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Lyondell to sell Millennium TiO2 business to Saudi firm
April 2007
Additives for Polymers
high at 1.7 billion. In the Plastics segment, higher volumes and price increases led to a 9% improvement in sales to 12.8 billion and 18% rise in EBIT before special items to 1.2 billion. Hambrecht’s outlook for 2007 is positive, based on forecast global economic growth of 3.2% and a similar increase in global chemical production. Significantly higher full year sales are expected in 2007 compared with 2006.
company says that the expansion was needed to meet the growing demand of the tyre industry to produce more fuel-efficient, high-performance tyres.
Contact: BASF AG, Carl-Bosch-Straße 38, D67065 Ludwigshafen, Germany; tel: +49-621-600; fax: +49-621-60-42525; URL: www.basf.de
Lyondell to sell Millennium TiO2 business to Saudi firm
Degussa divests antioxidants business, completes US silica expansion Düsseldorf-based Degussa GmbH is selling its antioxidant activities to a subsidiary of the Starnberg holding company ARQUES Industries AG. The transaction includes the sale of the Spanish head office in Barcelona (Degussa Sant Celoni SA) and the antioxidants business of the British company Degussa Knottingley Ltd. Financial terms have not been disclosed. The sale is subject to the approval of the relevant authorities and cartel offices but Degussa and ARQUES expected the transaction to be finalized in the first quarter of 2007. Degussa’s antioxidants business comprises products for plastics, lubricants, foods and paints as well as beauty care and wellness. In fiscal 2005 it employed about 140 staff and generated sales of approximately 60 million. Dr Klaus Engel, chairman of Degussa’s management board, says that the transaction is part of the company’s “systematic portfolio optimization”, divesting an activity that is not part of its core business. “We will continue to focus on highly profitable speciality chemicals,” he adds. In other company news, Degussa’s Advanced Fillers & Pigments (AF&P) business unit has recently completed what it describes as a “major expansion” at its precipitated silica plant in Chester, PA, USA. Through debottlenecking and yield improvement of existing equipment, several million pounds of capacity have been added, raising the facility’s annual capacity to around 85 million lbs (39 000 tonnes). The
Contact: Degussa AG, Karl-Arnold-Platz 1a, D-40474 Düsseldorf, Germany; tel: +49-21165041-0; fax: +49-211-65041-555; URL: www. degussa.de
Lyondell Chemical Co has agreed to sell its Millennium Inorganic Chemicals subsidiary to Saudi Arabian company National Titanium Dioxide Company Ltd, also known as Cristal. Millennium Inorganic is the world’s secondlargest producer of widely used white pigment titanium dioxide (TiO2), with an annual capacity of 670 000 tonnes, around 2900 associated employees and facilities in North and South America, Europe and Australia. The transaction is valued at approximately US$1.2 billion, and will include a cash payment of $1.05 billion plus the assumption of certain liabilities directly related to the business. Lyondell estimates its after-tax proceeds at $975 million. Closure of the deal is subject to the usual regulatory and other conditions and is expected to occur in the first half of 2007. Privately held Cristal, which is 66% owned by Saudi group Tasnee, is currently the world’s ninth largest producer of TiO2 and the only producer in the Middle East and North Africa. It has production capacity of 100 000 tonnes/year and exports to more than 70 countries. Cristal intends to continue operating the assets it will acquire from Lyondell. “The acquisition of Millennium Inorganic Chemicals is an exciting component of our continued growth story,” says Cristal chairman and CEO Dr Talal Al-Shair. Lyondell acquired the inorganic chemicals business in its 2004 purchase of Millennium Chemicals Inc [ADPO, May 2004]. The agreed sale will not impact other Millennium subsidiaries. “This transaction would allow us to accelerate our debt repayment and focus our resources on capturing the synergies between our refinery and our chemicals business to achieve the great-
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Additives for Polymers
est value for our shareholders,” says Dan F. Smith, Lyondell president/CEO. In conjunction with this transaction, Lyondell has determined that the carrying value of goodwill associated with the inorganic chemicals business segment is impaired as of 31 December 2006. Accordingly, the company’s net income of $228 million for 4Q 2006 will be reduced by $549 million to be a loss of $321 million. After this reduction, Lyondell’s net income for the full year 2006 is $186 million. Sales for the fourth quarter and the full year were $6.245 billion and $22.228 billion, respectively, of which the inorganic chemicals business contributed $312 million and $1354 million. Titanium dioxide sales volumes declined by 24 000 tonnes in 2006 compared to the previous year due largely to operating issues at two facilities in the fourth quarter and lower US demand. Contact: Cristal, PO Box 13586, Jeddah 21414, Kingdom of Saudi Arabia; tel: +966-2-6519883; fax: +966-2-651-8757; URL: www.cristalarabia.com Lyondell Chemical Co, PO Box 3646, Houston, TX 77252-3646, USA; tel: +1-713-652-7200; URL: www.lyondell.com
