My Turn – Comments on Global Polyolefins & Elastomers – Dr. Balaji B. Singh
Welcome to 2006 – May the New Year bring peace and prosperity – traditionally associated with a peak year. The argument from most of the pundits is not whether this is a peak year for petrochemicals, but how long it will last. Similar to the economic recovery we had the past few years without any improvement in the job situation, this current peak may go down in history as a peak without any demonstrable prosperity.
2006 will be a more accelerated version of 2005 – more U.S. shutdowns, and more movement to China, the Middle East, and Asia. The minimum, the petrochemicals industry should/can do is appeal to the U.S Government to ease up on travel/employment restrictions on Chinese in the U.S. Every other American wants to visit China – all the while, we severely restrict Chinese travel in the U.S.???
Qatar Petrochemical and Total plan petrochemicals complex
Qatar Petrochemical Company announced the signing of a contract with Total to build a petrochemical plant at a cost of $1.2 billion to produce polyethylene in the state.
Qatar Petrochemical Company Limited will own 63 per cent of the project while Total would own 36 per cent and Qatar Petroleum one percent.
The plant, which will be built in the industrial city of Mesaieed, is expected to produce nearly 1.3 million metric tons of polyethylene each year when it is completed at the end of 2008. Qatar, the site of the world’s third largest gas field, has launched a major industrialization drive to become the world’s top exporter of liquefied natural gas (LNG).
Comments: Qatofin was formed as a joint venture of ATOFINA (which melded into TOTAL) to produce ethylene crackers and derivatives on a world-class basis from Qatar’s abundant natural gas. The major partner in the venture is Qatar Petrochemical Company (Qapco) with partners ATOFINA/TOTAL and QP setting up the petrochemical entity Qatofin. Ethylene for the Qatofin project is supplied by the adjacent ethane cracker owned and operated by Qapco and its partners. The new $1.2B Qatofin project will include an ethane cracker in the Ras Laffan Industrial City and an additional 450,000 tpy of LLDPE along with the ethane feedstock nearby.
The total project costs including expenditures under the engineering and construction contracts, as well as owner and financing costs, are estimated to be in the range of $1.2B. In the 4th quarter of 2005, Qatofin obtained commitments from 24 lead institutions to raise $760mm under an international loan facility for the financing of the project. Additional funding is provided by the partners. With the expanded ethylene capacity to 1.3 mm metric tons capacity, the ethane cracker complex owned by Ras Laffan Olefins Company (a JV between Qatofin and Q-Chem II) will be one of the world’s largest complexes. Technip France was awarded the Olefins construction contract. All associated plants (Q-Chem II, Qatofin, Ras Laffan Olefins Company, and derivatives) are scheduled to go on stream simultaneously at the end of 2008.
PMD selects Hostalen & Lupotech G processes for new plants in Saudi Arabia
Project Management and Development Company Ltd. (PMD) selected Basell technologies for two new polyethylene plants it intends to build in Saudi Arabia.
Hostalen technology will be used in a high-density PE plant with an annual capacity of 400 KT and LupotechG technology will be used in a medium-density/high-density PE plant with an annual capacity of 300 KT.
Earlier this year, PMD selected Basell’s Spheripol process for two new PP plants with a total annual capacity of 640 KT and Basell’s Lupotech T technology for a new LDPE and EVA copolymer plant with an annual capacity of 270 KT.
All five plants will be part of a new petrochemical complex in the industrial city of Al Jubail, Saudi Arabia. The start-up is scheduled for 2009.
Comments: In 2005 several companies including: (1) Gharb Petrochemical (Iran), (2) Saudi Aramco & Sumitomo (Saudi Arabia), (3) Indian Oil (India), (4) Tasnee Petrochemical (Saudi Arabia), and (5) SABIC (Yanbu National Petrochemical and SABIC Europe), and others licensed Basell technology.
Hostalen is a dual reactor, low-pressure, slurry process for the production of HDPE. The two reactors can be operated in series or in parallel, to customize product properties. The main licensors of bimodal high-density polyethylene are Mitsui and Basell. Mitsui is more popular for pipe applications, especially in Asia.
Shell to sell 50% stake in Société du Craqueur de l’Aubette to Basell
Shell Chemicals companies and Basell signed an agreement for the sale of Shell PetrochimieMediterranee’s (SPM) 50% share in Société du Craqueur de l’Aubette (SCA) to Basell.
