Westlake bids for US chemicals firm Georgia Gulf

Westlake Chemical has submitted an unsolicited proposal to US-based chemicals firm Georgia Gulf to acquire all of the outstanding shares of Georgia Gulf for $30/share in cash, as per Hydrocarbonprocessing.

Westlake said it first approached Georgia Gulf with the proposal on September 20, 2011, but that Georgia Gulf’s management “has been unwilling to engage in substantive discussions”.

The proposal represents a 51% premium to Georgia Gulf’s 30-day volume-weighted average share price of $19.82, Westlake said. The proposal is not subject to a financing condition.

Westlake expects the transaction would be accretive to earnings in the first fiscal year after the close of the transaction, it said. Westlake also noted that it has acquired shares representing approximately 4.8% of the outstanding common shares of Georgia Gulf.

The combination of Westlake and Georgia Gulf would create one of the leading North American olefins, vinyls, and building products producers, with increased scale in the growing global vinyls market and with additional growth opportunities.

Acquiring Georgia Gulf would enable Westlake to become a leading polyvinyl chloride (PVC) resins producer and vinyl-based building products supplier, and would provide Westlake with opportunities to expand its global product offerings, it said.

“We believe that our proposal represents a unique opportunity to deliver significant and immediate value to Georgia Gulf stockholders,” said Albert Chao, Westlake CEO. “As such, we are surprised and disappointed that Georgia Gulf’s management has been unwilling to engage in substantive discussions with us.

“Since the initial delivery of our proposal on September 20, 2011, we have made numerous attempts to engage in meaningful dialogue with Georgia Gulf and have expressed our willingness to explore, pursuant to a customary confidentiality agreement, whether opportunities exist that would justify increasing our proposal price,” Chao continued.

“However, Georgia Gulf has been unwilling to provide us with information that would allow us to explore these opportunities or to enter into substantive discussions.

“We urge the Georgia Gulf board to act in the best interests of its shareholders by meeting with us to seriously discuss our compelling proposal.”

Georgia Gulf’s production range includes basic chemicals, vinyls, polymers and fabricated PVC products.

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Chevron U.S.A., a wholly owned subsidiary of Chevron Corporation, has completed a retrofit of its refinery in Pasadena, Texas (U.S.), which is expected to increase product flexibility and expand the processing capacity of lighter crudes by nearly 15% to 125,000 bpd, as per Hydrocarbonprocessing.

Chevron acquired the Pasadena refinery in 2019 with the strategic intent to expand its Gulf Coast refining system. This project is expected to allow the company to process more equity crude from the Permian Basin, supply more products to customers in the U.S. Gulf Coast and realize synergies with the company’s Pascagoula refinery.

The Light Tight Oil (LTO) Project aims to enhance facility reliability and safety and will ultimately result in an increase in the supply of refined products domestically. The refinery will also begin producing jet fuel and exporting gas oil.

“The Pasadena Refinery is on a journey to maximize value for Chevron and the community it serves by driving progress in safety and reliability,” said Chevron Manufacturing President Chris Cavote. “This refinery now firmly integrates our upstream and downstream businesses as we aim to optimize the value chain.”

Planning for the LTO Project began in 2019 with work beginning in early 2020.

“I’m extremely proud of our employee and contractor workforce, which logged over 4 million hours to complete this complex project in an operating refinery. Our safety program reinforced the focus on working safely throughout the project,” said Refinery General Manager Tifanie Steele. “We are investing in the refinery to help it be successful in the long-term, which we hope will support continuing positive economic impact to our community.”

The phased start-up of the asset is expected to last through Q1 of 2025 as project team members work to confirm all plants are operating as planned and products are developed to specification.

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Agricultural chemical firm Best Agrolife Ltd. (Delhi) has signed a memorandum of understanding with Shanghai E-Tong Chemical Co. Ltd. (Shanghai), as per Chemweek.

The companies will collaborate in the research and development (R&D) of agricultural chemicals and market development. The agreement will be in force for five years.

The companies intend to advance R&D in agchem technicals and develop intermediates and formulations. They also plan to expand global market reach through joint ventures and product registrations.

Best Agrolife operates a plant at Gajraula, Uttar Pradesh state, with a capacity of 7,000 metric tons per year and produces active ingredients and intermediates. At Jammu, it has a capacity of 15,440 metric tons per year. The company also operates a R&D center at Greater Noida, Uttar Pradesh, which focuses on advanced synthetic intermediates, formulations and technical products.

