E-Weekly News Briefs, July 4 - 8E-Weekly News Briefs, July 4 - 8

News briefs

Middle Eastern partners make power play at Borealis

Norway''s petrochemical producer Statoil (Stavanger, Norway) is selling its 50% share in the Borealis (Kongens Lyngby, Denmark) polyolefins joint venture for €902 million plus €80 million in a guaranteed dividend for 2005 to its partners, International Petroleum Investment Co. (IPIC; Abu Dhabi, U.A.E.) and OMV (Vienna, Austria). As a result of the sale, IPIC now owns 65% of the company while OMV has the remaining 35% share.

Statoil Chief Executive Helge Lund says, "We are selling our interest in petrochemicals because this no longer forms part of our core business." Statoil originally joined then-partner Neste of Finland in 1994 to start up the polyolefins manufacturing company Borealis. Only four years later Neste bailed out and sold its interests in the firm to IPIC and OMV. IPIC already owns almost 18% of OMV, Austria''s prime petroleum producer.

The deal, set to close in the fourth quarter assuming regulatory approvals can be obtained, will see OMV deputy CEO Gerhard Roiss become Borealis chairman. According to figures from analysts at Maack Business Services (Au, Switzerland), Borealis is the eighth largest global polypropylene producer with 1.44 million tonnes of nameplate capacity, and number 10 in polyethylene production with 1.98 million tonnes capacity.

The company has had its ups and downs over the years and is emerging from what Borealis Chief Executive John Taylor calls "a major transformation" that included consolidations, placing more emphasis on value-added polymer resins than commodities, as well as staff layoffs. Yet, Taylor sounds positive about the ownership change because "I believe it will provide the opportunity to further strengthen the company in its implementation of our value creation strategy launched in 2001." The recent rise in polymer prices has certainly helped improve the company''s balance sheet.

Roiss says the ownership change should enable Borealis "to further develop integrated investment opportunities with its owners as well as exploring additional routes to achieve profitable growth." Statoil''s Lund says his company will remain Borealis'' largest customer of natural gas liquids for feedstocks.

Manufacturing expansion continues

The Institute of Supply Management (ISM) released its latest report, which showed that the U.S. manufacturing sector expanded at a faster than expected rate in June, as new factory orders picked up. Activity at the nation''s factories increased for a 25th consecutive month according to the ISM''s Manufacturing Index. The Index registered 53.8 in June, up from 51.4 in May and significantly higher than the 51.5 forecasted by analysts. ISM''s report recorded a 44th consecutive month of expansion in the overall economy.

"These are the most positive signs we''ve seen in several months, and they indicate that we may be through the `soft patch'' that many observers touted," says Norbert J. Ore, chair of ISM''s Manufacturing Business Survey Committee.

Another report just released by the Census Bureau notes that during the 12-month period ending in May, spending on construction in the manufacturing sector rose $28.1 billion at a seasonally adjusted annual rate of 24.3%. This was the largest increase for any category of construction, according to the report.

Milacron revises full-year outlook downward

Pointing to weakened automotive sales in North America, overall lower sales in Western Europe, and higher oil prices, Cincinnati, OH-based machine and industrial fluid manufacturer Milacron has lowered its guidance for full-year sales to between $815 to $840 million. This would represent a net loss of $14 to $24 million compared to 2004 sales of $774 million, which resulted in a net loss of $51.3 million.

For the current quarter, for which Milacron will release results on Aug. 1, Milacron is projecting sales of $198 million for a net loss of $6 million. Milacron said positive growth was seen in Asian sales as well as North American packaging, health care, and building materials markets, but a weakened automotive sector in North America had negatively affected machinery and industrial fluid sales.

The company recently received a waiver from its bank group that allows for positive adjustments to EBITDA for specific non-cash charges. Milacron believes this will allow it to satisfy the minimum EBITDA level for the second quarter per its revolving credit agreement.

Names in the News

Kurt W. Schneider has been named president and CEO of foam, sheet, and film processing equipment maker Battenfeld Gloucester Engineering (Gloucester, MA), part of the SMS group (Düsseldorf, Germany). He previously served as a business consultant and president of Agnitos Management Consultants; president of Prochem a manufacturer of fluid handling equipment; and also was senior VP of the pulping products division of Beloit.

