Papertex Pigments and Dyes

Clariant raise prices of paper chemicals

noreply@blogger.com (Papertex) — Thu, 31 Mar 2011 08:48:00 +0000

In a press release, Clariant has announced it is to raise prices of its paper chemicals across its product portfolio. The statement goes on, "Price increases of 8% will affect all product groups and as contracts allow. Selected individual products will experience higher increases due to the severe impact of their particular raw material cost increase. "

This increase is expected to affect all Clariant's optical brighteners, colorants and chemicals sold to the paper industry globally.

Clariant to buy Sud-Chemie for €2 billion

noreply@blogger.com (Papertex) — Thu, 17 Feb 2011 16:13:00 +0000

On the same day that Clariant announced that it would not be paying a dividend to shareholders, it also announced that it was acquiring 95% of the shares of Sud-Chemie in deals worth €2 billion. Most of the Sud-Chemie shares will be exchanged for Clariant shares, although Clariant is still borrowing CHF900 million to finance the deal.

Clariant shares fell by over 13% on the news

Clariant announce 2010 results

noreply@blogger.com (Papertex) — Thu, 17 Feb 2011 16:05:00 +0000

Clariant has announced its results for 2010. In their press release, they state the following achievements:

Full-year sales up 13% in local currency and 8% in CHF

Operating income margin before exceptional items of 9.8% compared to 4.1% in 2009

Cash flow from operations of CHF 642 million after CHF 757 million in the previous year

Net debt reduced from CHF 545 million in 2009 to CHF 126 million

Net income amounted to CHF 191 million compared to a net loss of CHF 194 million in 2009

2011 Outlook: Clariant expects a stable business environment in 2011, with growth mainly coming from the emerging markets. Based on this scenario, Clariant forecasts local currency sales growth in the low single-digit range and an EBITDA margin before exceptional items above that of 2010.

In the same press release Clariant also announced that they would not be paying any dividends, grants or payouts to shareholders.

BASF to close Basazol production facility in Germany

noreply@blogger.com (Papertex) — Tue, 08 Feb 2011 16:15:00 +0000

BASF have announced that they are to restructure their global production operations for the manufacture of paper dyes. In a press release dated 7th February, they have announced that all future production will come from plants in India and Mexico.

The press release states:

As part of the strategic realignment of the Paper Chemicals division, BASF will be closing down its production facility for the manufacture of basazol dyes at the Ludwigshafen (Germany) site. In future, the demand for paper dyes in Europe will be served completely from the two global production sites in Ankleshwar (India) and Altamira (Mexico).

"With this decision, we are adjusting our production structures to the changing conditions on the worldwide market. Our global positioning strategy is aimed at restoring our paper chemicals business to international competitiveness," explains Dr. Fred Baumgartner, President Paper Chemicals division.

The planned restructuring will affect 42 full time jobs at the Ludwigshafen site. Employees will receive a new workplace at the site.

This change completes BASF's restructuring of its paper dye business at the global level.

Eka Chemicals to increase prices of paper chemicals

noreply@blogger.com (Papertex) — Tue, 01 Feb 2011 16:28:00 +0000

In a press release, Eka Chemicals announced that it will increase prices across its entire North American paper chemicals product range by up to 20% with immediate effect.

“During the second half of 2010 cost increases of basic materials have impacted Eka Chemicals’ cost structure.” says Greg Bengtson, Vice-President, Sales and Marketing, Eka Chemicals Inc. North America.

“Our on-going efforts to optimize operational costs have been outpaced by these increases. It is therefore necessary for prices to be increased in order to maintain a sustainable business.”

PIRA International sold by BASF to Smithers Group

noreply@blogger.com (Papertex) — Fri, 03 Dec 2010 14:16:00 +0000

The Smithers Group have announced the purchase of PIRA International from BASF. Although originally primarily a technical research organisation supporting the paper, packaging, printing and allied industries, PIRA has evolved into an organiser of conferences and supplier of market research reports for this market. They continue to provide technical consultancy, testing services and contribute to many multi-client research projects.

