Canada blocks BHP takeover bid for PotashCorp

(ICIS)--The Canadian government rejected BHP Billiton's $39bn (┬28bn) hostile foreign takeover bid for PotashCorp, Industry Minister Tony Clement said on Wednesday. Clement said the offer did not present a likely net benefit to Canada, adding that he had notified BHP of the decision.


The proposal was terminated under the Investment Canada Act, marking only the second time in the 25-year history of the law that a bid was blocked.
Following the announcement, PotashCorp's stock dropped $7.98, or 5.5%, to $137.52/share in after-hours electronic trading on the New York Stock Exchange.


The deal had been opposed by Saskatchewan Premier Brad Wall, who said approval of the deal would be ⌠a profound betrayal of our province and its people and did not rule out a constitutional challenge based on provincial ownership of resources. The legislature in Saskatchewan, where PotashCorp is based, had unanimously called on the government in Ottawa to reject BHP's bid.


Saskatchewan's lawmakers were of the opinion that a BHP takeover posed a potential risk to jobs, provincial revenue and Canada's strategic interest, according to news media reports.


If approved, BHP was said to preparing to sweeten its $130/share offer to win shareholder approval, with some analysts estimating a successful offer would have to top $155/share.


MRC


Iran's PE, PP demand forecast to grow 7-8% to 1.7m tonnes

(ICIS) -- Polyolefin consumption in Iran is expected to hit 1.7m tonnes in March next year, translating into an annual growth of 7-8%, industry sources said on Friday. Polyethylene (PE) would account for the bulk of total at 1.09m tonnes, while polypropylene (PP) consumption would total 630,000 tonnes at the end of Iran's fiscal year on 21 March 2011, they said.


Demand would have been stronger, with growth possibly in the 20% level, if not for the international sanctions on Iran, said an industry sources. The sanctions had slowed down investments into Iran's automotive and electronics - the key downstream for polyolefins.


Iran's projected domestic consumption in the current year was about 45% of the country's polyolefin production capacity at 3.8m tonnes/year. The country has around 2.8m tonne/year nameplate capacity for PE and can produce 1m tonnes/year of PP, according to ICIS data. But plants were not running at full capacity due to production hiccups.


Among the high density PE (HDPE) grades, film grade had the strongest growth, with consumption volumes estimated to hit 210,000 tonnes in the current year, industry sources said. This demand would entirely be met by local supply, as Iran enjoys surplus production of HDPE.


MRC


Borealis Q3 earnings exceeded expectations

(ICIS) -- Borealis CEO Mark Garrett said on Thursday that the group's third-quarter earnings had exceeded expectations, which had been lowered by the expected negative effect of start-up costs incurred for the company's Borouge 2 project and for its low density polyethylene (LDPE) plant in Sweden.


Earlier on Thursday, Austrian-based plastics producer Borealis reported that its third-quarter net profit rose by 14.8% to ┬54.0m ($76.1m) compared with the same period last year, while sales for the third quarter grew by 24.1% year on year to ┬1.59bn.


⌠We currently get no sales [from Borouge 2] because we are doing all the performance testing; we are slowly filling up the supply chain but product won't get to customers until the December/January timeframe, so we won't see any sales benefits until then, the CEO added.


Garrett said that the Borouge 2 project, which is an Abu Dhabi, United Arab Emirates (UAE)-based joint venture with the UAE's stated-owned Abu Dhabi National Oil Company (ADNOC), was now on track and the expanded plant was starting up as planned, with all olefin and polyolefin units operational.


He added that the group's LDPE plant at Stenungsund in Sweden was manufacturing wire and cable rope and that product was with major customers for testing. However, Borealis was still working to deliver consistent operability, he said.


Meanwhile, Garrett reiterated that Borealis would focus on its existing projects in Europe and the Middle East before looking at any new investments. However, he added that the group expected to make significant additions to monomer and polymer capacity between now and 2015.


MRC


China PTA futures prices spike 4% on bullish sentiment

(ICIS) -- China's purified terephthalic acid (PTA) futures prices surged 4.02% to yuan (CNY) 9,626/tonne ($1,441/tonne) Thursday morning on bullish sentiment, prompting a trading halt, market sources said.


Recent outages at regional plants, along with positive news on the US economy overnight, spurred buying activities that pushed PTA futures to breach the 4% cap set on daily swings in values in just the first two hours of trade at the Zhengzhou Commodity Exchange, they said.


In the spot market, domestic PTA prices in China jumped CNY150-200/tonne from Wednesday to CNY8,950-9,000/tonne ex-warehouse on strong buying from a number of Zhejiang-based polyester makers, market sources said.


Market players were surprised by the sudden and sharp increase in prices, notwithstanding the supply tightness in the PTA market. PTA supply was expected to remain tight in November due to low operating rates at plants, along with outages and maintenance shutdowns at a number of Chinese and Taiwanese PTA facilities.


MRC


Business booming for Honduran fabric-bag maker

(Plastics News) -- Privately held bag maker Anduro Manufacturing says the company's sales volume has doubled since its 2009 opening. The company ≈ owned by an investment group put together by the Datelle family of Atlanta ≈ operates in 90,000 square feet of a 170,000-square-foot plant in San Pedro Sula. Anduro makes bags for the feed and seed market by laminating polypropylene and biaxially oriented PP fabric.


⌠Ninety-five percent of our sales are in the U.S. right now, but if you look out two years in our forecast, we're in a contract-bidding process for all of Cargill's Central and South American bags, Marc Datelle, the company's president, said.


The plant produces 4 million bags per month and is on track to produce 12 million bags per month by the end of 2010. Its location about 30 miles south of Puerto Cortes, Honduras ≈ Central America's busiest seaport ≈ combined with Honduras' low labor costs, mean Anduro can compete well in the U.S. market.


The Datelles bought Anduro from another American owner doing business in Honduras since 2007. The new owners brought in additional equipment and recently installed looms at a nearby fabric manufacturer's plant to weave PP for the company's Durofab sewn-open-mouth bags. The Durofab bags are converted at the factory when the woven PP fabric is laminated to a printed BOPP top layer.


MRC