DuPont, the $35-billion US-based chemical giant, is eyeing the Indian industrial biosciences business. It has already identified the textile, household and fabric care, and animal nutrition business for partnership with local companies. DuPont plans to sell its bio-based solutions and technologies to Indian companies.

Its products include renewably sourced materials such as fibre, which is used in fabrics and carpets, and bioactive products such as enzymes.

These products can be used by textile, chemical and poultry companies ranging from Reliance Industries to Godrej.

"With a growing global population putting increased pressure on existing resources in food, materials and fuels, we need to rethink the way we consume and sustainably produce the resources over the long-term," Jim Collins, president of DuPont Industrial Biosciences business, told reporters recently.

These products can be used by textile, chemical and poultry companies ranging from Reliance Industries to Godrej. DuPont Industrial Biosciences is also innovating with new technologies to drive sustainability with energy and water-use savings in industrial processes.

Solvay to Build Specialty Surfactant Plant in Germany

Solvay SA (SVYZY.PK), a chemical and plastic business, announced recently that it will build a specialty surfactant plant at an industrial park in Genthin, Germany, close to Berlin. The company said that the unit will develop and produce surfactant solutions for its home & personal care and industrial customers serving Central and Eastern Europe.

The plant will produce specialty surfactants that aid in the delivery of functional performance attributes such as cleansing, dispersal, moisturizing and texturizing qualities. The unit is scheduled to be operational by the first quarter of 2014 and initial operations will add more than 30 new jobs to the existing industrial platform in Genthin.

Dow Chemical Details $1.5-Billion Divestiture Plan

Dow Chemical says it plans to raise as much as $1.5 billion from divestitures over the next 18 months, including sales of its polypropylene licensing and catalysts business and plastic additives business. The polypropylene licensing and catalysts unit sells polypropylene (PP) production technology, including Unipol process technology and catalysts. The plastic additives sells additives for the processing and modification of thermoplastic and thermosetting resins used in construction materials, packaging, consumer appliances, and other applications.

Dow announced in December that it was adjusting strategy to a “slow-growth world” with a program for over $3 billion in cost savings and divestitures. The latest divestiture announcement “is yet another proof point of Dow’s rigorous focus on return on capital, and is squarely in line with commitments we made earlier this year,” says Dow chairman CEO Andrew Liveris.

The PP licensing and catalysts business is a part of Dow’s performance plastics segment, which recorded $14.5 billion in sales in 2012. That figure was down 10.5% year-on-year from 2011. The segment recorded $3 billion in Ebitda, down 11.8%. The plastic additives business is part of Dow’s performance materials segment, which recorded $13.6 billion in sales in 2012, down 6.8% from 2011. The segment recorded $1 billion in Ebitda, down 41.2%.

Dow sold its tin stabilizers business to PMC (Mount Laurel, NJ) in January. Also in January, Dow agreed to sell its 50% stake in Nippon Unicar, a polyethylene joint venture in Japan.

“We are reviewing our entire portfolio and seeking even further opportunities to optimize value and selectively pruning assets that are no longer a strategic or financial fit,” Liveris says.

Dow has divested businesses worth about $8 billion in revenue since its 2009 acquisition of Rohm and Haas.

Dow Chemical to Build Several Plants on US Gulf Coast

Dow Chemical is planning to take full advantage of the low price of U.S. shale gas by investing in the construction of several processing plants on the U.S. Gulf Coast that are set to produce plastics for a range of applications in the transportation and telecommunications industries, Global Processing reports.

As plastics production in the United States gradually shifts from oil-derived naphtha and turns to natural gas and ethane, operating a number of facilities might prove an immensely lucrative business for the Michigan-based company, Reuters commented.

The new plants are predicted to serve as link between Dow's manufacturing operations in the United States and attempts to boost shale gas supply in North America. Because of the relatively cheap natural gas, Dow believes the project could help the company make up for the narrowed margins that its plastic production has seen in Europe and Asia recently. Industry analysts predict that U.S. natural gas prices are likely to remain low for years to come because of the abundant production. At present, natural gas prices stand at $3.85 per mmBtu in the United States, compared to Asian natural gas prices of $16.15 per mmBtu, according to Reuters.

