ExxonMobil Corporation andSymyxTechnologies, Inc. form an alliance on High Throughput Experimentation – Symyx Stock (SMMX) jumps +15%

ExxonMobil Corporation and Symyx Technologies, Inc have formed a technology alliance focused on high throughput experimentation (HTE).

The companies will work together over a five-year period to develop the system for chemicals, lubricants and fuels products and processes. The tools and techniques developed as part of this alliance will enable ExxonMobil to generate new products and accelerate the commercialization of new technologies, broadening its intellectual property portfolio.

The research program initially focused on implementing HTE methods that will accelerate and enhance ExxonMobil’s strong corecompetency in catalyst research and development. The program will establish high throughput research laboratories throughout ExxonMobil using Symyx Discovery Tools, and widely deploy Symyx’s Renaissance® informatics software, including dedicated training for ExxonMobil researchers.

ExxonMobil’s chemical business has had ongoing collaborations with Symyx. Two years ago, ExxonMobil acquired tools for polymerization catalyst discovery from Symyx and, for the last year, the two companies have had a collaborative agreement covering several applications in olefins technology and associated tool development.

Symyx will benefit having revenue for five-years from ExxonMobil for alliance activities. In addition, Symyx will receive royalties from the commercialization of materials, processes and products based on discoveries made in the fields of agreement. The broad scope of this alliance will enable Symyx to strengthen its technology base in chemicals and expand high throughput technology into lubricants and refining.

Symyx Technologies (Symbol: SMMX) increased by +15%.

Comments: Symyx technologies took the concept of experimental design used to evaluate and survey optimum operating parameters in thepreliminary research evaluation to the next level.

Given a chance, typical experimental chemists and engineers would like to conduct thousands of experiments to evaluate the impact of variables like temperature, pressure, flow rate etc., on conversion/yield. Since the domain is so broad, and costs/experiment are high, researchers in the past had to resort to experimental design methodologies like Box &Hill techniques to reduce the number of experiments and rely on the statistical trend data.

Symyx has simplified the process by allowing a large number of experiments to be conducted simultaneously by automating the sample collection and analysis of experimental results. This has increased the speed with which screening experiments can be conducted.

It is a valuable tool for catalysis research in screening various catalysts at the same reaction parameters or exploring a given catalyst’s performance over a broad range of conditions. Symyx’s technology has been useful in polyolefin catalyst development in the last decade. Many of the newer catalyst developments in polyolefins used the methodology successfully.

ExxonMobil is now expanding the technique to other areas of research including chemicals, lubricants and fuels products and processes.

Dr. Peter Cohen, the president of Symyx has presented several papers on the High Throughput Technologies in the past FlexPO conferences.

ExxonMobil reports a very successful Second Quarter

ExxonMobil Corp. the world’s largest publicly traded oil company announced that its second-quarter profit surged 58 percent due to higher oil and gas prices, improved refining and marketing results.ExxonMobil also reported the highest earnings on chemicals operations in five years.

ExxonMobil exploration and production earnings rose 27 percent to $2.84 billion. Oil and gas output slipped 0.1 percent to 4.02 million barrels per day, as increases from new projects were offset by natural field declines and outages. Refining and marketing profit doubled to $1.15 billion on wider margins and higher sales.

ExxonMobil’s chemical division’s earnings increased 63 percent to $439 million, the highest level since 1998, driven by lower costs, higher sales and the weak U.S. dollar. One of the Wall Street analysts, Warburg declared “ExxonMobil executives are a bit embarrassed about their current cash position ..,”

Comments: It is a welcome news in the current economic situation. The greatest strength of ExxobMobil is in vertical integration in operations and a conservative, efficient, and a systematic approach to business.

This is yet another proof of the strength of vertical integration efficiency. – Go South instead of East/West for success!

Nova Chemicals continues to lose money in Olefins/Polyolefins and Styrenics for the 9th quarter in a row-2003 second quarter results continue the trend !

NOVA Chemicals’ loss to common shareholders before unusual items was $42 million ($0.42 per share ) for the 2003 second quarter. This represents the 9th straight quarterly loss for the olefins/polyolefins and styrenics groups.

Nova attributes the losses to North American market conditions of – reduced demand, limited price increases and higher feed stocks.

The olefins/polyolefins business reported a net loss of $5 million in the second quarter, compared to fist quarter net income of $4 million. Polyethylene price increases were more than offset by higher feedstock costs. Both Ethylene and Polyethylene sales volumes declined slightly from the first quarter.

