Hello and welcome to your early week international coatings industry update, brought to you by SpecialChem. Last week brought some milestone announcements from industry companies, so let's start there.
Dynea's latest resin production plant in Nanjing, Jiangsu province commenced regular production after successful commissioning. "Dynea's investment in this state-of-the-art resin plant in Nanjing is a strong statement of Dynea's commitment to customers in Eastern China and our belief in continued growth in the Chinese economy," says Hans Pettersson, President and CEO of Dynea. "The new capacity as well as our technology portfolio will allow us to fully meet the demands and expectations of our customers - present as well as new."
The plant produces phenolic and amino (UF, MUF, PMUF) resins. The phenolic resins are used mainly by the plywood and bamboo industries and by other manufacturers in industrial applications such as mineral wools and abrasives. Also, the amino resins are used for a wide variety of applications, such as wood-based flooring, panels, furniture, load-bearing constructions and wooden building products. The plant has an annual production capacity of 80,000 tonnes and employs some 60 persons.
Arkema announced that it will sell its tin stabilizer business to PMC Group headquartered in Mount Laurel, New Jersey, USA, a manufacturer of performance chemicals and plastics. With this proposed divestment of organometallic products, including Thermolite tin stabilizers, Fascat catalysts, and fine chemicals, Arkema continues to refocus its activities on fast growing core specialty businesses.
The project will involve 234 people and 4 industrial sites around the world: the Carrollton Kentucky, USA plant, certain assets at the Mobile, Alabama, USA plant and the Beijing plant in China will be transferred. Additionally, the part of the Vlissingen, Netherlands site dedicated to tin stabilizer operations will be run by Arkema on behalf of PMC. It is anticipated that all involved employees in the sold business will be offered employment with the new entity.
In renewables, Gevo, Inc. signed a Joint Development Agreement with Beta Renewables, a joint venture between Chemtex and TPG, to develop an integrated process for the production of bio-based isobutanol from cellulosic, non-food biomass. The companies are also evaluating future opportunities to partner on other U.S. and international projects with a long-term goal of developing a licensable package for future interested third parties.
The project would integrate Beta's Proesa technology and Gevo's Gift and ATJ technologies, with anticipated production plants to be located where cellulosic feedstocks such as switchgrass, miscanthus, agriculture residues and other biomass will be readily available. The agreement also anticipates commercialization of the technology upon project success, which could enable renewably sourced, competitively priced jet fuel as well as other chemicals and fuels made from isobutanol. BTW, Beta Renewables is currently building a 60,000 metric ton per year bio-refinery in Crescentino, Italy that will produce cellulosic ethanol with startup targeted for the end of 2012.
In financial news, after a long stretch of tough financial times, Cytec looks like it is rebounding in a major way. They announced Friday that the company estimates its adjusted earnings per diluted share for the second quarter of 2012 to be between $1.50 and $1.55 per share.
The main drivers for the quarter's excellent results are strong performance in the In Process Separation and Coating Resins business segments. Engineered Materials and Additive Technologies performed well and are on track with prior guidance. Excluded from adjusted earnings per share amounts are restructuring and other charges related to the Coating Resins sale process and the acquisition of Umeco.
Higher prices and sales in the coatings unit, which Cytec is trying to sell, may have contributed as much as 80% of the earnings that beat estimates, analysts say.
"Coating resins appears off to a very strong start in the first half, which, in our opinion, should help potential buyers become more comfortable with the normalized earnings power of this business," Michael Sison, a Cleveland-based analyst at KeyBanc Capital Markets, said last week in a note.
Coatings mostly benefited from lower raw-material costs, particularly propylene, rather than improved demand.
Cytec will issue its second quarter 2012 earnings release on July 19, 2012 with the Coating Resins segment reported as discontinued operations. The company will also provide updated full year 2012 guidance.
In a follow-up to a merger announcement that we reported in May, Appleton Papers and a Texas-based company have called off their merger.
Appleton CEO Mark Richards said volatile market conditions prevented a deal from being struck that was acceptable to both parties.
When it announced the proposed $675 million deal, Appleton said the merger with Dallas-based Hicks Acquisition Company II, would strengthen the Wisconsin company's balance sheet and provide capital for growth.
Appleton still plans to change its name to Appvion, as the company announced in May. The name combines the words "applied" and "innovation," reflecting the company's transformation from a paper company to a business focused on coatings and specialty chemicals.
Based in Appleton, Wisconsin, USA, the company has manufacturing operations in Wisconsin, Ohio and Pennsylvania and employs approximately 1,700 people, including 870 in Appleton.
In other business news, Huntsman Corp. said Tuesday that it has acquired the remaining ownership of its Russian joint venture Huntsman NMG, giving it full ownership of the company. Financial terms were not disclosed.
Huntsman NMG supplies polyurethane systems to the adhesives, coatings and footwear markets in Russia, Ukraine and Belarus.
The Salt Lake City, Utah, USA-based company said that Russian demand for the products is poised for growth and the investment will give the company greater access to its markets.
In China business news, Jotun is opening a powder coatings factory and regional research and development (R&D) facility in China, according to a statement from the company.
