Wednesday, October 22, 2014

Dow Chemical's Earnings Keep Improving

Dow Chemical has announced their 3rd quarter earnings and as passed along by the Urethane Blog, they are up nicely.
"EBITDA(3) grew to $2.3 billion, up 24 percent versus the prior year, driven by ongoing productivity actions and improved market fundamentals. Performance Plastics achieved record quarterly adjusted EBITDA results (up 31 percent versus the year-ago period). Performance Materials EBITDA grew 61 percent with increases in most businesses, notably in Polyurethanes and PO/PG. Electronic and Functional Materials also delivered record quarterly EBITDA (up 11 percent)"
Normally I don't comment much on earnings reports, but this year has been different ever since the activist investor Daniel Loeb took up a stake in the company back in January. Unfortunately for Loeb, the company has been doing very well since then, providing plenty of egg for him to wipe off his face, such as that great earnings report that came out just 6 days after his initial critical comments. But might be expected for someone who has forgotten their calculus lessons.

Somehow I don't think Loeb will be commenting anytime soon (other than to announce that he threw his arm out trying to pat himself on the back for the great job he did in improving Dow's performance since January).

Previous Years

October 22, 2013 - October 22, 2013 -

October 22, 2012 - White Isn't Always White

October 22, 2010 - Thoughts on Losing Electricity

October 22, 2010 - Plastics - They Have a Future, but no Futures

October 22, 2010 - It's Not Easy Being Green

Monday, October 20, 2014

Martin Sheen and His Hypocritical Hate of Plastics

Last Friday I wrote of Lindsay Lohan's love of plastics. Her feelings are not shared by all of Hollywood however. Martin Sheen is a good example. On Saturday, he had a new boat christened after him. The boat is a research vessel for studying ocean plastics. While I've written many times that plastics have no business being in the ocean (or polluting any other part of the natural environment for that matter), the importance of ocean to plastics to mankind's survival to debate. Sheen says
"The biggest risk and danger to the world today are plastics in our oceans."
The biggest danger? Bigger than nuclear proliferation? Climate change? Chemical weapons in the hands of terrorist? Starvation? Disease? Poverty? These are all less of a danger than plastics?

Psst. Martin, take a look at the pictures of the new boat you're standing on.
Martin Sheen - I hate plastics. But the ones on my boat don't count, right?
You know what I see? Plastics. Lots and lots of plastics everywhere on that new boat. The blue and white paint on the side - plastics. The unpainted wood - coated with plastic. The ropes going every which way - plastics. The sails - plastics. The microphone that you are speaking into? Wires that are coated with plastic insulation (as are many of the wires carrying the electricity from the powerplant to the microphone.) The ink that was used to print your speech? Plastics are in that. The paper that your speech was written on? Plastics are in that too.

Looks to me Martin like your boat is only adding to the problem, not solving it. You better drydock it ASAP and help save the world.

Previous Years

October 20, 2011 - Who Invented Kraton?

October 20, 2011 - The Inventors of Kraton...

October 20, 2009 - Patent Quality and Value

Friday, October 17, 2014

Linday Lohan and plastic bags

I last wrote about Lindsay Lohan in April of 2013. Since that time, she has kept a pretty low profile as far as the plastics industry is concerned. But that all changed this morning when the Daily Mail published photos of her and a plastic bag:
Lindsay Lohan being a plastic bag
That's her behind the bag, leaving for home(?) after performing onstage in London last night. (The article has more photographs that show that it is indeed Lindsay.)

She can get away with this in London, but pulling the plastic bag stunt in California is going to become pretty difficult. The state just past a law banning plastic bags. So what are all the actors and actresses going to do? Hide behind a paper bag? That would make them to butt of way too many coyote jokes. Maybe Hollywood will need to change their stance and call for a repeal of the ban. Their privacy needs to be respected.

Previous Years

October 17, 2013 - Is This Really Self-Healing?