Comments: Mr. Jeff Lipton, Nova Chemicals’president and CEO attributed the losses to declined demand, global industrial production, customer inventories, limited price increases and higher feedstock costs – a combination representing the continued losses for the last 9 quarters!

The major impacting factor is still – feedstock position!

Eastman and Jupp Associates announce licensing program for high pressure polyethylene technology

Eastman Chemical Company, through its Voridian Division, has signed an agreement with Jupp Associates Limited, Yarm, England, to sublicense Voridian developed process and mechanical know-how to operators of high-pressure polyethylene autoclave reactors.

Initial licensing packages include stirring and reactor bearing improvements that solve two major issues with autoclave reactors: lower zone temperature stability and reactor stirrer bearing life. According to Eastman, other know-how packages will be developed on a later date depending on the market need. These will include mechanical and process technology pertinent to both old-style and modern high-pressure autoclave plants.

Comments: The developments cover the operating improvements for the autoclave reactors. Eastman’s strategy for the most part has been to license the incremental developments in the technology developed via internal innovation – similar to the ENERGX technology.

DSM to shut down Addis, LA plant next year – Impacts on Baton Rouge area!

DSM Elastomers will shut down the Addis, LA plant next year, eliminating about 180 plant jobs and demolish the outdated plant facilities.The decision does not affect DSM copolymer’s separate plant in Baton Rouge.

The parent company, DSM (Dutch State Mines) in Netherlands, following Shell’s example, made a decision several years ago to withdraw from the petrochemical derivatives business.

DSM Elastomers was a JV of Nova operations and Polysar operations. The plants are being shut down because of the relative cost positions. Most of the career executives in the rubber industry have already switched their positions from DSM in the past two-three years.

This is, yet another impact on the greater Baton Rouge area – long time home for the polyolefins and elastomers industry.

Comments: The city of greater Baton Rouge feels the brunt of the situation in addition to several other developments.

The greater Baton Rouge area including Plaquemine, Addis and other suburbs, played a major role in the polyolefins and elastomers businesses in addition to several petroleum related operations. Exxon laying off 77 jobs– trim 200 jobs. Chemical industry in this area so far laidoff 400 jobs this year. The total employment this year is 8,400 compared to 10,600 two years ago.

Toyota Motor to construct a pilot plant for producing bio-plastics

Tokyo based Toyota Motor Corporation is set to construct a pilot plant for producing polylactic acid (PLA) based bio-plastics made from renewable resources like sugarcane. The plant capacity would be 1,000 tons/year of bio-plastics. Toyota is evaluating feasibility of reaching cost and quality targets during mass production. Toyota plans to carry out the entire process, from fermenting and purifying lactic acid to polymerizing PLA. The plant scheduled to be completed in August 2004.

Comments: PLA based polymer developed originally by Cargill under a joint development program with Dow Chemical Company are the first commercial bio-plastics. Toyota’s process is based on sugarcane as the major raw material in place of Corn.

Kraton Polymers completes expansion at Berre, France

Houston based Kraton Polymers culminated expansion at Berre, France adding about 5 million pounds of capacity. The company plans for another expansion to be completed by mid 2004 at Belpre, Ohio. At the inception of its production in late 2002, the application of Kraton A product line was focused in compounding. The different advantages of Kraton A include: (1) better flow, (2) improved low-shear processing, (3) improved adhesion, (4) enhanced mold definition, and others. These materials are typically used to modify other materials.

Kraton also reorganized its compounds and polymer modification unit to create a compounds and personal hygiene unit and a packaging and polymer modification unit. The compounds and personal hygiene unit will work on automotives, consumer goods, medical markets and elastomeric films. Food containers and packaging films would be the areas activity for the packaging and polymer modification unit. One third of Kraton’s sales are generated from these units, while the rest are from asphalt modifiers and roofing materials.

With 700 MM lbs of capacity at plants worldwide, the company posted sales of $650 million in 2002. Their pretax profit is reported to be $120 million. Ripplewood Holdings LLC, which bought the company for $520 million, now looks to sell it for $840 million.

Comments: SB copolymers are the differentiated commodities and have excellent growth potential due to their unique characteristics. The recent multiclient study completed by Chemical Market Resources, Inc. covers the Global developments in SB copolymer industry.

