Germany-based research company Ceresana has released a report estimating that demand for polyvinyl chloride (PVC) is set to increase by 3.2% a year until 2021.

The company states that 49.3 million tonnes of PVC was consumed globally in 2013, with the Asia-Pacific region accounting for almost 56%. Ceresana also states that the North America and Western Europe PVC markets have begun to grow again after incurring significant losses in the past few years.

The company notes that both China and India are growing markets for PVC, and despite the US seeing low domestic demand in the past few years this market has now begun to pick up due to the construction industry.

Meanwhile, Ceresana states that Western Europe countries such as Spain and Italy are still struggling, with Italy ceasing to produce PVC altogether.

Ceresana highlights that whilst some large scale manufacturers have sold their PVC businesses (for example Arkema), others like Solvay and Ineos have merged their divisions.

Chinese producers mainly rely on coal-based vinyl chloride to produce PVC whilst other countries including the US use ethylene-based vinyl chloride. Uses for PVC include pipes and conduits, along with cables, floorings and automotive coatings.

The research company says that India and China are producing large amounts of PVC whereas in Turkey and Russia they manufacture a large amount of profiles.

COMPANY NEWS

BASF Opens India Polyurethane Chemicals Plant

BASF has inaugurated its new large-scale chemical production complex at Dahej in Gujarat, India, the company announced recently.

With a project cost of INR 1,000 crore (approximately €150 million), the site represents BASF’s single largest investment in India.

“As part of our investment plans of more than €10 billion in Asia Pacific between 2013 and 2020, we want to strengthen our production platform in India," said Michael Heinz, a member of BASF's executive board. "With our new Dahej site, we are enhancing our position as supplier with local production and can even better ‘create chemistry’ with our customers. With our advanced technologies and the commitment of our team in India, we will both contribute to and benefit from India’s huge market potential.”

The site includes an integrated hub for polyurethane manufacturing and production facilities for care chemicals and polymer dispersions. The care chemicals facility at the Dahej site hosts the first BASF sulfation plant in India, which will cater to customers in the fast-moving consumer goods sector.

The polymer dispersions plant will expand BASF’s production footprint in the dispersions business, complementing the Mangalore facility. It will serve paper and board, architectural coatings, construction, adhesives, and fiber bonding customers, located in northern and western India.

The integrated polyurethane manufacturing facility will host a MDI (methylene diphenyl diisocyanate) splitter for processing crude MDI, a core component in the manufacture of versatile polyurethane products.

“With this production hub, including the first MDI splitter in South Asia, we are well positioned to increase our long-term competitiveness significantly in this key market," said Dr. Raman Ramachandran, BASF chairman in India & head of South Asia. "We will serve our customers in the Asia Pacific region even better through stable product supply in terms of both quality and volume.”

The site will also produce Elastollan TPU (thermoplastic polyurethane), Cellasto (microcellular polyurethane components) and polyurethane systems. The integrated hub will support the demand of industries in the appliances, footwear, automotive, construction, and furniture segment.

The site currently employs 200 people directly and 300 people indirectly. In the near future, the site will offer direct employment opportunity to 50 additional people.

Tesla Selects Nevada for Battery Plant

Tesla has chosen an industrial park outside Reno to build its battery ‘gigafactory’. Tesla's choice of Nevada over California, Texas, Arizona and New Mexico takes it a big step closer to mass producing an electric car that costs around $35,000 and can go 200 miles on a single charge.

The new factory will give Tesla an advantage over competitors, mainly General Motors Co. and Nissan Motor Co., which also are racing to build a relatively affordable electric car with a range that lets people take most daily trips without recharging. Tesla has shown that hundreds of miles of range is possible, but the sales volume and technology aren't available yet to get the cost below the $70,000 base price of the Model S luxury sedan Tesla sells now.

The gigafactory, with a projected 6,500 jobs and 10 million square feet — equivalent to about 174 football fields — would bring the cost of batteries down by producing them on a huge scale. Tesla wants the factory running by 2017 (when it has promised the new, relatively affordable Model 3) and producing batteries for about 500,000 vehicles annually by 2020.

Tesla will pay about half of the Nevada factory's cost. The other major investor is Panasonic Corp., which will manufacture the lithium-ion battery cells and invest in equipment.

Competition for the factory has been intense among the states, which bid up their incentive packages in private negotiations with Tesla. Nevada beat competing states because it combined several must-haves.

