On September 29, 2010, Cabot Corporation and China National Bluestar (Group) Corporation broke ground on the expansion of their world-class fumed silica manufacturing facility in Jiangxi Province, China. The $43 million investment is a project of Cabot Bluestar Chemical (Jiangxi) Co. Ltd., a joint venture between subsidiaries of Cabot Corporation and China National Bluestar (Group) Corporation. The expansion will expand the site to produce up to 20,000 metric tons of fumed silica annually. In the first phase of this expansion, capacity will increase from 5,000 metric tons to 15,000 metric tons with commissioning expected in the second half of calendar year 2011.
September 30, 2010
September 29, 2010
CEE Rubber & Tire Markets conference scheduled in Instanbul
CMT (Centre for Management Technology) is sponsoring its 4th CEE Rubber & Tire Markets conference in Instanbul on November 25-26, 2010.
“Realigning to Take Advantage of the Recovering Tire & Rubber Markets”
* Outlook of Tire Markets in CEE, Balkan, Russia, Turkey, India
* Perspective of Tire Producers – Strategies and Directions to prepare for the Upturn
* Emerging Innovations for Tire Designs, Tire Technologies and Green/Alternative Materials
* Demand Growth of Rubber Products
* Assessing the Volatility in Natural Rubber and Synthetic Rubber Markets
* Supply/Demand of Butadiene
* Tire Retreading & Recycling Trends
September 23, 2010
OMNOVA Solutions to Acquire Eliokem International
Yesterday, OMNOVA Solutions Inc. announced that it had entered into an agreement with AXA Private Equity granting OMNOVA a period of exclusivity to acquire specialty chemicals manufacturer Eliokem International. Closing of the proposed transaction is subject to consultation with Eliokem’s Works Council in France, completion of a definitive agreement, regulatory approvals, financing and other customary conditions. Subject to these conditions, the Company anticipates completion of the transaction by the end of 2010.
Under the proposed transaction, OMNOVA will pay 227.5 million euros for Eliokem, or approximately US$300 million at current exchange rates. OMNOVA intends to raise US$425 million of new long term debt to fund the transaction and the repayment of all existing OMNOVA and Eliokem debt. In addition, OMNOVA intends to extend and increase the size of its unused asset-based credit facility to US$100 million and expects to have US$40 million of cash at the closing of the acquisition.
“This acquisition will transform OMNOVA Solutions into a much larger, more diverse specialty chemical and functional surfaces company with significantly enhanced global capability,” said Kevin McMullen, Chairman and CEO of OMNOVA Solutions. “It is an excellent fit with OMNOVA’s strategy to grow in existing markets, penetrate new adjacent markets and globalize our Company.”
Eliokem is a worldwide producer of specialty polymers and chemicals, including coating resins, elastomeric modifiers, antioxidants, rubber reinforcing resins, oil and gas drilling chemicals, and latices for specialty applications. Last twelve months sales and Adjusted EBITDA through May 2010 were approximately US$268 million and US$50 million, respectively. Eliokem is headquartered in Villejust, France (near Paris), and has manufacturing sites in Caojing and Ningbo, China; Valia (Gujarat state), India; Le Havre, France; and Akron (Ohio), USA. Eliokem also has regional sales offices in Akron, Singapore, Shanghai, and Mumbai. The company employs about 630 people worldwide.
OMNOVA plans to integrate Eliokem with its Performance Chemicals segment, a business that has significantly strengthened its competitive position and financial performance over the past several years.
The press release is here.
September 21, 2010
Indian Tyre Industry Overview
Here’s an interesting overview of the Indian tire industry, including raw materials. It’s posted at scribd.com but it’s difficult to determine its source. For the record, I think the carbon black figure is too low, though the rubber chemical figure is good.
Evonik Names New VP Sales at Carbon Black Business
Following yesterday’s announcement that Evonik would divest its carbon black business, the company today announced a management change at the unit. As of October 1, Michael Hirschhäuser will take over the position of Vice President Sales & Global Key Account Management Tire from Mr. Stefan Immer, who will retire at the end of the first quarter 2011 and will support his successor during the handover period.
After studying Business in Sheffield and Giessen, Michael Hirschhäuser began his career in 1988 as trainee in the former Degussa AG. Since then he has held several positions for the company in Sales, Product Management and General Management in Germany, France, Spain and the United States. In his last position he was responsible for the Global Key Account Management Silicone of the Business Unit Inorganic Materials of Evonik Degussa GmbH
Here is the press release.
September 20, 2010
Evonik to Divest Carbon Black Business
Evonik Industries announced today that it planned to divest its carbon black business. Below is the main text of the press release.
Evonik sets the course for the future of its carbon blacks business
Decision to divest the global carbon blacks business
Strong position opens up new perspectives
Essen. Evonik Industries has decided to divest its carbon blacks business. Klaus Engel, Chairman of the Executive Board of Evonik Industries AG: “Our declared aim is to find a solution that is equally convincing for customers, employees and business partners. The decision to divest this business provides the best basis for sustained investment in carbon blacks, new growth prospects and for securing future-oriented jobs in the long-term.”