Dow expects the facilities to employ about 3,000 people. They will manufacture materials for a number of its fast growing segments, including hygiene and medical, transportation, electrical and telecommunications, packaging, consumer durables and sports and leisure. On a broader scale, Dow estimates that the project will create around 5,000 jobs during the construction and more than 35,000 jobs in the U.S. economy over the next five to seven years. In a separate announcement, the company said it plans to raise over $1 billion within the next 18 months from the divestment of non-core assets, such as its polypropylene licensing and catalysts arm and its plastics additives unit.

Currently, Dow is looking into possible locations for the plants on the Gulf Coast and is expected to announce its final decision on the sites at a later stage. Zacks Equity Research said that the plants are currently in the front end engineering and design (FEED) phase and are expected to be completed in 2014.

However, according to Nikkei Business Daily, the development is likely to take place on the Texas coast given that oil refiner Idemitsu Kosan and trading company Mitsui & Co have plans to team up with Dow to launch a petrochemical plant in Texas, estimated to cost about $1.05 billion and to be operating by 2017, located next to a new Dow plant.

Sasol Says Plastics, Chemicals to Aid Profit at Louisiana Works

Sasol Ltd. (SOL), the largest producer of motor fuel from coal, will profit from its investment of as much as $21 billion in two new Louisiana plants by producing plastics and chemicals, Chief Executive Officer David Constable said.

An ethane cracker scheduled for operation in 2017 will expand the Johannesburg-based oil and gas company’s production of ingredients for low-density and linear low-density polyethylene, as well as chemicals such as monoethylene glycol, used in antifreeze and polyester, Constable said recently in an interview after an investor presentation at the New York Stock Exchange. Another plant will convert natural gas into diesel and chemicals beginning in 2018.

Sasol is trying to lower construction costs after estimates rose in December more than 50 percent to as much as $7 billion for the cracker and $14 billion for the gas-to-liquids plant, Constable said. Plans call for producing 1.55 million tons a year of ethylene in 2017 and two 48,000 barrel-a-day fuel units in service by 2019.

Sasol expects a final investment decision on the ethane cracker in next year’s second half and a decision on the GTL plant 18 months to 24 months later, he said. The GTL unit will also produce paraffin, a chemical feedstock.

China Cornerstone of Lanxess’ Global Growth Strategy

Specialty chemicals company Lanxess has started up on schedule a leather chemicals plant in Changzhou Yangtze Riverside Industrial Park. With a capacity of up to 50,000 metric tons per year, the plant is the largest of its kind in China and will strengthen Lanxess’ position as a sustainable leather chemicals provider in the local market. Lanxess has invested EUR 30 million in the facility, which employs about 150 people.

At the Changzhou site next to the leather chemical plant, Lanxess is currently constructing a plant for EPDM rubber. This plant worth an investment of EUR 235 million represents the largest investment the company has made in China to date. Construction work is going according to plan.

To further support the development of innovative products and applications, Lanxess has entered into an agreement with Changzhou National Hi-Tech District to additionally invest about

EUR 35 million in order to extend the research and development center as well as the facilities for the storage and transportation of chemical products.

“This further investment shows our confidence in the development in Changzhou. The city will become an important production hub for Lanxess to provide high-quality materials and tailor-made products in response to the specific needs of local customers,” said Chien Ming Cheng, CEO of Lanxess Greater China.

China is a cornerstone of Lanxess’ global growth strategy. The company achieved sales of more than EUR 1 billion in Greater China (mainland China, Hong Kong, Taiwan and Macao) in 2012. All of Lanxess’ 14 business units are represented at 11 sites in Greater China, with roughly 1,000 employees in total.

PPG Completes $1.05 B Purchase of Akzonobel N. American Decorative Coatings Unit

PPG Industries has completed the $1.05-billion purchase of AkzoNobel's North American architectural coatings business. The acquired business had 2012 sales of €1.19 billion ($1.57 billion) and Ebitda of €19 million, according to AkzoNobel. The business had 4,670 employees at the end of 2012.

The acquisition “further extends PPG’s architectural coatings business in the United States, Canada, and the Caribbean and continues the accelerated pace of our business portfolio transformation,” says Charles Bunch, PPG chairman and CEO. “With this acquisition, PPG has expanded its reach in all three major North American distribution channels, including home centers, independent paint dealers, and company-owned paint stores.”