Aside from low tax rates and business-friendly workplace laws, Nevada offers plenty of sun and wind to generate "green" power, and relative proximity to the company's car manufacturing plant in the San Francisco Bay Area.

The industrial park 15 miles east of Reno also is near a deposit of lithium, an essential element to produce the battery cells.

Farmer Co-op CHS to Build $3-billion Nitrogen Fertilizer Plant in North Dakota

CHS (St. Paul), a farmer-owned cooperative, announced recently that it will construct a $3-billion nitrogen fertilizer manufacturing plant at Spiritwood, ND. The plant is intended to be fully operational in the first half of 2018 and will employ approximately 160–180 people. The plant will be the co-op’s single largest investment in its history. Construction site work could start this fall, or by next spring at the latest.

CHS, which stands for Cenex and Harvest States, had $44.5 billion in revenue last year, and is known best for its grain and petroleum-based businesses.

CHS is also one of the nation’s largest fertilizer wholesalers, but the Spiritwood nitrogen plant would be its first production facility. The plant will make nitrogen fertilizer, primarily for CHS’ farmer members in Minnesota, the Dakotas, Montana and Canada. Natural gas accounts for more than half of nitrogen fertilizer’s production costs. Gas prices are low and are expected to stay that way as U.S. shale oil and gas production has boomed.

LyondellBasell to Build World Scale PO/TBA Plant on U.S. Gulf Coast

LyondellBasell announced recently plans to build a world scale PO/TBA plant on the U.S. Gulf Coast with an annual capacity of 900 million pounds of propylene oxide (PO) and 2 billion pounds of tertiary butyl alcohol (TBA) and its derivatives. The preliminary timetable is to have the plant operational in 2019. The project is expected to generate up to 1,200 construction jobs at its peak.

The plant is expected to sell PO in the global marketplace to meet growing demand for polyurethanes, which are used primarily for the manufacture of bedding, furniture, carpets and car seats. TBA and its derivatives will be sold to meet the need for high octane gasoline blending components as well as for use in manufacturing synthetic rubber and lubricant additives.

"While we have not finalized the exact location of the plant, the abundant natural gas liquids associated with shale gas make the U.S. Gulf Coast an advantaged feedstock region," said Pat Quarles, LyondellBasell Senior Vice President of Intermediates and Derivatives. "This project combines our leading proprietary PO/TBA technology with low cost feedstock and demonstrates our continued commitment to capturing maximum advantage of market opportunities."

LyondellBasell is one of the world's largest plastics, chemical and refining companies. The company manufactures products at 55 sites in 18 countries. LyondellBasell products and technologies are used to make items that improve the quality of life for people around the world including packaging, electronics, automotive parts, home furnishings, construction materials and biofuels. More information about LyondellBasell can be found at www.lyb.com.

Dow to Divest Three More Businesses

Dow said recently it is marketing three of its businesses for divestment, and it now expects the proceeds of its entire divestiture program to be at the higher end of its $4.5 billion to $6 billion range.

Dow has been working this year to shed billions in low-margin business and to streamline its operations. Dow has completed $1.3 billion in divestments, as part of its plan to divest up to $6 billion by 2015.

The company is actively marketing its Angus Chemical Company, Sodium Borohydride and AgroFresh businesses for divestment, which would yield proceeds of more than $2 billion. These transactions would close early next year, Dow said.

Dow added it has completed the sale of a portion of its North America rail car fleet, for nearly $450 million in proceeds. It is also in the process of a planned carve-out of its U.S. Gulf Coast Chlor-Alkali/Chlor-Vinyl, Global Chlorinated Organics and Epoxy businesses, with signed agreements expected in the second quarter of 2015, Dow said.

MERGERS/ ACQUISITIONS

Johnson Matthey Acquires Catacel

Johnson Matthey recently announced that it has completed the purchase of the business and assets of Catacel Corporation.

Catacel, based in Ohio, USA, is an innovative supplier of novel technology centred on the use of metal foil coated catalysts and sorbents to a range of process industries. Its products include high heat transfer catalyst technology for hydrogen and syngas production and fuel processing systems for stationary fuel cells.

Catacel’s SSR® (Stackable Structural Reactor) technology is a novel, patented, catalyst technology for steam methane reforming that can deliver fuel savings or throughput increases in tubular reformers.

Johnson Matthey is a leading supplier of catalyst technology to steam reformers in the hydrogen, methanol and ammonia markets. The further development and optimisation of Catacel’s SSR technology will enable Johnson Matthey to offer its customers an enhanced range of market leading catalyst technologies for hydrogen or syngas manufacture.

