Temporary Plant Closure
Equistar Chemicals has temporarily shut down its plant in La Porte, Texas as a result of declining demand for products that use plastic. The olefin unit is expected to remain out of service until early 2009. The plant has a capacity to produce 1.7 billion pounds of ethylene and 700 million pounds of propylene a year. The plant’s 580 employees will continue to work during the temporary shutdown.
Buyout
Shareholders of Rohm & Haas Co. have approved a $15.3 billion buyout by Dow Chemical Co. Shareholders will get $78 in cash for each share they own. Including debt, Dow will invest approximately $18.8 billion in the buyout with it closing in early 2009 pending regulatory approval. Rohm & Haas will become a subsidiary of Dow.
Technology Center Closure
Chevron Phillips Chemical Co. plans to relocate services provided by the company’s Orange Technology Center in Houston, Texas to its Plastics Technology Center in Bartlesville, Oklahoma. This will enable the company to combine the team providing technical service for the film and coatings segment of the polyethylene market with the technical service molding and durables polyethylene team in Bartlesville. Chevron Phillips expects to relocate or redeploy the majority of the affected employees in the Orange Technology Center.
Sugar-Cane Firm Purchase
Monsanto plans to pay $290 million for Aly Participacoes, parent of the Brazilian sugar-cane-breeding and technology companies CanaVialis and Alellyx. Monsanto hopes to work with the acquired companies to increase sugar-cane yields while using fewer resources for cultivation. Longer term, the company hopes the purchase will supplement its ongoing commitment to corn as an ethanol feedstock, diversifying the company’s crop-technology portfolio.
Changes for Science Policy and the Chemical Sector
President-elect Barack Obama will bring changes for science and technology policy, as well as for regulation affecting the chemical sector. Although the president-elect’s choices for key federal posts, including his science advisor and heads of NIH, EPA and the Department of Energy have yet to be named, his positions on scientific issues during the campaign make it clear that the chemical sector can expect to see change, ranging from potentially more money for basic research to revisions of environmental regulations.
Banks Sued
Hexion Specialty Chemicals is suing the two banks contracted to finance its $10.6 billion acquisition of Huntsman Corp. Hexion is suing Credit Suisse and Deutsche Bank for breach of contract and is asking the court to force the banks to provide $15.35 billion in financing so it can complete the deal. Despite acknowledging their own earlier opposition to the merger, Hexion now cites the banks as the problem in completing the deal with Huntsman.
