For 2008 as a whole, overall chemistry output in the U.S. slipped 4.7 percent. Thomas Kevin Swift, chief economist of the American Chemistry Council, expects chemicals production to fall 8.1 percent in 2009 before recovering 1.6 percent growth in 2010 and 2.2 percent in 2011.

Swift believes basic chemicals and some specialty segments are expected to face the most volatile variation as the inventory cycle plays out. He also forecasts chemicals production will fall in all regions in 2009 with a double-digit decline expected in the Gulf Coast region.

The chief economist says the global chemical industry appears to be recovering led by the emerging Asian economies. "Global chemical output is expected to slip 6.3 percent in 2009 before recovering in 2010 and 2011," Swift says. "Growth in developing economies will outpace that in developed countries which saw steeper output declines."

Registration Open for the Polyurethanes 2009 Technical Conference, Oct. 5 to 7

Scientists, engineers, manufacturers and business leaders from around the world will discuss future growth and opportunities at the Polyurethanes 2009 Technical Conference, just outside Washington, D.C. This year's conference will include more than 80 technical papers in 16 technical sessions, as well as numerous poster presentations, educational seminars and the annual Polyurethane Innovation Awards. ACC's Center for the Polyurethanes Industry will release its biennial 2008 End Use Market Survey on the Polyurethane Industry in the U.S., Canada and Mexico, and two special-issue sessions will address the Green Chemistry Initiative and turning recession into opportunity using new polyurethane applications. To register, visit http://www.polyurethane.org/s_api/index.asp.

COMPANY NEWS

BASF Cuts Polystyrene Capacity

BASF (BASF.DE) will dismantle a plant producing plastics for packaging, stepping up efforts to permanently cut capacity as demand shows little signs of recovery.

The world's largest chemicals maker said the closure of a polystyrene plant, part of a business it has been trying to sell for two years, will reduce BASF's annual output capacity for the standard plastic in Europe by about 15 percent.

It had previously announced plant closures in Spain, the United States and South Korea.

BASF, which expects sales and earnings to decline this year, in April idled one of its two steam crackers, which produce the basic petrochemical ingredients for its products, at its headquarters for at least three months.

BASF's polystyrenes are used for disposable packaging, refrigerator linings and as housing material. The business had been under pressure from low-cost rivals even before the current slump in demand started.

No jobs will be cut as part of the closure, the company added.

Celanese Increases Some Chemical Prices

The Dallas Business Journal reports chemical maker Celanese Corp. had raised prices on four products.

Dallas-based Celanese, which reported net sales of $6.8 billion in 2008, has raised the price of ethyl acetate, methyl isobutyl ketone and methyl isobutyl carbinol by 5 cents per pound in the United States, Canada and Mexico.

In addition, the price of ethyl acetate has been increased to $75 in Central and South America and Asia. In Europe, all four products are up in the 25 to 60 euro-range on a per-ton basis.

Celanese Completes Sale of PVOH Business to Sekisui Chemical

Celanese Corp. (NYSE: CE), a leading, global chemical company, recently announced it has completed the sale of its polyvinyl alcohol (PVOH) business to Sekisui Chemical Co., Ltd. for the purchase price of approximately US$173 million, excluding the value of accounts receivable and payable retained by Celanese. Celanese announced its agreement to sell its PVOH business to Sekisui on April 27, 2009.

The sale includes the facilities in Calvert City, Ky., Pasadena, Texas, one unit within the complex at Tarragona, Spain, and resources from the company’s Houston Technology Center. In total, approximately 250 employees located at these operations, supported by personnel in administrative, technical and sales functions, will join Sekisui. In addition, the transaction includes long-term supply agreements between both companies.

Based in Osaka and Tokyo, Japan, Sekisui is a global company whose products include high performance plastics and polymers, urban infrastructure and environmental products and housing materials, with annual sales of approximately $10 billion and 18,000 employees.

Cargill Once Again Owns All of Natureworks

Ownership of the NatureWorks 50-50 biopolymers joint venture between agriculture and food company Cargill of the USA and Teijin of Japan has been transferred to Cargill, with Teijin withdrawing from the business as part of its restructuring moves in response to the global economic downturn.

