News from Notch Consulting, Inc.

January 8, 2009

Columbian Confirms Closure of Sevalco

Filed under: Carbon Black — Notch @ 12:46 am

Columbian Chemicals today confirmed that it plans to close its Sevalco carbon black production and laboratory facilities in Avonmouth, Bristol, United Kingdom by January 31, 2009. This blog reported a story in early December in the Bristol Evening Post indicating that the plant may be shut down. The move, which will remove 68,000 tonnes of capacity, will result in approximately 85 positions being eliminated.

In a press release, Columbian’s president and CEO, Kevin Boyle, said, “Continued overcapacity coupled with an uncertain business outlook has forced Columbian to reevaluate its assets across Europe. We are optimizing our resources during this difficult economic period while at the same time maintaining our focus on our customers. Our remaining plants in Europe are well positioned to supply this critical market with high quality products and excellent service.”

Mr. Boyle continued, “We are very focused on aligning our assets with the demand of our customers which is continuously moving more to the developing economies of the world. With our recent announcement on the closure of our Marshall, West Virginia plant, this rationalization in Europe, along with our recent and ongoing expansions in Brazil, Central Europe, and China is critical to this strategic initiative.”

Here is the press release.

January 5, 2009

DC Statement on Columbian Sale

Filed under: Carbon Black — Notch @ 5:51 pm

On Friday, January 2, DC Chemical issued the following statement regarding its intention to sell its stake in Columbian Chemicals Company. This is the statement in its entirety.

DC Chemical Decides to Sell its Interest in Columbian Chemicals

Woo Sug Baik, President and CEO of DC Chemical Co., Ltd. announced today that the Board of Directors approved on December 31, 2008 the sale of the Company’s entire 66.75% stake in Columbian Chemicals Company to One Equity Partners, a private equity fund that has been a JV partner to DC Chemical since its original investment in March 2006. The parties executed a definitive agreement on December 31, 2008, and the transaction is expected to be completed during the 1st Quarter of 2009, subject to regulatory approval.

In light of the current global financial crisis and imminent global as well as domestic economic downturn, DC Chemical decided to sell Columbian Chemicals to focus on core strategic businesses, mitigate global risks and reduce external debt. Although Columbian Chemicals, which has been in the carbon black business for more than 100 years, will no longer be part of DC Chemical, its 200,000 metric ton Pohang and Gwangyang plants will continue to be owned and operated by DC Chemical to serve the domestic carbon black market as it has since 1976.

Although the sales price of US$150mn is less than the total invested amount of US$257mn, this divestment is considered timely and prudent when viewed in the context of extraordinarily uncertain economic conditions and continued deteriorating financial market conditions worldwide. Cash proceeds and debt reduction from the divesture are considered significant, and they in turn will strengthen DC Chemical’s continued effort to evolve its portfolio towards fast growth and highly profitable businesses.

Below are the financial details of the divestiture. Here is the link.

1. Details of Issuing Company
– Name of Company (Nationality): Columbian Chemicals Holding LLC (USA)
– Representative : Woo Hyun Lee
– Capital Stock (KRW) : 462,423,500,000KRW
– Relationship to Company : Subsidiary company
– Number of Outstanding Shares : 385,000,000
– Main Business : Producing and supplying carbon black

2. Details of Disposal
– Number of Shares to Be Disposed : 256,987,387
– Disposal Amount (KRW) : 188,925,000,000KRW
– Equity Capital (KRW) : 1,165,386,207,000KRW
– Ratio to Equity Capital(%) : 16.21%
– Applicability of Large-scale Corporation : yes

3. Number of Shares Held and Shareholding Ratio after Disposal
– Number of Shares Held : 0
– Shareholding Ratio : 0%

4. Purpose of Disposal
– Focus on core strategic businesses, mitigate global risks and reduce external debt.
-To solve the problem issued by the Korea Fair Trade Commission pursuant to the Monopoly Regulation and Fair Trade Act.

5. Scheduled Disposal Date : –

6. Date of Board of Directors’Resolution (Decision Date) : 2008-12-31
– Attendance of Outside Directors : Present(No.) 5 Absent(No.) –
– Attendance of Auditors(members of Audit Committee) : present

7. Subject to reporting to the Fair Trade Commission : Yes

8. Other references concerning investment decisions
– Above”1_Capital Stock” is as of September 30, 2008.
– Above “2_Disposal Amount (KRW)” is estimated with the F/X Rate (KRW 1,259.5/USD) of the decision date, and the actual disposal amount is subject to change according to the F/X rate of the actual closing date.
– Above “5.Scheduled Disposal Date” is expected to be completed during the 1st Quarter of 2009.

January 4, 2009

India Investigating Anti-dumping Duties on Carbon Black

Filed under: Carbon Black — Notch @ 11:15 pm

New Delhi, Jan. 3 — The Designated Authority in the Commerce Ministry has set off an anti-dumping investigation into imported “carbon black used in rubber applications” from Australia, China, Iran, Malaysia, Russia and Thailand.


January 2, 2009

DC to Sell Stake in Columbian Chemicals

Filed under: Carbon Black — Notch @ 11:46 am

According to JoongAng Daily, Korea’s DC Chemical plans to sell its 66.8% stake in Columbian Chemicals Company, the world’s third largest producer of carbon black. DC Chemical will sell the stake for 188.9 billion won ($150 million) in the first quarter of 2009 to JPMorgan Chase’s One Equity Partners LLC, which already owns 33% of Columbian.

DC disclosed the news in a regulatory filing on January 2. DC is selling the stake in order to reduce risk and focus on its polysilicon business. Proceeds will be used to reduce debt and fund capital investments. DC Chemical and One Equity Partners bought Columbian Chemicals in 2006 from its former parent, Phelps Dodge. Aside from its ownership in Columbian, DC Chemical also operates two carbon black plants of its own.

January 1, 2009

Michelin Reaches Settlement in Run-Flat Case

Filed under: Run-flats — Notch @ 11:10 am

Michelin North America Inc. and American Honda Motor Co. Inc. have reached a settlement in a class-action lawsuit involving run-flat tires. The settlement was announced on Monday, January 29, 2008 in a filing in the US District Court in Greenbelt, Maryland. Terms were not disclosed. The settlement awaits the judge’s approval, which is scheduled for January 14. The case involved Michelin’s PAX run-flat tires installed on Honda Odyssey vehicles. The suit alleges that the companies failed to notify consumers that the tires do not last as long as conventional radials tires and cost more to repair and replace.

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