Polyurethane industry battles with a wide range of environmental issues.

Urethanes Technology; 12/1/2000; Reed, David

At times in the last few years, the polyurethanes industry seems to have been beset by
environmental problems. In fact, during the mid-1980s there were genuine fears that
whole swathes of the industry might cease to exist.

This was when the whole of the industry had to find replacements for the ubiquitous
chlorofluorocarbons (CFCs), a vital component contributing most of the insulation
performance of the rigid foams used in making refrigerated appliances, building panels
and sprayed rigid foams.

These same materials were equally widely used in making integral skin foams, where
they helped form the tough outer skin that gives car steering wheels and the like their
combination of toughness and soft feel.

CFCs were also widely used in making flexible foams, both moulded, and slabstock,
where their inertness made them easy to handle in an industrial context as it means they
are non-flammable and free of health hazards. In addition, their boiling points are such
that the heat released during the isocyanate-polyol reaction allowed them to generate
the gas needed to create foams.

Even in the production of elastomers, CFCs were widely used as their inertness made
them suitable for use as cleaning and flushing solvents.

It is, accordingly, truly amazing that, within a few years, alternatives to CFCs were
developed for all but a small fraction of these myriad uses.

`Banana board' problem

Not that their substitution was easy. It is hard to imagine what the technical specialists
must have felt when the first rigid foam boards made without CFCs began to shrink and
twist into the famous `banana boards' of the late 1980s. But the many technical problems
were eventually overcome, thanks to the greater depth of understanding that developed
during the whole substitution process.

But, as the article starting on p24 shows, the pressure to eliminate CFCs and their second
generation replacements, the hydochlorofluorocarbons (HCFCs), continues. It also
shows that the fluorochemicals industry is striving to bring the alternatives into
commercial production at a price that users will be able to afford-and to a tight
timescale.
But, as the CFCs issue has come under control, another significant problem has waxed
and waned in importance over the least decade: recycling. At present this topic is high
on the agenda again, with a focus on materials recovered from scrap cars, or end of life
vehicles, as they are referred to in European Union circles.

The articles on pp 28-35 highlight the current state of play in this area, from a
polyurethane industry standpoint.

The final section of this health, safety and environment feature describes an Australian
firm's efforts to monitor emissions from the exhaust stacks of its foam making plants
(pp36-41). Such emissions have also come under close regulatory scrutiny around the
world, with plants in the US, for example, being threatened with closure after allegations
that significant levels of emissions could be detected outside of their premises.

A new twist to the tale

Continuing matters in the health, safety and environmental world include the basic
chemical safety issues with the most recent twist to this topic being the `Precautionary
principle.'

This phrase is now coming into use throughout the European Union and means, roughly
speaking, if you can't quantify the risk posed by a new material or process, you
shouldn't introduce it.

Quite where this will leave innovation is, at present, extremely uncertain.

The concept implies major efforts on risk assessment and the question then is "who is
going to do it?," said Geert Strobbe, secretary general of ISOPA (the European
Isocyanate Producers Association). ISOPA is already far advanced with risk assessment
on MDI (methylene diphenyl diisocyanate), and "this should be finalised by the end of
the year," he said. "We have to get our act together," he continued: if a material has "any
risks they can't quantify, they want to ban it," he added.

"The concern in industry is that, whatever we do or want to do, we will always be

threatened one way or another by the precautionary principle; it gives them
[environmental campaigners and others] a free ride," Strobbe asserted.

This situation is leading ISOPA to change its focus more to issues management, he
indicated, "we have to do this."

And there are funding implications too, "we have to mobilise human and environmental
toxicologists to produce the data," Strobbe pointed out. "If we don't provide it, they will
take default values [which are] much higher than in practice. This could result, at worst,
in a product ban," he warned.
The polyurethanes industry's handling of the CFCs issue shows that it is capable of
dealing with massive change and this will stand it in good stead since, as noted here, the
pressures are not likely to lessen in the immediate future.

HDI measurement

New standards on measuring monomeric hexamethylene diisocyanate from the

American Society of Testing and Materials use an Iso-Chek filtering cassette to separate
vapour and aerosol.

Monomeric HDI is widely used in many high performance coatings, but it is a

sensitising agent, so workers using it need protection. The level of volatile monomeric
HDI in coatings has now been reduced, but the amount of HDI oligomer has increased
and the spray equipment used can create an aerosol, posing a hazard to workers, says
Omega Speciality Instrument Co, which makes the Iso-Chek.

The ASTM D6561 and 6562 tests measure aerosol (oligomeric) and gaseous (monomeric)
HDI respectively.

Samples passed into this device first encounter a PTFE membrane which traps the
aerosol phase and the vapour phase passes through a glass-fibre filter coated with 9-(N-
methylaminoethyl) anthracene (MAMA). Here a stable derivative is formed which can
be detected at levels as low as 0.2 micrograms/[m.sup.3].

The aerosol fraction captured by the PTFE can be reacted with (methoxy-2phenyl-1)
piperazine (MOPIP) and treated to analyse the vapour phase.

More details from Omega Tel +1 800 346 8253, from ASTM Tel +1 610 832 9500,
www.astm.org

Re-turning the mattress

BOSTON, MASSACHUSETTS--A US charitable group is setting up a facility capable of

recovering more than 225 000 kg of polyurethane foam a year from post-consumer
mattresses.

The facility is being established by the St Vincent de Paul Society of Lane County,
Eugene, Oregon, in a 930-[m.sup.2] building in Oakland, California. It will also recycle
the other mattress components, including steel, wood, and cotton, according to an
announcement from the Alliance for the Polyurethanes Industry.

The unit is part of a recycling programme developed by the St Vincent de Paul Society of
Lane County, in Eugene, Oregon, in conjunction with the International Sleep Products
Association. This programme also aims to recover components from other articles of
furniture containing polyurethane foam. It is another of the society's numerous recycling
efforts, one of which rebuilds 500 appliances a month with others focused on recycling
or reusing glass, wood and aluminium.
The new facility--called DR3 for divert, reduce, reuse, recycle--will use special saws to
slice soft materials away from the metal springs, with a conveyor-fed shredding system
to recycle all the mattress components.

The St Vincent de Paul Society has developed markets for reselling the recycled
materials, and anticipates that more markets will evolve once the plant is operative.

"We will be able to recycle 250 to 500 mattresses a day," estimated Lyle Harris, business
development specialist with the charitable group.

"This is an innovative approach to a very challenging material," says Steve Lautze,

recycling market development zone coordinator with the City of Oakland. "The St
Vincent de Paul Society is tackling a waste stream that's never been successfully
addressed before."

The average queen size mattress weighs about 28 kg, with polyurethane foam
accounting for about 2.7 kg. At the low end of Harris' estimate (250 mattresses per day),
the facility will recycle about 700 kg of PU foam per day, more than 225 000 tonnes each
year.

While the PU foam is a small part of the mattress' weight, it will provide a valuable
revenue stream since it has the highest value of any of the recycled materials.

Driver training initiative launched

MARSEILLE, FRANCE--Across Europe, since 1995, there have been between 50 and 100
spillages involving isocyanates each year, and a slight rise in incidents in the last couple
of years has prompted ISOPA (the European Isocyanate Producers Association) to act, as
part of its commitment to Responsible Care.

A briefing in mid-October introduced its latest initiative, on "training the trainers" of

road tanker drivers, to representatives of many of Europe's leading chemicals
transporters. The aim is to encourage them to use training materials prepared by ISOPA
and hence to cut the number of spillage incidents to zero.

This can only be done by "changing behaviour to improve performance," emphasised

Reinhard Leppkes, president of ISOPA, when opening the meeting. This initiative is
only one part of the picture, he continued, with the isocyanate makers themselves also
focusing on safety awareness, both internally and among those dealing with the
materials.

The accidents occur in three areas, during loading, in transit and during unloading, he
continued, and the emphasis of the 13 Nov event was on road transport. This was
because, in road transport, "there is more likelihood of members of the public, our
employees and drivers being at risk of an accident," Leppkes explained.
Although ISOPA does not have full information on the scale of the problem, since some
companies are not allowed to report such matters to external bodies, it provided the 50-
100 incidents estimate, pointing out that the amount spilled varies between a few litres
up to several 1000 litres per incident; the group also suggests that about two thirds of the
incidents occur on unloading at customers' premises, about 20 percent during transit
and only 15 percent during loading.

"This is a first in the chemical industry in Europe," claimed Serge Cosemans, supply
chain environmental health and safety and compliance manager for Dow Europe and
chairman of the ISOPA logistics EH&S working group.

"Behind the slides there are trainers' notes with more detail," such as explanations of the
differences between the hazards posed by the two main materials involved: MDI
(methylene diphenyl diisocyanate) and TDI (toluene diisocyanate). It also describes how
to handle them properly, he explained.

Geert van Wijnen, who will head the safety management of the Huntsman Group from 1
Jan 2001, pointed out that "70-80 percent of the business is in bulk, the rest in drums,"
but that both needed handling with care. In addition, emergency response procedures
should be in place, to be sure that any major spillage could be dealt with promptly and
effectively.

"Training is an attempt to modify people's behaviour in a positive way," explained Johan

Bakker, with Lyondell Chemical Co.

One further aspect of importance in the improvement in safety is that `near misses'
should be reported. "For every actual incident there are as many as 600 near misses,"
Bakker said, so this is the key for improving safety in the future.

Copies of the CD-ROM and video with the full trainers' package are available from
ISOPA, price 20 [European Dollar] per language. It is available in eight languages.
Contact Colette Veys, ISOPA, Fax: +32 2 676 7479; E-mail main@isopa.org

COPYRIGHT 2000 Crain Communications, Inc.

Environment and PVC.(mail)

Australian Nursing Journal; 5/1/2005; MacMillan, Sophi

We commend Fiona Armstrong for her call to action to improve the environmental
performance of the health care sector in Australia in her article 'Do No Harm? Health
Care and the Environment' (ANJ, February 2005, pp.18-21).
However, she's likely to throw the baby out with the bathwater if she supports Health
Care Without Harm's campaign for the removal of PVC from the provision of health
care.

In Australia, the PVC industry takes its product stewardship responsibilities seriously.
We have a program in place to identify and address issues associated with the
manufacture, use or end-of-life of PVC products (see our Product Stewardship
Commitment: 2002 at www.vinyl.org.au).

We are not permitted the space to reply in detail to Ms Armstrong's article, but have
posted a full response on our website at www.vinyl.org.au.