Using the IntertechPira brand, PIRA International employs 120 people across five sites in the UK and USA. Smithers bought UK-based Pira from BASF, which acquired Pira as part of its 2009 purchase of Ciba Specialty Chemicals.

The Smithers Group is headquartered in Akron, Ohio, and includes Smithers Viscient, Smithers Pharma Services, Smithers Rapra, Smithers Quality Assessments, iSmithers, and now Pira International and IntertechPira.

Eka announces Price Increases for Paper Chemicals

noreply@blogger.com (Papertex) — Mon, 15 Nov 2010 16:08:00 +0000

Eka chemicals has announced price increases for its bleaching and paper chemicals.

Eka has stated that it will increase prices across its entire European Paper and Bleaching Chemicals product range with immediate effect, or as contracts permit. Depending on the product type, increases will range from 5 % to 30 %, as raw material availability and costs dictate.

Jay Hunsberger, Eka's European Marketing Director, is quoted as saying “Dramatic increases during the past year in basic raw materials have impacted Eka Chemicals’ cost structure. The impact to margins over the past year leads Eka to have to take more than just raw material cost into future pricing considerations. It is no longer a matter of properly managing our supply chains; raw material cost increases in 2010 have often been faster and higher than the speed at which we can implement a strategy to minimize the impact to our finished goods cost”.

This is an issue right across the chemical industry, and corporate buyers in the paper industry have been particularly adept at playing one supplier off against another. The high degree of fragmentation among paper chemical suppliers is likely to maintain this situation in the future, so it remains to be seen how well Eka manages to achieve these price increases.

BASF RESTRUCTURES PAPER CHEMICALS BUSINESS

noreply@blogger.com (Papertex) — Thu, 11 Nov 2010 16:01:00 +0000

In a press release today, BASF have stated the following:

With a view to future growth markets for paper chemicals and dyestuffs in China, Indonesia and India, BASF's Paper Chemicals division will reorganize its global business structures. The business in optical brighteners for paper is to be exited in Europe, and it is planned to close the corresponding production operations at the site in Grenzach, Germany.

In addition, BASF intends to relocate paper dye production from Grenzach to Ankleshwar , India . In the course of the relocation, the paper dye product range is to be reduced. Dr. Fred Baumgartner, head of BASF's Paper Chemicals division, commented: "Currently, paper chemicals are a difficult business to be in. Paper manufacturing is increasingly concentrated in Asia’s emerging markets, which is where future growth in the paper industry will originate. Our measures are a further important step toward adjusting production structures to changing market conditions and thus toward ensuring the profitability of our paper chemicals business in the long term."

BASF plans to focus the Grenzach site squarely on the production of ingredients for the cosmetics and personal care industry in the future. Pigments for the electronics and coatings industries will continue to be produced in Grenzach as well. "We want to keep the production of UV filters and antiseptic products in Grenzach unchanged,” said Gabriel Tanbourgi, head of the Care Chemicals division. Alongside production activities, Grenzach is also the global development and technical services hub for these two Care Chemicals product groups.

The planned restructuring is expected to affect about 300 full-time jobs in Grenzach and would be implemented in the period from 2011 to 2013. About 180 jobs are to remain at the site in the future. “This will mean profound changes for many employees and for the site overall in the coming years,” said BASF’s, President Human Resources Hans-Carsten Hansen. “We are well aware of our special responsibility in this regard. We see good chances to offer alternative employment to many employees affected by the restructuring at other sites in the BASF Group, especially in Ludwigshafen, Kaisten, Schweizerhalle, Hüningen and other BASF Group companies.”

Kemira sells global FWA business

noreply@blogger.com (Papertex) — Wed, 23 Jun 2010 13:48:00 +0000

In a press release today, Kemira has announced that it is selling its global Fluorescent Whitening Agents (FWA) Business to German Catec GmbH financially supported by Fengler Beteiligungs GmbH for an undisclosed sum. In recent years, FWA's have struggled for profitability, so it is likely that the business did not make much, if any profit. In any event - Kemira has stated that the transaction will not have any significant impact on their financial figures.

