Industry News

Royal Vopak Issues Optimistic Forecast, Expects Net Income to Increase in 2001

Koninklijke NV (Royal Vopak) Vopak has issued an optimistic forecast for its performance in 2001.

With the acquisition of Ellis & Everard, half of Royal Vopak's growth target for chemical distribution was achieved. The effect in distribution would be that sales increase by 45%, to Euro 4.9 billion, and operating income increases by Euro 59 million (before goodwill amortization). Integration of organizations in the United States and Europe began in early 2000 and is now well underway. Synergy benefits are expected to amount to Euro 17 million before income taxes in 2002. Non-recurring cost as a consequence of the Vopak chemical distribution organization will be recognized as extraordinary expense in 2001.

Vopak will continue to improve communication with its customers using Internet technology. In the United States, links have been established between Vopak's ICT systems and those of its customers.

In Singapore, a joint venture between Vopak Terminals Singapore (Vopak's interest is 69.5%) and Semb Corp will build a third terminal on the island of Jurong. This terminal, with chemical storage capacity of 350,000 cubic meters in the first phase, will provide integrated logistics services to chemicals manufacturers, distributors, and transporters.

Optimization of the terminal network in Europe is progressing. Based on product and customer specialization in the Rotterdam-Antwerp area, petroleum product storage is being concentrated as much as possible at the Europort terminals.

In chemical logistics, Vopak initially had to contend with low inventories in 2000 due to high product prices. Lost ground was made up in the second half of the year through increased output of the terminals and better utilization in tanker shipping. This trend is expected to continue in the first half of 2001. The good performance of oil logistics in 2000, during which market imbalances boosted demand for terminal services and tanker shipping, is expected to continue in early 2001.

This outlook is based on assumption of an oil price range between US $25 and US $30 per barrel and a soft landing for the US economy.

Based on internal organizational improvements launched in the past year, net income, before amortization of goodwill (Ellis & Everard) of some Euro 18 million and before extraordinaries, is expected to rise by 19% to 21%. After amortization of goodwill, net income is expected to rise by 8% to 10%. This includes additional financing expense in connection with the acquisition of Ellis & Everard.

Due to divestments in oil and gas logistics (terminals in Pernis and Nijmegen in the Netherlands, 50% interest in IMTT terminals in the United States, 50% interest in Tankstore in Singapore, and the former Paktank Botlek terminal in the Netherlands) operating income fell by Euro 17 million. Improved results at Chemgas and in deep-sea tanker shipping contributed to higher operating income. Tank storage results in Rotterdam and Singapore recovered in the second half of the year. In Tallinn, operating income benefited from increased volumes. High oil prices raised bunker costs and reduced bitumen demand. Portfolio adjustments have led to improved returns compared with 1999.

Acquisitions in chemicals logistics, expansions in Asia, divestments of the former Paktank Botlek Terminal in the Netherlands, and the 50% interest in Gamatex in Belgium on balance lifted operating income by Euro 4 million. Improved results in Asia and in logistic services more than offset lower results in coastal shipping due to high bunker costs.

Matlack Files for Chapter 11 Reorganization

Matlack Systems Inc, one of the largest United States tank truck carriers, filed March 29 for Chapter 11 protection under the Federal Bankruptcy Code. The filing comes after several recent press reports questioned the continued financial viability of the Wilmington DE-based company.

In the Chapter 11 announcement, Matlack management said bank lenders are supporting the company through reorganization by allowing the tank truck carrier to use the lenders' cash collateral while debtor-in-possession financing is negotiated.

Ranked among the top 10 tank truck carriers, Matlack reported gross revenues of $186.9 million in 2000, with a loss of around $39.9 million for the year. The previous year, the company reportedly lost $16.9 million on $198.2 million in gross revenue. The losses began in 1998, when Matlack reported that it lost $2 million of gross revenues of $233.3 million.

Currently, the carrier has 53 terminals and about 1,500 employees nationally. At least 500 of its fleet of approximately 750 tractors are six years old. Another 235 are 2000 model year units. At the end of fiscal 2000, Matlack reported that the average age of its tractors was 3.5 years. The average age for the trailer fleet was 17.1 years.

Bad Brakes: Biggest Truck Safety Problem

Defective or poorly adjusted brakes continue to be the leading reason for removing trucks and buses from North American highways, according to reports from the Commercial Vehicle Safety Alliance, Canadian Council of Motor Transport Administrators, and Ontario Trucking Association.

Besides enforcement statistics on brake inspections, the reports contain more than 140 pages of findings and proceedings of the first North American Brake Safety Conference held in September 2000 to address the brake safety problem. The conference brought together manufacturers, regulators, drivers, carriers, engineers, and enforcement officials to provide their perspectives and suggest solutions.