Evonik’s carbon blacks business ranks second in the world and has strong and established brands. It has 1,700 employees in twelve countries and sales of around €1 billion. Carbon black is an attractive business. Following the sharp market downturn during the crisis in 2009, this year earnings will rebound to the good level registered in 2008. Klaus Engel: “We are actively utilizing the opportunities offered by this strong position to open up new perspectives for the carbon black activities. Now is the right time to extend and secure their global presence through a change of ownership.”
About 80 percent of Evonik’ chemicals business ranks among the market leaders. The Group adopted a new strategic focus at the end of 2009, and has announced that it will be further streamlining its portfolio and focusing investment even more clearly on key growth markets. Strategic portfolio development is aligned to the three global megatrends: resource efficiency, health & nutrition, and globalization of technologies. In this way, Evonik aims to sharpen its profile as one of the world’s leading specialty chemicals corporations. The Executive Board has therefore decided to concentrate investment on areas with above-average growth potential. Given this, together with the increasing consolidation of the sector and the rising significance of Asian markets, Evonik sees better perspectives for the carbon blacks business outside the Group. The carbon black activities are no longer defined as part of Evonik Industries’ core business and have already been carved out to a separate legal entity.
Evonik manufactures and markets carbon blacks for the rubber and tire industries and pigment blacks for applications including coatings, plastics, printing inks and toners.
Since the start of this year Evonik has been intensively examining the options for the value-oriented development of this business. It has now engaged an investment bank to prepare the divestment.
September 16, 2010
Lanxess Forecasts Tight Markets for Polybutadiene & Butyl Rubber
Here are two interesting presentations from Lanxess’s Capital Markets Day on September 16.
Business Unit Performance Butadiene Rubbers – Taking performance to a new level
Joachim Grub, Head of Business Unit
Business Unit Butyl Rubber – The Enabler of Mobility
Ron Commander, Head of Business Unit
A few observations:
- Lanxesss sees tire fuel efficiency standards in Europe and tire fuel efficiency labeling programs in the US and Japan as major drivers for BR demand going forward. In particular, Lanxess feels that its LXS HP rubber can be useful in improving rolling resistance in tire treads.
- Truck tire retreading is also a leading driver for BR demand, especially as retreaders strive to improve fuel economy and extend the tread life of retreaded tires (which will promote demand for high performance elastomers).
- Coupled with tire labeling programs, the continued diffusion of hybrid and electric vehicles will promote consumer awareness of the rolling resistance ratings of passenger tires. The BR presentation forecasts that 40% of global car registrations in the year 2020 will be electric/hybrid.
- The butyl presentation highlights the growing middle class in the BRIC countries as a key driver, along with investments in road infrastructure and ongoing radialization.
Did Cash for Clunkers Work as Stimulus?
We find that the program induced the purchase of an additional 360,000 cars in July and August of 2009. However, almost all of the additional purchases under the program were pulled forward from the very near future; the effect of the program on auto purchases is almost completely reversed by as early as March 2010 – only seven months after the program ended. The effect of the program on auto purchases was significantly more short-lived than previously suggested. We also find no evidence of an effect on employment, house prices, or household default rates in cities with higher exposure to the program.
From a paper by Atif Mian and Amir Sufi, “The Effects of Fiscal Stimulus: Evidence from the 2009 ‘Cash for Clunkers’ Program,” available here.
For my part, I’m not sure what kind of vehicle scrappage program would not, by its very definition, pull purchases forward from the very near future. After all, one can only encourage vehicle trade-ins amongst those already inclined to trade in their vehicles. I do think that the per-vehicle rebates could have been reduced and spread out over a longer period. As it happened, the CFC program created a tsunami of demand over a very short window, jolting the automotive and tire industries from the absolute trough of the recession into overdrive and creating shortages in an industry that had reduced inventories to rock-bottom levels.
Solutia Appoints New President of Technical Specialties
Yesterday, Solutia named Greta Senn as president and general manager of its Technical Specialties division, which includes the Flexsys rubber chemicals business. She replaces Mike Donnelly, who has been named president and general manager of Solutia’s Performance Films division, which manufactures films that provide energy savings and safety and security benefits when applied to glass, as well as high-value precision coated films and film components for advanced technology and performance products.
Greta Senn most recently served as vice president, business management of the Technical Specialties division. Her previous responsibilities included developing and implementing new strategies for some of Solutia’s most profitable product lines, including Solutia’s specialty fluids and Crystex businesses.
September 15, 2010
Notch Publishes New Rubber Chemicals Market Update
Notch Consulting has published the latest edition of the Rubber Chemicals Market Update, a bi-annual report on the global rubber chemicals market. The report provides current and projected demand for rubber chemicals, including country, regional, and global demand totals for 6PPD, TMQ, other antioxidants (including phenols and hydroquinones), primary and secondary accelerators, and other chemicals (such as retarders, homogenizers, adhesion promoters, and anti-reversion agents). The report provides an update of global capacity by company for PPDs, TMQ, and accelerators, including details on recent and planned projects by China Sunsine, Flexsys (a subsidiary of Solutia), Kemai (Tianjin), Korea Kumho Petrochemical, Rhein Chemie (a subsidiary of Lanxess), and Sinorgchem. Data include both quarterly and annual totals. To order or for more information, please contact Notch Consulting Group.