🏭 The Column: May 17, 2024

Good morning. Today’s second story about BASF reminded me that chemical plants are occasionally portable. The first time I heard about this was about Methanex’s revival and how they shipped their plant in Chile to Louisiana, but I hadn’t realized that there are entire companies dedicated to selling and transporting these assets. I forget the company’s name now, but someone was selling a glycerine plant at SOCMA last year. If you’re familiar with this business shoot me an email!

Things Happened:

A bio-based 1,3 propanediol expansion

It’s been two years since DuPont divested its biomaterials business, which was borne out of a partnership between DuPont and Tate & Lyle, who together developed a strain of E. coli K12 capable of producing 1,3-propanediol (1,3-PDO) from glucose via fermentation. That biomaterials business is now owned by Huafon and was renamed CovationBio, but the mission is still the same: replace petroleum-derived 1,3-PDO, 1,4 butanediol, ethylene glycol, and propylene glycol in sustainability-sensitive applications that still function with bio-based 1,3-PDO. The company is now planning to expand its 70 KTPA site in Tennessee to 100 KTPA. (For reference, the world currently produces roughly 7,000 KTPA of polyols.) [LINK]

Less BASF in Ludwigshafen

In case you haven’t heard, energy costs in Europe were particularly bad in 2022, and few have hope for a world where those costs plummet in the near term. BASF’s enormous site in Ludwigshafen, Germany has been feeling this cost pressure, so they decided to shut down production of caprolactam, ammonia, cyclohexanol, cyclohexanone, soda ash, TDI, and the precursors for DNT and TDA (reasons are listed here). And now they’ve decided to ditch two additional plants (a methanol plant and a melamine plant) and to sell both of them alongside the ammonia plant they shut down. The best part: this sale isn’t going to end with someone else operating the plants on BASF’s site, it’s going to end with these plants loaded up on a boat headed to their new home. [LINK]

Equinor bought into Standard Lithium

We’ve talked about Standard Lithium (SL) a couple of times recently (a few weeks ago and back in December) because their strategic partner, Lanxess, backed out of their joint venture plans sending SL into a state of financial uncertainty. But now, instead of having to rely on a bank to issue maximally derisked bonds to fund their upcoming sites, they found a new partner: Equinor. This checks out: Equinor, aka Norway’s state oil company, has been investing in direct lithium extraction since 2018, and is well known for making progressive investments with all of its oil money. They ended up buying a 45% stake in both of SL’s upcoming sites, so now things are looking up for SL. [LINK]

Ashland is selling its nutraceutical biz

Mid-20th century Ashland was an oil refiner that had acquired what became Valvoline, but by the turn of the 21st century they were shedding their oil businesses and buying up specialty chemical businesses. By 2016, over a third of the company’s revenue came from Valvoline, so they spun it out as a public company, and all that remained is the big specialty behemoth we know today. As far as I can tell their current corporate strategy sounds something like “stay in specialties but ditch all of the underperforming segments”. Apparently their nutraceutical business (e.g. chewable bases for vitamins, caffeine and sports drink powders, and aloe vera, tart cherry, and cranberry concentrates, etc.) hasn’t been doing so well due to an “unprecedented and extended customer destocking” that caused sales to drop 67% in 2023 relative to 2022. So they sold the business to a private equity firm, who, I suspect, will split it up and sell its parts. [LINK]

Other Things Happened:

Wanhua doubled its MDI production at the Fujian Industrial Park. Carbios found a waste PET supplier for its PET bio-recycling site. ADNOC backed out of talks to acquire Braskem. Brenntag decided to buy a distributor in Mexico. Shell is selling its Singapore refinery. LyondellBasell might sell a lot of its European assets. BASF is expanding its paraffin inhibitor production. Axalta is acquiring an automotive refinish and aftermarket coating producer. Kuraray is expanding its activated carbon business with another acquisition. Climeworks started up its new and bigger DAC plant in Iceland. Wacker is growing its mRNA and protein production in San Diego. Fortescue broke ground at its new green hydrogen plant.