News from Notch Consulting, Inc.

August 29, 2008

Columbian Chemicals Opens Bahia Plant

Filed under: Carbon Black — Notch @ 3:00 pm

Columbian Chemicals announced that it has inaugurated its new plant in Bahia, Brazil.

Today Columbian Chemicals Co. hosted an inauguration celebration for the company’s new plant in Camaçari Pole, a chemical complex in the Bahia state of Brazil. The project began in September of 2005 and utilizes the latest environmental and energy conservation technologies. The US$75 million facility’s production capability of 75,000 metric tons can be expanded as the market develops.

Here is the press release.

Concarb Decision: Ominous Sign for US CB Industry?

Filed under: Carbon Black, Tire Recycling, Tires — Notch @ 2:49 pm

The August 25, 2008 edition of Rubber & Plastics News featured an editorial (subscription required) about the recent Continental Carbon verdict that sees the decision as an ominous sign for the US carbon black industry.

Concarb’s [Kim K.T.] Pan, who feels justice wasn’t served, warned that even a shred of evidence can elicit a lawsuit. “There’s no downside for them; it’s a lottery mentality, and all they have to do is hit on one of them to collect. It can happen to any company.”

Amen, say executives at various tire companies caught in the tire recall juggernaut that began with the Ford Explorer-Firestone SUV tire controversy of the early 1990s. One after another faced lawsuits as trial lawyers found the industry easy pickings. Settle rather than fight it out was the norm for the tire makers.

Now that one of the carbon black producers has been hit with a huge judgment, you can be sure that somewhere a law firm is nosing around, trying to find a similar case to pursue.

That’s how the game is played.

This issue of R&P News also included a Materials Update dedicated to carbon black. The update included five articles related to carbon black production and use:

  • Continental Carbon fights challenges in N.A.
  • Delta-Energy expands capacity in North Dakota
  • Sid Richardson touts SR401 grade carbon black
  • Cancarb makes upgrades to keep up with thermal black
  • A reinforcing agent used with virgin carbon black

Evonik Degussa to Close US Carbon Black Plant

Filed under: Carbon Black — Notch @ 10:27 am

On August 28, 2008, Evonik Degussa Corporation announced that it planned to cease production at its carbon black plant in Aransas Pass, Texas by the end of 2008. The move will affect 30 of 38 positions at the plant. The plant will continue to ship carbon black until year-end to fulfill existing contracts. After manufacturing has ceased, the site will be used as a warehouse.

The Aransas Pass plant, located 220 miles south of Houston, began operations in 1941 as a two-unit channel black plant. Furnace black production at the site began in 1977, when the plant was purchased by Ashland. Degussa bought the plant in 1988.

Degussa Evonik said that the decision came after an intensive review of its North American operations, and is accompanied by an investment program to increase efficiencies at the company’s remaining US plants, located in Ivanhoe, Louisiana; Orange and Borger, Texas; and Belpre, Ohio. These investments have already begun, according to the company.

Ruediger Eberhard, Head of Evonik’s Rubber Reinforcement Business Line, said that in order for the company to remain competitive in today’s global marketplace, it must fully utilize the capabilities of its carbon black operations, concentrating resources at more efficient facilities that can compete in today’s challenging environment.

Here is the press release.
aransas-pass-carbon-black-facility-08-28-081

August 26, 2008

Rubber Chemicals Market Update 2008

Filed under: Rubber Chemicals — Notch @ 6:30 am

Notch Consulting has released a new report entitled Rubber Chemicals Market Update 2008 that provides an overview of current conditions in the global rubber chemicals market. This 22 slide Powerpoint deck is a companion report to the Rubber Chemicals World Data Book 2007, and is provided to subscribers of that report at no charge. The update addresses current extreme tightness in the rubber chemicals market, including contributing causes, the effect on pricing for key products (6PPD, TMQ, sulfenamides, and thiazoles), and the short term outlook. For more information or to order the Rubber Chemicals World Data Book 2007, including this update, contact Notch Consulting at info@notchconsulting.com.

Lanxess to Move HQ from Leverkusen to Cologne

Filed under: General, Rubber Chemicals — Notch @ 12:26 am

Lanxess plans to move its headquarters from the Leverkusen Chempark operated by its former parent Bayer AG to a new site most likely located in Cologne, Germany. The new location will house about 500 of its top management by 2011. Lanxess will retain a sizable presence in Leverkusen, which will remain the company’s largest production site.

Here is the press release.

August 25, 2008

Does It Work: Run-Flat Tires

Filed under: Run-flats — Notch @ 11:07 pm

For the latest installment of the Does It Work series, Car Magazine tested run-flat tires.

More manufacturers are fitting run-flat tyres, as they seek to remove the unnecessary bulk and expense of spare tyres. But do run-flats actually work? Watch our new video as we put them to the test in our latest Does It Work video series.

August 18, 2008

Americans Are Driving Less

Filed under: General, Tires — Notch @ 3:23 pm

Perhaps the least surprising news of the day is that Americans are driving fewer miles due to high gas prices. More coverage here.

WASHINGTON – New data released today by the U.S. Department of Transportation show that, since last November, Americans have driven 53.2 billion miles less than they did over the same period a year earlier – topping the 1970s’ total decline of 49.3 billion miles.

“We can’t afford to continue pinning our transportation network’s future to the gas tax,” said U.S. Transportation Secretary Mary E. Peters. “Advances in higher fuel-efficiency vehicles and alternative fuels are making the gas tax an even less sustainable support for funding roads, bridges and transit systems.”

