Famous Quotes of the Month

- All truth passes through three stages. First, it is ridiculed. Second, it is violently opposed. Third, it is accepted as being self-evident. (Arthur Schopenhauer)
- It is much more comfortable to be mad and know it, than to be sane and have one's doubts. (G. B. Burgin)
- Knowledge speaks, but wisdom listens. (Jimi Hendrix)
- It's kind of fun to do the impossible. (Walt Disney)
- An inconvenience is only an adventure wrongly considered; an adventure is an inconvenience rightly considered. (Gilbert Keith Chesterton)
 

Why do Milk Cartons Indicate "Open Other End" on One Side of the Spout When Both Sides Look Identical?
One end indicates "Open Other End" and the other end says "To Open." The milk carton looks symmetrical so it hardly seems to matter where you form the spout. But it does matter. The reason has to do with how the ends get formed and sealed when the carton is produced. Milk companies buy the paperboard for milk cartons unformed. Machines at the milk distributor form the paperboard into the familiar carton shape, seal the bottoms, fill the cartons with milk, and then seal the top. The machine is adjusted so that only one side of the "open this side" end, the gable, is sealed. When you pull the gable sides, the spout is exposed and opens. If you pull back the gable sides on the other end of the top and then squeeze the sides, nothing happens. The gable on that side stays sealed. Why? The secret is a special adhesive that is applied to the pour spout to make it easier to open. The adhesive also prevents the solid bonding of paper to paper that occurs on the "open other end" side.

H.C. Starck Divestment Finalized

Advent International and Carlyle Group completed their $1.56 billion (Euro 1.2 billion) acquisition of H.C. Starck from Bayer after receiving approval from U.S. and EU antitrust authorities. Bayer is using the proceeds from the sale to reduce net debt and fund its Schering acquisition. The new private equity owners hope that in 3-5 years they will be able to take the company public in an IPO.

Hercules Reduces Workforce

Hercules announced that it will reduce its workforce by approximately 200 positions in 2007. The company expects to save $6 million annually by contracting out some support services for its information technology, procurement, accounting and other groups. The 200 positions will be eliminated throughout its worldwide organization.

Independent Report Finds Fault with BP
An independent investigative panel led by former Secretary of State James Baker found that BP's U.S. refineries did not have adequate process safety programs, the lack of which led to the fatal accident at its Texas City facility in 2005. The company mistakenly understood personal safety performance to be the same as process safety performance. However, there was no evidence that BP's safety program suffered as a result of cost cutting measures. The panel charged the company's board of directors to introduce a new safety culture, including a comprehensive process safety program, and follow their progress over the next few years. The company announced that it has already taken a number of measures and will implement the recommendations. In the report, the panel also calls on other companies to consider its recommendations and apply them where appropriate. (See "Change of Leadership" article in the Personnel section.)

Lanxess to Upgrade Saltigo Facilities

Lanxess will invest $52 million (Euro 40 million) to convert existing Saltigo sites in Leverkusen and Dormagen to the production of active pharmaceutical ingredients and intermediates. The company will also build a new multi-purpose plant. The investment is designed to improve Saltigo's profitability. Lanxess is also considering a new flextime system and asking employees to work longer hours without a raise in pay.

Patent Suit Decision in Favor of SK Corp.
SK Corp. announced that a court decided in its favor regarding the claim of Tonen Chemical Corp that SK had violated patent rights and trade secrets for lithium-ion battery separators (LiBS). SK Corp. was the first South Korean company to develop technology for producing LiBS. The company has alleged that Tonen tried to obstruct SK's advancement in the market by filing the law suit.

Pfizer Will Eliminate 10,000 Jobs
By the end of 2008, Pfizer will eliminate 10,000 jobs (10% of its workforce) worldwide in order to reduce costs by $2 billion (Euro 1.5 billion). The company will close manufacturing facilities in Brooklyn, NY and Omaha, NE and put a plant in Feucht, Germany up for sale as well as close research locations in the US and possibly Japan and France. The company's fourth quarter earnings were down 15 percent. The savings from these measures will be funneled into Pfizer's drug discovery and development initiatives.

