Petrochem and SIIG to delay merger proposition

(Arabian Oil and Gas) -- Saudi Arabia's National Petrochemicals Company (Petrochem) and Saudi Industrial Investment Group (SIIG) have decided to delay merger study of their assets until the start and the stabilisation of the project of the Saudi Polymers Company, the two companies said in a statement published on Saudi stock exchange ⌠Tadawul.

The two companies said that the Saudi Polymers project is slated for production in the fourth quarter 2011. ⌠Upon the completion of the project, we will be able to take the best expectation including the costs, sales and the profitability of the project, said Petrochem, the owner of the Polymers project. ⌠This will allow us to set a fair value of the company's shares before the merger, it added.

MRC

(Plastemart) -- The Yunlin County Government has ordered Formosa Plastics Corp (FPC), the group's flagship company, to shut down a 12 hectare vinyl chloride monomer (VCM) plant, and asked another group member, Nan Ya Plastics Corp to close its 50 hectare Haifeng factory compound over safety concerns.

Closure of these six plants- one run by Formosa Plastics and five by Nan Ya Plastics, will result in daily losses of USD 1.2 mln. Formosa Petrochemical Corp's (FPCC) Number 1 petrochemical and olefins plant at the complex remains shut because of disruptions to raw material pipelines.

MRC

(ICIS) -- US-based Ashland plans to pay down debt while continuing to change into a high-margin, high-growth specialty chemicals company following its planned acquisition of US-based International Specialty Products (ISP), Ashland's chief executive said on Tuesday.

⌠This has been a transformational story for Ashland. [The Hercules acquisition] was our first choice to upgrade our position in specialty chemicals, and ISP will define us. But the story is not fully written, said chairman and CEO James O'Brien in an interview with ICIS.

Ashland has agreed to buy ISP for USD 3.2bn (EUR 2.2bn) in cash, representing a multiple of 8.9 times earnings before interest, tax, depreciation and amortisation (EBITDA) of USD 360m for the 12 months ended March 31.

The deal will expand Ashland's positions in the personal care, pharmaceutical, food and beverage and oilfield chemicals markets.

After the close of the deal, expected before the end of September, about 74% of Ashland's EBITDA will be from specialty chemicals businesses, O'Brien said.

MRC

(ICIS) -- China's manufacturing sector grew at a slower pace in May, with the purchasing managers' index (PMI) at its its lowest level in nine months at 52%, official data showed on Wednesday. PMI, a barometer of the monthly performance of China's factories, slipped 0.9 percentage point from 52.9% in April, according to China Federation of Logistics & Purchasing (CFLP).

Except for a slight rebound in March, the PMI has been falling continuously since September 2010, when China turned more aggressive in its monetary tightening policy in response to spikes in inflation.

In the oil and petrochemical industry, producers opted to destock cargoes in April and May instead of building more inventory, discouraged by declines in commodity prices, said Wu of Changjiang Securities.

Inflation is expected to remain high at 5.4-5.5% in May, with price pressures on food being aggravated by drought affecting a huge swathe of farmlands in China, he said.

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(ICIS) -- Lanxess is planning to build the world's largest neodymium polybutadiene rubber plant in Singapore, the German specialty chemicals maker said on Wednesday. The 140 KTa plant will be built at a cost of EUR 200m (USD 290m) on Jurong Island, next to Lanxess' new 100 KTa butyl rubber plant, which is currently under construction and is scheduled to come on stream in the first quarter of 2013, the firm said in a statement.

Neodymium polybutadiene rubber is part of a tyre's compound and reduces energy consumption more efficiently than many other tyre rubbers, according to the statement.

Construction of the 100 KTa butyl rubber plant is progressing according to schedule, it said. The new neodymium polybutadiene rubber plant is expected to start up in the first half of 2015, the statement added.

Lanxess has signed an agreement with the Petrochemical Corporation of Singapore (PCS) on the long-term supply of butadiene feedstock via pipeline. Butadiene is the key raw material for the production of neodymium polybutadiene rubber.

MRC