JM Eagle potentially liable for billions in damages

MOSCOW (MRC) -- JM Eagle faces billions of dollars in damages following a federal jury decision that North American largest manufacturer of PVC pipe knowingly sold substandard product to government entities for water and sewer systems from 1996-2006, said Plasticsnews.

During that period, three states and 42 cities and water districts named in the whistle-blower lawsuit spent USD2.2 billion to buy plastic pipe from JM, which was formerly called J-M Manufacturing, according to Eric Havian, a lawyer with Phillips & Cohen LLP, who represented the plaintiffs.

JM officials plan to appeal the unanimous verdict reached Nov. 14 in a seven-week trial before U.S District Court Judge George H. Wu. The appeal will be based on evidence the jury was not permitted to hear or see.

Havian said JM Eagle lied about whether its pipe met strength and durability standards required by government specifications and that it is liable the False Claims Act. The law encourages private citizens to sue companies that are defrauding the government and recover funds on its behalf.

A new jury will be seated for the second phase of the trial to determine the amount of damages owed. The whistle blower, John Hendrix, is entitled to 15-25% of the amount recovered.

Hendrix, who worked as an engineer in JM Eagle’s product assurance division in New Jersey, did not take the stand. However, other witnesses testified that plant managers were under pressure to meet production quotas and they would remove "reject" tags from pipe that failed to meet quality standards and ship it to customers.

One of the plaintiffs, the Calleguas Municipal Water District in Thousand Oaks, Calif., spent USD4 million to replace JM Eagle pipe that had broken and leaked seven times, according to Havian. During the trial, five government entities were selected from the larger group as exemplar plaintiffs. The others are the cities of Reno, Nev., and Norfolk, Va., and the South Tahoe Public Utility District and Palmdale Water District, which are both in California.

However, dozens of other states, cities and water districts that bought JM Eagle pipe but did not join the lawsuit also could qualify to participate in the next phase of the trial addressing monetary damages.

In a related matter, a hearing on a joint motion for JM’s former parent company, Formosa Plastics Corp. USA, to settle with a long list of plaintiffs for USD22.5 million has been pushed back from Dec. 2 to Dec. 19. Attorneys requested additional time for more than 300 cities, municipalities, water districts, and potential parties time to evaluate and respond to the proposal.

JM Eagle has offered a 50-year warranty on its thermal plastic pipe products since 2010, when the lawsuit that was filed in 2006, was unsealed. The company has 17 manufacturing plants and more than 1,000 employees.

MRC

MOSCOW (MRC) -- Borouge is seeking to increase its customer base by threefold as it prepares to enact a massive capacity expansion at its petrochemicals plant in Abu Dhabi, reported GV.

The joint venture of Abu Dhabi National Oil Company and Borealis is in the process of expanding its polymers output to 4.5 million tonnes a year from 2.5 million tonnes currently. The move comes as listed regional petrochemical giants, such as Saudi Basic Industries Corporation, struggle with stagnant European demand and the revival of polymer producers in North America.

Borouge has opened offices in Asia and has been talking to more customers in industries such as automotive and infrastructure supply, according to Wim Roels, the chief executive of Borouge’s Singapore-based marketing firm, which operates as a separate entity from the production firm based in Abu Dhabi.

Meanwhile, the Arabian Gulf’s hydrocarbons industry is facing slowing demand growth in China and the prospect of a shale gas boom there. Mr Roels said Borouge, which has customers in China and South East Asia, was sanguine about that.

"China’s GDP is still growing at 7.5 %, which is not the double digits of a couple of years ago, but I don't think the double digits will come back," he said.

Mr Roels noted that shale gas in China had the potential to affect Middle East producers by freeing up coal for petrochemical production.

The majority of shale reserves in China are believed to be methane, which can be used to produce electricity. But the fuel is less useful as a feedstock for petrochemical crackers, which use "wet" gas such as ethane, propane or the crude derivative naphtha.

However, China has invested heavily in petrochemical plants that use coal. Next year, its coal-driven chemicals factories are forecast to account for more than a quarter of the world’s expansion in ethylene production capacity, according to South Korea’s Woori Investment & Securities.

As MRC wrote previously, Austrian petrochemical company Borealis has begun preparations for the start of Borouge 3 in Ruwais, Abu Dhabi. Borouge 3, includes an 1.5 million mt/year ethane cracker, three polyethylene (PE) units with a capacity of 1.43 million mt/year and two polypropylene (PP) with a capacity of 960,000 mt/year.