Reliance Has Big Plans
Reliance will sign a memorandum of understanding with the Gujarat State Government committing to the investment of $15.2 billion (Rs 675.5 billion) on several projects including the Jamnagar special economic zone (SEZ), refinery and polypropylene (PP) plant development, coal and lignite gasification, port use, city gas distribution and a cross-country gas pipeline linking Godavari in Andhra Pradesh State to Karnavati in Gujarat. The company also plans to establish a private university focused on life sciences in the Gujarat.

According to Indian news reports, Reliance may also be interested in acquiring GE's plastic business. GE is asking $10.0 billion (Euro 7.7 billion). Other potential buyers include Dow Chemical, BASF, SABIC, and private equity groups.
 

Change of Leadership at BP
BP CEO Lord John Browne announced that he will retire at the end of July. He will be replaced by Tony Hayward, who currently serves as BP's head of exploration and production. Browne originally planned to remain as CEO until 2008, but decided it would be in the company's best interest to retire early. An independent investigative panel appointed to evaluate BP's safety practices following a fatal accident at a Texas City facility in 2005 determined that Browne was responsible for the company's lack of emphasis on process safety. The report does recognize that since the accident Browne has repeatedly called for the improvement of process safety performance at BP. (See "Independent Report" article in the Companies section.)

Chemetall Gets New President
Rockwood has appointed Monika Engel-Bader as president of Chemetall. Before joining Chemetall in 2004, Engel-Bader held different positions with Celanese and Hoechst. Rockwood acquired Chemetall in 2004.

OMG Names New Board Director
OM Group (OMG) announced that it has appointed David Pugh as the new director of the company's board. Pugh is CEO of distributor Applied Industrial Technologies and serves on the board of U.S. plastics producer Hexcel.

2006 Good Year for South Korean Chemical Exports, Growth Expected to Slow in 2007
Exports of petrochemical products from South Korea rose from $20.8 billion in 2005 to $24.1 billion in 2006, a 15.7 percent increase. The growth was attributed to higher crude oil prices and reduced domestic demand, according to the country's Ministry of Commerce, Industry and Energy. The greatest increase was observed for petroleum products, and China received the largest percentage of petrochemical exports from South Korea. Imports declined from the Americas but increased dramatically from the Middle East. In 2007, the growth rate for petrochemical exports is expected to slow as crude oil prices stabilize and new capacity in China comes on stream.

Separately, the South Korean Fair Trade Commission (FTC) is expected to fine LG Corp, GS Caltex and S-Oil for price fixing and cartel-like behavior. According to local media reports the companies could be fined as much as $213 million.
 

Chemical Productivity Rises in Argentina
According to Argentina's Statistics Institute (Indec), chemical production in the country rose 6.8 percent in 2006 as compared to 2005. Production of pharmaceuticals and agrochemicals increased by the greatest amounts, 9.9 percent and 8.5 percent, respectively. Plastic raw materials and synthetic rubber production rose 6.1 percent, while detergents, soaps and personal products production grew by 5.4 percent. Basic petrochemical production experienced the smallest growth at only 0.7 percent.

Chevron and ExxonMobil are Talking with Iraq
According to Iraq's minister for industry and minerals, the country is involved in early-stage negotiations with Chevron and ExxonMobil regarding a $3 billion petrochemical complex. Fawzi Hariri is hopeful that the discussions will lead to a memorandum of understanding with one of the two companies by July 2007. Iraq is also talking with ABB Lummus, Dow Chemical and KBR about rehabilitating existing facilities.

China Moves on WTO Commitment
As part of its commitment to the World Trade Organization, China's Ministry of Finance announced that it has reduced import tariffs on several chemicals. High density Polyethylene (HDPE) and low density Polyethylene (LDPE) saw tariffs decline from 9.1 percent to 7.8 percent. Tariffs for Polypropylene (PP), Polystyrene (PS), Polyvinyl chloride (PVC) and Acrylonitrile butadiene styrene (ABS) were lowered to 7.6%. Epoxy resin, Polyformaldehyde, Nylon 6,6, polyols, and Polyisobutyene also have reduced tariffs.

Imports of Urea, compound fertilizer and Diammonia phosphate (DAP) will have an added 1 percent tariff. The compulsory import tax for Benzene has been doubled from 1 percent to 2 percent.
 