The deal covers a production plant in Leverkusen, Germany, the global FWA sales network and the associated support functions. The FWA business and its staff of about 100 persons will be transferred to the new owner once the companies have closed the transaction in August 2010.

BASF reaches deal to acquire Cognis

noreply@blogger.com (Papertex) — Wed, 23 Jun 2010 13:45:00 +0000

The press reports are confusing - Reuters and AP say that BASF are to spend €700 million on Cognis, while other papers say the deal will cost 3.1 billion. We therefore went to the press release, which says the following.

BASF SE has reached an agreement with Cognis Holding Luxembourg S.à r.l. controlled by Permira Funds, GS Capital Partners and SV Life Sciences to acquire the specialty chemicals company Cognis for an equity purchase price of €700 million. Including net financial debt and pension obligations, the enterprise value of the transaction is €3.1 billion. The acquisition is subject toclearance by the competent merger control authorities. Closing of the transaction is expected for November 2010 at the latest.

AkzoNobel to divest National Starch business for $1.3bn

noreply@blogger.com (Papertex) — Mon, 21 Jun 2010 15:42:00 +0000

Akzo Nobel N.V. (AkzoNobel) today announced the sale of its National Starch business to Corn Products International. The company will receive $1.3bn in cash and the buyer will assume certain pension and employee benefit liabilities.

The transaction, which has been approved by the Boards of both AkzoNobel and Corn Products International, is expected to close at the end of the third quarter of 2010, subject to the appropriate regulatory approvals.

Corn Products International is a leading global provider of ingredient solutions for diversified industries based in Westchester, Illinois, in the US.

National Starch – a subsidiary of the former ICI – was taken over by AkzoNobel as part of its acquisition of ICI in January 2008. While it was regarded as an excellent business, the Board of AkzoNobel concluded that National Starch did not offer sufficient opportunity to create value within the company’s transformed coatings and specialty chemicals portfolio. In April 2010, it was announced that AkzoNobel had received renewed expressions of interest in National Starch, which had accordingly been reclassified as a discontinued operation.

Commenting on the divestment, CEO Hans Wijers said: “I am pleased that we have found a respected company to be the new home of National Starch, where it will once again be a core operation. This transaction today marks the strong focus on our core business and confirms AkzoNobel’s transformation into the world’s largest global coatings and specialty chemicals company. “We can look to the future with much confidence as we are well positioned to capture growth both organically and by selected acquisitions.”

“The acquisition of National Starch represents an exceptional opportunity for Corn Products International and a significant step forward toward achieving our strategic goals,” said Ilene Gordon, Chairman, President and Chief Executive Officer of Corn Products International. “The acquisition aligns with our strategic priorities to grow our ingredient portfolio, increase our presence in priority food processing segments, enter new markets, and develop innovative solutions that better serve our customers.”

Two thirds of the jobs to go at BASF's Paisley pigments plant

noreply@blogger.com (Papertex) — Tue, 13 Apr 2010 14:18:00 +0000

BASF has announced a major restructuring of its global pigments business.

The press release from BASF states:
After an in-depth analysis of the combined operations, the company will eliminate specific products and adapt production capacities to market developments. As a consequence, approximately 500 of the current 2,900 jobs in the global pigment production will be redundant. The measures, which mainly concern azo pigments and phthalocyanines, will begin this year and are expected to be completed by 2013.
BASF currently operates 22 production sites for pigments worldwide. “At six sites in North and South America as well as in Europe we will close individual production plants. At six other sites in Asia and Europe, we will expand existing capacities or make better use of them,” explained Dr. Markus Kramer, President of BASF’s Dispersions & Pigments division.
In Europe, about 320 positions will be cut by 2013. This will mainly affect the sites in Paisley, Great Britain, and in Grenzach, Germany. About 90 positions will be cut at the South American site in Guaratinguetá,Brazil. The redundancies at our North American sites in Louisville, Kentucky, and Elyria, Ohio, will total about 80 positions

An article in Scotland's Evening Times states that 232 jobs are to go in Paisley, leaving just 120 workers at the plant. This means that it is likely that only 90 positions will be lost in Grenzach, Germany.