Catacel also has a strong position in coated catalysts and reactor systems for fuel processing for stationary fuel cells. Johnson Matthey will look to identify technical and commercial synergies within its current businesses to assist and accelerate growth in this market.

The Catacel business will be integrated into Johnson Matthey’s Process Technologies Division and will have access to the wider resources of the Johnson Matthey group, including its global network of research and technology centres with their world-leading development and characterisation facilities.

Johnson Matthey is a global speciality chemicals company underpinned by science, technology and its people. A leader in sustainable technologies, many of the group’s products enhance the quality of life of millions through their beneficial impact on the environment, human health and wellbeing. In catalysis, it is a supplier of both precious and base metal catalysts and offers products for a diverse range of industries: from fuel cells and environmental catalysts to petrochemicals, edible oils and specialist oil and gas purification. Johnson Matthey also supplies a full range of catalysts for synthesis gas (syngas), ammonia, methanol and hydrogen, substitute natural gas (SNG) and FCC additives under its KATALCOJM and INTERCATJM product brands.

Catacel is an industry leader in the design and manufacture of catalytic steam reforming and heat exchanging technology. Catacel shapes special metal foils into a variety of geometries and then coats the foils with different catalysts designed to enable target reactions within specific process environments.

Solvay to Acquire CPChem’s PPS for $220 million

Solvay has a reached a deal to acquire the polyphenylene sulfide (PPS) business of Chevron Phillips Chemical (CPChem) for $220 million. Solvay will acquire two Ryton PPS resin manufacturing units at Borger, TX; its pilot plant along with its PPS R&D assets at Bartlesville, OK; a compounding plant at Kallo-Beveren, Belgium; and certain intellectual property relating to the PPS business. CPChem's compounding unit at La Porte, TX, will remain part of CPChem and will provide temporary tolling services to Solvay. The deal is expected in the fourth quarter.

CPChem's PPS business has a strong share in the automotive sector, replacing metal parts to make cars lighter and more energy efficient. Other worldwide leading positions are in electronics, where it enhances fire resistance, and in filter bags to extend their lifetime in reducing pollution at coal-fired power stations, Solvay says.

CPChem recently developed new PPS production technology, which has not yet achieved its full potential, Solvay says. Solvay will invest and use its engineering know-how and operational excellence process to improve the technology over the next three years.

Albemarle Sells Antioxidant, Ibuprofen and Propofol Businesses to SI Group

Albemarle Corporation (NYSE: ALB) recently announced the successful completion of the sale of its antioxidant, ibuprofen and propofol businesses and related assets to SI Group, Inc. The transaction includes manufacturing sites in Orangeburg, South Carolina and Jinshan, China. Certain applications and technical support capabilities located in Shanghai, China and Baton Rouge, Louisiana were also included in the transaction. Financial terms of the transaction were not disclosed.

Albemarle Corporation, headquartered in Baton Rouge, Louisiana, is a leading global developer, manufacturer, and marketer of highly-engineered specialty chemicals for consumer electronics, petroleum refining, utilities, packaging, construction, automotive/transportation, pharmaceuticals, crop protection, food-safety and custom chemistry services. Albemarle employs approximately 3,900 people and serves customers in approximately 100 countries.

Albemarle, Israeli Firm to Produce Polymeric Flame Retardants in New Joint-Venture

Baton Rouge-based chemical maker Albemarle and global manufacturer ICL, based in Tel Aviv, have formed a joint venture to produce ICL's FR-122P polymeric flame retardant and Albemarle's GreenCrest polymeric flame retardant.

All partners in the joint venture will own and operate an already existing 2,400 MT per year Netherlands plant, and a 10,000 MT per year Israel plant, which is scheduled to come on line in the fourth quarter of 2014.

Both plants are located at ICL sites as previously announced by ICL. The joint venture will enable additional capacity to be brought to the market to meet the growth needed for the EU and the rest of the world following the phase out of HBCD from these markets. The transaction is subject to certain closing conditions, including regulatory approvals, and is expected to close in 2015.

According to a joint announcement released Aug. 29, the flame retardants are designed to replace hexabromocyclododecane (HBCD).

The joint venture and its partners will own and operate an existing 2,640-ton Netherlands plant and an 11,000-ton plant in Israel, which is scheduled to begin operating sometime in the next three months. Both plants are at ICL sites.