Borouge is a joint venture between the Abu Dhabi National Oil company and Borealis.
MRC

MOSCOW (MRC) -- SIBUR Tobol is the second gas carrier to operate under a long-term charter agreement with Sovcomflot, Russia’s largest ship owner and tanker operator, reported SIBUR on its site.

The carrier was built by Korea-based Hyundai Mipo Dockyard Co. Ltd. SIBUR Voronezh, the first gas carrier custom-built for SIBUR, arrived at Ust-Luga in September 2013.

The carrier has already completed six deliveries of LPG to European customers. SIBUR Tobol is moored for test loading at SIBUR's new terminal as part of its start-up and commissioning programme. Once loading in Ust-Luga seaport has been completed, the carrier will head for Sweden on an LPG delivery.

A naming ceremony for SIBUR Voronezh and SIBUR’s other new LPG carrier, SIBUR Tobol, took place on 4 July 2013. SIBUR Tobol is expected to arrive at Ust-Luga in November 2013.

Both gas carriers were designed to SIBUR's specific requirements using the latest shipbuilding technology and in partnership with experts from Sovcomflot Group.

SIBUR's Ust-Luga terminal is the largest in the CIS and the first in Northwest Russia to tranship LPG. The terminal is capable of handling up to 1.5 million tonnes of LPG and up to 2.5 million tonnes of light oils each year. The terminal’s distinguishing feature is its isothermal LPG storage tanks and its compatibility with almost all existing vessels, including refrigerated ships.

SIBUR is a uniquely positioned vertically integrated gas processing and petrochemicals company. SIBUR owns and operates Russia’s largest gas processing business in terms of associated petroleum gas processing volumes and is a leader in the Russian petrochemicals industry.
MRC

MOSCOW (MRC) -- Alliance Polymers & Services, LLC (APS) is the newest North American distributor of Huntsman Polyurethanes’ Irogran and Avalon thermoplastic polyurethanes (TPU), as per GV.

The materials are available in many grades designed from simple applications to complex engineering products.

APS is a privately owned thermoplastic elastomer distributor with warehouses and independent sales agents throughout North America, under the direction of two of the plastic industry’s leading marketing and technical support executives, Roger Huarng and Stephane Morin, whom have earned a long-standing reputation for providing guidance on thermoplastic elastomer selections, the use of proper additives, and processing insights.

"We are honoured Huntsman recognised our technical and commercial expertise in TPUs and chose us to represent them in the USA and Canada", said Huarng.

APS offers thermoplastic elastomer raw materials (TPE) such as styrenic-based thermoplastic elastomers (TPE-S), thermoplastic vulcanisates (TPV), thermoplastic polyester elastomers (COPE), and fluoropolymers (PVDF).

"Our ability to source materials globally insures we provide quality elastomers at the most competitive pricing", said Morin. APS also manufactures and markets speciality compounds designed to enhance certain properties of the TPEs it sells.

As MRC informed previously, this summer, Huntsman Corp. signed a definitive agreement to acquire Oxid LP, a privately-held manufacturer and marketer of specialty urethane polyols based in Houston, Texas. The polyols are combined with methylene diphenyl diisocyanate (MDI) to create polyurethane foam insulation for walls, roofs, refrigerators and other applications.

Huntsman Polyurethanes serves customers in more than 90 countries and operates TPU manufacturing facilities in the USA, Germany, and China.

Huntsman is a global manufacturer and marketer of differentiated chemicals. Its operating companies manufacture products for a variety of global industries, including chemicals, plastics, automotive, aviation, textiles, footwear, paints and coatings, construction, technology, agriculture, health care, detergent, personal care, furniture, appliances and packaging.
MRC

MOSCOW (MRC) -- A shortage in the domestic market has forced Russian producers to reduce exports of polypropylene (PP) in October. Sales to foreign markets fell by 44% from September, according MRC DataScope.

Scheduled and unscheduled outages at Russian PP plants in September-early October led to the shortage in the domestic market. As a result, local producers cut export sales in October in favor of the domestic market to 5,500 tonnes tonnes from 9,900 tonnes in September.

The main importers of Russian polypropylene are Russia, China and Ukraine. October shipments of Russian polymer to Belarus fell to 1,400 tonnes from 2,400 tonnes in September. October exports to China also dropped by almost half to 3,200 tonnes from 1,900 tonnes in September. Shipments to the Ukrainian market declined less sharply last month and totalled 1,200 tonnes (in the previous month - 1,400 tonnes).

The overall exports of Russian PP rose to 81,400 tonnes in January-October, 2013, from 33,600 tonnes in the same period of 2012. Homopolymer of propylene accounts for more than 95% of the total exports.
MRC