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christa.jpg (5628 bytes) Chemical Industry News Editor Christa Semko
Every two weeks, Christa will bring you the latest chemical industry news from the U.S. and India.  If you have a press release that you'd like to share with us, please mail it to us through our online contact form here.

Dateline: May 16, 2006

Technically Speaking

North America


BASF acquired Johnson Polymer for $470 million.  Johnson Polymer produces and supplies water-based resins and raw materials for the production of coatings in the automotive, wood, packaging and printing industries.  Johnson Polymer has 430 employees and operates to production sites in the U.S. and one in the Netherlands, as well as technical centers and offices in Asia Pacific.  Its operations will be integrated into BASF’s performance chemicals division, which produces and markets specialty chemicals worldwide.  The transaction is expected to close by the end of June.

Facility fire

A fire knocked out Huntsman’s light olefins unit (LOU) in Port Arthur, Texas.  The facility made up 30% of the company’s global ethylene capacity and is expected to be down for several months.  The LOU has a production capacity of 1.4 billion pounds/year of ethylene.  The unit also has capacity of 800 million pounds of propylene, 308,000 tons of cyclohexane and 209,000 tons of benzene.  The fire began in the propylene refrigeration unit, but all present at the facility were safely evacuated.  

Plant closures

Mosaic will close its South Pierce and Green Bay phosphate fertilizer production plants and its Fort Green phosphate mine in Central Florida by June 1.  The closures will allow Mosaic to maximize production at more efficient phosphate operations in Florida and Louisiana.  About 700 people will lose their jobs.  The closures will result in lower raw material and operating costs, reduced capital expenditures and improved cash flow beginning in fiscal 2007.

Plant idled

Nova Chemicals will idle its Bayport, Texas styrene monomer plant due to the ethylene force majeure declared by Huntsman and limited ethylene availability on the U.S. Gulf Coast.  Customer demands for both styrene monomer and styrenic polymers will be met through Nova’s Sarnia, Ontario, Canada styrene production unit and other supply arrangements.


Sealant that eliminates “shiners”

GE Sealants & Adhesives (GESA) has introduced GE Infinity, a paintable acrylic sealant that eliminates “shiners” (changes in the sheen of paint when it is applied over caulk or sealant).  GE Infinity is a uniquely formulated acrylic urethane elastomeric sealant that provides superior adhesion, elasticity, long-lasting durability and no dirt pick-up or yellowing.  It enables consumers and contractors to deliver a seamless look when painting. 

Production expansion

BOC will expand production capacity in Wisconsin by building a new air separation unit to strengthen service to Midwestern customers.  The plant will produce more than 700 tons/day of liquid oxygen and nitrogen.  The gases will be trucked to hospitals, food processors, metals and chemicals manufacturers in Wisconsin, Illinois and Iowa.  Construction should begin shortly, with production starting at the end of 2007.

Ethane-based cracker and derivates project

Westlake Chemical Corporation and The Government of the Republic of Trinidad and Tobago have entered into a Memorandum of Understanding (MOU) for Westlake to develop an ethane-based ethylene, polyethylene and other derivatives project there.  The project evaluation will be in conjunction with The National Gas Company of Trinidad and Tobago, Ltd. (NGC) and the National Energy Corporation of Trinidad and Tobago, Ltd. (NEC).  Trinidad and Tobago has expressed an interest in becoming a minority equity partner in the project.  The project would use 37,500 barrels/day of ethane to produce 570,000 tons/year of ethylene, which would in turn be used to produce polyethylene and other derivates.  Costs are estimated at $1.5 billion, with construction starting in late 2007 and operations beginning in late 2010.

Turning point

The House of Representatives has taken a major step toward restoring the supply of natural gas at reasonable prices.  The step may mean survival for the domestic commodity chemicals industry.  The House Appropriations Committee voted to end the 25-year Congressional ban on drilling for natural gas in federally owned outer continental shelf regions.  The offshore regions extend for 200 miles off U.S. coasts and have estimated reserves of 420 trillion cubic feet of natural gas, enough to meet U.S. gas requirements for 18 years.

50/50 chance

The American Chemistry Council sees a 50/50 chance that Congress will authorize natural gas drilling in a small portion of the outer continental shelf this year to bring relief to high U.S. gas prices.  There is momentum building in Congress to expand access to some of the vast offshore gas reserves, mainly a region off the Florida and Louisiana coasts known as Lease Area 181.