Ripplewood Partners exploring the opportunities for the sale of Kraton Polymers

New York based Ripplewood Holdings LLC are exploring the opportunities for the sale of global Kraton operations.

The news was made public by the New York based financial news website. Ripplewood confirmed that they are exploring the idea of the sale of Kraton Polymers and have appointed Morgan Stanley as the authorized banker.

Ripplewood confirms most of the other information related to sales, EBDIT, potential suitors is fraught with errors.

Comments: Ripplewood Holdings LLC acquired the Kraton business from Shell Chemical Company in 2001, upon Shell’s decision to withdraw from the downstream product lines.

FlexPO2001 presented an analysis of the Krtaon business under the title “Kraton – Shell’s Crown Jewels for Sale”. We also discussed the issues related to its attractiveness to the individual organizations versus a holding company.

Kraton Polymers to present at the Global SB copolymer session at FlexPO 2003 – Sept 17-19th, 2003

Kraton Polymers organization will be presenting a paper in the FlexPO 2003 conference Sept 17-19, 2003 in Houston.

The session will focus on Global developments in SB copolymers. Chemical Market Resources, will present a Global assessment of the SB copolymer business trends and opportunities. The other presenters include: (1) Kurraray, (2) Dynasol and (3) Asahi. Most of the major Global SB copolymer producers and end users plan to attend the session.

Comments: Chemical Market Resources staff have tracked the SB copolymer industry since 1985 when Fina acquired Phillip’s Solprene business. We have tracked the major developments in technology, end uses and players in detail since that time. CMR Inc. published a detailed analysis of Global SB copolymers and potential polyolefin suitors (APP/APAO and metallocenes).

The significant issues including: (1) hydrogenation technology, (2) role of Shell Chemical Company –Kraton, (3) the newer players Enichem, Dexco, Kurrary, Asahi into North American markets have been analyzed in detail.

Huntsman to leave American Chemistry Council

Huntsman is planning to leave American Chemistry Council (ACC) at the end of this year.

Inability to merge with the American Plastics Council (APC) and ineffectiveness in thrusting a political agenda to address soaring natural gas prices, paved the way to the resignation of Huntsman Corp. from ACC.

The decision implies withdrawal of the company from APC as well. Reasons behind the move as quoted by Huntsman include failure of ACC to oppose attempts to ban gasoline additive MTBE, insufficient returns on their investments and the inability to materialize the savings from the merger with APC. Also, the diversity in their membership hinders quick responses. Thetrade association made no cuts in their NorthAmerican workforce, despite the rough economic phase.

According to Peter Huntsman, the company will remain an active ACC member through the end of the year, and it is open to reconsider its decision to leave if changes are made.

Comments: APC/SPI/SPE issue and the ACC issues could have been resolved more amicably when the times were good. These are hard economic times for the industry and the organizations have not really demonstrated the unity of purpose and/or clear and persistent benefits to their members.

Their problems, spillover from the past APC/SPE issues are more related to turf controls and programs andare common among most volunteer organizations. These problems are especially devastating during the tough economic times. These complicated issues compromise the overall mission of the organization and justifiably make organizations take a serious look at their participation.

Samsung General and Atofina formmarketing and sales JV in south Korea

Samsung General Chemicals Co. and Atofina, the chemical branch of the French Group TotalFinaElf, have formed a 50-50 joint venture, called Samsung-Atofina.

For Samsung the joint venture will secure its market leading position through economies of scale in production and sales as well as optimize its business portfolio through the integration of technical expertise and advanced technologies.

Atofina will gain a major manufacturing base in Asia and reinforce its marketing position in a rapidly growing market in partnership with a leading regional player.

The combined production capacities of Samsung and Atofina are 3.65 million tons ofethylene, 4.57 million tons of polyolefins and 1.95 million tons of styrene monomer.

LG Chemical completes PVC expansion of 100,000 MT/year at its joint venture company Tianjin LG Dagu Chemicals in China

LG Chemical based in South Korea has expanded its PVC capacity at Tianjin, China by 100,000 MT/year, bringing the total PVC capacity of its joint venture, Tianjin LG Dagu Chemical, to 340,000 MT/year. The plant was built with an initial capacity of 100,000 MT/year, and has undergone three expansions since.

LG Chemical’s future plans include raising its annual PVC capacity in China to 1.1 million metric tons per year in China.

