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Europe Faces Tightness in Several
Intermediates
Rising prices and tighter supplies
of Monoethylene glycol (MEG) could
impact downstream Polyester and
antifreeze customers in Europe.
Availability is short due to both
planned and unplanned European
shutdowns and lack of material for
import. There is very little spot
material available, and record high
prices are expected in October.
Diethylene glycol (DEG) spot prices
are also climbing due to low
producer stocks and limit
availability of import material.
Tightness in Ethylene oxide due to
both planned and unplanned outages
is expected to lead to price hikes,
which will in turn affect the spot
markets for Butyl glycol ether (BG)
and Butyl di-butyl glycol ether (BDG).
Polyethylene terephthalate (PET)
supplies are expected to dimi | | | | |
The Mexican legislature passed a new
corporate tax law, the 'flat-rate
business tax' or IETU, that raises
business tax rates to 16.5 percent
of earnings in 2008, 17 percent in
2009 and 17.5 percent in 2010 and
beyond. Allowable deductions will
include expenses, regional and bank
deposit taxes, fines, unpaid trade
credits and charity contributions.
The chemical industry in the country
lobbied against the tax as double
taxation on top of the federal
income tax and indicated it would
significantly erode profits. Pemex,
state oil-to-petrochemicals monopoly
Petroleos Mexicanos, already pays
taxes worth about 6 percent of
Mexico's gross domestic product,
which has restricted investment in
petrochemicals. Mexican President
Felipe Calderon Hinojosa must ratify
the measure.
The U.S. House of Representative
passed the Patent Reform Act of 2007
that will bring changes to the
patent system desired by information
technology companies and disapproved
of by the pharmaceutical and biotech
industries. The bill makes many
changes including switching the U.S.
from a 'first to invent' to 'first
to file' system, modifying the way
damages are calculated and granting
broader rulemaking authority to the
Patent and Trademark Office. Others
opposing the bill include small
inventors, labor unions and the Bush
administration.
In the 11th day of its trial, BP
reached an agreement with four
plaintiffs that brought civil suits
against the company for injuries
related to the explosion at its
Texas City plant in 2005. These
cases were the only ones to make it
to trial. The amount of the
settlement was not disclosed. BP
previously settled 1,600 other
cases. Another 1,200 lawsuits
connected to the event remain to be
settled. The company has set aside
$1.6 billion to cover the costs of
the lawsuits resulting from the
accident.
In order to focus on life sciences
and materials, DSM will sell off its
Melamine, Urea, fertilizers, energy
elastomers, specialty products and
Maleic anhydride operations, all
with sales worth about $2 billion
(Euro 1.4 billion). It is also
seeking a partner for its Citric
acid business. The company hopes to
complete the divestments by 2010 as
part of its Vision 2010 strategy.
Sigma-Aldrich Fine Chemicals
announced that it will invest
approximately $25 million to build
its first manufacturing plant in
China, a large-scale non-GMP
facility in Wuxi. The plant is
expected to start operations in the
fourth quarter of 2008. The company
then expects to double its initial
investment with expansions over the
next few years. Products will target
the pharmaceutical and electronics
markets. 
The bill renews for five years
programs to collect fees from drug
and medical device producers to fund
FDA product review programs and also
gives the agency the power to
require further safety studies by
drug makers and mandate label
warning changes when problems with
marketed drug products occur. The
FDA could also issue fines for
non-compliance with these
requirements and if companies do not
complete follow-up studies once
drugs receive approval. The agency
would itself be required to more
actively monitor drug safety of
commercial products. Clinical trial
results at some level will also be
made public.
McKinsey & Co. predicts that the
Indian pharmaceuticals market grow
from $6.3 billion in 2005 to $20
billion in 2015, at which point
India will be one of the top 10
global pharma markets. The rapid
growth is attributed to growing
disposable incomes and an expanding
middle class combined with greater
access to health care and health
insurance and an increase in chronic
diseases. Small and medium-sized
Indian pharma companies are reaping
the largest benefits and achieving
excellent market penetration.
PPG Industries announced the sale of
its fine chemicals and auto glass
businesses. ZaCh System, a
subsidiary of Zambon, has agreed to
pay $65 million (Euro 47 million)
for the fine chemicals business,
while Platinum Equity will pay $500
million (Euro 360 million) for the
glass operations. The transactions
are expected to be complete by the
end of the fourth quarter of 2007.
With these divestments, PPG has
taken the necessary steps to focus
on becoming a leading coatings and
specialty products and services
company, according CEO Charles
Bunch.