SCA owns the ethylene cracker at Berre in southern France and Basell currently holds 50% of the SCA shares. Once the transaction is completed, the cracker will be wholly owned by Basell. As part of the agreement, Basell will also acquire the butadiene business of Shell at Berre, including the butadiene assets, as well as logistic assets associated with the cracker operation in Aubette, Berre, and Fos.
SPM will continue to operate the cracker, logistic assets, and butadiene plant under the terms of the relevant operating agreements with Basell. The transaction is subject to approval by the relevant antitrust authorities and other customary closing conditions. Completion of the transaction is expected at the end of 2005.
Comments: Historically Basell has relied on its parent companies for feedstock/olefins. Royal Dutch/Shell has been the major provider of feedstock/olefins for Basell. However, after the divestiture, Basell would have had to rely on any long-term contracts (related to feedstock/olefins) that were made with its parent companies prior to its sale. In the absence of long-term contracts, Basell would have been forced to buy feedstock/olefins from the merchant markets. This deal will improve Basell’s raw material position and decrease the company’s reliance on the external supply of raw materials.
Basell has started to strengthen its feedstock position via equity stakes in the feedstock-advantaged Middle Eastern region. In March 2005 National Petrochemical Industrialization Company (also known as Tasnee Petrochemicals) and Basell signed an agreement with respect to building a new integrated polyethylene complex at Al-Jubail industrial city in Saudi Arabia. The agreement reflects Basell’s intention to take 25% of the equity share in the project. The current deal shows that Basell is continuing to adopt the strategy of strengthening its feedstock position.
Basell was a 50:50 joint venture between BASF and Royal Dutch/Shell. BASF and Royal Dutch/Shell announced in the second quarter of 2005 that they will sell Basell plastics for 4.4 billion euros ($5.7 billion) to the New-York based Access Industries. The sale forms a part of a divestment program at Shell that aims to raise $15 billion by 2008 to invest in oil and gas exploration and development. The BASF sold its stake as it wanted to focus on other plastics, such as styrenics and polyurethanes.
Access Industries, founded by company Chairman and President Len Blavatnik in 1986, is a privately held, industrial holding company with investments worldwide. Access has long-term strategic interests in the oil, aluminum, coal, and telecommunications sectors. Len Blavatnik is one of the partners in BP’s Russian TKN-BP venture. He is co-owner of Russia’s second-largest aluminum firm, SUAL.
Titan acquires Indonesia’s largest polyolefin producer – PT Peni
Titan Chemicals Corp Bhd, an integrated producer, and Malaysia’s largest olefins and polyolefins manufacturer, announced its plans to acquire Indonesia’s largest polyethylene producer PT Peni.
Currently, Titan which is the second-largest polyolefins producer in Southeast Asia, is expected to become the largest in Southeast Asia. Titan which runs a massive RM6 billion petrochemical complex located in Pasir Gudang and Tanjung Langsat, houses eight integrated process facilities manufacturing polyolefins.
Titan would be acquiring a 100 percent stake in the Indonesian company and is expected to pay out US$23 million for the purchase.
Titan, a joint venture between PNB Equity Resource Corp. and Taiwan’s Chao Group International, is Malaysia’s largest maker of olefins and polyolefins — materials used to produce plastics and fibers used in mobile phones and car dashboards.
Comments: Titan Chemicals Corporation is Malaysia’s first and largest integrated producer of olefins and polyolefins, and the second-largest polyolefins producer in South-East Asia. Titan Chemicals commenced construction of its first facility in Malaysia, an RM300 million PP plant, in 1989. Today Titan has a total of eight integrated process facilities in Pasir Gudang and Tanjung Langsat in the southern state of Johor, Malaysia with a nameplate capacity of over 2,000 KT per year of olefins, polyolefins, and other associated products.
Titan currently has 649 KT of ethylene, 345 KT of propylene, 200 KT of benzene/toluene, 205 KT of LLDPE/HDPE, 220 KT of LDPE, 105 KT HDPE, and 370 KT PP capacity. Titan is to acquire 100% of the equity of Chemical Brothers Limited, 100% equity owner of PT PENI. PT PENI is the largest producer of polyethylene in Indonesia and operates a petrochemical complex in Cilegon, Banten Province. The petrochemical complex has three LLDPE/HDPE lines with a nameplate capacity of 450 KT. The complex was built by BP and the plant utilizes Innovene technology. This acquisition will increase the polyolefin capacity of Titan Chemicals by close to 50% and make it the largest polyolefin producer in South East Asia.
