Chexpress - October 1, 2014

North America

Unit Sale

Dow Chemical Co. has started the process of selling its epoxy and chlorine businesses. The company has hired Goldman Sachs Group Inc. and Barclays Plc to manage the process. Combined, the epoxy and chlorine businesses have annual earnings before interest, taxes, depreciation and amortization of close to $500 million.

Expansion

LyondellBasell is evaluating a further expansion project at its petrochemical plant in Channelview, Texas. The expansion would potentially add up to 550 million pounds/year of ethylene capacity. Preliminary engineering work is underway to assess expansion feasibility and if it proceeds, the project is expected to be completed in 2017. This expansion effort would be in addition to work already underway to install two large cracking furnaces at the site that are slated to increase production by 250 million pounds/year when construction is complete in early 2015.

Donation

General Electric Co. will give Penn State University up to $10 million to create a new center for natural gas industry research. The money will support research projects, equipment, and undergraduate, graduate, and postdoctoral fellowships at The Center for Collaborative Research on Intelligent Natural Gas Supply Systems. The new center will include faculty from the Smeal College of Business, Earth and Mineral Sciences, Engineering, and Information Sciences and Technology. The money will be donated over the next five years and earmarked for different uses. The company will also have engineers in residence to work with faculty and students.

World

Plastics Plant

Saudi International Petrochemical Co. (Sipchem) has started trial operations of a new plant in Riyadh, Saudi Arabia along with Hanwha Chemical. The plant has an annual production capacity of 1,000 tons of plastic moulds. The plant is estimated to have cost $29.3 million to build. Sipchem owns 75 percent of the joint venture – Saudi Specialty Products Co. – while Hanwha owns the remaining 25 percent.

Hydrocarbon Fluid Production

ExxonMobil Chemical is increasing production of its high performance hydrocarbon fluids by about 10 percent through expansion projects at its Singapore and Antwerp, Belgium facilities. The additional capacity will begin producing by mid-2015 and be complete in 2016. The expansion projects are in progress and build on other recently announced investment projects in the two facilities.
ExxonMobil to Boost Hydrocarbon Fluid Production at Antwerp, Singapore

Exit

Clorox is shutting down all operations in Venezuela, citing restrictions by the government, supply disruptions, and economic uncertainty as the reasons. Clorox said that for almost three years, its affiliate, Corporación Clorox de Venezuela S.A., had to sell more than two-thirds of its products at prices frozen by the Venezuelan government. During that same time span, there was a sharp rise in inflation that resulted in significantly higher costs for Clorox. After repeated meetings with government authorities, the company had expected significant price hikes would be allowed earlier this year. The price increases that were approved were nowhere near sufficient and Clorox said it would be forced to continue selling products at a loss. The company is now looking to sell its assets in Venezuela.

Acquisition

Siemens AG has reached a deal to acquire oilfield equipment maker Dresser-Rand for $7.6 billion. Dresser-Rand’s portfolio of compressors, steam, and gas turbines and engines complements Siemens’ existing offerings mainly in the global oil and gas and power generation businesses. Siemens will operate Dresser-Rand as its oil and gas business under the Dresser-Rand brand name and retain its executive team.