 |
|
|
|
|
|
|
|
|
|
|
|
Dow, Rohm and Haas
Prepare for Merger
Rohm and Haas, once acquired by Dow
Chemical, will be called Rohm and Haas
Advanced Materials. Following the closure of
the $18.8 billion deal in early 2009, this
division will operate with six business
units comprised of operations from both Dow
and R&H. Rohm and Haas' current COO Pierre
Brondeau will head up the division. Luiz
Fernandez, also from R&H, will be
responsible for coatings. Raynaud de Fitte
of Dow will be responsible for all European
operations, while Peter Davies of Dow will
take charge of designed polymers and
separation technologies. Mark Douglas and Yi
Hiyon Park, both from R&H, will be
responsible for the Asia/Pacific operations
and electronic materials, respectively.
For its part, in advance of the merger Rohm
and Haas is attempting to deal with
declining demand across most downstream
markets and geographies. The company has
instituted a hiring freeze and is
accelerating the restructuring program it
announced earlier in 2008, which included
the elimination of 925 jobs and closure of
25 to 30 percent of its paint and coatings
capacity in North America.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chemical Companies
Take Major Action in Response to Economic
Slowdown
Chemical manufacturers are taking strong
action in the face of reduced demand. BASF
announced that it will temporarily shut down
approximately 80 production sites and reduce
operating rates at about 100 facilities in
response to "massive decline in demand in
key industries." The capacity reductions are
expected to last until January 2009. Many of
the plants supply products for the
automotive, construction and textile
industries. Six of the company's integrated
sites in Europe, Asia and North America, and
around 20,000 employees will be affected.
Europe will be hardest hit, with 50 of the
80 plants located in the region. BASF also
notified analysts that its full-year profits
outlook will be lower than that achieved in
2007.
Arkema announced that it will close 12
production sites in December, with three
quarters located in France. Polymethyl
methacrylate (PMMA) production will stop in
December in order to reduce inventory. Other
outdated facilities will be closed
permanently, including two Vinyl plants in
France. The company will also centralize its
procurement operations beginning in April
2009 and expects to save about Euro 35
million annually as a result.
Perstorp will stop production of Oxo-alcohols
and Phthalic anhydride facilities in Sweden
for about a month. The company had
previously reduced operating rates by up to
30 percent. In addition, 105 jobs will be
eliminated. Rhodia is closing its Polyamide
plant at Valence, and Solutia is reducing
Nylon production and shrinking its workforce
by 1,600, with 700 of the reductions as
permanent cuts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chemical industry trade groups issued statements
welcoming president-elect Obama and new members of
Congress, but indicated they expect the political
environment to be challenging over the next four
years. The Synthetic Organic Chemical Manufacturers
Association (SCOMA) has developed a "First 100 Days"
program to introduce itself and its agenda to the
111th Congress, which includes free-trade
agreements, sit-security legislation, and reform of
TSCA while avoiding Reach-like regulations. The
American Petroleum Institute (API) hopes that an
energy policy encouraging development of US
resources can be established. The Natural Gas
Council has promised to work with Obama and the new
administration to develop clean energy. The National
Association of Distributors (NACD) is very worried
about the anti-business majority in Congress. The
American Chemistry Council (ACC) and the National
Petrochemical & Refiners Association (NPRA) had no
comment. Most groups stressed that any new tax and
energy policies must consider the realities of doing
business in the current economic climate.
Chemical Information Services recently
released ChemInfo MarketPlace, a new
accompaniment to its family of chemical
sourcing tools. A collaboration with
Chemfinet Services, Inc., this innovative,
web-based exchange service meets the needs
of buyers and sellers from the
pharmaceutical, biotech and custom chemical
manufacturing industries. Users can now
utilize the service for their procurement
and sales functions. Buyers post RFQs
(Request for Quote) on the site for
molecules they need and sellers submit bids
for the chemicals they can make or provide
at competitive pricing. Buyers make their
decision based on their own criteria. The
custom, exchange takes place in a neutral
venue, where both parties do business with
mutual benefits and comprehensive support.
Buyers save time and search costs with
instant access to pricing and availability
information. Sellers gain access to greater
opportunities and save sales and marketing
dollars.
European chemical trade group Cefic predicts
that chemicals production in the region will
decline by 1.3 percent in 2009. That
reduction follows a 0.6 percent decrease in
2008. Polymers output will fall the most in
Europe in 2009 (2.3 percent), while
petrochemicals production will decline by
1.5 percent, specialty chemicals by 1.2
percent, and inorganics by 0.8 percent.
Along with reduction in operating rates and
closure of older plants, European chemical
manufacturers have said they will also be
cutting their workforce numbers.
To stimulate exports, the Chinese government
has raised export tax rebates on 3,770 items
effective December 1, 2008. Many of the
items are produced by labor-intensive
industries. Certain types of steel, chemical
products and grains will have tariffs
completely eliminated. The tariff on
fertilizers will be reduced. This
announcement follows previous export tax
rebate increases in 2008, which took place
in July and November.
Demand from small and medium sized
businesses (SMEs) in China has dropped
sharply during 2008, leading many chemical
manufacturers to reduce operating rates. As
many as 67,000 SMEs have closed their doors,
according to the National Development and
Reform Commission. The toy, textile and many
other sectors have been hurt by slowing
demand from the U.S. and other western
nations and the inability to access credit.
Some plants, particularly plastics
producers, have cut rates to as low as 50
percent.
With the democrats taking over Washington
DC, changes are anticipated in the FDA. The
agency has faced many problems with food and
drug products, from the withdrawal of Vioxx
and tainted heparin to recalls of spinach
and other foods during the last eight years.
A strong leader must be appointed that will
enable the FDA to reestablish credibility
with consumers and industry. Andrew
Eschenbach, the current administrator, is
expected to leave once the new president
takes office. Janet Woodcock, who presently
serves as the head of the agency's drug
division, has the support of the pharma
industry. Those backed by consumer advocacy
groups include cardiologist Steven Nissen
and Baltimore City's health commissioner,
Joshua Sharfstein. 
The FDA opened its first overseas office in
Beijing, China in mid-November. The agency
plans to open two others in the country - in
Shanghai and Guangzhou - and will initially
employ eight Americans plus other Chinese
workers. The offices will also relay on
third-party certifiers, who will work under
supervision of the American inspectors.
The Indian government will restart seven
different naphtha and fuel oil-based
fertilizer plants that were mothballed in
2002. The cost and timeframe were not
disclosed. The decision is the result of a
deal worked out with different parties in
the government. The plants are owned by
Hindustan Fertilizers Corp and The
Fertilizer Corp of India.
The environment committee in the European
Parliament voted to severely restrict the
use of many common pesticides. The proposals
would ban any substances suspected of being
endocrine disrupters or having been
identified as harmful to bees. These
proposals are very different from the ones
agreed to earlier by farm ministers and the
European Commission. As a result, further
debates are expected within EU member
states. The European Parliament could vote
as soon as January 2009. Many fear that if
the proposals pass as written, that up to 85
percent of products could be withdrawn from
the market, seriously impacting the ability
of farmers to raise food crops and maintain
the food supply.