Kemira Oyj and VTT to establish Centre of Water Efficiency

noreply@blogger.com (Papertex) — Tue, 09 Mar 2010 16:25:00 +0000

Kemira has announced that they and VTT are to establish a Centre of Water Efficiency Excellence in Finland. The total cost of the research, which will be performed at the center, is estimated at 120 M€, including external funding. The investments will be allocated into 4 years, resulting further investment activities in projects for piloting and proof on concept purposes. The center will employ 200 persons annually.

The press release states:

The goal is to develop unique water knowledge to Finland and to create new business opportunities for companies in the environmental technology sector. The research center supports Kemira’s strategic target to become a leading water chemistry company and to promote profitable growth by generating new business in the already strong field of water knowledge.

The main partners of the Center of Water Efficiency Excellence are Kemira and VTT. ”The aim is to develop new technology, which helps to enhance the water usage and recycling, and to create more sustainable and energy-efficient solutions for the water intensive industry. When choosing the research sectors, one of the main selection criteria has been the growth of the global markets. Some examples of the research sectors are the cost-efficient cultivation of sea water into drinkable water, the utilization of bio mass resulting from the waste water treatment in production processes of energy and bio energy, and the decomposition of products", says Kemira's EVP of R&D and Technology Johan Grön.

BASF 2009 results and predictions for 2010

noreply@blogger.com (Papertex) — Thu, 25 Feb 2010 17:09:00 +0000

BASF has released its results for 2009, showing a 19% fall in sales (€50.7 billion) and a 29% fall in EBIT at €4.9 billion. The fourth quarter results showed some positive movement, with an increase in sales and EBIT of 2.9% and 19% respectively compared to the third quarter of 2009. When these results are compared with the same period a year earlier (Q4 2008), the change was greater - with sales down 8% and EBIT up 181%. In these cases, these EBIT results are before special items.

Looking forward to 2010, BASF stated in their press release:

"In 2010, BASF expects global industrial production to grow by just under 5 percent, albeit from a very low level. “The slow recovery is continuing. The fourth quarter of 2009 was encouraging and gives us grounds for confidence. The worst is behind us, even though dark clouds remain. 2010 will be a transitional year with uneven development from region to region. Overall, there are no signs of a self-sustaining, long-term recovery,” said (BASF's Chairman Jurgen) Hambrecht.

Nevertheless, BASF is seeing growth in most of its customer industries, which are, however, emerging from a deep recession. Here, the automotive, IT and electronics industries are leading the way.

The company expects the following macroeconomic conditions in 2010:

-A moderate increase in global gross domestic product (+2.7 percent) and significant growth in global chemical production (excluding pharmaceuticals) (+5.3 percent)

-An average euro/dollar exchange rate of $1.40 per euro and

-An average oil price of $75 per barrel

In view of this economic situation, Hambrecht expects BASF’s sales to grow again in 2010 and that the company will outpace global chemical production. Because the economic situation remains fragile, BASF will continue to rigorously implement its efficiency and restructuring programs. The company will also continue to adjust its investment plans to the current market conditions.

“We expect a significant increase in EBIT, mainly due to a rise in volumes and cost synergies from the Ciba integration. Furthermore, costs related to the integration of Ciba will be considerably lower in 2010 than they were in 2009. Our goal is clear: In 2010, we expect to earn a premium on our cost of capital again,” said Hambrecht."

Clariant reports increased losses for 2009

noreply@blogger.com (Papertex) — Tue, 16 Feb 2010 16:26:00 +0000

In reporting their annual results for 2009 today, Clariant announced a 194 million Swiss Franc loss, compared with a loss of 37 million Swiss Francs in 2008. Sales dropped 18% (14% in local currency) to CHF 6.6 Billion.