Americans drove 4.7 percent less, or 12.2 billion miles fewer, in June 2008 than June 2007. The decline is most evident in rural travel, which has fallen by 4 percent – compared to the 1.2 percent decline in urban miles traveled – since the trend began last November.

Last month, Secretary Peters unveiled the USDOT’s transportation reform plan which offers lawmakers several options to consider when Congress takes up highway and transit legislation next year. “It really makes little sense to try to upgrade our infrastructure using a revenue source as ineffective, unsustainable and unpopular as the fuel tax,” she added.

“Secretary Peters’ plan to overhaul our nation’s transportation investment strategy begins the much-needed transition away from status quo solutions that produce status quo results. Her plan strengthens the abilities of state and local officials to integrate effective transit and highway solutions to meet Americans’ ever-changing travel demands,” said Acting Federal Highway Administrator Jim Ray.

As Americans drive fewer miles, less revenue is generated for the Highway Trust Fund from gasoline and diesel sales – 18.4 cents per gallon and 24.4 cents per gallon, respectively. During the first quarter of 2008, motorists consumed nearly 400 million fewer gallons of gasoline, or about 1.3 percent less than during the same period in 2007, and 7 percent less – or 318 million gallons – of diesel.

The Federal Highway Administration (FHWA) collects vehicle-miles-traveled data for all motor vehicles through more than 4,000 automatic traffic recorders operated round-the-clock by state highway agencies. To review the FHWA’s “Traffic Volume Trends” reports, including that of June 2008, visit http://www.fhwa.dot.gov/ohim/tvtw/tvtpage.htm.

Could Run-Flat Tires Have Prevented War Between Russia & Georgia?

Filed under: General, Run-flats, Tires — Notch @ 2:35 pm

An intriguing possibility.

According to the leading British newspaper, a flattened tyre of a Russian diplomatic car forced the cancellation of key peace talks between the sides before fighting erupted 10 days ago.

Though trouble had been brewing in the disputed South Ossetian region for weeks as Moscow-backed militias skirmished with Georgian troops, Russian-brokered negotiations between the Georgian government and the separatists continued.

But on Aug 7, the first substantial face-to-face talks failed following a farcical chain of events with a top Russian diplomat claiming that he could not attend the meeting in South Ossetia because his car tyre had run flat, the newspaper said.

But looking more closely at the situation, it seems the flat tire was simply an excuse.

“I called and spoke to [Russian diplomat Yuri] Popov and he said he could not get to the office because his car had a flat tyre,” [Timur] Yakobashvili said. “This was preposterous. I said the delegation must have more cars. He said there is another car but its tyre is flat too. At this point I knew it was a trap and I was very angry.”

And even if run-flat tires were to effectively eliminate the flat tire excuse, there are other ways to miss an important meeting.

Asked about the whereabouts of the rest of the delegation, General Kulakhmetov, the only Russian present at the meeting hall, said the South Ossetian delegate had turned his mobile off.

August 15, 2008

Tire Recycler Charged with Fraud

Filed under: Tire Recycling — Notch @ 1:08 pm

From Rubber & Plastics News (subscription required) comes news of fraud regarding a tire recycling company.

On July 31, 2008, a federal district court in Detroit froze the assets of a Michigan-based tire recycling company, Encore Associated Leasing, LLC, as well its president and his son. The action followed an allegation of fraud by the Securities and Exchange Commission.

According to the SEC’s complaint, from September 2006 to July 2007, Merklinger raised at least $7.2 million from five investors through the sale of investments in his purported tire recycling business. The investments consisted of an interest in a tire shredding truck that Encore Leasing would lease from the investor and purportedly use in its business operations, and a $10,000 warrant for a 1% interest in Encore Leasing. Merklinger told investors that a working prototype of the shredding truck existed and that their trucks would be in operation shortly. He promised that Encore Leasing would pay the investors $15,000 in monthly leasing fees and investment interest, and that after five years, the investors could expect returns of up to 372% and the warrant would be worth at least $1.2 million. However, as alleged in the SEC’s complaint, there was no working prototype, no reasonable basis for Merklinger’s income and return figures, and the investors never received a dime from their investment. Instead, Merklinger used more than $950,000 of investor funds for his own personal benefit, including payments for rent, back taxes and the purchase of luxury automobiles and watercraft and extravagant landscaping and furnishings for his home. He also, as alleged in the SEC’s complaint, spent or transferred more than $172,000 for the benefit of his son, Brian Merklinger, and used more than $134,000 to make payments to investors in one of his other companies. Further, Merklinger failed to disclose to investors that he had been barred from participating in Ontario, Canada’s securities markets for ten years in connection with a prior investment scheme.

The SEC’s complaint charges Paul Merklinger and Encore Leasing with violating federal securities laws (specifically Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder). It seeks permanent injunctive relief, disgorgement of investors’ funds, and civil penalties. The complaint also seeks disgorgement of all investor funds provided to Brian Merklinger.

Indian Tiremakers Urge End to SR Import Duties

Filed under: General, Tires — Notch @ 11:25 am

From Reuters India comes news that Indian tire makers and other rubber users are asking the Indian government to eliminate the anti-dumping duty on synthetic rubber and to curb exports of natural rubber to reduce prices for these commodities. According to M.F. Vohra, president of the All India Rubber Industries Association (AIRIA), the Indian tire industry faces extremely challenging conditions due to higher prices for raw materials such as natural rubber, carbon black, and rubber chemicals. Natural rubber prices have risen about 20 percent in the last three months, hitting an all-time high of 141.50 rupees per kg on Aug. 1, according to the Rubber Board.

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