In February this year, Best Agrolife acquired Sudarshan Farm Chemicals India Ltd.

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The ORLEN Management Board has decided to halt the Olefins III project after determining that the actual implementation costs would have exceeded the initial estimates by sixfold, as per Hydrocarbonprocessing.

This decision is expected to save the company approximately PLN 15 billion. The funds will be redirected towards projects that sustainably enhance the competitiveness of both the company and the Polish economy. Irregularities related to the capital investment process have been reported to the prosecutor’s office. Additionally, ORLEN is considering pursuing a compensatory claim against former management board members, enabled by a recently adopted resolution of the General Meeting.

A comprehensive review of the costs and terms of constructing the Olefins III complex, conducted for the first time since the project’s inception, revealed that the project was not financially viable. An analysis of the preparation and execution process, overseen by Daniel Obajtek’s management team, uncovered numerous irregularities, including unrealistic assumptions that ignored market conditions, as well as issues with schedules and implementation technologies. Among other findings, significant design and technical problems were identified in the ISBL installations, which directly impacted the project’s implementation.

The original cost of the project was estimated at PLN 8.3 billion ($2 B). In 2023, the then management tripled the projected expenditure to PLN 25 billion ($6.1 B), while simultaneously scaling back the scope of the project by excluding the most promising advanced chemicals. The actual cost of the project, including the construction of critical infrastructure needed for the plant’s operation, would have climbed to as much as PLN 51 billion ($12.6 B).

The decision to halt the project is the most prudent course of action, limiting potential losses caused by the misguided decisions of the previous management.

To mitigate the adverse economic impact of the Olefins III project, ORLEN plans to repurpose the existing infrastructure as the foundation for its New Chemicals (Nowa Chemia) project. Built on revised technological, operational and business assumptions, the initiative will include a state-of-the-art facility for monomer production and expanded sales capacity in ethylene oxide and glycols, styrene and the C4 fraction, with volumes to be optimised to meet market demand. Starting around 2030, the New Chemicals project will take over the functions of the current Olefins II facility and will remain operational throughout the lifecycle of the Plock plant.

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Air Liquide has been awarded a grant of €110 MM from the European Innovation Fund for its ENHANCE project in the port of Antwerp-Bruges, Belgium, that aims to produce and distribute low-carbon and renewable hydrogen (H2) derived from ammonia, as per Hydrocarbonprocessing.

As part of the project, Air Liquide intends to build, own and operate a first-of-its-kind large scale renewable ammonia cracking plant and an innovative H2 liquefier. ENHANCE is the first European industrial-scale project for the production and distribution of low-carbon and renewable H2 using ammonia as a feedstock.

As part of this initiative, Air Liquide intends to retrofit one of its H2 production units located in the Port of Antwerp-Bruges, using renewable ammonia as a feedstock instead of natural gas, and would also build a H2 liquefier. This new facility would support the development of a low-carbon and renewable H2 supply chain in Europe and contribute to the decarbonization of a wide range of hard-to-abate customers, such as refineries, chemicals, as well as heavy-duty road, maritime transport and aviation.

Replacing natural gas by ammonia to produce gaseous and liquid H2 would allow the project to reduce the CO? emissions by more than 300,000 metric tpy. This project would capitalize on the knowledge and expertise acquired from the Group’s ammonia cracking pilot plant located in the port of Antwerp.

Armelle Levieux, member of the Executive Committee of Air Liquide, notably overseeing Innovation, stated: “The combination of ammonia cracking and hydrogen liquefaction technologies offers an additional solution to support the growth of the global hydrogen market. We welcome the support from the European Commission for our ENHANCE project, which contributes to the emergence of a viable infrastructure for the supply of renewable and low-carbon hydrogen in Europe. In line with our ADVANCE strategic plan, this project supports Air Liquide’s commitment to the energy transition, with low-carbon hydrogen playing a key role for the decarbonization of the industry and mobility. ENHANCE supports European ambitions towards carbon neutrality.”

Ammonia - a molecule made of H2 and nitrogen - can notably be produced with a low-carbon footprint in geographies with abundant renewable energy sources such as sun, water and wind, or other low-carbon source of energy. A global supply chain infrastructure is already in place for its production, transportation and utilization at large scale, serving various industries.

The European Innovation Fund is one of the world’s largest programs for promoting innovative low-carbon technologies. Receiving this funding is an essential milestone in making a final investment decision and starting the execution of this project.

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