Located in Zhangjiangang, Jiangsu Province, the new production facility covers an area of 130,000 square meters with a design that looks towards maximizing efficiencies and reducing energy consumption.
The new R&D facility is focused on the creation and development of products for coatings, paint and powder coatings.
"The opening of these two new facilities proves to be a very strategic move for us as China is currently positioned as the world's largest and fastest growing powder coatings market," said Bjorn Naglestad, General Manager, Jotun Coatings China.
Finally in business news, BASF has been named the world's most transparent chemical company, in a new global ranking by non-governmental organization and whistle-blower advocate Transparency International. BASF was also the top rated German-headquartered company of any industry.
Transparency in Corporate Reporting scored 105 of the top publicly-traded companies based on their public commitment to transparency. Company scores were based on public availability of information about anti-corruption systems, transparency in reporting on how they structure themselves, and the amount of financial information they provide for each country they operate in.
One of the things that amaze me about marine coatings is how tolerant they must be of bad application conditions. You rarely see failing coatings anymore, even after months of hard service, but occasionally conditions conspire to make a coating fail - and then a timely solution is absolutely critical.
Three months after its commissioning, the US Coast Guard's fast response cutter Bernard C. Webber was back on land to repair chunks of top coat literally peeling from the ship's hull.
The problem occurred during production and was caused by high humidity and poor ventilation in the shed it was painted in, said an official at Bollinger Shipyards, the company building the craft.
Webber, commissioned April 14, spent about two weeks being repainted at the company's facility in Port Fourchon, Louisiana, USA. The cutter is back in its home port of Miami, Florida following the repairs.
Workers at Bollinger discovered spots without paint this winter, before the ship was delivered to the Coast Guard. Only the top coat was affected, so the peeling was only an aesthetic issue and did not affect the seaworthiness of the ship. Because of this, Webber was delivered on schedule to the Coast Guard in February as a fully functional ship. Bollinger and the service coordinated a later time to put the ship in dry dock and fix the problem.
The majority of the top coat remained in place until the ship got back to dry dock; the largest piece to come off was 18 square feet located near the stern on the port side of the ship, said Charles "Skip" Bowen, Bollinger's program manager for FRCs. There were also smaller spots of peeling near the bow.
The ship was initially painted February 9th inside the shipyard's fabrication shed in Lockport. While temperatures were in the 50s and 60s, high humidity and a lack of air movement or ventilation led to the problem, Bowen said.
As a result, the primer coat did not cure properly. A thin film formed between the primer and the glossy top coat, Bowen said, causing parts of the top coat to delaminate from the primer.
Also, the stickers that spell out Webber's name and number would not stick and had to be replaced a couple of times before the ship went for repairs, Bowen said.
The ship was still under warranty, so Bollinger made the repairs at no cost to the Coast Guard, as well as covering all dry dock costs and the crew's lodging during the repairs. During the dry docking, workers at Bollinger sandblasted the ship to bare metal and all coats of paint were reapplied.
Webber was the only fast response cutter to be painted inside the fabrication shed.
"Since then, we've invested in a very large awning, like a huge painting tent, so when the boat moves forward out of the fabrication shed, it moves into the tent," Bowen said. "We invested in that after FRC 1 was complete."
Webber is the first-in-class FRC, which are designed to replace the 110-foot Island-class patrol boats. The new cutters offer better guns, a more comfortable living environment and a rigid hull inflatable boat that can launch easily out of a stern gate.
The Coast Guard has plans to acquire 58 FRCs, with the first six going to Miami. The next six will go to Key West, Florida, and the following six will be stationed in San Juan, Puerto Rico. Bollinger is under contract for 12 FRCs, with options for up to 34 cutters, according to a Coast Guard news release.
"No project is ever without some problems, but how a contractor responds to those problems is very important," Bowen said. "In this case, we've done everything we could to make it right... the government's not paying for anything."
Truer words were never spoken.
In other news, the business line Comfort & Insulation of Evonik celebrated the 10 years anniversary of its local production of Polyurethane Additives (PU) in China at the Shanghai-Xinzhuang Site. Leveraging the state-of-the-art production Evonik has successfully delivered both consistent quality and innovative solutions to the polyurethane industry in Asia, especially in the Greater China region...more
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PPG Industries has presented seven Excellent Supplier Awards for superior performance in 2011. On an annual basis, PPG purchases more than $7 billion in materials and services from thousands of suppliers. The company's criteria for Excellent Supplier Awards include product quality, delivery, documentation, innovation, responsiveness, continuous improvement and participation in PPG's Supplier Added Value Effort program...more
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Heubach officially opened a new production plant for pigment preparations in Langelsheim. The building comprises a total area of 2,300 square meters. On an area of 1,500 square meters, universal and water-based colorants will be produced with an annual capacity of 2,000 tons. Mainly pigments manufactured by Heubach Langelsheim, Ankleshwar/India and Hangzhou/China are processed in the new factory...more
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And finally, Wacker Chemie AG bestowed this year's Alexander Wacker Innovation Award on Christian Daniels, John Boylan and Bruce Gruber. The WACKER researchers have developed two novel dispersions based on vinyl acetate-ethylene copolymers. These kinds of dispersions are increasingly replacing the established coatings for paper applications, especially in the USA...more
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