Dow Chemical opens China epoxy plant
MIDLAND, MICH. - Even as it deals with major cost-cutting, Dow Chemical Co. is growing its international PET and epoxy businesses.
Midland-based Dow opened a 90 million-pound-per-year epoxy plant in Zhangjiagang, China, in early May. The plant will supply China, Japan and the Asia-Pacific region. Epoxy use in powder coatings, marine applications, protective liquid paints and electrical laminates is growing at double-digit rates in China, Dow officials said.
The new plant is expected to create about 25 jobs. Dow also has a total of 155 million pounds of annual epoxy capacity in Asia at plants in Kumi, South Korea, and Handa-shi, Japan.
The company also is building a PET plant with 385 million pounds of annual capacity at Dow's BSL site in Schkopau, Germany. The plant, set to open in late 2004, will be Dow's second PET operation at the site.
Engineering on the PET plant will be handled by Jacobs Engineering Group Inc. of Pasadena, Calif.
Dow has announced plans to cut costs by $1 billion in 2003 by eliminating as many as 4,000 jobs, divesting noncore businesses and closing production sites. The firm posted a pretax loss of more than $600 million in 2002.
Dow is off to a better start in 2003, registering pretax profit of $149 million in the first quarter as sales climbed almost 30 percent vs. the same period in 2002 to $8.1 billion.
Husky starts leaving utilities to the wind
BUFFALO, N.Y. - Wind power now is providing 100 percent of the electricity at Husky Injection Molding Systems Ltd.'s parts distribution center in Buffalo.
According to utility company officials, Husky's Buffalo operation is the largest industrial customer east of the Mississippi River to source all its electric power from wind. Husky also becomes the first large New York manufacturing operation to be 100 percent wind-powered.
``It's a great step,'' said Ron Kamen of Community Energy Inc. in Wayne, Pa.
Community Energy worked with Husky's electricity supplier, New York State Electric and Gas Corp., to help Husky move to wind power. Energy from the windmill farm in Fenner, N.Y., near Syracuse, is transported over the NYSEG grid to Husky's spare parts center next to Buffalo Niagara International Airport.
The wind farm started producing electricity 11/2 years ago.
Keith Boss, general manager of the distribution center, said Husky is paying 10 percent more for the wind energy than it paid for electricity, generated mainly from coal-fired generators.
``We believe it's worth it to pay a little more to support cleaner energy sources,'' Boss said.
Environmental stewardship is a core value at Husky, a Bolton, Ontario-based injection molding machines maker. Husky is traded on the Toronto Stock Exchange.
Husky's annual supply contract for wind energy through Community Energy covers the facility's use for 12 months, beginning in January 2003.
Community Energy and NYSEG officials said Husky's wind purchase will offset about 2.47 million pounds of carbon dioxide a year. The emissions reduction is equal to planting more than 168,000 trees a year, and taking more than 200 cars off the road, the utility officials said.
Orica standing by Qenos joint venture
MELBOURNE, AUSTRALIA - Orica Ltd. Chief Executive Officer Malcolm Broomhead said despite an A$140 million (US$90.4 million) write-off of its polyethylene joint venture Qenos, the PE manufacturer still could be a ``strong cash generator'' in the future, but ``we just don't see that occurring in our short-term horizon.''
Broomhead said the business would be attractive to an international player that could take advantage of the global PE downturn to gain access to Australian markets.
Qenos is a 50-50 joint venture between Melbourne-based Orica and Exxon Mobil Chemical Co. It controls 75 percent of Australian PE production with an output of about 400 million pounds of high density PE, 200 million pounds of low density PE and 220 million pounds of linear LDPE a year. It has PE plants in Sydney and Melbourne, and an engineered plastics plant in Melbourne.
Qenos also manufactures polypropylene, olefins, synthetic rubbers and engineering plastics.
Orica wrote off A$122 million (US$78.7 million) from the book value and another A$18 million (US$11.6 million) in operating losses for the half year to March 31. The main reason for the losses was decreased production at one plant after bush fires caused power outages in December, the company said.
Since its inception in 1999, Qenos has struggled with low regional PE prices and high oil prices.
Qenos was formed with the objective of divestment but, not long after its formation, Exxon and Mobil entered merger talks that precluded the opportunity for divestment before mid-2002. Broomhead said a sale still is being sought.