Results in the 4th quarter of 2009 were slightly improved on 2008, with a CHF 67 million loss compared to a CHF 207 million loss the previous year.

Clariant continue to make moves to try and turn around the situation, with yet another announcement of restructuring and job losses (500 today). Most of these (400) are in Muttenz in Switzerland, as production of textile dyes and chemicals is moved to Asia. Paper Chemicals production is moved to Prat in Spain (how long ago was production moved from the UK to Switzerland?).

In Brasil, there will be a partial plant closure at Resende, as part of the restructuring of the textile chemicals business. The plant in Balkum, in Thane (Mumbai), India is also due to be closed.

Extracting some details from Clariant's press release, the paper, textile and leather chemicals business does not look as bad as other parts of the business:

"Chemicals Division rose 5% in local currencies and remained stable in Swiss francs. Sequentially, demand continued to stabilize at low levels, resulting in a flat sales development compared to the previous quarter. The seasonal pattern was similar to prior years, indicating that business conditions are slowly but steadily normalizing.

Double-digit percentage volume growth in the Textiles business resulted in a moderately higher sales figure year-on-year. Volume growth in the Paper business was similar to Textiles, but more than offset by a substantial pressure on sales prices. This effect was expected as the Paper business implemented massive price increases due to skyrocketing raw material costs during 2008. As a result, Paper posted a sales decline in local currencies compared to the previous year period.

The Leather business continued its upward trend in the fourth quarter, driven by a demand increase from the automotive industry. Year-on-year sales grew in the double-digit range in local currencies and in Swiss francs.

At the regional level, the division’s biggest market, Asia, stood out with strong local currency sales growth in all three business units. While sales in Europe and Latin America remained relatively stable in local currencies, demand in North America continued to weaken as expected.

The capacity utilization increased compared to previous quarters but was still below normal levels. Consequently, the unabsorbed costs due to underutilization of capacities were substantially lower compared to the previous year period. Therefore the gross margin improved substantially from the trough levels reached earlier in the year. The operating margin was weaker than in the third quarter but significantly improved on a year-on-year comparison. This came despite a write-down for slow-moving inventories.

Effective January 1, 2010, the division was split into the four stand-alone operating business units Leather Services, Textile Chemicals, Paper Specialties and Emulsions."

Looking forward to 2010, Clariant are not optimistic. While Asia (especially China) and South America are both expected to show some strong "impulses", this will not make up for the weak demand in Europe and North America. Growth is expected to be in the low single digit range in local currencies.

Kemira reports improved results for 2009

noreply@blogger.com (Papertex) — Tue, 09 Feb 2010 16:23:00 +0000

Kemira today reported improved results for 2009. Despite difficult trading conditions, their operating profit excluding non-recurring items rose from €132.6M to €175.0m. The improvement was even more marked when we look at the Profit before Tax, which rose from just €1.8m in 2008 to €102.9m.

This improvement in performance came from improved cashflow, increased prices and a focus on reducing costs. Revenue in the same period fell from €2,833m to €2,500m. Kemira has also been implementing its strategic plan to focus on the major water using industries.

Kemira's President and CEO Harri Kerminen stated: "Implementation of our strategy that focuses on water has progressed very well. The company that used to be rather fragmented is rapidly becoming a uniform Kemira that focuses on full utilization of our water expertise. Furthermore, we have improved operational efficiency. The cost cutting program for fixed costs which started in 2008 has proceeded faster than planned and it will be completed by the end of 2010, the balance sheet is stronger and Tikkurila will be separated. All of this creates a strong basis for the next phase which is profitable growth."

Kemira's business structure now comprises the following segments: Paper, Municipal & Industrial (previously "Water"), Oil & Mining, Tikkurila and Other. The Other segment consists of specialty chemicals such as organic salts and acids and the Group expenses not charged to the segments (some research and development costs and the costs of CEO Office).