In brief, while we agree it is appropriate to control the amount of dioxins released to the
environment, the keys to controlling dioxin emissions are incinerator design and
operation, not limiting the amount of PVC in the waste stream. Eliminating PVC
products would not have any significant impact on dioxin emissions.

With respect to Health Care Without Harm's claims about the phthalate plasticiser
DEHP commonly used in flexible PVC products, there is no evidence of "developmental
problems and hormone disorders" in humans receiving these treatments, nor evidence
of any harm to humans after more than 50 years of this plasticiser's use in PVC medical
devices and products.

Health authorities around the world recognise the benefits of treatments using PVC may
outweigh the perceived risks and they do not, therefore, advocate forgoing their use.
PVC continues to be a trusted material for health care providers. No other material can
match its track record of performance and safe use.

The suggestion that PVC should be eliminated from health care would lead to material
use decisions that would risk the quality of patient care, increase costs and do little, if
anything, to improve waste management, or environmental performance in the sector.

The Vinyl Council would be pleased to share further information with the clinical waste
management industry, nurses or others engaged in the sector to address concerns about
PVC and to work collaboratively on environmental improvements.

PVC: latest developments: recent studies show positive results for

poly(vinyl chloride) (PVC), but the industry needs life-cycle analyses for
medical devices made of PVC and alternative materials.(materials)

Medical Device Technology; 9/1/2004; Hansen, Ole Grondahl

Slow progress in Europe

After six years of comprehensive investigation by European scientists, civil servants and
politicians, the European Commission has not succeeded in finalising the
"Communication on Poly(Vinyl Chloride)" (PVC) or completing the proposed risk
assessment of phthalates. The Communication should result in a common European
strategy on how to move forward with environmental improvement of PVC. The
phthalate risk assessment should provide a common understanding on where to use
phthalates and risk reduction strategies for certain phthalates. The lack of a resolution
by the Commission may cause EU Member States to make national regulations.

However, while industry waits for the slow and bureaucratic EU system to finalise its
work, there are many developments going on in the European PVC field. Some of these
are pointing to the conclusion that PVC does not differ from alternative materials when
it comes to environmental impact.

New assessment of PVC

In 2000, the EU Parliament called for an assessment of PVC's environmental impact.

This was to compare PVC with alternative materials from a life-cycle perspective and
assess, from a holistic approach, whether any environmental benefits would be achieved
if PVC is exchanged for other materials. In April 2004, the Commission published the
long-awaited 320-page report, titled "Life Cycle Assessment of PVC and of Principal
Competing Materials." (1) The chief authors of the report are from PE Europe (Stuttgart,
Germany). They have assessed 230 existing life-cycle studies on PVC and alternative
materials and examined 35 of the most relevant ones. The most relevant studies are
those that fulfill the requirements outlined by ISO 14014 on life-cycle analyses (LCAs).
Most of the 230 studies were either undertaken before the standards were enforced or
aspects were neglected because of time or information limitations. The majority of them
deal with building products and only a few examine medical devices. These medical
device studies are not LCAs and do not fulfill the requirements for LCAs.

Base LCAs on products not materials

The report points out that LCAs should be based on products and not on materials. This
is because available literature is normally limited to one stage of the material's life cycle,
that is, the waste phase, which is not adequate, say the authors. All aspects of the
lifetime should be included in the analysis. If during use, a product has low weight, long
durability and needs little maintenance, this will have a substantial and positive
influence on its lifecycle result.

Of the 230 existing life-cycle studies, not one has specifically analysed medical devices
manufactured from PVC according to ISO 14014 and compared the results with those
fabricated from alternative materials. Thus, an LCA for medical devices is advocated.
The authors say, "No comparative LCA studies exist for materials used in medical
applications and little environmental optimisation in medical products has taken place
so far. Taking this into consideration, together with the large amount of waste produced
by hospitals as a result of waste medical products, the potential of comparative LCA
studies identifying methods for environmental improvement is expected to be high."
As good as any other materials

In June 2004, the European Council of Vinyl Manufacturers, the PVC raw-material
manufacturers association, welcomed the publication of the LCA study, which, it says,
confirms that PVC is as good as any other material. The association urged the
Commission to finalise the common European PVC strategy. It said, "After six years of
comprehensive investigation, the European Commission now has all the information in
its hands to conclude its horizontal initiative and publish a Communication on PVC."

PVC meets its obligations

Even though the Commission has not completed its deliberations, the European PVC
industry intends to keep the promises it made in its "Voluntary Commitment." This
commitment was signed by the Vinyl 2010 organisation on behalf of PVC raw material
manufacturers, stabiliser and plasticiser manufacturers and representatives of the more
than 23 000 PVC converters in Europe. The latest Progress Report of Vinyl 2010 was
published in April 2004 (www.vinyl2010.org). This report illustrates how far the PVC
industry has reached in its efforts to adapt the PVC material to the sustainable society of
the future. Secretary General of Vinyl 2010, Jean-Pierre de Greve, said, "Many sectoral
projects in PVC waste management have made significant progress in 2003 and are
ahead in many areas. I believe that targets for 2005 are now within reach. There is still a
lot of work to do, of course, but this is an excellent result and one to be proud of."

To ensure transparency and trust in the PVC industry's environmental programme a

monitoring committee has been set up. The European Commission and the EU
Parliament are represented and the environmental results are audited by independent
bodies. Minutes from monitoring committee meetings can be read at
www.vinyl2010.org

Phthalates and children

In addition to the lack of a European PVC strategy, after six years the Commission has
not finalised the phthalates risk assessment. This assessment may be decisive for
medical device manufacturers. The preliminary results of the EU phthalate risk
assessment show that most types of phthalates are completely without risk. However,
there is some concern over the use of the di(2-ethylhexyl)phthalate (DEHP). Several EU
toxicologists do not consider DEHP to be an appropriate plasticiser for tubing used in
small children because the exposure is so high.

The risk assessments are gradually being finalised and the conclusions are relatively
clear. However, the conclusions have not yet been published officially and it is not
known when this will happen. There are still some committees that are to evaluate the
conclusions, and others to evaluate the conclusions of the committees, and so on.

Member States may go their own way

When EU Member States do not have European phthalate risk assessment and risk-
reduction strategies to comply with, the negative consequence could be that countries
will make national regulations in this area. In Denmark, for example, the Minister for the
Environment has made some statements in this regard. He has become so tired of the
Commission's slowness that if the phthalate risk assessments are not finalised by the end
of 2004, he will promote a national Danish ban against phthalates in toys. In June 2004,
during a World Health Organisation conference on risk to children from exposure to
environment hazards, held in Budapest, Hungary, he has tried to persuade his fellow
Ministers for the Environment to follow him. "When the civil servants of the Member
states cannot reach an agreement, the environmental ministers have to show political
courage," he said to the Danish media.

It is a shame that after so many years it is still not possible to reach a panEuropean
understanding on the environmental and health aspects of using phthalates. When
toxicologists appointed by the Commission cannot reach a scientifically based
agreement the result may be that political emotions will rule the day and that would be
a great disappointment.

Reference

(1.) A copy of the report, published in English, is located at www.pvc.dk

Ole Grondahl Hansen

PVC information Council, Copenhagen, Denmark

Ole Grondahl Hansen is General Manager of the PVC Information Council, Norre
Voldgade 48, DK 1358 Copenhagen, Denmark, tel. +45 3330 8630, fax +45 3330 8631, e-
mail: ogh@pvc.dk www.pvc.dk

Solving the PVC problem: PVC is used extensively in society, but creates a
problem for disposal or recycling. Vicky Dunn considers some of the
options.(PVC)

Chemistry and Industry; 4/19/2004; Dunn, Vicky

The polymer polyvinyl chloride (PVC) is used extensively in floor coverings, windows
and doors, cable coverings, piping and packaging, 5.7mt/year of PVC are produced in
the European Union (EU), (1) 0.7mt are consumed and 0.18mt disposed each year in the
UK. (2)
PVC is generated through the chlorination or oxychlorination of ethene to form
dichloroethane, followed by elimination of hydrochloric acid (HCl) to form vinyl
chloride (chloroethene), which is then polymerised. Lead, and historically cadmium, are
added as stabilisers to prevent degradation during processing and over time. High
percentages of plasticisers, typically phthalate compounds, and smaller amounts of
pigments and other additives may be added to tailor the properties of the PVC for
specific uses.

Calls have been made to ban PVC on the grounds that the monomer and some additives
are toxic and that burning PVC can produce dioxins. (3) Others have countered that
PVC is an excellent material, many jobs depend on it, and its environmental problems
can be overcome. Vinyl 2010 is an initiative of the European Council of Vinyl
Manufacturers (ECVM) and others to enhance the sustainability of the PVC industry,
addressing technology, environmental performance, waste collection and recycling. (4)

Options for disposal of waste PVC are landfill, incineration or some form of recycling.
The collection and transport systems must also be considered to determine the overall
economic and environmental benefits of each option. Relatively pure waste streams are
available from roof and floor coverings, used piping, windows and doors, and factory
residues, but PVC is difficult and costly to separate from mixed wastes, Due to the long
life of PVC in many applications, waste volumes are forecast to rise. (5)

Unplasticised PVC and metal stabilisers have little environmental impact in landfill, but
phthalate plasticisers can leach to groundwater. (6) The cost of landfill in the UK is
increasing due to the landfill tax, and scarcity, particularly in the south-east.

Incineration

Incineration is a common disposal option in parts of Europe and may become more
widespread in the UK. Hydrochloric acid is produced when PVC is incinerated which
must be removed from the flue gasses by scrubbing, for instance with lime. This
produces solid residues requiring disposal. Highly carcinogenic dioxins may be
generated in the flue gases and solid residues. Investigations are ongoing as to whether
PVC can be burned cleanly in dedicated 'energy recovery' plants. (4,7)

Mixed plastic waste streams may be treated by melting to form a new product polymer.
Unfortunately, the melting and decomposition temperature of PVC is lower than many
other plastics, causing problems with HCl generation and uneven melting in the plant.
Some plants use optical scanners to separate the PVC. The Redop process, (4) which is
currently undergoing large-scale trials, aims to dechlorinate mixed plastics waste
including PVC and use the hydrocarbon content as a commercially viable replacement
for coal in steel production.