After the acquisition, Titan Chemicals will be able to offer integrated solutions to a non-integrated producer. Besides being able to supply ethylene to PT PENI from its Pasir Gudang facility, Titan Chemicals will also be able to supply feedstock chemicals and catalysts to PT PENI via its procurement network.
Japan Polypropylene to build a plant at Kashima
Japan Polypropylene (Tokyo), a 65-35 joint venture between Mitsubishi Chemical and Chisso announced its plans to build a 300,000 MT/year polypropylene (PP) plant at Kashima, Japan.
The plant will produce high-impact copolymer PP mainly for the automotive industry from early 2008. The company will invest ¥15 billion ($125 million) to build the plant. Japan Polypropylene has five PP production units in Japan with a combined capacity of 1.08 million MT/year.
Comments: Japan Polychem Corporation (JPC), the holding company for Japan Polyethylene Corporation and Japan Polypropylene Corporation, has had a complex ancestry involving several joint ventures with several companies including Tonen, Japan Polyolefins Corporation, Chisso, and others. Japan Polychem Corporation, a 65:35 joint venture between Mitsubishi Chemical Corporation and Tonen Chemical Corporation, began its operation in September 1996, as a marketing entity, and added a manufacturing arm in 1998. Japan Polyolefins Corporation (JPO), a 65:35 joint venture company between Showa Denko K.K. and Nippon Petrochemicals Co., Ltd., was formed in 1995 to integrate the polyolefins business of the two companies.
In 2001, JPC and JPO agreed to merge their polyethylene businesses. During the same time, JPC and Chisso agreed to merge their polypropylene businesses. The resulting entities were Japan Polyethylene Corporation and Japan Polypropylene Corporation. In 2003, Mitsubishi Chemical Corporation purchased Tonen’s share of JPC, making it a 100% owned subsidiary of Mitsubishi Chemical.
After the integration, the new structure is complicated and includes:
– Mitsubishi Chemical owns 100% of Japan Polychem – Japan Polychem owns 50% of Japan Polyethylene and 65% of Japan Polypropylene
– The remaining 50% of Japan Polyethylene is owned by Japan Polyolefins (42%) and Mitsubishi & Shoji Plastics (8%).
– The remaining 35% of Japan Polypropylene is owned by Chisso.
The total polypropylene capacity for JPC is 685 KT and Chisso has 380 KT of polypropylene capacity. JPC currently has a 335 KT polypropylene capacity in Kashima and with the addition of this new plant, the company will double its capacity in Kashima. The new plant will increase the total polypropylene capacity in Japan by 10% and increase JPC’s capacity by almost 30%. Polypropylene produced from the new facility will be mainly used in the automotive markets.
DSM to increase Dyneema® fiber capacity
DSM, the largest manufacturer of high-performance polyethylene (HPPE) fiber in the world, announces its decision to make another investment in a new production line for Dyneema® fiber in Greenville, North Carolina (USA). It is the third announcement in 2005 of new Dyneema® fiber production lines at DSM’s Greenville site, following earlier decisions to build two additional fiber lines and one Dyneema® UD (UniDirectional bullet resistant sheet) line.
The investment will be in the range of several tens of millions of US dollars and will bring the total number of fiber lines for the company to nine, with four production lines being located at the Greenville facility. The expansion of Dyneema® fiber capacity follows the continued strong demand in all application areas, such as heavy marine mooring ropes, sports applications, and cut-resistant garments. Due to the continuing strong demand for personal security and protection against terrorism, production in Greenville until today has had a strong focus on supplying the US Army and law enforcement agencies. By adding extra multi-functional capacity to its highly integrated Greenville site, DSM remains capable of meeting the growing demand from all segments in which the company is active. The new line is expected to come on stream in mid-2007. Construction is planned to start in January 2006.
The markets for Dyneema® continue to show growing demand. BP Shipping, for example – a long-time satisfied user of mooring ropes with Dyneema® – has been using Dyneema® based ropes on a North Sea shuttle tanker since 1997. In these most extreme conditions, the ropes have shown minimal loss of strength. BP Shipping therefore recently also selected Dyneema® based mooring ropes on their newly built LNG carriers.
Comments: Dyneema® fiber also sold under the trade name Spectra® (Honeywell trade name) fiber is a fiber made of ultrahigh molecular weight polyethylene (UHMWPE). The typical MW of commercial UHMWPE is 3-6 million g/mole. The ultrahigh molecular weight coupled with high crystallinity imparts UHMWPE fiber with exceptional strength. At present, body and vehicle armor is the largest and fastest-growing application of Dyneema fiber. At the same time, Dyneema ropes and cables are gaining more and more acceptance, and the demand is expanding very rapidly. Medical applications represent the newest development of Dyneema fiber.