Ralph Ottlinger, 53, has been appointed managing director of PVC producer Vinnolit (Ismaning, Germany). With an annual output of 650,000 tonnes (1.4 billion lb), the company is Germany''s leading vinyl producer.

Processor Capsnap France, part of the Capsnap joint venture between Portola Packaging and Greiner Packaging (Kremsmünster, Austria), has announced that Gilles Bonnesoeur, 42, is the new plant/production manager. Previously he spent more than 15 years working for a competitive operation producing perfume bottles. He replaces André Hallosserie, who is taking over the job of quality and process manager.

Chinese petrochemical site starts up successfully

Polymer producer BASF (Ludwigshafen, Germany) and its 50-50 Chinese joint venture partner Sinopec have started commercial production at a 220-hectare site near Nanjing to produce 1.7 million tonnes of chemicals and polymers annually. More than $2.9 billion was invested in the integrated site.

Andreas Kreimeyer, member of BASF''s board of executive directors responsible for Asia/Pacific, says that by 2010 his company expects "to generate 20% of its sales and earnings in its chemical activities in Asia/Pacific, with 70% coming from local production."

The plant has a 600,000 tonnes/yr steam cracker producing ethylene and propylene for polymer feedstock in downstream plants. Startup occurred less than four years after groundbreaking.

Changes at Basell include closures, JV ownership sale

Polyolefins producer Basell (Hoofddorp, Netherlands) has decided to sell its half share of the Polibrasil polypropylene joint venture to its partner Suzano Petroquimica. Polibrasil has a total capacity of 625,000 tonnes/yr at three sites in Brazil. Basell will acquire full ownership of Polibrasil''s compounding business, which produces resins primarily for the Latin American automotive sector.

In other news from Basell, after announcing the planned closure or mothballing of 300,000 tonnes/yr capacity of high-density polyethylene (HDPE) in Europe last year, it has just decided to idle another 100,000 tonnes of HDPE capacity at its Wesseling, Germany facility. Werner Breuers, president of Basell Polyolefins Europe, says the move allows the company to focus on its 320,000 tonnes/yr plant at Wesseling, which was recently commissioned. Basell also has another HDPE plant in Poland at its joint venture Basell Orlen Polyolefins, set to start up at the end of this year.

At the same time, Basell has decided to dedicate its two small 120,000 tonnes/yr HDPE lines in Frankfurt and Münchmünster, Germany to produce specialized grades.

Pipe processor Uponor plans reorganization of brands

Pipe and fittings producer Uponor (Vantaa, Finland) says it will consolidate its brand names and by the beginning of next year will sell all products around the world under the Uponor brand, thereby moving away from names introduced via acquisitions over the years.

Company CEO Jan Lång says this is a logical step along the company''s development path. "Our strategic goal is to create one unified company, which is reflected in our current efforts to harmonize our internal processes and sharpen our focus on our customer interface," he says.

Internationally, well-known pipe system names such as Wirsbo, Unipipe, and Ecoflex will be replaced by the Uponor brand. Some of brand names will, however, remain as part of the product names, he says.

German processor Simona receives certification

Plastics processor Simona (Kirn, Germany) has been granted the automotive quality certificate ISO/TS 16949:2002. Simona has been supplying multilayer polyethylene barrier sheets for Tier One supplier Delphi Automotive Systems for the last two years. These are twin-sheet thermoformed into fuel tanks used in the BMW X3 series automobiles.

Service company for European composites sector established

Anticipating the introduction of further measures to take back and recycle used vehicles in Europe under the EU end-of-life directive, 24 companies in the composites sector have set up the European Composite Recycling Co. (ECRC; Brussels, Belgium).

Pascal Diaz, CEO of SMC compounds and molded parts processor Inoplast, and ECRC chairman, says the new organization''s goal is to establish a commercially viable composites recycling system. It is set to establish logistics for distribution of used parts to recycling centers, develop new reuse technologies, and create outlets for recycled materials.

A system of granting the "Green fiber-reinforced plastics (FRP)" label from the ECRC, which should be part of each part destined for recycling, has been devised. Diaz expects the first Green FRP label vehicle parts soon, and it should start taking back used car parts by the end of this year.

Jarden grows

Jarden Corp. (Rye, NY), a consumer products manufacturer, announced a definitive agreement to acquire privately held Holmes Group Inc. (Milford, MA) in a transaction valued on a debt-free basis at approximately $625 million, consisting of approximately $420 million in cash and 4.1 million shares of Jarden common stock.