PVC is soluble in certain solvents which leave other plastics untouched --presenting an
opportunity for separation. Mechanical recycling means reforming the PVC waste into a
new product without chemical transformation. Solvay operates a process (Vinyloop)
where PVC waste is dissolved and the PVC reprecipitated. (8) The quality and colour of
the product are controlled by selection of feedstock--white is most valuable, mixed
colours are less so. Valuable additives such as lead and phthalates are retained in the
product. A Vinyloop plant already operates in Ferrara, Italy, with a capacity of 250-
750t/month, and a joint agreement with Kobelco Eco-Solutions, Japan, to build Asia's
first plant, capable of recycling 12 000t/year from 2005, was announced in January 2004.

Recyling

Chemical or feedstock recycling processes involve a chemical transformation of the PVC

waste. In some ways this is a distortion of the definition of recycling--that materials go
round again and again--but these processes clearly offer re-use of the energy or material
in a product and avoid use of virgin material. As PVC lacks complex chemical structure
or expensive elements, there is little possibility of creating a high-value product.
However, if feedstock recycling makes products with some value and disposes of the
PVC, it may be cost effective.

Dow BSL operates a plant in Leipzig, Germany, accepting high chlorine content waste
including PVC and converting it to pure HCl for further PVC manufacture, and raising
heat and steam from the hydrocarbon component. (3,9)

The Stigsnaes plant in Denmark is a converted hydrolysis plant which de-chlorinates the
PVC and produces a chlorine-free organic liquid for use as a feedstock. Its capacity is 40
000t/year of PVC waste. (9)

The Linde process involves heating PVC with silicate slag at 1400-1600[degrees]C,
producing syngas (CO/[H.sub.2]), pure HCl gas and a slag containing heavy metals and
additives. (9) Though tested at Tavaux, France, the process has not been taken further
(10) and the ECVM is examining other gasification technologies. Generally, the
production of pure HCl suitable for other uses onsite is a goal of treating high chlorine
content wastes, but the NKT pyrolysis process, which has been tested at pilot-plant
scale, instead uses lime to capture the Cl content, producing calcium chloride, coke,
metal chloride concentrate (to 60% Pb[Cl.sub.2]) and organic condensate (fuel oil). (10)

Feedstock recycling can handle mixed materials which cannot be economically

separated for use in mechanical PVC recycling, making the two processes
complimentary.

Further measures

Only 2-3% of PVC waste in the EU is recycled at present. (10) Wrap, which aims to
create markets for recycled resources, is about to report on the state of PVC recycling
and markets for recyclate in the UK. (2) There are capable processes for mechanical and
feedstock recycling of PVC and technology will improve with research. Increased
recycling depends on collection systems and the relative prices of other disposal options.
Recycling rates will also depend on what regulations are applied to recycling PVC
containing phthalates and heavy metals. (5)
In Brief

* Green groups call for a PVC ban because of toxicity and dioxin production

* Vinyl 2010 initiative pushing for sustainable PVC industry

* Options for disposal of waste PVC are landfill, incineration or recycling

* Only 2-3% of PVC in Europe is recycled but more options are emerging

References

(1) Association of Plastics Manufacturers in Europe website www.apme.org

(2) Wrap website www.wrap.org.uk

(3) Greenpeace report, 'What's wrong with PVC?', 1997

(4) www.vinyl2010.org

(5) ENDS report issue 303, April 2000

(6) European Commission report, 'The behaviour of PVC in landfill', February 2000

(7) European Commission report, 'Influence of PVC on the quantity and hazardousness
of flue gas cleaning residues from incineration', April 2000

(8) Solvay website www.vinyloop.com

(9) European Commission report, 'Chemical recycling of plastics waste (PVC and other
resins)', December 1999

(10) ENDS report issue 340, May 2003

COPYRIGHT 2004 Society of Chemical Industry

INDUSTRIAL CHEMICAL DIVISION SEARCHES

World fluorochemicals demand forecast to reach 2.2 million metric tons in

2007.(Industry News)
 The Journal of Coatings Technology; 10/1/2003

Global demand for fluorochemicals is forecast to increase 3.2% per year through 2007 to
2.2 metric tons, according to "World Fluorochemicals," a new study published by The
Freedonia Group, Inc., Cleveland, OH.

The study suggests that value gains will increase 6.5% per year to $12.9 billion, due to a
strong outlook for higher value products such as HFCs and fluoropolymers. The fastest
gains, in terms of volume, are expected for fluoropolymers because of new product and
application development, accelerating growth in large markets, and expansion in the
electronics sector. Inorganic and specialty chemicals are also expected to have strong
gains due to growth in worldwide aluminum production and continued expansion in
the use of fluorine-based pharmaceuticals.

Freedonia reports that environmental concerns have had a dramatic impact on the
global fluorochemicals industry since the early 1990s. They predict that the trend will
continue through the end of this decade due to the inclusion of a number of key
fluorochemicals in high profile international agreements. Furthermore, West European
countries have outlined the strictest schedule for curtailing HCFC production, and
certain countries in the region with strong environmental track records, such as
Germany and Denmark, are encouraging the use of hydrocarbons and other
nonfluorinated alternatives.

In addition, the study states that the U.S., the world's largest producer and consumer of
fluorochemicals, has been successful at eliminating CFC usage over the past decade.
However, attempts at replacing HCFC production with the less environmentally
damaging HFCs have encountered some obstacles. The fastest growth is expected in the
Asia/Pacific region, excluding Japan. Fluorochemical demand in China, India, and other
developing nations in the region is expected to have particularly healthy gains. Due to
rapid industrialization and rising consumer incomes, these countries will have a
significant effect on the demand for refrigeration and air conditioning equipment and
other products that use fluorochemicals. In addition, these countries tend to replace
CFCs and HCFCs with other fluorine compounds.

"World Fluorochemicals" is available for $4,800 from The Freedonia Group, Inc. For
more information, contact Corinne Gangloff at 440.684.9600 or pr@freedoniagroup.com.

Special acrylic esters have broad prospect.

China Chemical Reporter; 11/26/2005

Rapid production growth of special acrylic esters

The brisk acrylic acid market in recent years has mainly benefited from the rapid
development of the acrylic acid in-depth processing sector and the constant expansion
in the application market of acrylic acid downstream products. The output of acrylic
acid in China was 170 000 tons in 2004. The total consumption of acrylic acid was 282
000 tons. The consumption in general-purpose acrylic esters was around 171 000 tons,
accounting for 60.6%. The consumption in special acrylic esters was around 27 000 tons,
accounting for 9.7%. The consumption in polymers and other products accounted for
29.7%.

The drastic demand increase of special acrylic esters caused by the development of the
coatings industry, and the radiation curing technology has promoted a rapid production
growth of special acrylic esters. The output of special acrylic esters in the world was
only 66 000 tons in 1988 but reached 180 000 tons in 2003, the average annual growth
being over 10%. Varieties with the biggest output are monomers and oligomers used in
radiation curing. Hydroxyl acrylate extensively used in the coatings industry and the
fine chemical industry also have quite big production.

China has more than 30 special acrylic esters producers with a total capacity of 80 400
t/a. The total output was 41 590 tons and the export amount was 6 212 tons in 2004.
More than 20 varieties can be produced. Besides the commonly used monomers such as
trihydroxymethylpropane triacrylate (TMPTA), tripropyl glycol diarcylate (TPGDA),
neo-pentyl glycol diacrylate (NPGDA), 1,6-hexandiol diacrylate (HDDA), dipropyl
glycol diacrylate (DPGDA), pentadiol diacrylate (PDDA), hydroxyethyl acrylate (HEA),
and hydroxypropyl acrylate (HPA), second-generation special acrylic ester monomers
with low skin irritation such as ethoxylated TMPTA (EO-TMPDA), propoxylated
NPGDA (PO-NPGDA), propoxylated glycerol triacrylate (PO-GLTA) also have large-
scale production. The output of special acrylic ester monomers was 27 350 tons in 2004.
Special acrylic ester oligomers started specialized production in 2001 and varieties
include epoxy acrylate (EA), modified EA, phenol formaldehyde epoxy acrylate (FA),
polyurethane acrylate (PUA), and polyester acrylate (PEA). The output of special acrylic
ester oligomers was 14 240 tons in 2004.

Bright market prospect of radiation curing

Radiation curing is the most important market of special acrylic esters. For long years in
the past the radiation curing market in the world was mainly concentrated in Europe
and North America. The rapid development of the radiation curing sector in China has
led to a drastic growth of the radiation curing market in Asia in recent years. The output
of radiation curing products in Asia reached 121 000 tons and the market shares was
43.8% in 2004. According to projection, the output of radiation curing products in Asia
will continue to increase and reach 180 000 tons in 2009. In radiation curing products in
foreign countries, UV (ultraviolet) varieties account for 95% and EB varieties account for
5%. China has yet no EB (electron beam) curing production lines, and all radiation
curing products are UV varieties. China produced 32 599 tons of UV curing products in
2004, an increase of 27.4% over the previous year. Among UV curing products, UV
coatings have the biggest output and the output reached 23 300 tons in 2004. UV inks
come next and the output was 9 057 tons in 2004. The production of UV adhesives in
China started from scratch in 2002 and the output was 242 tons in 2004. Major varieties
of UV adhesives are those used in medical apparatus, optical instrument, glass,
handicraft, LCD and DVD sectors.

The distribution of the radiation curing sector in China is not balanced. 73% of
producers are concentrated in East China and South China, especially in Jiangsu,
Zhejiang, Shanghai, Guangdong and Hunan. The radiation curing sector in Northeast
China and Northwest China is relatively backward and needs urgent development.

In spite of a rapid development, the radiation curing sector in China still has a
considerable gap compared with advanced countries and regions such as the United
States, Europe and Japan. Producers have weak research and development ability and
there are few high-end products, especially patent products. Water-based UV coatings
and inks, powder UV coatings and double curing systems developed in recent years
have already started commercial production in foreign countries but are still at the
development stage in China. The radiation curing market in China is therefore still very
big and the special acrylic ester sector has an extensive development space. The output
of radiation curing products in China was 32 600 tons in 2004, consuming 29 300 tons of
special acrylic esters. It is expected that the output of radiation curing products in China
will reach 60 000 tons in 2009 and around 54 000 tons of special acrylic esters will be
needed.

