 years at Dow Corning and The Dow Chemical Company.

Dorf Ketal Chemicals To Expand Plant in Taloja, India

Dorf Ketal Chemicals to Expand Plant in Taloja, India

Dorf Ketal Chemicals LLC, a leading global additives and process chemicals company, is expanding its production capabilities to better meet the needs of additive, adhesive and other specialty chemical customers. The increased capacity and new facilities will offer a wider product range and strengthen Dorf Ketal’s ability to produce custom chemicals.

The Taloja, India, facility houses Dorf Ketal’s R&D facility, pilot plant and is the main center for petroleum process chemicals production. New infrastructure is being built to support a hydrogen reformer; an updated effluent treatment plant and quality control labs are already under construction.

As a result of a government-established Special Economic Zone (SEZ), Dorf Ketal has acquired 10 hectares of land in Jamnagar, India. Announced in early 2000, SEZs were established to spur economic growth and quality infrastructure in rural India by offering favorable trade and fiscal incentives to corporations. The new state-of-the-art facility will exclusively handle export business and provide production redundancy for other facilities.

To meet the growing needs in Brazil and Argentina, two hectares of land have been purchased in Bahia, Brazil, for the installation of a batch facility. The new 3,000-ton facility will produce additives to serve the lubricant, fuel and adhesive industries. Dorf Ketal, headquartered in Mumbai, India, develops tests and manufactures specialty chemicals for the petrochemical, adhesive, paint and coating industries. All products are produced in the company’s state-of-the-art plant in Mumbai and sold through six major sales offices across the globe for guaranteed delivery at competitive rates.

DSM Announces New High-performance Nylon

DSM Engineering Plastics (Sittard, The Netherlands) has announced the development of PA4T, a new polyamide 46 under the Stanyl brand name. PA4T offers good dimensional stability, compatibility with lead-free soldering, high stiffness and mechanical strength at elevated temperatures and high melting point. The new polymer will target miniaturization and convergence of electronic devices like cell phones and computers. It also will assist automakers in continued weight reduction efforts for better fuel efficiency and lower costs.

According to Roelof Westerbeek, global business director, Stanyl, “PA4T materials are highly suitable for electronics applications such as memory card connectors, CPU sockets, high-temperature bobbins, and notebook computer memory module connectors, based on its excellent compatibility in lead free surface mount technology and dimensional stability. In automotive markets, we expect the material to support new developments in under the hood applications relating to automotive electrical systems, air/fuel and powertrain components.”

DSM has filed patents on the new polymer, developed compounds and held initial investigative trials with market leaders for various end uses.

McIlvaine Company

Northfield, IL 60093-2743

Tel: 847-784-0012; Fax: 847-784-0061

E-mail: editor@mcilvainecompany.com

Web site: www.mcilvainecompany.com