Sales (and profits) in the paper segment moved from €1,003 (€41.5m) in 2008 to €906 (€44.9) and in Municipal & Industrial (water) from €584m (€25m) to €607m (€66m).

The Kemira Press Release contains the following comments regarding their paper chemicals business:

The Paper segment's revenue in 2009 declined by 10% to EUR 906.4 million (1,003.3) as demand in customer industries decreased markedly. The currency exchange effect had an approximately EUR 4 million negative impact on revenue. Reclassification of customer assignments between segments decreased revenue by about EUR 1 million in 2009.

The consumption of paper used in magazines and newspapers and the number of printed advertising material have fallen, particularly in the traditional markets in Europe and North America. Management estimated that demand has decreased by 10-25% depending on the paper grade. To adapt production to weaker demand, the Paper segment's customers in the paper industry have cut back and shut down capacity, and cleared stocks. The demand for packaging boards has also weakened, although Asia and Eastern Europe showed signs of recovery in demand in the second half of the year. The high utilization rate of pulp mills in the second half of the year was visible as a pick-up in pulp chemical demand.

Operating profit excluding non-recurring items was EUR 44.9 million (41.5). The operating profit margin rose to 5.0% from 4.1% a year earlier (excluding non-recurring items). Higher average prices and lower fixed and variable costs compensated for the decline in sales volumes. Variable costs decreased by about EUR 6 million compared to 2008.

At the beginning of the year, Kemira and the Chinese company Tiancheng Ltd. set up a joint venture, Kemira-Tiancheng Chemicals (Yanzhou) Co., Ltd., to produce AKD wax, and adhesives derived from its wax, for the paper and board industry. The company's operations have started as planned, and the company's home market in China shows healthy demand for the products.

Kemira has been taking measures for over a period of several years to adjust its paper and pulp chemicals business to the increasingly challenging market. In addition to temporary production shut-downs, AKD wax production in Vaasa, Finland was shut down in March 2009. Over the last few years, six North American production facilities have been closed.

The Municipal & Industrial (Water) section is also commented on as follows:

The Municipal & Industrial segment's revenue in 2009 was EUR 607.5 million (583.7). Reclassification of customer assignments between segments decreased revenue by about EUR 8 million in 2009. Comparable revenue increased by 5% from 2008. Acquisitions had an approximately EUR 22 million positive impact on revenue while divestments had an approximately EUR 3 million negative effect on revenue. The currency exchange effect decreased revenue by about EUR 7 million.

Overall steady demand continued in the municipal water treatment business despite a decrease in delivery volumes in certain market areas. In the industrial water treatment business, demand decreased in some customer industries due to lower capacity utilization rates, but in other industries, such as the food industry and power production, demand for water treatment chemicals was stable. Total delivery volumes were lower than in 2008, but prices were higher on average.

Operating profit excluding non-recurring items was EUR 66.4 million (25.0). The operating profit margin rose to 10.9% from 4.3% in 2008 (excluding non-recurring items). Operating profit was boosted by higher sales prices compared to 2008, particularly in the first half of the year, and by lower variable and fixed costs. Variable costs decreased by approximately EUR 26 million from 2008. There was a shortage of many recycled industrial raw materials during the first half of the year in particular, which increased variable and fixed costs as production had to use other raw materials. Acquisitions had an approximately EUR 5 million positive impact on operating profit.

In September, Kemira and Akzo Nobel agreed that Kemira will take over Akzo Nobel's water treatment iron coagulant business in Scandinavia (Sweden, Norway and Denmark). The business deal did not involve any transfer of personnel or production facilities.

Kemira has revised its strategy in Asia, especially in China, and divested its coagulation chemicals unit during the year. In September 2008, Kemira announced its intention to acquire a water chemical company operating in the Shandong province in China, but the deal fell through and will no longer be completed.

The segment was renamed Municipal & Industrial in September. The name replaced the previous name "Water". The new name describes the segment's customer base, which ranges from small municipalities to big cities and various industries.