There are three major manufacturers of UHMWPE fibers worldwide, and they all originated from DSM’s technology. Honeywell has licensed from DSM to make Spectra fiber in Richmond, Virginia. Toyobo has a joint venture with DSM to manufacture Dyneema fiber in Japan.
Initially, DSM mainly focused on the European market. Due to the growing demand in the US, Dyneema started manufacturing in Greenville, North Carolina in 2001. Since then, particularly after 9/11, most of the new expansions of DSM are made in the US. This is the third announcement of new expansions just in 2005. At the same time, Honeywell is also expanding their Spectra fiber capacities. For more information, please refer to a recent article in our Next Generation Polyolefins (volume 10, issue 3, 2005) or contact CMR staff.
DuPont Performance Elastomers reaffirms its decision to close the Neoprene® plant in Louisville, KY
DuPont Performance Elastomers, a wholly-owned subsidiary of DuPont recently reaffirmed its plans to close its Louisville, Kentucky neoprene manufacturing plant in December 2006. DPE is the result of a dissolved joint venture between DuPont and Dow known as DuPont Dow Elastomers (DDE).
The severe shortage of neoprene has caused representatives of New England’s rubber manufacturers to lament that plants throughout that region may be forced to close with the resulting loss of thousands of jobs. The current shortage grew worse by Italy’s Polimeri Europa’s decision to close its plant in Champagnier, France effective September 30th. In addition, the International Trade Commission’s 2006 decision to reaffirm a 55% tariff on Japanese manufacturers who ship neoprene to the U.S. further suppresses the amount of product available to rubber manufacturers and mixers.
DPE has acknowledged that demand for neoprene is high globally and that the lingering effects of Hurricanes Rita and Katrina have affected plans to expand production in its Pontchartrain, Louisiana plant that was purportedly designed to offset the closure of the efficient and viable Louisville, Kentucky facility. With construction outfits throughout the South understandably occupied with rebuilding homes, schools, and churches on the Gulf Coast, further delays in expanding production facilities in DPE’s Pontchartrain site appear inevitable.
Comments: DuPont invented neoprene in 1930 went it was originally known as Duprene. The company is the only manufacturer of Neoprene in North America, and like other rubbers in recent months has seen a shortage of supply due to the effects of the hurricane and higher demand in other regions of the world. The most common markets for Neoprene include (1) automotive parts, (2) adhesives, (3) mechanical rubber goods, (4) construction, and others. The typical applications for neoprene include tires, fan belts, hoses, seals and gaskets for vehicles, and gear of many types. Other areas of use include wet suits and soft coatings on exercise weights. The North American demand for Neoprene was 155 million pounds out of which the largest and fastest growing application is in automotive, accounting for 32% of the demand.
Neoprene has excellent properties including (1) degradation resistance from sun, ozone, and weather, (2) good performance in contact with oils and many chemicals, (3) high-temperature resistance, (4) good physical toughness, (5) excellent resistance to damage caused by flexing and twisting, and others. There has been an overcapacity of Neoprene in North America and in the last few years, Neoprene has seen little growth due to inter-material competition for other synthetic rubbers such as EPDM.
The closing down of the older plant at Louisville which started production in 1941 will lower the overall production capacity giving a better supply/demand scenario and in addition lower the emission for environmental reasons which was also a contributing factor to their decision.
BASF makes an offer to acquire Engelhard
BASF Aktiengesellschaft, the world’s leading chemical company, has made an all-cash proposal to acquire all outstanding shares of common stock of Engelhard Corporation, Iselin, New Jersey, a Fortune 500 company and a leading supplier of goods for catalysis and surface finishing, for US$37.00 per share or an aggregate of US$4.9 billion. This price represents a 23% premium above the December 20, 2005 closing price of Engelhard’s stock of US$30.05.
By acquiring Engelhard, BASF would become a leading provider worldwide in the dynamically growing catalyst market. The proposal reflects what BASF believes is an opportunity for significant value for Engelhard’s stockholders: a robust premium over Engelhard’s current stock price; and a fully financed, all-cash transaction, with no significant regulatory hurdles anticipated based on present knowledge.
