May 2009
Welcome to the blog. Our aim is to share up-to-date news and views related to chemicals manufacturing. If you would like to add any comments, please submit them via the 'contact us' link on the left hand side of this page.
29th May
Carbon capture and storage - test facility in UK
A new test unit in Scotland is being brought on line. The unit will capture a portion of the emissions from a power station and convert the CO2 into liquid for underground storage. The aim will be to improve the effectiveness of this technology so that it can become cost and energy efficient.
With large numbers of new coal-fired power stations being built around the world, it is necessary to develop a technology that can be retrofitted on to existing units. Currently the technology is expensive and relatively inefficient - but it is very early days and things will improve.
http://news.bbc.co.uk/1/hi/scotland/edinburgh_and_east/8072583.stm
28th May
Can 'biochar' help in the fight against climate change?
Biochar is a product made from heating biomass like domestic 'green' waste or forestry/crop waste at temperatures up to 550 degrees in the absence of oxygen and a charcoal-like product is produced which can be buried or used as a fertiliser. The biochar can store carbon for many hundreds of years. What's more, the biochar can act as a highly effective fertiliser, leading to dramatically improved yields on low grade farmland.
These new technologies are new and relatively unproven but form an interesting alternative to other more expensive forms of carbon sequestration.
http://www.abc.net.au/landline/content/2008/s2579264.htm
27th May
The US Chemical Safety Board (CSB) has this week launched its redesigned website. The site is packed with highly valuable process safety related information for anyone involved in chemicals manufacturing.
In particular, we would recommend a close look at the videos and investigations. The 60-minute video on the BP Texas City disaster should be compulsory viewing for chemicals manufacturing professionals.
http://www.csb.gov/default.aspx?
26th May
The next gold rush?
Shares in a number of rare earth mining companies are soaring as the world switches on to a future with electric vehicles. In the US, the Obama administration has allocated $2.4 billion in funding aimed at turning the U.S. into a battery-manufacturing powerhouse.
In Australia, shares in mining companies have soared in recent weeks, with some companies seeing 200% increases in share values.
Finally Bolivia has more than half the world's reserves of lithium. What will this mean for the future of the country?
http://www.news.com.au/perthnow/story/0,21598,25534648-5017966,00.html
24th May
Shell and Chevron are set to use Twitter to give updates on the 2009 hurricane season. Twitter will be used to give information about evacuations, production shutdowns and other effects of hurricanes on offshore and onshore operations.
This is a great idea. Communication with the general public is always very difficult in any emergency situation. With the widespread use of the internet and mobile phones, this would be a great way of sharing up-to-date information very quickly.
http://www.chron.com/disp/story.mpl/business/6436278.html
22nd May
According to a new survey, many toxicologists believe that the media overstate the risks associated with chemical products. According to the survey carried out by the George Mason Universtity (USA), the majority of toxicologists believe that most (US) government agencies accurately portray but consider that leading environmental activist groups can overtstate the risks.
Regarding the media, 90% of those surveyed say media coverage of risk lacks balance and diversity and 97% say the media doesn’t distinguish good studies from bad studies.
Perception has always been a major problem for the chemical industry. Negative events create far more publicity than the many many benefits created by the industry. However public perceptions don't change easily and this is why we all have to play a part in creating and sustaining a safe, successful and positive industry.
21st May
Could the current economic downturn lead to even greater problems for the chemical industry in terms of skills? Taking the UK as an example, fewer students are embarking on engineering and science courses. Then at an industry level, fewer people are being recruited and trained as the recession bites and cost reductions have to be found in order to survive.
The problem is that the impact of this recruitment gap is not felt immediately. Downsizing means that less people are required in the short term. Plant closures also mean that skilled personnel are available in the recruitment market.