Tronox formulates global TiO2 production strategy Tronox Inc has announced plans to optimize its global titanium dioxide (TiO2) assets by focusing on capturing opportunities presented by the company’s chloride technology expertise, strong customer base and the rapid growth of the AsiaPacific market. Tronox is the world’s third-largest producer and marketer of TiO2 pigment, with an annual production capacity of 624 000 tonnes. Consistent with this strategy, Tronox is to increase annual capacity at its Tiwest TiO2 pigment plant in Kwinana, Western Australia by 40 000 to 50 000 tonnes from its current capacity of 110 000 tonnes/year. The company estimates the total expansion cost will be in the range of US$35 million to $45 million. Engineering studies have commenced at the site, and the regulatory approval process is under way. The new capacity is expected to come on line in 2009 and will provide the opportunity for increased sales into the Asia-Pacific region where demand grew 6
April 2007
approximately 11–13% in 2006. By 2010, the Asia-Pacific is projected to be the world’s largest pigment consuming region driven primarily by the growth of the Chinese market. Tiwest is a 50/50 joint venture between Tronox Western Australia Pty Ltd and Yalgoo Minerals Pty Ltd, a subsidiary of South African-based Exxaro Resources. Established in 1988, the jv is the world’s largest integrated titanium minerals production and manufacturing company, operating six sites in Western Australia. Also in line with Tronox’s strategic objectives, the chloride process TiO2 plant at Botlek in the Netherlands has demonstrated its ability to consistently run at higher rates of up to 90 000 tonnes/year. This increase above the previous stated 72 000-tonne capacity was achieved over several years through low-cost process improvements, improved uptime and debottlenecking, and was timed to meet the growing European market demands for high-quality chloride process pigment, the company says. The Botlek plant’s organic growth contributed to the company’s 1.6% production volume increase in 2006 to 598 200 tonnes. In addition to meeting the growing chloride demands of the AsiaPacific and European regions, an integral part of Tronox’s global strategy will be a continued focus of resources, competencies and efforts dedicated to the Americas. Furthermore, Tronox is exploring the options for the 107 000-tonnes/year facility in Uerdingen, Germany, its only remaining sulphate process TiO2 plant following the closure of the Savannah, GA facility [ADPO, November 2004]. Though describing the Uerdingen plant as “world class” and “a valuable asset”, Tronox chairman/CEO Tom Adams says it does not fit the company’s present strategy. It has therefore hired investment banker Robert W. Baird & Co to explore strategic options to “optimize its value to Tronox”. In its latest financial results, Tronox reported net sales of $1.411 billion in 2006, up 3.5% compared to $1.364 billion in 2005, due primarily to increased sales volumes. Income from continuing operations for 2006 was $25.0 million compared with $46.4 million in 2005, while a net income of $18.8 million in 2005 was converted to a net loss of $0.2 million in
Additives for Polymers
high at 1.7 billion. In the Plastics segment, higher volumes and price increases led to a 9% improvement in sales to 12.8 billion and 18% rise in EBIT before special items to 1.2 billion. Hambrecht’s outlook for 2007 is positive, based on forecast global economic growth of 3.2% and a similar increase in global chemical production. Significantly higher full year sales are expected in 2007 compared with 2006.
company says that the expansion was needed to meet the growing demand of the tyre industry to produce more fuel-efficient, high-performance tyres.
Contact: BASF AG, Carl-Bosch-Straße 38, D67065 Ludwigshafen, Germany; tel: +49-621-600; fax: +49-621-60-42525; URL: www.basf.de
Lyondell to sell Millennium TiO2 business to Saudi firm
Degussa divests antioxidants business, completes US silica expansion Düsseldorf-based Degussa GmbH is selling its antioxidant activities to a subsidiary of the Starnberg holding company ARQUES Industries AG. The transaction includes the sale of the Spanish head office in Barcelona (Degussa Sant Celoni SA) and the antioxidants business of the British company Degussa Knottingley Ltd. Financial terms have not been disclosed. The sale is subject to the approval of the relevant authorities and cartel offices but Degussa and ARQUES expected the transaction to be finalized in the first quarter of 2007. Degussa’s antioxidants business comprises products for plastics, lubricants, foods and paints as well as beauty care and wellness. In fiscal 2005 it employed about 140 staff and generated sales of approximately 60 million. Dr Klaus Engel, chairman of Degussa’s management board, says that the transaction is part of the company’s “systematic portfolio optimization”, divesting an activity that is not part of its core business. “We will continue to focus on highly profitable speciality chemicals,” he adds. In other company news, Degussa’s Advanced Fillers & Pigments (AF&P) business unit has recently completed what it describes as a “major expansion” at its precipitated silica plant in Chester, PA, USA. Through debottlenecking and yield improvement of existing equipment, several million pounds of capacity have been added, raising the facility’s annual capacity to around 85 million lbs (39 000 tonnes). The
Contact: Degussa AG, Karl-Arnold-Platz 1a, D-40474 Düsseldorf, Germany; tel: +49-21165041-0; fax: +49-211-65041-555; URL: www. degussa.de