Healthy Consumer Demand for Petrochemicals in Asia
Strong demand from downstream products led by healthy consumer demand will help counteract high oil prices in Asia, which are hurting profits of petrochemical producers. Demand in China will be particularly important because several projects for production of downstream products are being undertaken in that country. These projects are expected to come on stream in the next 1-3 years. While oversupply may be a concern initially after the many new facilities begin operations, eventually prices for petrochemicals will stabilize as demand grows.

Lower Chemical Tariffs from Vietnam
After joining the WTO on January 11, 2007, Vietnam must reduce its tariffs on 80 percent of chemical products as required by the Chemical Harmonization Agreement. The country's average tariff on cosmetics will be lowered from 44 percent to 17.9 percent. Tariffs for pharmaceuticals within five years will average 2.5 percent. Vietnam must also inhibit the importation of highly toxic chemicals such as Aldrin, DDT and Hexachlorobenzene as required by the Stockholm Convention on Persistent Organic Pollutants. The country also adopted the Rotterdam Treaty on Prior Informed Consent in 2006 and must ban the use of highly hazardous pesticide formulations covered under the treaty.

Prices Keep Dropping
European and Asian Naphtha prices have fallen significantly. Global polymer prices are also lower. Prices for aromatics are fluctuating around the world but generally are trending downward. Prices for MTBE are responding in kind to lower crude and natural gas prices.

Merck May Exit Generics Business

Merck KGaA confirmed that it may divest its generic business. Analysts estimate its value at $4 billion (Euro 3 billion). According to the company, the sale is one strategic option being considered as a means for the business to realize its potential and strengthen its market position. Merck's generics business is considered one of the top four players in the industry. Ranbaxy and other Indian pharma companies looking to increase their presence in the international marketplace are likely candidates to make such an acquisition. Possible European contenders include Barr, Sandoz, Sanofi-Aventis, and Actavis. Private equity firms like Blackstone and Kohlberg Kravis Roberts & Co. (KKR) could be in the running as well.

Bright Outlook for Specialty Pigments
Pigments that provide a performance advantage or special effect are experiencing growing global demand. Scratch and abrasion resistance are two key properties receiving interest from the automotive market. Pigments that provide color effects such as sparkle, pearlescence, or a metallic look find use in paints and coatings, personal electronic equipment, and some packaging applications. Traditional organic pigment producers are facing competition from Asia and a downturn in printing in response to the growth of digital media. They are responding by moving production to China to remain competitive as these products become commoditized.

ISP Purchases Vincience

International Specialty Products (ISP) acquired Vincience, a French skin care research and development company, for an undisclosed amount. The purchase is designed to expand ISP's position as a supplier of ingredients to the high-end skin care market. According to the company, ISP's global marketing capabilities will make it possible to bring Vincience's technologies to a wider audience. Vincience specializes in peptides, botanicals, marine ingredients and biotech active ingredients. ISP will add additional technical personnel to Vincience's research facility in Sophia Antipolis, which will become the company's new global skin care technology center.

Phosphate Fertilizer Producers Looking Forward to 2007
Following a 10 percent decline in phosphate fertilizer production in 2006, analysts predict producers will experience an increase in consumption near 10 percent in 2007. The growth is attributed to a return to larger corn plantings and the associated increase in application rates. High margins are likely for the next several years. While exports of phosphate based fertilizers to China will decline in 2007, demand from India is likely to increase. Predictions for growth in phosphate fertilizer consumption in Brazil add to the rosy picture for U.S. producers. Supply is expected to remain balanced until 2009/2010, when an export-oriented phosphate complex will begin operating in Saudi Arabia.

Chinese Butadiene Market Very Strong
Demand from the automobile, household appliance and shoe manufacturing industries in China will continue to grow, helping to maintain a healthy Butadiene market in the country. Low production costs and the increasing price gap between crude oil and final Butadiene product are providing high profits for manufacturers. Butadiene is a key raw material for the production of both synthetic rubber and synthetic resins used in a variety of applications. Despite an added 330,000 tonne/year of capacity that came on stream in 2006 (Zhonghai Shell:155,000 t/y; Lanxing Petrochemical: 30,000 t/y; Maoming Petrochemical: 100,000 t/y; and Lanzhou Petrochemical: 45,000 t/y), Butadiene supply is expected to remain tight through mid-2009. At that time, several new Ethylene production facilities that will also produce Butadiene will be operational. Demand and supply should come into balance by 2010, according to industry analysts.