Founded in 1982, Holmes is a leading manufacturer and distributor of select home environment and small kitchen electrics, including Bionaire, Crock-Pot, Harmony, Holmes, Patton, Rival, Seal-a-Meal, and White Mountain. Holmes has annual revenues of approximately $700 million and an adjusted non-GAAP EBITDA of approximately $95 million.

The principal shareholders in Holmes are Berkshire Partners, a Boston-based private equity firm, and Jordan (Jerry) A. Kahn, the founder and CEO of the business. "I have been building The Holmes Group for nearly 25 years, and believe that the combination with Jarden will create significant new growth opportunities that Holmes could not have capitalized on as a standalone, private company," Kahn said in a prepared statement.

Martin Franklin, CEO of Jarden, says that after the completion of the transaction, Jarden is expected to have annualized sales of approximately $3.4 billion and more than 16,000 employees. Jarden''s custom plastics processing group is Jarden Plastic Solutions.

Jarden reported a first quarter net sales increase of 229% to $532.3 million, compared to $158.3 million for the same period a year earlier.

Saudis select Basell''s technology for plants

A Saudi Arabian company, Project Management and Development (PMD) Co. Ltd., has tapped two Basell technologies for its two polypropylene (PP) and one low-density polyethylene plants to be built at Al Jubail, Saudi Arabia. Spheripol technology is set for the PP facilities, with a combined capacity of 640,000 tonnes/yr; the Lupotech T process-a high-pressure tubular reactor method-is for a 270,000 tonnes/yr plant. All are set to start up in late 2008.

PO foam sheet line goes to Czech Republic

IMG Bohemia (Sezimovo Ustí II, Czech Republic) has taken delivery of a foamed polyolefin sheet extrusion line from equipment producer Krauss-Maffei (Munich, Germany). The processor is a leading manufacturer in the country of foamed construction panels for the building industry. The single-screw line has a width of 2.5 m and an output of 800 kg/hr.

First stage of Bayer''s Chinese PC project started

Udo Oels, a member of the Bayer (Leverkusen, Germany) management board, has just inaugurated a new compounding plant for polycarbonate (PC) and PC blends with an annual capacity of 40,000 tonnes. The compounding plant is part of the company''s PC production facility at Caojing, China, still under construction but scheduled to go on stream next year.

Corrugator pipe equipment successfully pairs with extruder series

During the recent pipe symposium conducted by Cincinnati Extrusion (Vienna, Austria), corrugated pipe equipment maker Unicor (Hassfurt, Germany) demonstrated its UC500 machine coupled with a Cincinnati Proton extruder. Martin Thein, technical director at Unicor says, "With this [Proton] extruder generation the resin''s melt temperature can be held at a constant level, which is very important for processing steps in the corrugator."

The UC500 has 40 pairs of water-cooled forming blocks and can produce flexible corrugated pipes in diameters of 65 to 500 mm with an output of 750 kg/hr. Thein says the extruder''s consistent rpm accounted for gentle melting of the resin and for the steady temperature at the die lip.

Ampacet mixes up Thailand color-compound expansion

Ampacet has added multiple extruder lines to its 110,000-sq-ft Rayong, Thailand facility, bumping production to 20,000-tons/yr for custom color masterbatches. Located 2 hours southeast of Bangkok, the plant, which opened in 1999, initially produced white and specialty additive masterbatches. In addition, the plant features a color service center and color lab replete with a blowmolding line to allow online adjustment as new colors and effects are created.

PolyOne sets up Shenzhen shop

Although only 4% of the company''s current revenue comes from Asia, custom compounder PolyOne (Cleveland, OH) is betting that figure can grow with the overall Chinese industry. The company has opened a new 65,000-sq-ft plant in Shenzhen with an annual capacity of 10,000 tons. PolyOne announced the expansion during the June Chinaplas exposition in Guangzhou, although production had been up and running since May 2005.

The plant actually incorporates production of a range of PolyOne products, including color and additive masterbatches, engineered materials, and polymer coating systems. PolyOne officials said that since many customers have located in the region, and the fact that plastics enjoy 10% to 15% annual growth according to their estimates, they believe the market will be a "growth engine" in the years to come.