CVSA is preparing to send letters to about 60 stakeholder organizations in the United States and Canada asking for a response to one or more of the 12 recommendations outlined in the reports.

According to the sponsoring organizations, the intent is to challenge the commercial vehicle community to take positive steps affecting brake safety in ways that have not previously provided results. The reports also are intended to serve as a baseline and building block for improving existing programs and initiatives that have demonstrated the ability to improve safety.

To obtain a copy of the reports, including the executive summary and recommendations, visit the North American Brake Safety Conference web site at www.ontruck.org.

Nordic Acquires Tank Storage Terminal

Nordic Storage has acquired from BP and Mobil its third tank storage terminal in Gothenburg, Sweden. Known as the Smofab terminal, the facility covers an area of 22,000 square meters and has 60 tanks varying in size from 5 to 3,000 cbm. This acquisition includes a manufacturing facility of 1,800 square meters, warehouse space of 1,900 square meters, and an office building of 400 square meters. Space in the manufacturing facility will be leased for production, blending, and packaging of bulk liquid products. The warehouse space will be used to store drums and semi bulk storage, and the office building will be converted into a laboratory.

CSX Corp Establishes Transflo Corp

CSX Corp has announced the formation of Transflo Corp, a business unit that will provide rail-centric transloading, materials management, and distribution services across North America.

Transflo will market a network of more than 160 locations across North America including 72 terminals operated by its subsidiary, Bulk Intermodal Distribution Services Inc (BIDS). Transflo handles more than 400 products through an ISO 9002-certified network of terminals.

Transflo service includes transloading products from one mode of transportation to another — primarily from rail to truck — for local delivery to non-rail customers. Services also include transloading between rail and international containers. Transflo also provides materials management services focused on inventory management and replenishment, material conditioning, and product enhancement.

Later this year, Transflo will introduce On-Site Service Management, a service combining management of loading, unloading, and rail transit for a single price. Transflo employees will manage rail shipments from a customer's premises, eliminating demurrage, freight damage claims, and labor overtime — all guaranteed with no additional charges.

Transflo also will focus in 2001 on expanding the terminal network, introducing Internet-accessible information technology as well as extending Transflo services to more commodities, especially non-bulk commodities through cross-docking.

Report Marks Diesel Forum's First Anniversary

“Clean diesel power is the technology of the future,” according to a white paper released by the Diesel Technology Forum to mark its one-year anniversary. The paper, Engineering Clean Air, documents technologies that have reduced, and will continue to reduce, the emissions from all diesel engines.

Engines now employ a range of technologies to lower emissions and increase performance and efficiency including new combustion chamber designs, advanced electronic fuel injection systems, turbocharging systems, exhaust gas recirculation, oxidation catalysts, particulate filters, and use of reduced sulfur clean diesel fuel.

Of the five major emissions from internal combustion engines — carbon monoxide, hydrocarbons, carbon dioxide, nitrogen oxide, and particulate matter — diesel emits only a small amount of the first three. The industry has focused on reducing particulate matter (PM) and nitrogen oxides (NOx). The white paper says particulate matter emissions from all new on-highway diesel engines built since 1988 have been reduced 83%. Emissions of nitrogen oxides have been reduced by 63% since 1988. New engine standards for 2004 will cut NOx emissions in half again, resulting in a total NOx reduction of 83% since 1988.

Adopted in February 2001, the 2007-2010 Environmental Protection Agency regulations will require use of cleaner diesel fuel to enable further lowering of NOx and PM — reducing these emissions by as much as 98% from the 1988 levels.

The white paper:

  • Explains inherent performance advantages of diesel.

  • Provides an emissions profile of diesel as the starting point for emissions reduction.

  • Documents major emissions reductions that have been made to date.

  • Describes the technologies that will be employed over the next decade to achieve the virtual elimination of key pollutants.

Copies of Engineering Clean Air can be downloaded from www.dieselforum.org or obtained by phoning 703-234-4411.

Bush Budget Plans for Transportation

After President Bush's nationally televised speech before a Joint Session of Congress recently, the White House's Office of Management and Budget formally unveiled its budget proposal for fiscal year 2002. Although many details have not been disclosed, several aspects of the plan could have significant impact.

Under the proposal's plan for highway funding, Bush calls for a highway “guarantee” level of $32.3 billion, or $2.1 billion above the 2001 enacted level to support state and local highway and bridge improvements. This level is provided to meet objectives under the Transportation Equity Act for the 21st Century.

In terms of transportation user fees, the budget says, “To ensure that users pay for specialized services or government support, the budget assumes that $75 million will be raised from new user fees to offset the costs associated with the regulation of the transportation of hazardous materials, expanded federal inspection of the nation's over two million miles of pipeline, and support for the railroad safety inspection program.”