Problems are more likely to arise in the medium term. Although chemicals manufacturing is suffering currently, skills will be required in the future for both existing plants and for new facilities, particularly those with innovative, green technologies. Skills will also be required in order to have sufficient strength in the managing contractor sector.
http://www.rsc.org/chemistryworld/News/2009/May/20050902.asp
20th May
Interesting interview with Dr Ramesh Ramachandran, CEO of Dow India on the prospects for the Indian Chemical Industry. India lacks the feedstock advantage of the Middle East but does have one of the fastest growing domestic markets, with ever evolving needs. The view is that companies with a technological advantage will flourish rather than the commodity producers. This is already being seen with the success of companies in sectors such as pharma.
Investment in technology also means investment in skills. These will be exciting but challenging times for the Indian Chemical Industry.
http://news.alibaba.com/article/detail/chemical/100105030-1-%2522in-india-only-those-who.html
19th May
Browsing today, I was struck by the report that every Blackberry Smartphone in the world is produced using SABIC plastic.
Despite this fact, SABIC reported a first-quarter net loss of 974 million Saudi Riyals ($260 million). They did, however report that demand in the Middle East had now picked up, with production in the Kingdom currently "flat out"
SABIC believe that the petrochemical industry is at the bottom of its business cycle and a recovery is expected in early 2011.
18th May
The United nations has challenged the Chemical Industry to clean up its act. In particular, companies are encouraged to dispose of inventories of obsolete products due to the hazards that they pose. According to the UN, many hundreds of tonnes of obsolte products, many of which pose known health risks, are stockpiled in developing countries, especially in Africa. Some nations have neither the technical capability nor the infrastructure to eliminate these products.
This approach must be supported by the industry wherever possible. 20 years on from Bhopal, the industry needs to do whatever it can to protect its reputation.
http://pubs.acs.org/cen/news/87/i20/8720notw10.html
15th May
A number of reports are emerging this morning of major incident at a plant in Armenia. An explosion at a production unit of synthetic rubber and caustic soda producer Nairit has killed four people and seriously wounded eight, according to statements from the company and the emergency sercices.
The blast and subsequent fire on Thursday evening seriously damaged the company’s chloroprene production unit.
Clearly it is too early to judge the cause of this incident and detailed investigations will follow. This is however, another reminder of the importance of s strong process safety culture in the industry. Incidents such as this have a catastrophic impact for those involved and their family and friends. For the companies involved, the losses are substantial.
http://armenianow.com/?action=viewArticle&AID=3725&CID=3579&IID=1234&lng=eng
14th May
Under the title 'Chemistry of Innovations' BASF publishes a series of excellent podcasts. The development of lithium ion batteries can lead to a wide range of interesting possibilities such as the capture of energy from sources such as wind power, allowing energy generated during the appropriate weather conditions to be stored for later use, hence smoothing the imbalance in supply from such sources.
The site is regulary updated and has podcasts on varying subjects
12th May
Whilst our aim is not to be repetitive in this blog, it is nice to be able to back up Sunday's comments (below) with a similar viewpoint. Celanese, in posting a $20M loss for quarter 1 2009, echoed the comments of Peter Huntsman.
"The first quarter was better than the fourth quarter was, and the second quarter is shaping up to be better than the first quarter," said David Weidman, the company chairman.
The view of Celanese is that real demand is returning but is still well below the pre-recession levels.
http://www.forbes.com/feeds/ap/2009/05/11/ap6406636.html
10th May
Huntsman this week posted a first quarter loss of $290M. Not remarkable, given the current economic conditions. More encouraging, however, were the comments from CEO Peter Hunstman, expressing his view that a recovery was underway. Huntsman said that chemical industry market indicators had showed slight improvement throughout the first quarter due largely to government stimulus packages. Destocking is now completed and 'normal' levels of demand are being established, albeit at lower levels than those seen pre-recession..
Cutbacks continue across the chemical industry and the future remains uncertain but it is encouraging to hear some positive statements from the industry
http://online.wsj.com/article/SB124178159484900473.html?mod=googlenews_wsj
8th May
The case against five companies charged in relation to the Buncefield (UK) oil terminal fire and explosion has been referred to the English Crown Court.