The joint venture will allow Albemarle to continue providing its GreenCrest branded product to customers while joining forces with a proven manufacturing partner in ICL," said Troy De Soto, Albemarle's vice president, Fire Safety Solutions. "The combined experience and know-how related to bromine and bromine derivatives of Albemarle and ICL will ensure a reliable, high quality alternative offering to HBCD in the EPS/XPS segment. In addition, Albemarle brings its financial backing and GreenCrest product manufacturing experience to the venture."

Albemarle began commercial qualifications of its GreenCrest sustainable polymeric product in 2013 and started commercial supply in April 2014 from the Netherlands plant. Positive customer feedback has confirmed that the GreenCrest product is suitable for commercial uses in EPS and XPS applications.

HBCD is found worldwide in the environment and wildlife, and has been the leading flame retardant used in expanded (EPS) and extruded (XPS) polystyrene foam applications, but is being phased out in the European Union (EU), Japan and other countries.

HBCD is often found in human breast milk, blood and body fat. According to according to the U.S. Environmental Protection Agency, the substance accumulates in animals and people and has a "toxic characteristic." There's concern about its effect on people's health based on animal testing that indicate potential developmental, neurological and reproductive effects.

PTT Global Chemical Increases Stake in French Chemical Firm Vencorex

PTTGC Netherlands, a wholly-owned subsidiary of Thailand's chemical producer PTT Global Chemical (PTTGC), has acquired Perstorp's 34% stake in French chemical maker Vencorex for an undisclosed amount.

The deal will increase the Thai company's interest in Vencorex to 85% and strengthens its presence in the downstream polyurethane market.

The acquisition will allow the company to expand production of Toluene diisocyanate (TDI) and Hexamethylene diisocyanate (HDI) and its derivatives in order to meet demand in Asian markets.

TDI, HDI and its derivatives are used as feedstock in manufacturing polyurethanes, which are used in foams and coatings for the automobile and construction industries.

PTTGC Netherlands has made an initial payment for the stake; the remaining amount will be calculated based on the performance of Vencorex Holding during this year and 2015 and will be paid at a later date.

PTTGC said it will support Vencorex as a R&D centre for isocyanate.

"This financial transaction is fully in line with Perstorp's long-term strategy to focus on its core business activities outside the isocyanates market."

Perstorp president and CEO Jan Secher said: "This financial transaction is fully in line with Perstorp's long-term strategy to focus on its core business activities outside the isocyanates market."

Perstorp Holding and PTTGC formed a joint venture in May 2012 and named it Vencorex Holding.

Following the completion of the latest deal, Perstorp will continue to support Vencorex as the new strategy is being implemented and the transaction will enable Vencorex to invest in downstream isocyanates.

PTTGC operations comprises upstream business with a petrochemical capacity of 8.2 million tonnes per year and a petroleum products capacity of 228,000 barrels per day; downstream business, which includes polymers; EO-based performance; green chemicals and high-volume specialities.

PPG Industries to Buy Mexican Paint Maker Comex

PPG Industries Inc. is to buy Mexico's largest paint maker for $2.3 billion to capitalize on potential upswing in the country's housing market and a failed effort by a rival to do the same.

PPG, whose paint brands include Olympic and Glidden, said it was confident that its purchase of Consorcio Comex SA would withstand regulatory scrutiny, which aborted a similarly priced offer by Sherwin Williams Co.

PPG said it is more focused on Mexico's automotive-paint segment and has negligible sales in construction and decorating paints, which Comex dominates. Mexican authorities rejected a Comex buyout attempt by Sherwin-Williams, which has a bigger presence in Mexico's building-paint market, saying the combined company would have too much market share. Sherwin Williams, which had been trying to buy the privately-held Comex for two years, abandoned its efforts in April.

"We are confident that we can get this transaction approved by the regulatory authorities in Mexico," said Charles Bunch, CEO of Pittsburgh-based PPG, which is the world's largest producer of paints and coatings with a global market share of about 20%.

The acquisition of Comex, which has annual sales of about $1 billion, will more than double PPG's sales in Latin America to 11% of the company's total sales from the current 5%. PPG expects the deal to close within four to six months.

Mexico City-based Comex, founded in 1952, distributes much of its paint through 3,600 stores that are independently owned and operated by more than 700 concessionaires, giving the brand high visibility. PPG officials plan to maintain this network, which they said has been a successful strategy for Comex.

PPG plans to fund the acquisition primarily using cash and short-term investments, but company officials said PPG may also borrow money to fund a portion of the deal.

McIlvaine Company

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

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