October 17, 2012 - Overlooking the Obvious: Self-Healing PVOH Hydrogels

October 17, 2011 - How to (NOT!) Determine PVC Rheology

October 17, 2006 - Off and Running

Wednesday, October 15, 2014

Polyethylene Production coming to North Dakota

While my homestate of Minnesota remains a frack-free zone (due to Mother Nature's choice to stock us with iron, copper and other minerals rather than even a drop of petroleum), our neighboring state of North Dakota is pretty much ground zero for the effort. And we hear about it a lot since many people have taken the day's drive out there for the good paying jobs. Western North Dakota is not highly populated, so manpower is short. If you can pass a drug test and supply your own housing, you can get a job. (And many hiring managers will say under their breath that they might let one of those conditions slide). Minnesota is also affected by the transportation of the flammable, petroleum liquids along the rail lines in our state. And the sudden increase in demand for the trains causes other logistic nightmares for anyone shipping anything else by rail.

Now comes a report from Plastemart that North Dakota will soon have their own world class polyethylene production facility - a $4 billion dollar investment. $1.5 million metric tonnes a year of HDPE - from North Dakota. That is pretty impressive.

In my mind, it was just a matter of time before this happened, although I've not heard anything previous about it unlike the plant being built in West Virginia to take advantage of the Marcellus shale production. At the same time, I bet that this plant will be far more expensive than the original estimate for many of the reasons I already discussed. The labor to build the plant will need to be imported - there aren't too many pipefitters out there and they are already kept busy with the existing fracking operations. And the housing shortage will only increase. While transporting polyethylene by train is much less risky than transporting petroleum liquids, it is not as efficient. The bulk density of polyethylene is about 0.5 g/cm3, a good fraction less than any hydrocarbon liquids. So that means more strain on the train network.

Looking at the very-long-term picture, at some point fracking production will dry up, and so the question be what happens to the facility. Will it be abandoned or will it continue to operate, albeit with a biobased source of ethylene, such as that produced by dehydration of ethanol? North Dakota isn't a very large corn producer, but over the coming decades, alternative biofeedstocks for ethanol will be developed, including some that could be raised in the dry regions of North Dakota. Either way, I'm prety sure that I will not see that future. It's too many decades down the road. (Yes, fracking will go on that long.)

Previous Years

October 15, 2013 - Turning Plastic Bags into Carbon Nanotubes

Tuesday, October 14, 2014

Yet more activist investors thinking they can run a chemical business

I've been writing a fair amount this past year about Daniel Loeb and his efforts as an activist investor to tell Dow Chemical's CEO how to run his business (1, 2, 3, and 4).

Since Dow is doing so well (no doubt as a direct result of Loeb's guidance (/sarcasm_off), Loeb is looking for a new place to produce similar results, now setting his sights oversee on DSM. He wants DSM to sell off the low profit plastics business and focus exclusively on the baby food and nutrition supplements business which operates at much higher margins. In other words, he want to be able to cherry pick and be appreciated as a business genius for doing so. While it might be easier to divide up the DSM pie than the Dow Chemical pie (i.e., there is less overlap between different operating units within the company), to say that this will "create value" is something I don't see. (A + B) = A + B. This is a really simplistic example of the associative property, but we've seen in the past the Loeb isn't very good at math.

And lest you think that Loeb is the only one being a pain in the posterior for the chemical industry, think again. C & E News reported a few weeks ago that Dupont has their own activist investor complaining to management. Such are the times we live in. If you have a stack of cash, you can get Wall Street to listen to you even if you are full of skatole-type compounds.

Previous Years


Monday, October 13, 2014

Dinosaur Mode

I had some very strange dreams towards morning including this gem: a cellphone that would mock me. Every time I would try and do something with it such as texting, a picture of an apatosaurus-type dinosaur would appear on the screen, implying that I was using an old, outdated technique and that faster, more efficient options now existed. That's not fair! I can't text as fast as my son (whose replies seem to violate the space-time continuum), but I'm more than able to find an efficient option for most tasks.

If any cellphone manufacturers want to use this idea, go ahead. It's yours for free.

(That's all for today - I'm booked solid. I'll get back to polymers tomorrow.)

Previous Years

October 13, 2010 - Calling Mr. Murphy...

October 13, 2010 - Pushing the Laws of Science and Man

October 13, 2010 - Never Mind

October 13, 2009 - Diodes, Diodes Everywhere

October 13, 2008 - Another Unusual Water Soluble LCST System