BASF has made efforts to negotiate a friendly transaction with Engelhard’s Board of Directors and management. BASF has said that its team is prepared to meet with the Engelhard team to see whether Engelhard can demonstrate value in addition to that discernible from the publicly available information that might enable BASF to increase the price that it proposes to pay for Engelhard by US$1.00 per share.
Comments: Engelhard is one of the leading players in the $10+ billion global catalyst market which serves the refining, petrochemical, environmental, and polymers industries
The company posted net sales and earnings of $4,166 million and $235 million, respectively, in 2004. Engelhard participates in various catalysts markets including (1) Environmental Catalysts – emission control catalysts, (2) Petrochemical & Refinery Catalysts – cracking catalysts, mineral adsorbents, and polymer catalysts. Engelhard plays an important role in the polyolefins industry, serving as a toll producer as well as a third-party supplier of proprietary Ziegler-Natta catalysts for polyethylene and polypropylene. Polyolefins catalyst offerings include but are not limited to, (1) Lynx series for PP, (2) Lynx series for PE, (3) CD series for Innovene’s PP process, and (3) PTK series for Novolen PP technology. They have also worked with Borealis to scale up its BC-1 catalyst for the Borstar process.
Although the polyolefins segment accounts for a smaller percentage compared to its traditional catalyst markets, Engelhard has made significant strides in this market segment by offering catalysts with higher activity and tailored performance attributes.
ExxonMobil considers second naphtha cracker in Singapore
ExxonMobil Chemical awarded a key contract to help study building a second naphtha steam cracker in Singapore.
ExxonMobil awarded the contract to Foster Wheeler and WorleyParsons, who will provide project coordination and services for a new cracker that would be located at and integrated with ExxonMobil’s existing refinery and chemical plant — ExxonMobil Chemical’s biggest investment in the world — on Jurong Island.
The project includes a world-scale steam cracker and associated derivatives units, including new world-scale polyethylene, polypropylene, and specialty elastomers plants, an aromatics extraction unit, and oxo-alcohol expansion.
This expansion would put ExxonMobil near the top in terms of capacity at an independent unit in the region, alongside planned facilities in China and Taiwan, which will each have at least one million tpy in capacity.
Comments: A second ethylene cracker for ExxonMobil in Singapore has been more than a distant plan for some time. We have reported in past issues that Singapore and this new capacity are at the epicenter of the double-digit growth Asia ethylene market. Now that a project coordination and services contract has been placed, the probability of this new unit only increases. Together with the more than 900,000 tpy of existing capacity of ethylene and associated products, a new naphtha cracker integrated with the ExxonMobil Singapore refinery could bring their capacity to almost 2,000,000 tpy when and if they build world scale which will probably be the case. Although ExxonMobil did not comment on the capital involved for only the cracker project, a similar project is under study for Singapore by Shell Chemical with a reported capital cost to exceed $1B excluding derivative units which are a must.
ExxonMobil has a great deal of existing infrastructure in Singapore which reduces the cost of a project like this according to analysts. In contrast to the Singapore projects’ order of magnitude price tags, Shell and CNOOC are starting up an 800,000 tpy cracker in southern Guangdong province which is projected to cost around $4B due to a lack of infrastructure. Regionally, it, therefore, appears that Singapore is the place to go on a cost-efficient building spree in ethylene and other base chemicals.
Apollo Management to buy Tyco plastics unit
Private equity firm Apollo Management announced its plans to buy the plastics and adhesives unit of Tyco International Ltd. for $975 million in cash.
The deal is expected to close in the first quarter of 2006. The sale includes Tyco’s plastics, adhesives, and Ludlow coated products businesses, but excludes the company’s garment hangers unit, which is to be sold separately. The businesses being sold posted net revenue of $1.7 billion in 2005, compared with Tyco’s total revenue of about $40 billion.
The Plastics, Adhesives, and Ludlow Coated Products businesses that are included in this transaction encompass approximately 7,100 employees at 43 manufacturing sites in five countries – primarily across North America, as well as at locations in Belgium, Korea, and India. The business is one of the top U.S. producers of trash bags, stretch film, and plastic sheeting, as well as a leading global producer of duct tape. Major markets served include the retail, industrial, automotive, agricultural, home construction, and food packaging sectors. Key brands include Ruffies® and Rhino-X® trash bags; Film-Gard® plastic sheeting; Nashua® tapes; Polyken® pipeline coatings; Scrollware® plastic dinnerware; Thermo-Ply®and Energy-Brace® wall sheathing; as well as R-Wrap® and Barricade® house wraps.