New rail depot

Western International Gas Cylinders has opened a rail depot site in Sealy, Texas.  The location, within 20 miles of Western’s Bellville plant, will be served by both Burlington Northern-Santa Fe and Union Pacific railroads.  The site includes a 9,600 sq. ft. unloading building, a 100-foot rail-truck combination scale, and more than 10,000 feet of track.  Western Sealy transfers 120 tons of calcium carbide/hour.  Propylene, MAPD, propane, other fuel gases and overseas cylinders can also be received.


Exclusive distributor

Sun Chemical Performance Pigments has appointed ChemCentral as its exclusive distributor for cosmetic pigments and preparations in the U.S. and for all specialties in Canada.  ChemCentral will distribute Performance’s complete line of specialty pigments and preparations, including organics, inorganics and pearls, through its existing sales force.


Acquisition and revamp

Coromandel Fertilizers will spend close to Rs. 30 crores for debt financing and revamping the manufacturing unit of Ficom Organics, which it is acquiring.  Ficom is one of the world’s three manufacturers of malathion technicals, an agrochemical.


Joint venture

United Nanotechnologies Pvt. Ltd. has formed a 50/50 joint venture with NEI Corporation of the U.S.  The joint venture, United Nanotech Products Ltd., will manufacture nanotechnology-based lithium-ion battery electrode materials for markets in Asia and Southeast Asia.  At an investment of Rs. 8 crore, the initial capacity will be 90 tons/year of lithium-ion battery electrode materials.  In the next four to five years, the capacity would be ramped up to 280 tons/year.  As personal electronic devices get more compact and perform more functions, the batteries that power them must get smaller and lighter, store more energy and retain energy capacity after more recharges – this is growing market potential that the joint venture hopes to capitalize on.

Factory plans

U.S.-based Nukote Coating Systems International is examining options to set up a factory in India, with plans to commence production in 12 – 15 months.  The coatings facility would serve the market in India as well as other countries in the region.  Nukote is an advanced concept in industrial coatings that can be used in a wide range of industries.  Unlike solvent-based paints, it is a molecular plastic, an advanced progressive polymer coating that sets at a high temperature.


Indian Petrochemicals Corporation Ltd. (IPCS) will merge six polyester manufacturing companies with itself, resulting in forward integration of the Vadodara-based company in the petrochemicals chain.  The merger includes Apollo Fibres Ltd. (AFL), Central India Polyester Ltd. (CIPL), India Polyfibres Ltd. (IPL), Orissa Polyfibres Ltd. (OPL), Recron Synthetics Ltd. (RSL) and Silvassa Industries Pvt. Ltd. (SIPL) with ICPL.


Effluent plant work

Travancore Titanium Products Ltd. (TTP) is set to expedite the setting up of an effluent plant as directed by the Supreme Court Monitoring Wastes.  TTP is a leading manufacturer of anatase grade titanium dioxide.

Technically Speaking

What is a good way to evaluate the difference between using a lined piping system or using an injected corrosion inhibitor?

This is a relatively common decision that has to be made in the chemical processing industry.  Procuring lined piping will obviously have a much higher initial installed cost than using a bare steel system.  However, if the bare steel system will require continuous injection of a corrosion inhibitor, you have classic life cycle cost estimate that needs to be done.

Let's assume that the installed cost of each system is:

Lined piping system = $ 1,200,000
Bare steel piping system = $ 500,000 (including inhibitor pump)

Now, you'd need to calculate the cost of running an inhibitor pump continuously (electric), maintenance/replacement of the pump over the system lifetime, and finally the cost of the inhibitor chemicals.

Let's suppose that the expected lifetime of both systems is 15 years.

The inhibitor pump maintenance and operating cost is $ 2,000 per year and the pump will have to be replaced four times over the life of the system.  The estimated cost of the replacements is ,000.  The inhibitor chemicals cost ,000 per year.

Experience within your company shows that a lined piping system does well for the first five years, then begins to require maintenance which totals an average of ,000 per year.

Here is what the lifecycle cost of each system would look like (not taking into account the time value of money):

Lifecycle cost of lined system = $ 1,280,000

Lifecycle cost of the bare steel system = $   915,000

So, from this quick analysis, the bare steel system looks like it may still be a good choice.  Of course, the most difficult variable to predict in such an analysis is the lifetime of each system.  If the lined system were to last 4-5 years longer than the bare steel system, it may indeed make a better choice.

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