The joint venture was set up in 2007 when Cargill sold a half share in NatureWorks to Teijin with the aim of expanding sales with the help of Teijin's experience in fibres, films and compounds. NatureWorks itself was the result of a cancelled alliance, when in 2005 Dow Chemical pulled out the Cargill Dow joint venture and the business took on the name of its NatureWorks brand PLA under sole Cargill ownership.

Since then NatureWorks has rebranded its PLA materials as Ingeo and now reckons to have the world's biggest PLA plant with a capacity of 140,000 tonnes – and is exploring the possibility of a second plant.

Teijin's withdrawal from Natureworks is by no means a withdrawal from biopolymers. It has its own brand PLA, Biofront, for which it has developed grades which overcome the inherent difficulty of PLA of low heat resistance. Teijin has been pushing Biofront for automotive applications and fibres, including fabrics for car upholstery, and earlier this year said it planned to get production up to 10,000 tonnes annually by 2010.

PROJECTS/ EXPANSIONS/ACQUISITIONS

ExxonMobil to Increase Polypropylene Compounding Capacity at Lillebonne Facility

ExxonMobil Chemical is investing in increased polypropylene (PP) compounding capacity and capability at its Lillebonne Polypropylene Plant (LPP), France. Capacity will increase by 45,000 tons to meet growing demand for Exxtral™ performance polyolefins from automotive original equipment manufacturers (OEMs) primarily in Europe. The expansion is due for completion by year end 2009.

The LPP facility currently manufactures neat, filled and compounded PP such as the new generation compound Exxtral BMU141 that was recently specified for the instrument panel of the new Citroën Berlingo and Peugeot Partner. Exxtral polyolefins were also specified for the door panel, and upper and lower trim of these vehicles.

Exxtral polyolefins have been used primarily for interior and under the hood automotive applications but are increasingly being specified for exterior applications, such as bumper fasciae which also are driving demand.

"This expansion also increases the range of polymers manufactured at LPP. It is yet another demonstration of ExxonMobil Chemical's commitment to meeting the needs of the growing global automotive industry. It follows announcements last year of capacity and capability increases in North America and Asia Pacific," said Samuel Deboos, automotive and appliance sales manager, polypropylene, Europe, ExxonMobil Chemical specialty compounds business. "As a result, customers will have easier access to a broader range of Exxtral polyolefins wherever they are located."

In January 2008, ExxonMobil Chemical announced the start up of a new $20 million specialty compounding facility in Baton Rouge, Louisiana with an annual capacity of 40 thousand tons.

Under an agreement announced in September 2008, Resin & Pigment Technologies Pte. Ltd., Singapore will manufacture a broad range of ExxonMobil Chemical's specialty compounds, including Exxtral polyolefins, for use in automotive interior and exterior applications.

Dow Partnership to Build and Operate Pilot-Scale Algae-based Biorefinery

The Dow Chemical Company (NYSE: DOW) announced recently that it plans to work with Algenol Biofuels, Inc. to build and operate a pilot-scale algae-based integrated biorefinery that will convert CO₂ into ethanol. The facility is planned to be located at Dow's Freeport, Texas site.

"This project and the innovative technology involved offers great promise in the battle to help slow, stop and reverse the growth of greenhouse gas emissions," stated Andrew N. Liveris, Dow chairman and chief executive officer. "We are very excited to be part of this ground-breaking alternative energy project, which is a good example of Dow's holistic approach to CO₂ capture and storage by adding value through chemistry."

Algenol's technology uses CO₂, salt water, sunlight and non-arable land to produce ethanol. Dow, National Renewable Energy Laboratory (NREL), the Georgia Institute of Technology (Georgia Tech) and Membrane Technology & Research, Inc. are contributing science, expertise, and technology to the project. Their combined expertise offers new and innovative technology, with the opportunity for creating a breakthrough process for ethanol production.

Algenol submitted its formal request to obtain a grant from the U.S. Department of Energy for financial support to successfully conduct the pilot. Upon approval of the grant, Dow and the other collaborators will work with Algenol to demonstrate the technology at a level to sufficiently prove that it can be implemented on a commercial scale.