Comments: Tyco was trying to sell its plastics business for a long time now. The company sold off non-strategic businesses hoping to increase shareholder value by shedding non-core assets.
Tyco Plastics & Adhesives, a division of Tyco International has been in financial trouble since 2002. The company tried to sell its unit in 2002 expecting to raise about $3-4 billion from the sale but was unable to do so. The company had planned to split itself into four separate publicly traded companies: security and electronics; healthcare; fire protection and flow control; and financial services. Earlier in 2005, the company sold its UK plastics division to a private equity firm.
William Stavropoulos to retire as chairman of Dow and Andrew Liveris elected chairman effective April 1, 2006
The Dow Chemical Company announced that William S. Stavropoulos will retire as chairman of the board, effective April 1, 2006. Dow’s Board of Directors has elected Andrew N. Liveris, president, and chief executive officer (CEO), to succeed Stavropoulos as chairman upon his retirement. Liveris will retain his role as president and CEO.
Stavropoulos, 66, is retiring after 39 years of service at Dow. He was elected to Dow’s Board in 1990 and has served as chairman since 2000. Liveris, 51, was elected president and chief executive officer by Dow’s Board of Directors in 2004. He had served as president and chief operating officer since 2003.
Stavropoulos joined Dow in 1967 and held a variety of research and business positions before becoming president of Dow Latin America in 1984. In 1990, he was named president of Dow U.S.A. and was elected vice president of Dow. Stavropoulos was elected to Dow’s Board of Directors in 1990 and became chief operating officer in 1993. He served as chief executive officer during 1995-2000 and 2002-2004.
Liveris was elected to Dow’s Board of Directors in 2004. His 29-year Dow career has spanned manufacturing, sales, marketing, new business development, and management. He has spent the bulk of his career in Asia, where he was general manager for the company’s operations in Thailand, and later head of all Asia-Pacific operations. He began his Dow career in 1976 in Australia.
Liveris was born in Darwin, Australia and later lived in Brisbane, where he attended the University of Queensland, graduating with a bachelor’s degree (first-class honors) in Chemical Engineering. He is a Chartered Engineer and a Fellow of The Institute of Chemical Engineers.
DuPont to pay $16.5 million in EPA settlement
DuPont Co. announced that it would pay $16.5 million in fines and other charges in a settlement with the U.S. Environmental Protection Agency over the use of a chemical compound used in nonstick cookware.
The agreement, subject to final approval by the EPA Environmental Appeals Board, would resolve four counts of reporting violations filed in 2004 under the Toxic Substances Control Act and the Resource Conservation and Recovery Act, the Wilmington, Delaware-based chemical company said.
Four additional counts, raised by the agency in 2005, also were resolved. The settlement closes the matter involving perfluorooctanoic acid, or PFOA, for DuPont, without any admission of liability, the company said. It will pay $10.25 million in fines and an additional $6.25 million for two supplemental environmental projects to be undertaken in connection with the settlement.
The supplemental environmental projects include funding for a research program to evaluate the potential for fluorotelomer biodegradation as well as funding for microchemistry and green chemistry programs in certain West Virginia schools.
DuPont and the EPA confirmed in April they had an agreement in principle, subject to certain conditions, to resolve the complaint. At that time, the company established a reserve of $15 million, pending final resolution of the matter.
DuPont said its studies and those from independent researchers confirm that cookware and other consumer products made with or using DuPont materials are safe for consumer use. In addition, it said, PFOA to date has had no known health effects on humans.
Rohm & Haas to restructure its businesses in Europe
Rohm and Haas Company announced restructuring initiatives to further improve the efficiency of its manufacturing network in Europe across several chemical businesses. In addition, the Electronic Materials business also announced a restructuring of its manufacturing, research, and development, and sales and marketing organizations in Europe and North America, primarily associated with its Circuit Board Technologies business.
The combined restructuring initiatives involve the closing or partial shutdown of manufacturing facilities in the United Kingdom and Germany and include the elimination of approximately 400 positions from the company’s global workforce.
As a result of the restructurings, which will be completed within 12 to 18 months, the company expects total pre-tax charges for the fourth quarter of 2005 to be approximately $65 million, resulting in a fourth-quarter 2005 restructuring charge of approximately $0.20 per share. The cost-saving initiatives are expected to yield pre-tax savings of approximately $35 million annually. The restructuring charges include pre-tax asset impairment charges of approximately $35 million and cash charges related to termination benefits and other expenses of approximately $30 million. The initiatives are expected to generate future pre-tax cash charges of approximately $10 million to close the facilities.
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