Within United States Customs operations, the plan calls for increased spending for a number of services including efforts to replace the automated import processing system.

The president's proposal has gone to Congress, which will begin debating how the budget will be resolved.

Cummins, Westport Form Joint Venture

Cummins Inc of Columbus IN and Westport Innovations Inc of Vancouver, British Columbia, have formed a 50/50 joint venture to develop and market low-emissions, high-performance natural gas engines.

Under terms of the agreement, Westport will contribute its high-pressure direct injection (HPDI) technology and other proprietary natural gas technologies. Cummins will include its on-highway vehicle medium-duty spark-ignited natural gas engines and proprietary engine-related technologies for on-highway vehicles, industrial, and power generation applications. Cummins will manufacture the engines that will be distributed and serviced by the Cummins distribution system. The joint venture is based in Vancouver, with a board of directors consisting of three representatives from Cummins and three from Westport.

Through the 50/50 joint venture and related supply agreements, Cummins and Westport share equally in profits from products developed and sold by the joint venture. For the first three years of the joint venture, Westport will contribute capital that the joint venture may require and is prepared, under the agreement, to invest up to US $50 million over that period of time. Westport's existing technology development projects with other diesel engine manufacturers are not affected by the agreement with Cummins.

Cummins EGR Technology Makes Progress

Cummins Inc has achieved a milestone in development of cooled exhaust gas recirculation (EGR) technology required to meet future emissions requirements, which are legislated at 2.5 grams oxides of nitrogen (NOx) plus non-methane hydrocarbon (NMHC). This technology was successfully demonstrated on the Cummins B Series engine and is also being applied to its other medium- and heavy-duty products currently in field test.

Cummins achieved a 2% improvement in fuel economy compared with its current product, reduced NOx by 50%, and reduced the time of unaided cold starts more than 80%. In addition, the throttle response of the engine significantly improved as a result of the variable geometry turbocharging (VGT).

Exhaust gas recirculation technology allows a portion of exhaust gas to be reused, reducing exhaust emissions. To take advantage of this technology, Cummins used VGT developed by its wholly owned subsidiary, Holset.

Camless Engine Technology Completes Testing on Nationwide Proving Ground

International Truck and Engine Corp has completed the first cross-continental test of its camless engine technology in an International 530E diesel engine. This journey allowed engineers to test the technology's reliability, durability, and performance characteristics in real-world situations across terrain and temperatures that cannot be simulated in a lab. The 7,600-mile trip added five times more miles on the camless engine than all previous tests combined.

The trek began with a test run to the top of Pike's Peak. From there, engineers from International and partner Sturman Industries drove the International 8100 truck — with 32,000-lb International Eagle Tour 2000 trailer in tow — west to San Francisco and down the Pacific Coast Highway to Los Angeles before turning back east to cross the nation.

Expected benefits of International camless engine technology include a 40% increase in torque at clutch engagement speeds for smoother acceleration and faster starts, and increased parts reliability and less noise because the rate of closing is controlled with hydraulic actuation and the valves compress gently.

Chao Says Health of US Workers Top Priority

In a press statement on job-related injuries and illnesses, United States Labor Secretary Elaine L Chao said the safety and health of American workers is her first priority. She said she is encouraged by the progress made in reducing workplace injuries and illnesses.

New data released by the Bureau of Labor Statistics for 1999 shows where efforts are succeeding and where the focus needs to be directed. Truck drivers, laborers, and nurses' aides suffer particularly high injury and illness rates with time away from jobs. Chao encouraged Americans to keep finding ways to reduce these rates and improve the safety, health, and productivity of these workers.

The Labor Statistics data showed that as more Americans were in the workforce than ever before, the number of ergonomics-related injuries continued to drop. However, musculoskeletal injuries accounted for nearly one-third of all injuries. According to Chao, “This demonstrates the need for a solid, comprehensive approach to ergonomics. It also points to a need to address injuries before they occur, through prevention and compliance assistance, rather than just rely on reactionary methods.”

Chao said she is committed to joining with unions, employers, safety professionals, and Congress to develop a strategy to reduce these injuries further.

Boncosky Earns Second Award from Aristech

For the second consecutive year, Boncosky Services, a Lake in the Hills IL-based transporter of bulk liquid chemicals, has earned Aristech Chemical Corp's Logistics Excellence Award for transport services provided to its Neville Island PA plant.

Aristech, a manufacturer of plasticizer based in Pittsburgh PA, presented the award to Boncosky's Coraopolis PA service center, which handles the Neville Island business. Boncosky was commended for providing reliable tank truck services consistent with Aristech's Total Performance (ATP) commitment to its manufacturing plants and customers.

