Mr. Paul Hodges

GLG News by Mr. Paul Hodges, Chairman

Reliance offers c$10bn for LyondellBasell

November 22, 2009

Analysis of:Reliance offers about $10bn for Lyondell | www.ft.com

First IPIC, now Reliance. The ongoing crisis is the petrochemical industry is encouraging deep-pocketed buyers to step forward. These are strategic purchases, but they are taking place at very discounted values compared to those of the 2003-7 Boom years.

Abu Dhabi looks to build its petchem activities

November 18, 2009

Analysis of:IPIC Mulls Bayer Joint Venture, Not Acquisition, Chairman Says | www.bloomberg.com

The Middle East is continuing to grow its role in petrochemicals. The latest move is by Abu Dhabi, to access technology for its ambitious new multi-$bn Chemaweyaat project.

Chemical Companies remain Cautious on the Outlook

October 31, 2009

Analysis of:Looking at the world from a stable but low level of activity | www.icis.com

The chemical industry is a leading indicator for the global economy. The recent company results season gives no support for the idea that earnings are about to stage a major recovery.

Chemical Companies face Bumpy Road in 2010

October 17, 2009

Analysis of:10,000: Then and Now | www.nytimes.com

2010 should be a better year for the chemical industry, as demand grows in line with a recovery in global GDP. But a quick V-shaped return to the 2003-7 Boom years in terms of volumes/margins seems unlikely.

China's Economic Recovery "Uncertain" - Premier

August 27, 2009

Analysis of:Economic recovery will take some time, premier warns | www.chinadaily.com.cn

China is a major player in the global chemical industry. But doubts are now emerging about the underlying strength of its recent economic revival.

The Analysts have got it Wrong - No Sign of an Upturn in Chemicals

August 1, 2009

Analysis of:Chemicals: What have We Learned This Week? | internationalechem.blogspot.com

Many analysts, having failed to spot last year's downturn, are now making the opposite mistake and hoping to spot a quick recovery in chemical demand. But a large number of companies reported this week, and only China's Sinopec saw any sign of strong demand ahead. BASF, the world's No 1, was even worried things could get worse again.

US Chemical Demand Bouncing along the Bottom

July 2, 2009

Analysis of:US June auto sales fall 29% | www.icis.com

The freefall in US chemical demand has come to an end, now inventories have been reduced down the value chain.  Latest figures on housing and auto demand show we are bouncing along the bottom, but give no sign of any green shoots of recovery.

Ineos talks of PetroChina Deal for Grangemouth

June 18, 2009

Analysis of:Fresh speculation over future of Ineos | www.falkirkherald.co.uk

An INEOS senior manager has told the local council that the company is in talks to sell part or all of the Grangemouth refinery in Scotland.  The cash would come in useful, given that Ineos has to agree a new businesss plan with lenders next month. 

Chemicals M&A: V-Shaped Sellers meet L-Shaped Buyers

June 8, 2009

Analysis of:Oil, gas M&A transactions derail in 2008 | www.ogfj.com

M&A activity is much lower than in the past. At the moment, many deals are stalled due to sellers adopting a V-shaped outlook, and expecting a quick profits recovery, whilst buyers are worried about the potential impact on profits of a prolonged L-shaped downturn

New US Auto Fuel Standards provide Chemical Companies with Major Opportunities

May 19, 2009

Analysis of:Obama to Toughen Rules on Emissions and Mileage | www.nytimes.com

President Obama is introducing tough new standards for auto fuel economy from 2012.  This will provide good opportunities for the major polymer companies to replace current use of metals and glass.  It will also lengthen European gasoline markets, providing petrochemical companies with the opportunity to obtain advantaged cost feedstock from struggling refineries

Chrysler Bankruptcy puts Major Pressure on US Chemical Sales

May 4, 2009

Analysis of:Chrysler bankruptcy to shake US supplier chain | www.icis.com

Two years ago, the US auto market was worth $46bn in chemical and polymer sales.  The market will be worth just $24bn this year, if auto sales continue around the 9 million level.  The closures recently announced by the world's top 3 chemical companies (BASF, DOW Chemical and LyondellBasell) are only the start of the cutbacks.

Difficult times call for tough decisions

April 15, 2009

Analysis of:LyondellBasell plans 14 plant closures, 4,800 job cuts | www.icis.com

LyondellBasell has appointed a COO for the first time, with a brief to consolidate management of the worldwide businesses.  The new man has wasted no time in announcing major cost-cutting, with $1.3bn already targeted for year-end 2010.   He has also been very realistic about the market outlook.

Dow Chemical buys high, fails to sell its petchem assets

March 11, 2009

Analysis of:Dow Chemical Capitulates, Agrees to Buy Rohm & Haas | online.wsj.com

The implementation of Dow Chemical's strategic transformation from commodity chemicals to a more innovation-driven portfolio has not gone well to date.  Dow has also lost a lot of respect within the chemical industry, as a result of its failure to have developed a Plan B, to cover the risk that Kuwait would walk away from the K-Dow deal.   

BASF - The German Oil and Gas Company

March 2, 2009

Analysis of:BASF to Close Plants in Cash Drive as Dividend Upheld | www.bloomberg.com

BASF advertises itself as 'The Chemical Company'.  It has also built up a wide range of global businesses.  But its 2008 profits show it is becoming increasingly dependent on the oil and gas sector, and its German operations, as the recession develops.

Abu Dhabi snaps up Nova Chemicals

February 24, 2009

Analysis of:Nova Jumps on $499 Million Buyout Offer by Abu Dhabi | www.bloomberg.com

Nova Chemicals' share price had fallen 95% since September.  Markets were worried about its debt load, and imminent refinancing needs.  Abu Dhabi has taken advantage of the situation with a shrewd purchase

Petrochemicals faces need for restructuring

February 9, 2009

Analysis of:China, India key for ExxonMobil Chemical growth | www.icis.com

Major new capacity is coming online in Asia and the Middle East.  At the same time, demand is falling.  Older plants should close, but the process will be slow and costly.

Is Dow Developing its Plan B?

January 28, 2009

Analysis of:What is Dow Thinking? | dealbook.blogs.nytimes.com

A month ago, I suggested that Dow needed to develop a 'Plan B', following the collapse of its K-Dow JV with Kuwait.  Events since then give us some clues as to what this may be.

Dow Chemical's debt could hit junk status

January 15, 2009

Analysis of:Ratings could sink Dow Chemical deal | online.wsj.com

Dow Chemical is the largest US chemical company. Now that its proposed JV with Kuwait has unwound, the ratings agencies are getting nervous. Both Moody's and S&P are threatening to downgrade its debt to junk, if the Rohm & Haas deal goes ahead without long-term financing in place.

LyondellBasell considers bankruptcy

December 31, 2008

Analysis of:Chemical Giant Mulls Bankruptcy | online.wsj.com

Petrochemicals is a very cyclical business.  The current downturn should be no surprise, after the extended 2003-7 boom.  It will cause particular problems for highly-leveraged companies.

Dow Chemical needs a Plan B

December 29, 2008

Analysis of:Kuwait scraps Dow mega deal | www.kuwaittimes.net

The Kuwait government has scrapped its $17.4bn JV with Dow Chemical, just 2 days before it was due to start operations. This will badly affect the government's standing in global markets. It also means Dow will have to implement a Plan B.

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