Table 1 Major Special Acrylic Ester Producers in China (t/a)

Producer Capacity

Cytec (Shanghai) Surface Specialties Co. 15 000

Yantai YK Chemical Engineering Co., Ltd. 12 000
Eternal Chemical Materials (Zhuhai) Co., Ltd. 11 200
Hontex Chemicals Co., Ltd. 8 000
Nantong Litian Chemicals Co., Ltd. 5 000
Jiangsu Sanmu Group Co., Ltd. 5 000
Huizhou Hengchang Petrochemical Co., Ltd. 3 000
Yixing Honghui Chemical Co., Ltd. 3 000
Tianjin Tianjiao Chemical Co., Ltd. 2 000
Shanghai Gaoqiao Petrochemical Company Ltd. Acrylic Acid 2 000
Plant
Heygey Chemical Co., Ltd. (Shunde) 2 000
Hunan Yada New Materials Sci-Tech Co., Ltd. 2 000
Beijing Eastern Acrylic Chemical Technology Co., Ltd. 1 500
Shanghai Showa Highpolymer Co., Ltd. 1 000
Wuxi Resin Plant (BSNCM) 1 000
Tianjin High-Tech Chemical Co., Ltd. 800
Tianjin Research Institute of Chemical Reagents 700
Kuang Shun Screen Printing Materials Co., Ltd. 500

Hydrogen peroxide. (Industry Profile)

 Economic Review; 2/1/1990

Hydrogen peroxide is a basic chemical which is decomposed without effect on the

decomposing agents. It is commercially used as an antiseptic agent, bleaching and
oxidising chemical. According to technical sources, manufacture of hydrogen peroxide
involves relatively sophisticated technology for the supply of which, the foreign firms
usually asked for a high price. The foreign firms are reported to be generally interested
in making collaboration in some large-size project.

The technical source indicated that hydrogen peroxide can be manufactured through
the following process.

i) By electrolytic oxidation of sulphuric acid or a sulphate with subsequent hydrolysis

and distillator.

ii) By decomposition of barium peroxide with sulphuric or phosphoric acids.

iii) Hydrogen reduction of ethylenthraquinone followed by oxidation with air to

regenerate the quinone and produce hydrogen peroxide.

iv) Electrical discharge through a mixture of hydrogen, oxygen and water vapour.

At present, there is no unit in the country for the manufacture of hydrogen peroxide
and the local demand for this chemical is met through imports, the trend of which, has
been as under during the past seven years.

Drastic capacity expansion of hydrogen peroxide leading to price drop.

(Market Report).(Brief Article)

China Chemical Reporter; 3/6/2002

Many new hydrogen peroxide units have cropped up in the recent years. Both the
capacity and the output have made a rapid increase and new breakthroughs and
innovations have also been made in application fields and product varieties. As a
sunshine sector, the hydrogen peroxide production has a bright prospect ahead.

With the development of chemical fertilizer and chloralkali sectors, byproduct hydrogen
has started comprehensive utilization. Advances in hydrogen preparation from coal and
methanol cracking has greatly reduced the production cost and expanded the application
market of hydrogen peroxide.
The application market of hydrogen peroxide has made a constant expansion in the
recent years from sectors of printing/dyeing and textiles to sectors of food, electronics,
papermaking, environmental protection, pharmaceuticals and chemical synthesis.

The price of hydrogen peroxide reached the highest of 2 800 yuan per ton (27%
concentration) in July 2000. Since the rectification and closure of small printing/dyeing
and papermaking mills causing serious pollution, great many hydrogen peroxide units
constructed in 1999 have lost a considerable market share. (CCR 1999, No. 30) The
market price of hydrogen peroxide has dropped all way to 1800 yuan per ton today.

The hydrogen peroxide production in China is strong in the east and weak in the west.
The production capacity in the south is expanding fast. The capacity of hydrogen
peroxide in Jiangsu, Shanghai, Zhejiang, Guangdong and Fujian province accounts for
around 50% of the national total. The development in the north is relatively slow. Most
producers are concentrated in economically advanced areas along eastern coasts. There
are only 10 producers in the central and western regions, accounting for 18% of the
national total and the capacity is around 68 500 t/a The distribution of hydrogen
peroxide production basically tallies with the pattern of overall economic development in
China.

In spite of this, Gaomi Chemical Plant still conducted expansion to its 40 000 t/a unit in
2001. (CCR 2001, No. 16) Zhejiang Lanling Chemical Industrial Co., Ltd. has
constructed a 10000 t/a in Xinjiang Chemical Fertilizer Plant because they think that
China is still importing hydrogen peroxide and also hope to export the product to the
international market.

Price of Hydrogen Peroxide (27%)

(yuan/t)

Jun-99 Dec-99 May-00 Jul-00 Feb-01 Apr-01 Jun-01 Aug-01 Oct-01

2 400 2 350 2 500 2 800 2 500 2 300 2 200 2 150 2 000

Jun-99 Jan-02

2 400 1 800
Production of Hyrdogen Peroxide in China

('000 t)

1995 1996 1997 1998 1999 2000

Capacity 364 404 476 527 694 928

Output 250 280 349 447 500 800
Import and Export of Hydrogen Peroxide

1998 1999 2000 2001

Import amount (t) 29 860 37 865 42 696 31 360

CIF price (USD/kg) 0.36 0.38 0.40 0.43
 Export amount (t) 1078 2817 6518 7332

PERFORMANCE PRODUCT DIVISION SEARCHES

Upwardly mobile: although the industry has been fraught with problems,
the use of additives has never been more popular. To overcome spiralling
costs and the tight supply situation for resins, processors are turning to
additives to enhance their processes. Asia, especially China, is also
becoming an important market.(Additives)

Plastics & Rubber Asia; 9/1/2005

No more in the doldrums

In the 1990s, the focus of the additives industry was on consolidation. According to
research company Townsend Polymer Services & Information's sixth study on the global
plastics additives market, a hundred acquisitions and joint ventures took place during
the 1990s as companies responded to globalisation and regulatory issues in a drive to
increase shareholder value. This was followed by three years of cost containment, plant
shutdowns and business rationalisations as the additives industry suffered from
economic slowdown in the plastics market, increased offshore competition and severe
price erosion.

Though the industry appears to be on the road to recovery, it is not out of the woods
yet. With feedstock price increases putting pressure on additives margins and forcing a
run up in prices starting in 2004 and continuing to 2005, Townsend says further
upheavals are expected. Nevertheless, even with the problems, the industry is on the
rebound. "We are seeing a movement of key end use applications to Asia," said Fred
Gastrock, Project Manager at Townsend, adding that the industry will continue to
restructure to improve efficiencies and reduce costs. "The establishment of
manufacturing and sales offices in all regions and consolidations through acquisitions
and joint ventures by additives suppliers is expected to continue," he added.

In 2004, global plastics additives consumption in North America, Europe, China, Asia
Pacific and the rest of the world was 9.5 billion tonnes or US$18.9 billion. Of this, Asia
consumed US$7.5 billion. China's monstrous appetite had it as the largest single
consumer of additives at US$2.9 billion with the rest of Asia (excluding India but
including Japan) at US$4.6 billion (Townsend includes India in the "rest of the world"
category since it has no specific data for it).

Plasticisers very much in the lead

Townsend divides the additives business into 15 categories that are made up of anti-
blocking agents and antioxidants, as well as coupling, anti-static and chemical blowing
agents. Others in the category include flame retardants, heat/light stabilisers, impact
modifiers/processing aids, lubricants/mould release agents, nucleating/clarifying
agents, organic peroxides, plasticisers and slip agents.

Of the total global consumption, plasticisers took the largest share of the pie with 58%,
followed by property extenders (23%), which include heat stabilisers, flame retardants
and antioxidants, to name a few. Polymer modifiers such as impact modifiers and
coupling agents registered a 12% share and processing aids like slip agents, anti-
blocking materials, lubricants and mould releases tallied 7%.

Growth focused in Asia

With electrical/electronic and business machine housing production moving to China,

growth will be centred in Asia. When asked how China would contribute to the
supply/demand situation, Gastrock said, "What we are seeing is a build up of capacity
for many additives in China, particularly where additives are growing at 10% annually.
There are numerous small domestic suppliers but global additives companies are
expanding in China, primarily through joint ventures with Chinese producers."

[GRAPHIC OMITTED]

As for the future, looking into the crystal ball, Gastrock said, "Strong growth at 10% a
year is expected through till 2009 in China because of the movement of moulding
operations and rapid infrastructure development." Growth in the rest of Asia is expected
to be more modest at 3-4% a year until 2009, in line with the growth in North America
and Europe.

Main players in Asia

Global companies with operations in China include Albemarle, Ciba, Akzo, Arkema,
Israel Chemicals, Chemson and ExxonMobil, while Chemtura has an important
additives joint venture in Korea.

Already operating a joint venture company, Ningbo Jinhai Albemarle Chemical and
Industry, Albemarle has launched into the second phase of its Chinese operation. It has
acquired land to build a technology centre and a repackaging facility for polyolefin co-
catalysts and additives. Initial activities will include basic flame retardant technical
service for customers in China and Asia. In addition, the company says the facility will
feature a flexible PU-foam flame retardant testing laboratory. In relation to this,
Albemarle has formed another joint venture company, Shanghai Jinhai Albemarle Fine
Chemicals, for the production and marketing of stabilisers and intermediates.

As part of a wider restructuring of its oleochemicals business, German company Cognis

has transferred part of its additives business to an existing joint venture company with
Malaysia-based Golden Hope. To be completed at the end of the year, the transfer
includes oleochemicals-derived plasticisers, lubricants and release agents.

Value creation by suppliers

At the Additives 2005 seminar held in New Orleans in April, Ron Babinsky, Business
Manager at Townsend, delivered a keynote address on how additives can be used to
add value to processes. He said, "Additives provide vital process and performance
characteristics and offer high valued-added products that are able to create profit
opportunities."

While this statement basically sums up why additives are very much in demand, on the
supply side the focus is on the marketing of solutions. "Rather than setting just single
products, additives suppliers are looking to add to value proposition by broadening
product lines and providing a complete "market basket" of products," he added. The
one-stop solution concept is further expanded. "Suppliers are packaging their products
with environmental, safety, regulatory, testing, training and patenting services,
ultimately with the aim of Luring potential customers," Babinsky said.

Due to the tough market situation, Babinsky said that additives suppliers are moving
toward value creation by targeting Loyal customers, to retain their competitive
advantage. "As resin producers reduce the number of grades they want to produce,
more speciality grades utilising additives are being pushed down to the compounders.
Thus, compounders are becoming even more important as additives customers," he
added.