In addition to leasing the land for the pilot-scale facility, Dow plans to develop the advanced materials and specialty films for the photobioreactor system. In addition, Dow will also provide the technology and expertise related to water treatment solutions and will provide Algenol with access to a CO₂ source for the biorefinery from a nearby Dow manufacturing facility. The CO₂ will be supplied to the algae in the photobioreactors and will serve as the carbon source for the ethanol produced. The result is a CO₂ capture process which converts industrially derived CO₂ into more sustainable fuels and chemicals.

In line with Dow's sustainability efforts, the project exemplifies the Company's commitment to providing solutions that improve energy efficiency, promote renewable energy and advance the environmental performance of its existing energy sources. According to Rich Wells, Dow vice president, Energy & Climate Change and Alternative Feedstocks, "This is yet another way that Dow is helping to solve world energy challenges with our expertise in sustainable chemistry that is good for the world, and good for business."

Huntsman Buys Indian Textile Chemical Unit

Huntsman Corp. said recently it is buying the Baroda, India, unit of Metrochem Industries Ltd., a manufacturing facility for the production of intermediates and specialty products for textiles. Financial terms weren't disclosed.

Huntsman's head of textile effects, Paul Hulme, said that the U.S. chemical firm was "realigning our manufacturing footprint towards Asia, the region that will fuel our growth in the years to come."

The company said the Baroda unit has current annual sales of approximately 2.4 billion rupees ($49 million).

EU OKs Access, ProChemie to Jointly Own LyondellBasell

The European Commission recently cleared U.S.-based industrial holding group Access Industries and German investor Andreas Heeschen's ProChemie Holding to create a joint venture to take over troubled chemical company LyondellBasell Industries.

Both parties will have a 50 percent stake in LyondellBasell, parts of which are currently under bankruptcy protection, through a new holding company called ProChemie GmbH.

LyondellBasell was previously wholly owned by Access industries.

Federal Stimulus to Help Fund $95M Chemistry Lab in Tenn.

Officials in Tennessee broke ground on a $95 million chemistry laboratory at Oak Ridge National Laboratory this week. $71.2 million of the project's funding is to come from federal stimulus funds available for "shovel-ready" projects. The 160,000-square-foot facility will replace labs that date to the 1950s. The project's schedule was accelerated by the influx of Recovery Act money and is now due for completion in 2011.

French Chemical Company Considering Land Purchase for Chemical Plant

A French chemical company is considering paying $400 million for 800 acres along the Mississippi River near Plaquemine, Louisiana that it would develop a plant on, according to the Baton Rouge Advocate.

Louisiana Economic Development Secretary Stephen Moret said he soon expects a decision from SNF Floerger SAS, a privately held firm. An SNF subsidiary has an option to buy the land.

The project would generate about 600 new chemical industry jobs by the end of a five-year development cycle. Hiring could begin by 2010, a consultant for SNF has said.

SNF makes insoluble chemical compounds that remove impurities from the water.

NEW PRODUCTS

Coca-Cola to Introduce Plant-Based Bottles

The Associated Press reports that Atlanta-based Coca-Cola Co. is introducing a new plastic bottle partially-made from plants, becoming the latest drink maker to try to make more eco-friendly packaging as consumers become more concerned about waste generated by plastic bottles. The world's biggest drink maker said it will start using the so-called "PlantBottle" with its water brand, Dasani, and certain sparkling brands in select North American markets later this year. The company's Vitamin Water franchise will be added in 2010. The bottles are made from a blend of petroleum-based materials and up to 30 percent plant-based materials. They are fully recyclable and will be identified with messages on the packages and in stores. Coca-Cola said the bottles are currently made through a process that turns sugar cane and molasses into a component for polyethylene terephthalate or PET plastic, though it is exploring using other plants. The major drink makers are trying to make their bottles more eco-friendly. In March, PepsiCo Inc. said it would start selling Aquafina in a lighter bottle to lessen the amount of plastic used. Nestle Waters North America also sells a lighter version of its Ozarka brand in certain states. Last June, mayors of 250 U.S. cities voted to stop using taxpayer money to buy bottled water and restaurants, college campuses, and even certain state governments are considering or have made moves to lessen their use.

McIlvaine Company

Northfield, IL 60093-2743

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

E-mail: editor@mcilvainecompany.com

Website: www.mcilvainecompany.com