Lyondell Chemical Co has agreed to sell its Millennium Inorganic Chemicals subsidiary to Saudi Arabian company National Titanium Dioxide Company Ltd, also known as Cristal. Millennium Inorganic is the world’s secondlargest producer of widely used white pigment titanium dioxide (TiO2), with an annual capacity of 670 000 tonnes, around 2900 associated employees and facilities in North and South America, Europe and Australia. The transaction is valued at approximately US$1.2 billion, and will include a cash payment of $1.05 billion plus the assumption of certain liabilities directly related to the business. Lyondell estimates its after-tax proceeds at $975 million. Closure of the deal is subject to the usual regulatory and other conditions and is expected to occur in the first half of 2007. Privately held Cristal, which is 66% owned by Saudi group Tasnee, is currently the world’s ninth largest producer of TiO2 and the only producer in the Middle East and North Africa. It has production capacity of 100 000 tonnes/year and exports to more than 70 countries. Cristal intends to continue operating the assets it will acquire from Lyondell. “The acquisition of Millennium Inorganic Chemicals is an exciting component of our continued growth story,” says Cristal chairman and CEO Dr Talal Al-Shair. Lyondell acquired the inorganic chemicals business in its 2004 purchase of Millennium Chemicals Inc [ADPO, May 2004]. The agreed sale will not impact other Millennium subsidiaries. “This transaction would allow us to accelerate our debt repayment and focus our resources on capturing the synergies between our refinery and our chemicals business to achieve the great-
5
Additives for Polymers
est value for our shareholders,” says Dan F. Smith, Lyondell president/CEO. In conjunction with this transaction, Lyondell has determined that the carrying value of goodwill associated with the inorganic chemicals business segment is impaired as of 31 December 2006. Accordingly, the company’s net income of $228 million for 4Q 2006 will be reduced by $549 million to be a loss of $321 million. After this reduction, Lyondell’s net income for the full year 2006 is $186 million. Sales for the fourth quarter and the full year were $6.245 billion and $22.228 billion, respectively, of which the inorganic chemicals business contributed $312 million and $1354 million. Titanium dioxide sales volumes declined by 24 000 tonnes in 2006 compared to the previous year due largely to operating issues at two facilities in the fourth quarter and lower US demand. Contact: Cristal, PO Box 13586, Jeddah 21414, Kingdom of Saudi Arabia; tel: +966-2-6519883; fax: +966-2-651-8757; URL: www.cristalarabia.com Lyondell Chemical Co, PO Box 3646, Houston, TX 77252-3646, USA; tel: +1-713-652-7200; URL: www.lyondell.com
Tronox formulates global TiO2 production strategy Tronox Inc has announced plans to optimize its global titanium dioxide (TiO2) assets by focusing on capturing opportunities presented by the company’s chloride technology expertise, strong customer base and the rapid growth of the AsiaPacific market. Tronox is the world’s third-largest producer and marketer of TiO2 pigment, with an annual production capacity of 624 000 tonnes. Consistent with this strategy, Tronox is to increase annual capacity at its Tiwest TiO2 pigment plant in Kwinana, Western Australia by 40 000 to 50 000 tonnes from its current capacity of 110 000 tonnes/year. The company estimates the total expansion cost will be in the range of US$35 million to $45 million. Engineering studies have commenced at the site, and the regulatory approval process is under way. The new capacity is expected to come on line in 2009 and will provide the opportunity for increased sales into the Asia-Pacific region where demand grew 6
April 2007
approximately 11–13% in 2006. By 2010, the Asia-Pacific is projected to be the world’s largest pigment consuming region driven primarily by the growth of the Chinese market. Tiwest is a 50/50 joint venture between Tronox Western Australia Pty Ltd and Yalgoo Minerals Pty Ltd, a subsidiary of South African-based Exxaro Resources. Established in 1988, the jv is the world’s largest integrated titanium minerals production and manufacturing company, operating six sites in Western Australia. Also in line with Tronox’s strategic objectives, the chloride process TiO2 plant at Botlek in the Netherlands has demonstrated its ability to consistently run at higher rates of up to 90 000 tonnes/year. This increase above the previous stated 72 000-tonne capacity was achieved over several years through low-cost process improvements, improved uptime and debottlenecking, and was timed to meet the growing European market demands for high-quality chloride process pigment, the company says. The Botlek plant’s organic growth contributed to the company’s 1.6% production volume increase in 2006 to 598 200 tonnes. In addition to meeting the growing chloride demands of the AsiaPacific and European regions, an integral part of Tronox’s global strategy will be a continued focus of resources, competencies and efforts dedicated to the Americas. Furthermore, Tronox is exploring the options for the 107 000-tonnes/year facility in Uerdingen, Germany, its only remaining sulphate process TiO2 plant following the closure of the Savannah, GA facility [ADPO, November 2004]. Though describing the Uerdingen plant as “world class” and “a valuable asset”, Tronox chairman/CEO Tom Adams says it does not fit the company’s present strategy. It has therefore hired investment banker Robert W. Baird & Co to explore strategic options to “optimize its value to Tronox”. In its latest financial results, Tronox reported net sales of $1.411 billion in 2006, up 3.5% compared to $1.364 billion in 2005, due primarily to increased sales volumes. Income from continuing operations for 2006 was $25.0 million compared with $46.4 million in 2005, while a net income of $18.8 million in 2005 was converted to a net loss of $0.2 million in