With environmental and regulatory pressures, particularly regarding halogenated flame

retardants, heavy metals, dust-free additives, end of life recycling and the phthalate
issue in plasticisers, processors are also looking at alternatives. Furthermore, to aid
processors who are looking at cost reductions without affecting the quality of their
products, suppliers are focusing on additives that require low loading levels, yet are able
to achieve high outputs.

Trends in the market

The materials replacement market will be a main driver of the additives market,
especially with polyolefins replacing PVC due to environmental concerns. The use of
PP/TPOs is also growing in ETP products, while PET bottle production has a competitor
in PP. Meanwhile, ETP is increasingly being used in products that were traditionally
made of metal glass and thermosets. Additives suppliers are also pursuing market
niches with long-term growth potentials, especially additives for wood composites and
long fibre-reinforced plastics. According to Townsend, last year the market for long
fibre-reinforced products exceeded 380 million lbs and this is expected to double by
2008.

Wood composites have experienced dramatic growth in North America, especially in the
decking market, and have averaged an annual growth of 25% since 1998. Though the
wood fibre is said to be completely encapsulated by the resin, thereby minimising the
potential for moisture absorption and microorganisms attacking the wood content,
recent information has shed tight on the actual durability of the wood composite
products. The publications highlight that, in actual fact, wood particles close to the
surface of wood composite products are subject to some moisture absorption and fungal
decay. As such, a focus at the April Additives seminar was on anti-microbial additives.
US Borax was promoting the use of its zinc borate preservative to reduce decay and UV
degradation. Other companies like Ciba Speciality Chemicals spoke about products to
prevent staining and microbe growth.

DuPont is also promoting its Fusabond polymer modifiers for wood composites.
"Fusabond coupling agents have been shown to improve tensile strength 200-300% more
than formulations that do not use coupling agents in PE/wood composites," said Megan
O'Brien, DuPont Marketing Programs Manager. As well, DuPont has a patent-pending
co-polymer product, W PC-576D. Rather than using traditional maleic anhydride
grafting, these co-polymers use anhydride functional monomers. While 576D has been
shown to work well, it may also allow producers to use Less than the standard 1-3%
additive levels. Also, Chemtura's Polybond coupling agents are said to not only improve
mechanical properties such as tensile and flexural strength and impact resistance but
also reduce water absorption in wood composites.

In the same vein, Dyneon has developed hydrocarbon-based block co-polymers that
feature proprietary controlled architecture materials (CAM). In a paper presented by
Dyneon's Jim Nelson at the WPC 2005 seminar early this year, he says that these are
being tested in wood composites and nanocomposites as well as for surface modification
in polyolefins. The new CAM system is aimed at improving processing and surface
aesthetics as well as increasing stiffness and tensile strength, lowering edge tear and
scrap rates.

New developments in the use of carbon nanotubes were also highlighted at the
Additives talk. Mark Hyman, from Hyperon Catalysis International, spoke about multi-
wall carbon nanotubes (MWNTs) being used as a conductive additive not just for
engineering resins but also in elastomers to make 0-rings for automotive fuel systems.
He said, "Several researchers have also been investigating using MWNT and nanoclays
in a synergistic mixture as a non-halogen flame retardant."

New flame retardants were also promoted by Clariant that has a non-halogen product
based on an organic phosphinic acid salt and can be used in electrical/electronic
applications. On the other hand, nanoclays are also being used as flame retardants in
materials like HIPS, PP and nylon. "Recent work has shown that nanocomposites may be
synergistic with conventional fire retardants, including halogen-based, phosphorous-
based and metal hydroxide-based systems," said Charles Wilkie, Professor of Chemistry
at Marquette University.

ROW 10%
China 15%
 Asia 24%
North America 27%
Europe 24%

Note: Table made from pie chart.

Of the types of additives consumed most by Asia and

China, plasticisers took up a large proportion

Plasticisers 61%
FR 12%
IM 7%
HS 7%
Lubes 4%
AO 3%
CBA 2%
Others 4%

COPYRIGHT 2005 Plastics & Rubber Asia Ltd.

Formaldehyde: in spotlight's glare.(EDITOR'S PAGE)

Wood & Wood Products; 11/1/2005; Christianson, Rich

Last August, I reported on the International Agency for Research on Cancels decision to
elevate formaldehyde's status from a "probable" to a "known" human carcinogen.

To recap, IARC's ruling was based on its interpretation of several epidemiological

studies of formaldehyde's health effects. The most important proved to be a study by
the National Cancer Institute of 22,000 workers exposed to formaldehyde at 10 plants,
compared to 3,000 chemical workers not exposed to formaldehyde. While the NCI study
found lower mortality from all cancers, it also found an excess incidence of
nasopharyngeal cancer, an extremely rare form of cancer that occurs where the back part
of the nose opens into the upper throat.

Much has happened, or is happening, on the formaldehyde front since IARC moved
formaldehyde to the top rung on its ladder of cancer classifications, where it joined 94
other known human carcinogens. In fulfilling my pledge at the conclusion of my August
2004 column for readers to "stay tuned" to new developments of formaldehyde's
continuing saga, here is a timely and important update.

U.S. Government Hops on IARC's Bandwagon

Citing the IARC ruling, the National Institute of Environmental Sciences, has nominated
formaldehyde for review and possible reclassification by the National Toxicology
Program as a known human carcinogen. Formaldehyde is currently listed in the
Register of Carcinogens as "reasonably anticipated to be a human carcinogen."

NCI Works on Follow-up

Industry's biggest criticism of NCI's 2003-2004 study reviewed by IARC was that it
involved workers who were exposed decades ago to formaldehyde levels far exceeding
those permitted in workplaces today by the Occupational Safety and Health
Administration. According to the Formaldehyde Council, a consortium of industry
groups that includes the Composite Panel Assn., American Forest & Paper Assn.,
Kitchen Cabinet Manufacturers Assn. and the National Funeral Directors Assn., the
NCI's epidemiological study update is to "make available additional data for a more
informed scientific evaluation of this important data set." The update is expected to be
completed in 2006.

In the meantime, the U.S. Environmental Protection Agency has delayed updating its
formaldehyde cancer risk assessment, last revised in 1987, until after NCI completes its
update.

BIFMA Proceeds with Furniture Emissions Standard

Members of the Business and Institutional Furniture Manufacturers Assn. recently voted
in favor of a proposed Furniture Emissions Standard. The voluntary FES, which is being
subjected to ANSI approval, establishes harmonized testing procedures for emissions of
formaldehyde and VOCs in office furniture and seating.

BIFMA said it hopes the U.S. Green Building Council will recognize the FES within its
Leadership in Environmental and Energy Development certification program for low-
emitting products. The LEED-CI EQ Credit 4.5 establishes emission limits of 50 parts per
billion for workstations and 25 parts per billion for seating. Those limits are generally
considered out of the reach of furnishings made with particleboard and MDF made with
urea formaldehyde resins.

Public Comments Cast Formaldehyde's PR Problems

Manufacturers of particleboard and MDF received a jolt from the keynote speaker at the
CPA's fall meeting last month.

Dan Miller, executive vice president of Kimball International, cited the IARC ruling and
LEED System in forcefully stating that manufacturers of particleboard and MDF must
find an alternative to urea formaldehyde in their products.

"Formaldehyde is a bad actor," said Miller, who is also the current president of BIFMA.
"We have got to find a way to eliminate it, and in the meantime, substantially reduce it."

Challenged by a member of the audience about whether Kimball would be willing to

pay more for a formaldehyde-free substrate, Miller matter-of-factly replied, "No."
CPA Promises Important Announcement

Members of the Composite Panel Assn. have reason to be proud of the strides they have
made to reduce formaldehyde emissions from their products. Tom Julia, president of
the CPA, estimated that emissions have been reduced 90 percent over the course of the
last 20 years.

As it continues to advocate the safety, and environmental and utilitarian benefits of

particleboard, MDF and hardboard, the CPA promises to make a major announcement
in the first quarter of 2006 concerning the creation of new voluntary formaldehyde
emission standards. One can only surmise, based on all that is swirling around
formaldehyde, that the CPA's announcement will entail emission figures well below
what is currently mandated.

Stay tuned.

Awaiting the whirlwind: the business tempo of the coatings industry in

2005 was quieter but there is a whirlwind brewing.(mergers)

PPCJ. Polymers Paint Colour Journal; 1/1/2006; Jotischky, Helma

Just as the dust is settling from past M&A squalls, new whirlwinds are brewing up. Less
forceful than those in 2004--when M&A activity reached a frantic high--these have
produced fewer and smaller deals in 2005.

Marked differences prevailed within the coatings industry's supply chain with regard to
the size and tempo of M&A transactions. Deals were at their biggest, with activity most
brisk, at the upstream chemical and petrochemical end, more moderate in size and pace
in the coatings raw material segment, but smaller and fewer transactions in the
downstream coatings market itself.

Restructuring continued in the chemical/petrochemical field--the fall-out from previous

transactions. A consolidation process was in action as well, as previously hived off
businesses proceeded to regroup or remerge, some emerging as new titans. Hexion in
resins and XSYS in inks were cases in point. Private equity groups played a key role in
these structural manoeuvres.

Less bold were the M&A activities in the coatings sector, where most of the mega-deals
had occurred in the late 1990s, followed by a period of digestion. By 2005, however, the
industry was ready for smaller bolt-on acquisitions, motivated by portfolio building or
geographical expansion. BASF's strengthening of its coil coatings business with the
purchase of Rhenania, or Akzo Nobel's further incursion into paint distribution with the
acquisition of the German Lange Group are examples of portfolio-building, while
Tikkurila's further venture into Russia and Akzo Nobel's into Ukraine typified the
geographical expansion approach.

Overall, settlement and consolidation proved the dominant trends of 2005.

At the Sharp End: chemicals and petrochemicals

Upstream chemicals and petrochemicals emerged at the sharp end of the year's M&A
agenda--completing unfinished restructuring business and buoyed up by a topical
interest in petrochemical refinery products and oil-based intermediates. Here, too,
private equity groups offered a helping hand.

By far the year's biggest European deal was an all-UK affair. The olefin and refinery
business, with a $9 bn price tag, was sold by BP and bought by the Ineos Group. It was a
purchase which made Ineos the world's fourth largest petrochemical producer--after
Dow, DuPont and BASF--as well as one of the top ten oil refiners with a daily capacity of
412 000 barrels, at a time when refining margins are particularly attractive.