AkzoNobel says the divestiture of its struggling North American decorative coatings business allows it to focus on key markets in Europe and high-growth emerging economies.

Clariant Chemicals’ to Divest Textile, Paper Specialties and Emulsion Products

The Board of Directors of Clariant Chemicals (India) Limited recently approved the proposal to divest the business of Textile Chemicals, Paper Specialties and the Emulsion products, for a consideration of Rs. 209.15 crores, subject to the approval by the shareholders.

The divestment of the above business includes a Textile Chemical plant situated at Roha. The Roha site has multi-business, multi-product production facilities and the textile chemical plant occupies a minor proportion in the overall site.

Johnson Matthey Acquires Perstorp Catalyst Business / Formaldehyde Technology

Specialty chemicals company Johnson Matthey has acquired Perstorp Specialty Chemicals' catalyst business Formox and formaldehyde technology for SEK 1.05bn (£107m) in cash.

The sale of these assets forms part of Perstorp's strategy to focus on and expand its core specialty chemicals activities.

Formox develops metal oxide-based catalysts for the production of the chemical intermediate formaldehyde from methanol and provides process technology for metal oxide-based formaldehyde production plants with an installed base of around 120 facilities across the globe.

Perstorp president and CEO Martin Lundin said the sale of Formox is a natural step in the company's strategy of focusing on growing its core technical platforms.

"The transaction provides Formox and its employees with an opportunity to develop further within Johnson Matthey as an explicit plant and catalyst technology provider," Lundin added.

Based in Perstorp, Sweden, Formox also provides a full recycling and refining service for spent metal oxide catalysts and manufactures platinum-based VOC abatement catalysts for formaldehyde plants. The business employs 100 people in Sweden, China, Singapore and the US.

Johnson Matthey chief executive Neil Carson said the acquisition of Formox will complement the company's existing technologies for process catalysts, plant design and licensing.

"Formox has a strong position in a growing and profitable market which gives Johnson Matthey new opportunities to grow its sales of catalysts and process technology into the wider petrochemicals market," Carson added.

Millington Advisory Partners acted as exclusive financial advisor to Perstorp in relation to the transaction, according to Perstorp.

Toray to Scale Up Production of Partially Bio-Based PBT

Japanese chemicals and plastics company Toray Industries Inc. is on the verge of going commercial with partially bio-based polybutylene terephthalate, Plastics News reports.

Toray said its new PBT will use bio-based 1,4-butanediol developed by Genomatica Inc. of San Diego, Calif. Toray proved the viability in bench-scale testing that showed the polymer gave molded prototypes equal to petroleum-based PBT.

Toray will make new PBT samples available this year to establish demand for the partial biopolymer. The Tokyo firm said it will market the PBT commercially when 1,4-butanediol is readily available from a Genomatica licensee.

Genomatica's butanediol process involves an engineered microorganism, fermentation techniques and downstream processing. The firm proved commercial-scale production of 5 million pounds of the polymer intermediate in November 2012. Although other firms have explored biological methods of making butanediol, Toray claimed it is the first company to confirm use of butanediol using Genomatica's process. The development is the culmination of two years of work between the two companies.

The other intermediate chemical for PBT is terephthalic acid, currently derived from petroleum. PBT is used in auto parts, electrical components and other end-uses where its tensile strength and elasticity combined with heat resistance make it a material of choice.

Toray said environmental pressures such as limited oil supply and oil price increases and concerns about carbon dioxide emissions make plastics based on biomaterials an attractive alternative.

Toray has developed bio-based PET resin and is working on bio-based nylon.

Among other Genomatica's other bio-based programs is development of butadiene, an intermediate for some polymers and rubbers.

FINANCIALS

PPG Reports First Quarter Results

PPG Industries (NYSE:PPG) recently reported first quarter 2013 net sales from continuing operations of $3.3 billion, equal with the prior year.

“During the quarter, we delivered strong performance in our coatings portfolio, as we grew aggregate coatings segment earnings by 13 percent versus last year’s record level,” said Charles E. Bunch, PPG chairman and CEO. “We continued to experience notable demand divergence among the major regional economies, with activity generally strong in North America, broad growth improvement in Asia and persistent weakness in Europe.