Paper Chemicals Price Increases

noreply@blogger.com (Papertex) — Thu, 28 Jan 2010 10:35:00 +0000

January seems to be the time when chemical prices are raised, and this year is no different. Ashland Hercules have announced price increases of 5 - 15% for all their sizing and wet strength products globally. The press release states:

"Ashland Hercules Water Technologies ... will initiate price increases globally for all sizing agents (AKD, ASA and rosin-based), all wet strength resins and specialty resin additives as contract and indexed-based pricing allows. Price adjustments will range from 5 to15 percent and will be primarily based on regional raw material cost impact."

Meanwhile - although I could not find the original press release on the Kemira website, RISI has published two releases from Kemira. One states that "Kemira is announcing price increases on its paper chemical products. The increase will range from 8-14% for most products, but could be higher for products more acutely impacted by escalating cost drivers. The increase will be effective for all deliveries on or after February 1, 2010 or as specific contract terms allow." The other is from North America and uses almost exactly the same words.

The chemical companies blame short supply of raw materials resulting in increasing prices.

Metso and Kemira increase co-operation

noreply@blogger.com (Papertex) — Wed, 20 Jan 2010 16:51:00 +0000

Kemira has announced that they and Metso have made a three-year research and development partnershipagreement, by which Kemira will handle the chemical control of Metso's pilot paper machines. The aim is to combine Metso's leading competence in paper and board machine processes, automation and technology with Kemira's know-how in water and fibre chemistry to produce optimal overall solutions for pulp.

I found it interesting that this press release can be found on the Kemira website - but not (at present) on the Metso site.

BASF to increase paper chemicals prices by up to 20%

noreply@blogger.com (Papertex) — Mon, 21 Dec 2009 18:34:00 +0000

A press release from BASF today states that "effective January 1, 2010, or as contract terms allow, BASF will be increasing its sales prices for all Wet End Paper Chemicals up to 20% in Europe, the Middle East and Africa."

"As a leading supplier BASF develops, produces and markets chemicals for the paper industry for the manufacture of paper and board. Wet-End Chemicals comprise process chemicals to enhance paper machine efficiency, functional chemicals to improve paper properties, colorants and optical brighteners."

It will be interesting to see if these price increases actually reach 20%, and whether they will stick in the face of intense competition. BASF is the largest supplier of paper chemicals however, so where they lead, others may follow.

Pentagon Chemicals receives £2m investment from Maven

noreply@blogger.com (Papertex) — Sat, 19 Dec 2009 16:46:00 +0000

Pentagon Chemicals, a UK-based manufacturer of a range of chemicals, including ASA for paper sizing, has received a £2m investment from private equity firm Maven Capital Partners. Pentagon has been struggling in recent years, with its cashflow. This investment will undoubtedly put the company on a much firmer footing for the future.

The investment has been made through the government-backed Capital for Enterprise Fund, a £75m fund of funds, which offers equity or mezzanine financing in businesses which meet the European Union’s definition of a Small to Medium Sized Enterprise.

Pentagon Chemicals has sales of over £40m per annum and employs around 200 people at its sites in Halebank, near Liverpool, and Workington in Cumbria.

Could GE Betz be up for sale?

noreply@blogger.com (Papertex) — Wed, 25 Nov 2009 17:21:00 +0000

This is one of the questions raised in an article on the Forbes website - and to be published in their Dec 14th issue of the magazine.

The article suggests that GE are trying to reduce debt, and as a result are selling off some of their assets - with a possible air of desperation. Businesses that were aired as possible sale items include GE's appliance, lighting, industrial controls and water chemicals businesses. Anne Eisele, a GE spokeswoman, says the company "strongly disagrees with the premise" it is selling assets to raise cash. She also says the appliance business is off the market and she isn't aware of plans to sell the others.

If they do go out for bid, Nicholas Heymann, a longtime GE analyst now with Sterne, Agee & Leach, says they might fetch $13 billion to $15 billion. "These businesses have been, shall we say, rode hard," says Heymann. "They were run with a focus of minimizing invested capital and maximizing return on capital."

