ASHLAND INCREASES CHINA INVESTMENT TO BUILD NEW PLANT AND TECH CENTERAshland Inc. has announced nearly $80 million in expansion projects for the company’s operations in China. The projects consist of a new resin production plant and a technology and business services center.
“The growth we are experiencing in China’s dynamic business environment is exciting, and our continued strategic investment in this region further positions Ashland as an industry leader,” said Dale MacDonald, president of Ashland China. “These investments will further support our ability to service customers and to develop products and technologies to meet the needs of the local market.”
A new unsaturated polyester resin (UPR) plant, to be built in northern China, represents an estimated initial $35 million investment. Current plans call for the plant to be operational in 2009. “This project marks the second resin production facility for Ashland in China, and it will be our fifth manufacturing site in the country,” said MacDonald. Ashland’s existing UPR production plant in Changzhou, constructed in 2005, is currently being expanded to triple its production capacity.
Ashland’s other announced capital expansion project is a $43 million technology and commercial center, which will be located in Shanghai. “It is vital to our continued success in China that we provide in-country product and application development support,” said Luca Fontana, chief technology officer for Ashland. “With this new center, Ashland will be able to proactively provide our customers in this region with the scientific and technological expertise they need to effectively compete in today’s global marketplace.”
The facility, expected to be completed in 2008, will also house management and business services that support Ashland’s operations throughout China. With more than 400 employees in China, Ashland currently has offices in Shanghai and Beijing, and manufacturing facilities in Beijing, Changzhou, Kunshan, and Nanjing.
For more information, visitwww.ashland.com.
HEXION SIGNS AGREEMENT TO ACQUIRE HUNTSMAN CORP.Hexion Specialty Chemicals, Inc., an Apollo Management L.P. portfolio company, has announced the signing of a definitive agreement to acquire Huntsman Corp. in an all-cash transaction valued at approximately $10.6 billion, including the assumption of debt.
Under the terms of the agreement, Huntsman stockholders will receive $28.00 in cash for each outstanding Huntsman share of common stock. The Huntsman Board of Directors, based on the recommendation of a Transaction Committee of independent, non-management directors, has unanimously approved the agreement and has recommended that Huntsman stockholders vote in favor of the agreement. Huntsman has terminated its previous merger agreement with Basell AF.
“This transaction provides Hexion and Huntsman with a great opportunity to create a world-class company with leading-edge products and technologies, a greatly expanded global reach (particularly in the high-growth Asia-Pacific region), and an outstanding team of people,” said Craig O. Morrison, chairman and CEO of Hexion. “Our combined company will be one of the world’s largest chemical companies, and a leader in our ability to serve customers with an expanded portfolio of specialty materials and a significantly enhanced global presence.”
Joshua J. Harris, founding partner of Apollo Management L.P., said: “This acquisition will build Hexion into one of the world’s largest specialty chemical companies. The combined enterprise will have annual sales of more than $14 billion and more than 21,000 associates in 180 facilities around the world. We are pleased to welcome the Huntsman team and look forward to building on their many accomplishments in the industry.”
The agreement also provides that the cash price per share to be paid by Hexion will increase at the rate of 8% per annum (inclusive of any dividends paid) beginning 270 days from July 12, 2007. The transaction is subject to regulatory approvals and the affirmative vote of Huntsman’s shareholders, as well as other customary conditions. Entities controlled by MatlinPatterson and the Huntsman family, which collectively own approximately 57% of Huntsman’s common stock, have agreed to vote in favor of the transaction, subject to certain conditions. The transaction is fully financed pursuant to commitments from affiliates of Credit Suisse and Deutsche Bank. O’Melveny & Myers LLP and Wachtell, Lipton, Rosen & Katz served as Hexion’s legal counsel.
For more information, visitwww.hexion.com.
U.S. EPA FILES COMPLAINT IN CHEMCENTRAL EXPLOSION AND FIREThe explosion and fire that destroyed the ChemCentral facility in Kansas City, MO, Feb. 7 has led to a civil complaint filed by the U.S. Environmental Protection Agency (EPA). EPA alleges violations of the federal Clean Air Act and the federal Emergency Planning and Community Right to Know Act.
The explosion occurred when ChemCentral was transferring “Indopol,” a fuel additive used in sealants, coatings, lubricants, cling film and adhesives. Indopol is a trade name for polybutene.
EPA’s Region 7 office in Kansas City, KS, and the federal Occupational Safety and Health Administration investigated the explosion for possible violations of environmental and public health laws.
EPA’s investigation found that ChemCentral violated the Clean Air Act by failing to identify chemical hazards and failing to design and maintain a safe facility.
EPA also found that ChemCentral violated the Emergency Planning and Community Right to Know Act by failing to submit a chemical inventory form for Indopol to the local emergency planning committee, the state emergency response commission, and the local fire department. The inventory, due by March 1 each year, provides information on chemical storage locations and physical or health hazards, which is critical for emergency planning and first-response activities.
ChemCentral could be liable for penalties of up to $32,500 per day for each violation of the two laws. The complaint proposes a penalty of $434,260. EPA’s complaint also requires the facility to comply with regulations. The federal laws are intended to inform citizens about chemicals in their community, prevent releases of hazardous chemicals, protect the community and emergency responders if there is an accidental release, and improve emergency response to releases.
For more information, visitwww.epa.org.