“Despite these regional differences, our coatings earnings grew in each major region aided principally by our proactive cost-management actions coupled with the continued strength of several end-use markets, including automotive OEM, aerospace and U.S. construction,” Bunch said.

Bunch commented that sales and earnings fell in the Optical and Specialty Materials segment based on weaker consumer demand in the United States, which was partly offset by volume growth from a strong new product introduction in Europe in February. Glass segment earnings declined versus the prior year on weaker fiber glass results, Bunch said.

“Strategically, we completed the acquisition of the AkzoNobel North American architectural coatings business April 1. The acquired business, with 2012 sales of $1.5 billion, more than doubles our business serving the construction and maintenance markets in the region,” Bunch said. “Since the acquisition announcement in December 2012, teams have been working diligently to ensure the integration is seamless for customers and successful in creating value for our shareholders. These teams have identified additional cost-improvement opportunities, and we have increased our synergy target by 25 percent. We now expect to achieve $200 million in annual synergies within the first three full years, including $60 million in annual cost reductions that we realized when the transaction closed.

“Looking to the second quarter, we anticipate positive momentum in the United States and Asia to continue, while conditions in Europe remain challenging with limited prospects for near-term improvement,” Bunch said. “We expect our earnings growth trend will continue based on our geographic and end-use market diversity, additional cost improvements from our restructuring program, and continued aggressive management of our businesses which is a hallmark of PPG. Finally, we are working to capitalize on our strong balance sheet as we continue to analyze opportunities to increase earnings though prudent cash deployment.”

As announced January 28, 2013, the company completed the separation of its commodity chemicals business and subsequent merger with a subsidiary of Georgia Gulf Corporation into a combined company now named Axiall Corporation.

Akzo First-Quarter Profit Drops on European Paint Volume

AkzoNobel reports a drop in first-quarter net income of 13 percent from continuing operations at €96 million ($125.2 million) on 7 percent lower revenues, of €3.47 billion, citing weak demand in Europe and divestments. Operating income, at €217 million, was 8 percent down compared with the year-earlier quarter since weaker end-markets and production issues in the specialty chemicals value chain impacted results.

The company, maker of specialty chemicals and Dulux paint, will look to make more cutbacks to offset a slump in Europe that’s left an existing 500 million-euro ($653 million) savings target outdated.

Celanese Corporation Reports First Quarter 2013 Results

Adjusted Earnings Up 44% on Margin Expansion

Celanese Corp., the world's largest producer of acetyl intermediate chemicals used to make paints and glues, posted first-quarter net income of $142 million, a decline of 26% due mainly to a significant favorable tax benefit in the year-ago quarter. Celanese also is a large producer of acetate tow, used to make cigarette filters.

The company expects weakness in Europe and much of Asia to linger longer than initially anticipated this year.

"We expect the current challenging market conditions in Europe and Asia outside of China to continue further into 2012 than originally anticipated," Chief Executive Mark Rohr said in a press release. Rohr promised to cut costs, run plants better and expand customer relationships to counteract weak demand.

Albemarle Profits Fall in Q1

Albemarle’s first-quarter results fell as all three of its business units posted double-digit profit declines year-over-year. The company reported net income of $84 million for its fiscal quarter ended March 31, down 27 percent from the year-ago quarter.

The Company reported net sales of $641.6 million in the first quarter of 2013 compared to net sales of $711.7 million in the first quarter of 2012, driven by their exit from the phosphorus flame retardants business, lower metals surcharges and pricing on certain products.

"First quarter results matched our expectation that 2013 would begin the year slowly," stated Luke Kissam, CEO. "Catalysts was impacted by start-up costs from our two greenfield polyolefin catalysts expansions and an unfavorable mix in Refinery Catalysts. In Fine Chemistry, we saw robust demand for drilling fluids and an expected slow quarter in custom manufacturing. Polymer Solutions showed modest improvement from fourth quarter, but our current order book patterns suggest that demand for our portfolio of products in consumer electronics, construction and European auto markets will remain sluggish."

McIlvaine Company

Northfield, IL 60093-2743

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

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