PolyOne to eliminate jobs & idle capacities

PolyOne Corp is closing its color concentrates plant in Fort Worth, Texas, idling two engineered materials compounding lines in Macedonia, Ohio; and reducing shifts at its seven PVC compounding plants. This would eliminate a total of 105 jobs, 32 in Fort Worth, 19 in Macedonia and 54 due to PVC cutback.Polyone considers the cuts a consequence of the first half losses totaling to $26 million.

Comments: Typical compounding operation consists of :(1) machinery, (2) labor and (3) proprietary knowledge. Most U.S compounders had the advantage in machinery and proprietaryknowledge for a long time.

With the recent developments in developing countries – like China, India etc., the U.S compounders are being challenged in the areas of machinery costs and the proprietary knowledge – in addition to already low labor costs. These cumulative advantages are offering the end users in packaging, automotiveapplications to rely on developing countries.

On the other hand, most of the North American compounders are using only the low labor costs overseas as the logic for their complaints and losing the effectiveness.

This is and will be an on-going issue for the future.

Aker Kvaerner awardedprojectsfrom Q-Chem (joint venture between Chevron Phillips & Qatar Petroleum)& Kraton

Aker Kvaerner based in Houston has been awarded an $11-million contract by Chevron Phillips Chemicals to carry out the front-end engineering design study for previously announced polyethylene (PE) and alpha olefins plants at Mesaieed, Qatar. The project is for Q-Chem, a 51-49 joint venture between Qatar Petroleum and Chevron.

The plant will have a capacity of 350,000 MT/year of high-density PE and 350,000 MT/year of alpha-olefins. The plant is expected to be completed by 2007.

Kvaerner has also been awarded detailed engineering contract by Kraton Polymers to double capacity of one of its Kraton G hydrogenated styrenic block copolymers units at Belpre, OH, to 100,000 MT/year by mid 2004.

Texas Petrochemical files for bankruptcy

Texas Petrochemical has filed for Chapter 11 bankruptcy protection with the U.S. Bankruptcy Court in the Southern District of Texas, citing deep losses as a result of declining methyl tert-butyl ether (MTBE) demand and rising energy costs. The move followed TPC’s announcement that it missed bond interest payments due July 1.

TPC has started to phase out production of MTBE, and will concentrate on its butadiene, butene, isobutylene, and gasoline alkylate businesses. TPC has capacity for 25,000 barrels/day of MTBE, but utilizes only 35%-40% of capacity.

Comments: This is the first causality of the on again – off again popularity of MTBE as a gasoline additive and Clean Air Act expectations.

Teknor Apex concludes expansion of Asian operations & launches new grades of PVC and TPE

Pawtucket, RI based Teknor Apex is nearing the completion of expansion of its Asian operations, while simultaneously launching new grades of PVC and TPE compounds. A 100,000 square-foot manufacturing facility and office complex for Singapore Polymer, Teknor’s first acquisition outside North America, is being completed in Asia. A new 100,000 square-foot PVC compounding plant was completed at the same site in mid 2002. The company is the largest non-integrated PVC compounder in the United States.

Thermoplastic elastomers, black and white masterbatches and engineering resins will be produced at the expanded site. The new grades introduced include super soft, low-hardness Uniprene® thermoplastic vulcanizates and plasticizer free Freeflex® PVC compounds. While the former are targeted to be used in soft grips and gaskets, the latter aim at hoses,tubes, tank and pond liners. With PVCs, Teknor is trying to create new applications and in case of TPEs, the effort is towards extending the product portfolio with a more cosmetic appeal.

Teknor finds most of its growth rate outside the US where the demand has changed leading to changes in their products and markets. The company seeks to provide its customers with similar consistency by configuring the lines in Singapore to be congruous with the ones in North America. The company posted sales of about $500 million with $300 million from the plastics division.

Comments: See Polyone comments

Russian firm Nizhnekamskneftekhim plans to build new polypropylene facility

Russian firm, Nizhnekamskneftekhim based in the constituent republic of Tatarstan plans to build new polypropylene production facilities worth $120 million.

The company said that it signed a memorandum of understanding with two Italian firms, Technimont and Basell, with respect to implementation of the project.

Technimont is expected to be the main provider of design services and equipment, while Basell will provide technology. The plant will have a total capacity of 120,000 MT/year of polypropylene, and is to be completed by the end of 2006 and break even after seven years of operation.

 

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