Nor was this the only Ineos purchase during the year. Ineos itself--the result of a MBO of
Inspec's Antwerp facility in 1998--has grown rapidly under Jim Ratcliffe into a $8 bn
turnover company thanks to a series of acquisitions. ICI's chlorine business and
Degussa's Phenolchemie were early prize purchases. During 2005 alone, Ineos pulled off
half a dozen deals, including BASF's US and Canadian-based polystyrene business,
Cytec's amino resin operation, Solvay's rigid plastic foils unit as well as full control of
the Dutch polyvinyl chloride producer EVC. To top it all, Ineos also added Rhodia's UK-
based chlor-alkali and sulphuric acid business.

The second largest transaction involved petrochemicals as well. Basell, the polyolefin
joint venture between BASF and Shell, had been up for sale for upwards of a year, when
it was bought in 2005 for 4.4 bn euros by a consortium led by the US-based Access
Industries and the Chatterjee Group of India. Basell, the world leader in polypropylene
and European leader in polyethylene fetched the year's second highest price among
European chemical transactions.

High price

Degussa, the German speciality chemical group, netted the third highest price. The
German conglomerate RAG, which already owned 50.1% of the company, now bought
an additional 42.9% for 2.8 bn euros ($3.3 bn) from the second largest shareholder Eon,
with an additional 600 m euros paid to squeezed out minority shareholders.

More is yet to come. To help it to finance the deal, RAG reportedly used its majority on
Degussa's supervisory board to decide on selling its profitable construction chemicals
division, which some analysts value at 2 bn euros. BASF is said to be interested in
acquiring the business.
Other sizeable chemical transactions included the $1.3 bn acquisition of the UK Vita
Group by Texas Pacific of the US, and the $1.7 bn takeover of explosives maker Dyno
Nobel by the Macquarie Bank of Australia. Merck's global electronic chemicals business
went for 270 m euros to BASE These and other deals are summarised in tabular form.

Spearheading Consolidation: the resins industry

Further down the supply chain, the resins industry continued the transformation which
had started in the late 1990s, and reached a peak in 2004 In that year, there had been
purchases by private equity groups Blackstone (of Celanese) and by Apollo
Management (of Borden Chemical, Bakelite and Eastman's CASPI business),
divestments of NeoResin by Avecia (to DSM) and by Akzo Nobel of its core resins
business (to Nuplex) as well as a 1.5 bn euro bid by Cytec for UCB's Surface specialty
business--all this in 2004. A greater consolidation was to follow in 2005.

The year started well for Cytec with the completion of the UCB transaction at a reduced
price of 1.4 bn euros. On the other hand, at the behest of regulatory authorities, Cytec's
amino resins business was put up for sale, with Ineos emerging as the buyer.

The year's most remarkable development, however, was the emergence of a new resin
empire--the Hexion constellation under the aegis of the Apollo private equity group.
The separate demergers in 2004 were followed by one grand mega-merger, in which
Apollo brought together in the new Hexion Group the three holdings it acquired in 2004
with its earlier bought epoxy and Versatics business from Shell in 2000.

And so what had been Resolution Performance Products (the ex-Shell business) was put
together with Resolution Specialty Materials (the ex-Eastman operation), Bakelite and
Borden Chemical to form the world's largest producer of thermosetting resins, with
combined sales of $4.1 bn, 7000 employees and 86 plants in 18 countries.

Global group

The US-headquartered Hexion was a truly global group, with 51% of its sales derived
from North America, 32% from Western Europe and 17% from Asia and other parts of
the world. This global character was strengthened during 2005 with two further
acquisitions; from Rhodia and Akzo Nobel. Rhodia's coatings business, comprising
emulsion and powder latexes and special acrylic resins, included eight manufacturing
sites--two in France and one each in Germany, Spain, the UK, Brazil, Australia and
Thailand. Two thirds of the sales, however, were derived from Europe.

Hexion's second purchase--Akzo Nobel's resin business for inks and adhesives with
sales of 166 m euros--is based in the Netherlands at Maastricht, with additional
manufacturing sites in seven countries including Portugal, the US, Argentina, New
Zealand and China.
Its products encompass both printing ink resins, alkyds and solid tackifier resins. Subject
to regulatory approval, a truly global resin empire will emerge. For Akzo Nobel it was
the continuation of the planned divestment of much of its chemical holdings.

Even as one group merges, another demerges.

The year's most notable demerger was that of the Reichhold Group through a
management buy-out from the Japanese Dainippon Ink and Chemicals (DIC). The
divestment, prompted by the underperformance of the originally American resins
company with sales of nearly $1 bn--had been on the cards for some time. Its form,
however, came as a surprise--sold for just $1 and the assumption of a $198 m debt to
CEO John Gaither and his management team.

The Austrian operation was excluded from the deal, leaving DIC a tiny toehold in the
European resin market with a share of less than 1%. The Reichhold divorce ended an 18-
year spell of Japanese ownership which had started with a much-contested acquisition
back in 1987.

Overall, however, 2005 gave renewed impetus to the resin industry's global empire
building and consolidation.

Empire Building in Printing Inks

Empire building was also the keynote in the printing ink industry. The deals were few
but stunning. Here, too, private equity capital and management buyouts played a key
role.

The new group which emerged during the year was XSYS under the banner of the CVC
Capital Partners private equity group. As in the resin industry, consolidation followed
as a result of the merger of previously acquired holdings, namely of BASF Print Systems
and ANI Printing Inks. CVC's double purchase in October 2004 had created a 830 m
euro group, with 600 m euros of its sales contributed by BASF and 230 m euros by ANI.
During 2005, however, XSYS received a further boost--the addition of Flint Ink, the No 2
in the global ink market, thereby making XSYS the new runner-up to Sun Chemical.

The ink had barely dried on the XSYS-Flint merger, when several management buyouts
(MBOs) were negotiated. First it was the turn of the Swiss XSYS subsidiary to secede,
becoming the Swiss Offset Support GmbH, followed by two separate MBOs of the metal
decorating businesses of both Flint and XSYS.

Empire-building was to prove the stronger trend, with the acquisition of a majority
interest in the Indian Micro Inks by the German Huber Group. Micro Inks held a special
attraction for Huber by bringing to the marriage not only a thriving pigments business
but also a foothold in India, and an additional US manufacturing site. The merger,
moreover, gave the inks industry a larger global spread. With the current globalisation
in printing, and the challenge from digital technology, the ink industry's extended global
reach seems a natural development.
Technology is playing an increasingly important role as a motive for buying companies
or shedding certain portfolio areas. Sericol, the UK's leading screen and digital ink
specialist, had special attraction for Japan's Fuji Photo Film Co, as a means of
complementing its digital photographic imaging capabilities with digital inks. Fuji
bought Sericol early in 2005, just two years after the US private equity firm Saratoga
Partners had bought the company from BP in January 2003, which in turn had acquired
Sericol from Burmah Castrol in 2000. As the Sericol transaction shows, private equity
groups are routine buyers and sellers of companies, while trade buyers are often mainly
interested in the technology implications for their portfolios.

The importance of M&A for portfolio adjustments was also borne out during the year by
a number of partial divestments. SICPA's acquisition of Wacker's liquid crystal pigment
business, particularly for security ink applications, and Siegwerk's purchase of SICPA's
packaging inks--making it the global No 2 in packaging inks--were cases in point.
Consolidation is going hand in hand with specialisation.

Portfolio-building in Coatings

Portfolio-building was of particular importance to the paint and coatings industry, in a

year in which it could boast neither mega-deals nor special scoops. Indeed, such usually
acquisitive buyers as Akzo Nobel or BASF, contented themselves with smaller additions
to their portfolios--coil coatings by BASF and decorative paint distribution by Akzo
Nobel. While BASF bought German coil coatings producer Rhenania from the Altana
Group--which was demerging much of its industrial coatings business to focus solely on
packaging coatings--Akzo Nobel continued to build up its German distribution system
with the purchase of the German paint distributor Lange with its network of regional
branches. To expand its industrial wood coatings portfolio, Akzo Nobel bought the
German specialist Zweihorn.

Sigma-Kalon also opted for a wood specialist, the local D&M Coatings (Doelfrey &
Macostan) in the Netherlands.

The Finnish Teknos Group, on the other hand, went for Tikkurila's coil coatings business
to form Teknos Nova Coil Oy. Tikkurila itself, which had made a final exit from the UK
market as will be seen below, chose to continue expanding into Eastern Europe instead.

Portfolio building was also important in the US and Japan, with Valapar buying the old-
established American stains and wood finishes Samuel Cabot and DIC snapping up
Eques Coatings in the Netherlands, a specialist in UV-cured coatings and adhesives for
DVDs and electronic applications.

... and Geographical Expansion

Nor did the impetus to geographical expansion subside during 2005. The two main
magnets were Eastern Europe and China, with both Russia and Ukraine now coming to
the fore.
Tikkurila, which had left the UK market after a manufacturing presence of over 20 years,
continued to expand its Eastern flange. By adding the Russian paintmaker Kraski Teks
to its existing Russian companies in St Petersburg and Moscow, Tikkurila now claims
market leadership in the Russian decorative paint sector.

Akzo Nobel, in contrast, went for a paint company in Ukraine (where, incidentally,
Tikkurila is already represented thanks to its acquisition of Kolorit in 2004). Akzo Nobel,
which already produces paint in Russia, ventured into Ukraine in 2005 by buying a 51%
stake in KReinrezerv, a producer of mid-range solvent and water-based paints with 225
employees.

Akzo Nobel's expansion drive also took it to China as well as to Switzerland. In China, it
bought the emulsion paint producer Toide, unusual for a company which chooses to
expand in China organically through greenfield sites. But nearer home, Akzo Nobel
managed to achieve market leadership in Switzerland with the purchase of the Swiss
market leader in paint Swiss Lack.

For BASF, expanding its geographical presence coincided with portfolio-building by

managing to buy out two of its joint venture partners--in Australia and Japan. In
Australia BASF bought the remaining share from Akzo Nobel in their long-standing
automotive joint venture, while in Japan BASF acquired the remaining 50% share from
NOF in the automotive joint venture established in 2000, making BASF the first
European coatings company to manufacture on Japanese soil.

For the French Materis Group the expansion was much more local. By buying the French
independent paint-maker Zolpan, Materis Peintures succeeded in strengthening its
position in the French market.

Roving the World with Adhesives

Corporate consolidation is also at work in the adhesives and sealants industry, with
nearly a dozen of deals cemented during 2005.