So who might be interested in GE Betz? Kemira are certainly starting to focus a lot more on water treatment chemicals according to their latest strategic presentations, so they may be interested. Ashland are still swallowing Hercules, but appear to be doing well according to their latest results. They are probably a remote possibility. If Nalco bid, there would be a lot of questions from the competition commissions around the globe - and generally Nalco seems to be moving away from this type of business.

So who else could come in? Siemens is a possibility, but the Chinese (or possibly Indian) corporations seem the most likely. They have the cash, and this would give them a global presence and technical knowledge that would take many years to acquire otherwise.

What does anyone else think, and is GE likely to sell?

BASF to close three paper coating binder plants in Europe

noreply@blogger.com (Papertex) — Mon, 23 Nov 2009 22:45:00 +0000

BASF has announced it is to close three manufacturing sites for production of XSB (carboxylated styrol butadiene) paper coating binders. The sites in Guturribay (Spain), Kaipiainen (Finland) and Ribécourt (France) will close by mid-2010.

BASF have stated that this represents a reduction of about 40%, or 310KT, of the company’s total XSB capacity in Europe. By consolidating production at its plants in Hamina (Finland), Ludwigshafen (Germany) and Pischelsdorf (Austria), BASF will significantly increase capacity utilization at those plants while improving its cost structure. With production concentrated in these three locations, BASF will be well positioned to meet demand throughout Europe. BASF state that they will work with employee representatives to develop appropriate social plans for its 40 employees at the plants to be closed.

Buckman's Chemicals spilt by drunken driver

noreply@blogger.com (Papertex) — Tue, 17 Nov 2009 17:57:00 +0000

According to a report in today's Bangor Daily News, a Memphis truck driver crashed in Maine, spilling a variety of paper chemicals, including Busan 1210, other biocides and a variety of acid based materials.

The truck driver was found to have a blood alcohol level at twice the legal limit. As a result of the accident, he has been charged with aggravated operating under the influence.

Fundamentals still not in place for a recovery?

noreply@blogger.com (Papertex) — Tue, 10 Nov 2009 10:38:00 +0000

This blog has been saying for months that the fundamentals are still not in place for a sustained recovery in the market (too much underlying debt). Many of the green shoots that have been seen recently may wither longer term. To me the only good news is that the economy seems to have stabilised - but at around 20% below where we were in mid 2008.

Paul Hodges at ICIS has written in his blog today about the high degree of debt remaining with US banks. He goes on to say "Insolvent banks can't lend, which is why lending to businesses and individuals remains so weak. Until policymakers start to tackle the solvency problem, the blog fears that we are unlikely to see any major recovery in the US jobs market, or in chemical sales."

In an earlier blog, Paul also comments on the high level of unemployment in the US. With the US economy accounting for 23% of global GDP, this needs to be addressed before a sustained recovery will be seen. The high levels of debt in the US banking sector will not help.

So is there a solution? Well unfortunately the level of debt - that in reality cannot ever be repaid, even by US government intervention - needs to be identified, accepted, and ultimately written off. This will be a long painful process, but sticking our heads in the sand will not help. I am not sure if this is what Paul means when he says that "policymakers" need to start to tackle the solvency problem.

Meanwhile the rest of the world, especially where the debt situation is not be so bad, needs to grow. After all, 77% of global GDP still lies outside the US.

Kemira acquires Akzo Nobel's iron coagulant business in the Nordic countries

noreply@blogger.com (Papertex) — Wed, 23 Sep 2009 15:47:00 +0000

Kemira has announced it and Akzo Nobel have reached an agreement whereby Kemira will take over Akzo Nobel's iron coagulant sales and supply in the Nordic countries (Sweden, Norway and Denmark). Iron coagulants are used in water treatment. The transaction represents approximately 20% of the Swedish iron coagulant markets. The parties have agreed not to disclose any financial details about the agreement which will be in force starting from November 2, 2009.