The explosion occurred in December 2005 and resulted from an overflow of one of the main gasoline storage tanks. This was due a number of issues, most notably a failure of an automatic shutdown system, designed to stop feed to the tank in the event of a high level being reached.
The blast measured 2.4 on the Richter scale and heard 125 miles away, widely thought to be the largest ever in peacetime Europe.
Widespread damage was caused and 43 people were injured. The claims arising from the incident are understood to have totalled more than £750 million.
The types of failures that occured were those that can be avoided by having a proactive process safety management programme in place. High quality leading indicators facilitate the early identification and correction of issues.
7th May
MorningStar is recognised and trusted source of information for investors. Their perspective of the future of the chemical industry is given in an article entitled 'The Chemical Industry is Under Pressure'.
They review the impacts of the new petrochemical capacity coming on line in the Middle East and China. As a consequence of this, together with the impacts of recession, the chemical majors are suffering, particularly those who have had to lend heavily to finance their growth (Ineos and Lyondell Basell are good examples). Further plant closures are deemed inevitable, particularly in Europe and North America, where costs are highest.
MorningStar conclude that the industry will indeed survive but that it will look very different from today.
http://news.morningstar.com/articlenet/article.aspx?id=289790
6th May
The IHS CERA Downstream Capital Costs Index gives an indication of inflation in petrochemical and refining construction projects. In recent years, inflation has been very high due to increases in labour costs, steel costs, managing contractor costs and a number of other factors. There have been many new projects, particularly new petrochemicals facilities in the Middle East and Asia. Since 2000, the index has seen an 87% rise.
The next data point will be published in the next few days and we will start to see the impacts of recession. Steel prices are now well below their peak value and many projects are nearing completion.
Tracking this index over the next few quarters will give a very interesting perspective on the state of the industry. We will be watching this very closely.
5th May
Companies are struggling with REACH registration. According to the head of the European Chemicals Agency, companies are submitting 'vague' dossiers and are trying to register multiple products per file. There is also reluctance to share information, particularly where there are significant IP issues regarding new and innovative products.
Enforcement of the legislation is also becoming an issue. Enforcement laws are national and vary greatly from country to country. For example, there are countries that impose financial penalties only, whereas in others, directors run the risk of imprisonment.
Whilst the aims of the legislation are undoubtedly positive, the regional differences and the complexities related to registration and SIEF organisation are causing major headaches for many organisations.
2nd May
Whilst we have seen significant investment in new capacity over recent years, debate continues to rage about the pros and cons of biofuels. A quick web search will uncover a wide (and often conflicting) range of views. We share one example here
http://www.thegreencarwebsite.co.uk/biofuels.asp
To promote the industry view, a 2nd Biofuels International expo & conference will take place in Amsterdam from 27 - 28 May 2009. According to the organisers, "'the event will bring together medium to large biofuels producers, investors, regulators, project owners and equipment/service providers to discuss how to fight the critics and drive the European market forward".
http://www.biofuelsinternationalexpo.com/
1st May
Given the recent announcements on site closures, we share our thoughts on how to best manage this difficult and highly emotional process
A well-managed site closure process will achieve all of the aims of the impacted business, ensure a positive transition for the impacted employees and will satisfy all regulatory requirements. All of this whilst controlling costs and taking advantage of a number of financial opportunities which can arise.
The flip side is that poorly managed site closure can have a number of serious consequences, impacting both the profitability and the reputation of the parent company.
For example, the process can become unnecessarily protracted, leading to significant extra cost. Staff morale can decline sharply in the period between announcement and closure, leading to increased risk, unreliable production and hence customer dissatisfaction.
Key staff can be lost early in the process if thought has not been given to their future in the organisation. Legacy issues such as land contamination can lead to problems with regulators or landlords. The resale value of assets is not realised and property value (lease or freehold) is not optimised.
With typical cost a site closure in the order of €10M, the difference between a successful outcome and a poorly managed outcome can be huge.