Not all of them had a global dimension; in fact, the industry still remains largely
fragmented. Nevertheless, adhesives companies happily crossed national borders and
continents.

Thus Henkel, the global leader in the field, ventured into the United Arab Emirates with
its purchase of a 49% stake in Polybit, a producer of waterproofing materials for
construction at a time when Middle East building activity is at a high. Henkel also
added to its portfolio by acquiring Rhodia's silicone sealants cartridge business, as did
the independent German producer Jowat by buying DuPont's automotive adhesives
arm.

Farther afield roved Switzerland's Sika and Germany's Uzin Utz. Sika picked up Fosroc's
adhesives, sealants and waterproofing business in New Zealand, while Uzin Utz
doubled its interest in its Shanghai-based joint venture from 45% to 90%, as well as
acquiring floor adhesives manufacturer Siga Floor AG in Switzerland. True to its name,
the US-based RPM International crossed the Atlantic once again to buy the German-
based Illbruck Sealants Systems, producing joint sealing tapes, cartridge sealants, and
adhesives for pre-fabricated construction elements, complete with a subsidiary in the
UK. The Illbruck acquisition brought RPM's European sales to $440 m.

While RPM went to Germany, fellow American HB Fuller looked to Japan. By forging a
joint venture with Sekisui of Japan, Fuller helped to create a strong contender in Japan's
industrial adhesives market with annual sales of some $150 m.

One potential deal, which however failed to stick, was the unwelcome bid by private
equity firm CVC Capital Partners for the Swiss Forbo Group. A leadership battle within
Forbo, headed by a rival shareholder group, resulted in the withdrawal of the CVC bid
after having received only 16% of Forbo's shares.

These and some other purely national adhesives deals are highlighted in tabular form.

Private Equity and IPOs

During the last decade, private equity has become a potent force in brokering M&A
transactions. In 2005, the global private equity industry overall, not merely restricted to
the chemical industry, was heading towards a $250 bn record. Investment is pouring
into private equity channels at a time when institutional investors are cutting their
allocation to listed equities in favour of alternative asset types, private equity included.

Just as money is flowing into private equity, money is also being returned to investors as
pay-back time approaches.

Pay-back can be recouped by private equity investors by selling an acquired company to

a trade buyer, or to another private equity house in a so called secondary sale, or
through an initial public offering or IPO.

The time interval between acquisition, usually three to four years, and IPO has recently
become shorter and shorter, while the full IPO has turned into a partial one. The last
option gives a private equity group the best of two worlds--raising money quickly but
holding on to some assets at least.

There were several partial IPOs during the year. Huntsman raised $1.45 bn in its IPO of
55.7 million common stock shares, while Celanese's IPO by private equity owner
Blackstone raised $800 m from floating a 40% share in the company. Blackstone's time
interval between acquisition and IPO was spectacularly short--just 10 months from the
Celanese acquisition in April 2004 to its partial flotation in January 2005. In the event,
the plan for an ultra-speedy financial turnaround misfired, by raising only $800 m
instead of the $900 m envisaged. Yet 60% of Celanese still lays in wait for another day!

More IPOs are to come in 2006. Companies mooting such steps include Kerr-McGee's
parent for its pigment business, Wacker as a first step in converting itself from private to
public company and Arkema, by way of a spin-off from the Total Group. Arkema, as
the renamed chemical arm of the Total Group is known, has proposed such a stock
market launch at a works council meeting in December 2005. Total's shareholders are to
approve the decision at their AGM in May 2006. The company with annual sales of E5.2
bn should offer no mean prize.

New arrivals

IPOs and stock market launches usually herald new names. Lanxess, the
chemical/polymer spin-off from Bayer, made its formal appearance in January 2005. The
year's other debutantes--though minus a stock market listing--included Hexion and
XSYS as well as the two intriguingly named offsprings from Tikkurila's MBO--Prospeed
and Protega. They join Chemtura in the US, the new name for the merged Crompton-
Great Lakes Group and a host of other newcomers of recent years such as Arkema itself.

Prospects

The corporate settlement is far from complete. Even now, a number of businesses await
their buyers--several of Akzo Nobel's chemical holdings included. IPOs are looming as
well. Other mergers and acquisitions will follow, as no doubt will demergers. Private
equity groups, by engaging in both buying and selling, ensure a steady progression of
both. Meanwhile succession problems of family firms, in Germany in particular, will
guarantee other type of asset streams on the market. Economic necessity, be it debt
repayment or impending insolvency, will also play a part.

Other whirlwinds will arise, invariably before the corporate dust from previous deals
can settle.

... and retrospect

In view of the 20th anniversary of this annual M&A column, which started in January
1986, it might be apposite to highlight just a few of the corporate changes that have
occurred over this period.

That first column in 1986 was heavily UK-oriented, reflecting the structure of the UK
paint industry at the time. Acquisitions by foreign companies were just beginning to
creep in, and these were on a small scale. Ten years later the industry had completely
changed. Not only was it European, it had become global. By the late 1990s, M&A
activities, even in the coatings industry, were on a new grand scale. Most of Courtaulds
Coatings Group disappeared into Akzo Nobel and Herberts into DuPont, while ICI was
re-inventing itself through its purchase of the Unilever speciality chemicals business and
the wholesale disposals of its commodity assets, including titanium dioxide.

Disposal upon disposal followed, as companies were vying in transforming themselves

into sleeker and more desirable versions. Purchases followed as well, and so did the
debts. The dotcom bubble burst, and global recession arrived with the new millennium.
M&A activity was muted for a few years--more modest and focused, with both
portfolio-building and dismantling firmly in mind. Restructuring became endemic and
M&A was a means of achieving it.

There was, however, a ray of light in the East. Eastern Europe was reborn and China
became the workshop of the world. It was on these two areas in particular on which
M&A activity was poised. And it is in these two areas that tomorrow's prospects lie,
until new opportunities are uncovered, perhaps even farther East.

Helma Jotischky is principal research officer at the UK's Paint Research Association, 14
Castle Mews, High Street, Hampton, Middlesex TW12 2NP.

Tel: 020 8487 0800 Tel: +44 (0) 20 8487 0800 Email: h.jotiischy@pra.org.uk

Buyer Acquired Company

Atlana (Germany) Kelstar International (US)

Azko Nobel (Netherlands) Khimrezerv (Ukraine)
Akzo Nobel (Netherlands) Lange Paint (Germany)
Akzo Nobel (Netherlands) Swiss Lack (Switzerland)
Akzo Nobel (Netherlands) Toide Paint (China)
Akzo Nobel (Netherlands) Zweihim (Germany) from ICI
Barlowworld (South Africa) Midas Paint (South Africa
BASF (Germany) Azko Nobel's automotive (Australia)
BASF (Germany) BASF NOF (Japan)
BASF (Germany) Rhenania (Germany)
Berlac (Switzerland) ISL- Chemie (Germany)from Lanxess
Cerita (Chile) Chilcorrofin (Chile)
DIC (Japan) Eques Coatings (Netherlands)
Ennis Paint (US) TMT Pathway (US)
Flugger (Denmark) Harpa-Sjofn (Iceland)
IBA Kimya (Turkey) EKB-Penta (Turkey)
Industr Kapital & MB (Sweden) CPS Color from Tikkurila
MacDermid (US) Autotype (UK) from Norcros
EK Mittelstandsfinanzierrubng AG Rembrandtin (Austria)
Northwest Coatings (US) Actinic (US)
PPG Industries (US) Crown Coatings (Singapore)
PPG In dustries (US) IPM Group (US)
Pidilite (India) Chemson Asia (Singapore
Raabe (US) Foxcolor (US)
Sico (Canada) Mills Paint (Canada)
Sigman Kalon (Netherlands) D & M Coatings (Netherlands)
Sigma Kalon Polifarb Cieszyn Wroclaw
Teknos Group (Finland) Tikkurila's coil coatings business
(Finland)
Tikkurila (Finland) Kraski Teks (Russia)
Tikkurila Coatings (UK) Debut of Protega and Prospeed
Valspar (US) Samuuel Cabot (US)
Valspar (US) Assets of DSM Somos (US)

Buyer Details

Atlana (Germany) Waterprint & UV overprint

 Azko Nobel (Netherlands)
Akzo Nobel (Netherlands)
Akzo Nobel (Netherlands)
Akzo Nobel (Netherlands)
Akzo Nobel (Netherlands)
Barlowworld (South Africa)
BASF (Germany)
BASF (Germany)
BASF (Germany)
Berlac (Switzerland)
Cerita (Chile)
DIC (Japan)
Ennis Paint (US)
Flugger (Denmark)
IBA Kimya (Turkey)
Industr Kapital & MB (Sweden)
MacDermid (US)
EK Mittelstandsfinanzierrubng AG
Northwest Coatings (US)
PPG Industries (US)
PPG In dustries (US)
Pidilite (India)
Raabe (US)
Sico (Canada)
Sigman Kalon (Netherlands)
Sigma Kalon
Teknos Group (Finland)
Tikkurila (Finland)
Tikkurila Coatings (UK)
Valspar (US)
Valspar (US)
Key coatings acquisitions 2005
Buyer
Additives
Rhodia (France)
Rockwood Specialities
Pigments & Extenders
Altana Chemie (Germany)
Ciba (Switzerland)
Ciba (Switzerland)
WC Heraeus (Germany)
Imerys (France)
Imerys (France)
Lansco Colors (US)
(US)
Resins & Polymers
Cytec Industries (US)
UCB
DSM (Netherlands)
Domino Color Corp (Canada)
Dow Chemical (US)
Hexion (US)
Paintmakers: 51%
Paint distribution
Paint manufacture
Emulsion paint
Industrial wood finishing
Decorative DIY
Remaining share JV
Remaining 50%
Coil coatings
Colour pastes
Swimming pool paints
UV curable coatings
Traffic paint
Paint manufacturers
Powder coatings
Remaining 27%
Coated films
Industrial coatings
Radcure & adhesives
Radcure
Store operation
Waterproofing
Custom color
Architectual paints
Furniture coatings
Increased share to 91.9%
Form Tekkkknos Nova Coil
Decorative
Industrial coatings
Stains and finishes
Powder products
Acquired Company
Wuxi Speciality Chemicals (China)
Rheological additives from
Sud-Chemie (Germany)
Eckart (Germany)
Daihan Swiss Chemical Corp (Korea)
Wolstenholme International (UK)
BASF (Germany)
World Minerals Corp (US)
Denain Anzin Mineraux (France)
International Color & Chemicals
Surface Speciality business from
Syntech (China)
Holiday Dispersions
Pacific Epoxy Co (Korea)
Akzo Nobel's Inks & adhesives resin
 ICI (UK)
Ineos (UK)
New Chem Resins/Deltech
New Chem Resins (US)
Nippon Synthetic Chemical
Nuplex (New Zealand)
Reichhold (US)
Buyer
Additives
Rhodia (France)
Rockwood Specialities
Pigments & Extenders
Altana Chemie (Germany)
Ciba (Switzerland)
Ciba (Switzerland)
WC Heraeus (Germany)
Imerys (France)
Imerys (France)
Lansco Colors (US)
Resins & Polymers
Cytec Industries (US)
DSM (Netherlands)
Domino Color Corp (Canada)
Dow Chemical (US)
Hexion (US)
ICI (UK)
Ineos (UK)
New Chem Resins/Deltech
New Chem Resins (US)
Nippon Synthetic Chemical
Nuplex (New Zealand)
Reichhold (US)
Key acquisitions in coatings raw materials 2005
Buyer
ANI Printing Inks (Sweden)
Fuji Photo Film Co (japan)
Huber (Germany)
SICPA (Switzerland)
Siegwerk (Germany)
Wikoff (US)
XSYS Merger
Inks
XSYS (Germany)
ZSYS MBOs
XSYS MBO
Buyer
Elotex: (Germany) from Celanese
Amino resins (US)
UR-Cryl Polymers Co assets
Thibault & Walker assets (US)
Clariant Polymers (Japan)
PML Holdings
Industria Barsileira
Resinas (Brazil)
Details
Surfactants etc
Organoclays etc
Specialty pigments
Remaining 50%
Metasheen alumium
Ceramic colour business
Diatomite & pearlite
Kaolin, feldspar & quartz
Organic & inorganic
Resins, adhesives, additives
Resin production
Renamed Gemini dispersions
Remaining 20% Sachan Inds
Speciality
Emulsion powder
For $78m
Urethane dispersions
Urethanes, long oil alkyds
Emulsions
Chemical distributor
Unsaturated polyesters
Acquired Company
Macro Australia Ltd
Sericol (UK)
Micro Inks (india)
Wacker's liquid crystal
SIPCPA's packaging inks
Frontier Printing Ink (Canada)
BASF Print Systems & ANI Printing
Flint Inks (US)
Metal decorating businesses
XSYS Switzerland becoming Swiss
Offset Support
Details
 ANI Printing Inks (Sweden) UV-Flexo & narrow web inks
Fuji Photo Film Co (japan) Screen & digital ink\
Huber (Germany) Printing inks & pigments
SICPA (Switzerland) Security ink
Siegwerk (Germany) Packaging inks
Wikoff (US) Flexo & gravure ink
XSYS Merger Inks
XSYS (Germany) Inks
ZSYS MBOs From XSYS and Flint
XSYS MBO Lead by Roger Bourquin

Key acquisitions in printing inks 2005

Buyer Acquired Company

Henkel (Germany) Silicone Seralants from Rhodia

Henkel (Germany)
Hyde Group (US)
ITW (US)
Jowat (Germany)
(US)
RPM International (US)Illbruck
Royal Adhesives & Sealants
Shaw Industries (US)
(US)
Sika (Switzerland)
Uzin Utz (Germany)
Uzin Utz (Germany)
(France)
Polybit (UAE)-49%
Roman Decorating Products
Permatex (US)
Automotive adhesives from Du Pont
Sealants Systems (Germany & UK)
Hardman (US) from Elementis (UK)
Paperoverlay business from Dyneas
Fosroc's adhesives (New Zealand)
Siga Floor AG (Switzerland)
Chinese JV (Shanghai Shenzin
Enterprise Development)

Buyer Details

Henkel (Germany) Cartridge business

Henkel (Germany)
Hyde Group (US)
ITW (US)
Jowat (Germany)
RPM International (US)Illbruck
Royal Adhesives & Sealants
Shaw Industries (US)
Sika (Switzerland)
Uzin Utz (Germany)
Uzin Utz (Germany)
Waterproofing material
Decorating adhesives
Adhesives & sealants
Automotive adhesives
Joint sealing tapes
Epoxy and urethane products
North Carolina plant
Adhesives & sealants
Floor adhesives
Interest raised to 90%

Key acquisitions in adhesives and sealants 2005

Energy costs force plastics firms to raise prices globally.(INDUSTRY

NEWS)(Brief Article)
 Plastics Engineering; 12/1/2005; Molinaro, Hope

Companies that sell plastics products in the Americas and Europe are widely reporting
the need to raise their prices based on unprecedented increases in the cost of energy and
raw materials. In the U.S., many cite the disruptions and damage inflicted by the Gulf
Coast hurricanes Katrina and Rita. The following list details some of these price hikes.

* Arkema, Inc. (Philadelphia)--4% for Rilsan Polyamides 11 and 12, effective Oct. 31,
2005, or as contracts permit.

* Chemtura Corp. (Middlebury, Conn.)--$0.12/lb for nonylphenol, effective Nov. 1, 2005,

or as contracts allow; and approximately 45% for the neat portion of its aluminum alkyl
products, effective November 15, or as contracts allow.

* Clariant (Muttenz, Switzerland), Pigments & Additives Division--"significant increase

for selected products," effective Dec. 1, 2005.

* Huntsman Polyurethanes (The Woodlands, Texas)--$0.08/lb for MDI isocyanates;

$0.10/lb for polyols; $0.09/lb for systems.

* Lanxess Deutschland GmhH (Leverkusen, Germany)--raising prices globally by up to

EUR 350/ton for hydrazine hydrate and the activated hydrazine hydrate Levoxin
(referring to 100% product), effective Nov. 1, 2005, or as contracts allow.

* Sartomer Company (Exton, Pa.)--$0.10/lb to $0.25/lb for acrylate monomers, $0.06/lb

to $0.12/lb for methacrylate monomers, $0.08/lb to $0.15/lb for oligomers, effective
November 15 or as contracts allow.

* Ticona (Florence, Ky.)--$0.05/lb for Celanex PBT, Impet PET, Vandar thermoplastic
polyester blends, and Riteflex TPE, effective Dec. 1, 2005, in the Americas.

COPYRIGHT 2005 Society of Plastics Engineers, Inc.

Plastics-industry prices continue to climb.(markets)

Plastics Engineering; 1/1/2006; Molinaro, Hope

Many plastics companies continue to cite "extraordinary" increases in the costs of energy
and raw materials, and transportation challenges, as they report price increases for their
products. Among them are the following.
* Air Products (Lehigh Valley, Pa.): all Airthane and Versathane polyurethane
prepolymers, effective Dec. 15, 2005, in North America; adjustments vary by prepolymer
type.

* Albemarle Corp, (Richmond, Va.): Antiblaze TMCP flame retardants, $0.07/lb;

Antiblaze 195 (TDCP) flame retardant and blends, $0.10/lb; all other phosphorus-based
polyurethane FR products, $0.15/lb; effective Dec. 1, 2005, or as contracts allow, in
North America; bulk mid-cut tertiary amines, to $1.40/lb FOB shipping point, freight
collect: all other ADMA and DAMA tertiary amines cuts and packages, by $0.40/lb:
effective Jan. 1, 2006, or as contracts allow, in North America.

* Arkema: Luperox organic peroxides, 8% to 12%, effective Jan. 1, 2006, as contracts

permit, for Europe, Middle East, Africa, and India.

* BASF Corp. (Florham Park, N.J.): Caprolactone Monomer (CLO) and all grades of
Neolt Neopentylglycol, $0.05/lb; 2-Pynolidone, 8%; effective Jan. 1, 2006, or as contracts
allow, in the U.S., Canada, and Mexico; Elastollan TPU resin, concentrate, and additives,
6%, effective Dec. 1, 2005, or as contracts allow.

* Bayer MaterialScience AG (Leverkusen, Germany): hexamethylene diisocyanate (HDI)

and HDI-based aliphatic isocyanates, 10% to 12%, effective Dec. 1, 2005.

* Celanese Chemicals (Dallas): Celvol polyvinyl alcohol grades, 10% per dry pound,
effective Dec. 1, 2005, or as contracts allow, globally.

* Chemson: PVC statilizers, increases based on lead content, effective December 2005, or
as contracts allow, in Europe.

* Chemtura (Middlebury, Conn.): basic calcium and zinc metallic stearates, $0.04/lb;
CaSt Kosher/food-grade/NF grade, ZnSt Kosher/USP, and all other stearates, $0.15/lb,
effective Nov. 15, 2005, or as contracts allow.

* Degussa (Dusseldorf, Germany), methacrylates business unit: methyl methacrylate

(MMA), butyl methacrylate (BMA), and methacrylate acid (GMAA) monomers and for
hydroxy esters, 120 EUR/MT or $150/MT as applicable; specialty monomers, 150
EUR/MT or $200/MT; effective Jan. 1, 2006, or as contracts allow.

* Dow Chemical Co. (Midland, Mich.): vinyl acetate monomer, $130/MT in Latin
America; $130/MT in Asia Pacific; 110 EUR/MT in Europe; $130/MT in Middle
East/Africa; $0.06/lb in U.S. and Canada; effective Dec. 1, 2005, or as contracts allow.

* DuPont Packaging & Industrial Polymers (Wilmington, Del.): all off-list grades of
Elvax and Keldax resins, $0.12/lb and $0.03/lb, respectively, effective Dec. 1, 2005, in
North America.
* Lanxess (Leverkusen, Germany), Technical Rubber Products business unit: Buna EP
(EPDM), Perbunan, Krynac, Baymod N (NBR), Baypren (CR), Therban (HNBR),
Levapren, Levamelt, and Baymod L (EVM), 0.10 to 0.50 EUR/kg, depending on grade.

* Noveon (Cleveland): Estane thermoplastic polyurethanes, $0.12/lb, effective Dec. 1,

2005, in the NAFTA region.

* Solvay Engineered Polymers, Inc. (Auburn Hills, Mich.): thermoplastic polyolefin

(TPO) products, $0.08/lb, effective Dec. 15, 2005.

* Ticona (Florence, Ky.): Celanex PBT, Impeta PET, Vandar thermoplastic polyester
blends, and Riteflex thermoplastic elastomer, $0.05/lb, effective Dec. 1,2005, in the
Americas.

COPYRIGHT 2006 Society of Plastics Engineers, Inc.