Boncosky also demonstrated a commitment to safety and service, with zero customer complaints from the period covering July 1, 1999, to June 30, 2000.

GATX Corp Completes Sale to Kinder Morgan

GATX Corp has completed the sale of most of GATX Terminals Corp's domestic operations to Kinder Morgan Energy Partners LP. This sale incorporates GATX Terminals' domestic terminaling operations and the Central Florida Pipeline Co. The sale of GATX's CalNev Pipeline to Kinder Morgan will occur upon receipt of certain regulatory approvals.

Purchase price for GATX Terminals' total domestic operations was $1.15 billion, including about $1.0 billion in cash plus assumption of external debt and certain liabilities. Approximately $800 million of the purchase price was realized in conjunction with the closing, including about $620 million in cash plus assumption of debt and other liabilities. The remainder of the purchase price will be realized upon closing of the CalNev Pipeline sale.

GATX Corp also has closed sales of substantially all of GATX Terminals' European operations. The company has completed the sale of GATX Terminals Antwerpen NV, a wholly owned terminal operation based in Antwerp, Belgium, to Oiltanking GmbH. The company also has completed the sale of its 50% interest in Terminales Portuarieas SA (TEPSA) to its partner, Petrofrance Chemie SA. Total gross proceeds from the sale of the entire European network will approach $100 million.

Transfer Facility Heats Up Alimet Distribution

Midwest customers of Novus International Inc are warming up to a new all-weather, rail-to-truck transfer facility for Alimet feed supplement. Located at Iowa Limestone Co in Alden IA, this new addition to the Novus supply chain puts a large stock of heated Alimet precisely where Midwest feed mills most need a secure source of methionine in midwinter. Alimet arrives at the Alden facility by rail, where it is heated and then transferred to heated tanker trucks for delivery of warm, flowable Alimet to the customer.

The Alden facility serves Alimet customers in Iowa, Minnesota, the Dakotas, Wisconsin, and Manitoba, Canada.

The original liquid analogue source of supplemental methionine, Alimet is an amino acid source used for poultry, swine, and dairy. Liquid Alimet offers many handling and metabolic benefits over powder methionine. However, during cold weather, methionine hydroxy analogue can become viscous. Keeping Alimet warm through the distribution chain helps assure good flowability at the feed mill.

Thermoid/HBD Acquires BRP Mfg Co

Thermoid/HBD Industries Inc has acquired the industrial hose product line of BRP Manufacturing Co of Lima OH.

After a brief transition period, these hoses, which are used in the industrial, automotive, marine, commercial, and military applications, will be produced at Thermoid's Salisbury NC and Oneida TN locations. BRP will continue to produce its sheet rubber products and rubber accessory item such as mallets, tape, and cloth sheet.

HBD Industries designs, develops, manufactures, and sells under the Thermoid trade name industrial and automotive hose, ducting, belting, V-belts, rubber bands, and rubber and silicone rolls. It has seven operations located in Bellefontaine OH, Chanute KS, Elgin SC, Greenville SC, Oneida TN, Salisbury NC, and Spartanburg SC.

Volvo Recalls 1,577 Heavy-Duty Trucks

Volvo Trucks North America Inc has recalled 1,577 heavy-duty trucks built between November 1997 and August 1999 because they were shipped with inaccurate front axle weight ratings. The company said the recall stemmed from incorrect tire rating information used to calculate weight ratings. Volvo said it either will replace the weight certification label with a correct one; replace front axle tires, rims or tie rod tubes; or replace or relocate fuel tanks.

Klean Wash Inc Marks Five Years of Service

Klean Wash Inc celebrated five years of service by holding an open house in conjunction with the Morton Chamber of Commerce recently. The tank wash is just off Interstate 74 in Morton IL, between Chicago IL and St Louis MO.

A complete interior/exterior tank and truck wash, the facility offers hot and cold flushes, detergent and caustic, steaming and drying, in-transit and product heating, and reefer interior wash. It also performs tank maintenance and parts inventory, along with DOT/HM-183 testing services.

Driver amenities include private shower/towel service and a break area. Secured truck parking, office space, warehouse, and emergency response services are also available. The Morton Travel Center/Truck Stop is adjacent to Klean Wash. Hours of service are from 6 am to 6 pm Monday through Friday, and 6 am to 11 am Saturday by appointment.

Chemical Safety Award Nominations Sought

Nominations are being accepted for community groups that demonstrate excellence in improving chemical safety awareness, the Chemical Educational Foundation (CEF) announced.

CEF annually gives Community Awards for Chemical Safety to emergency planning and response groups that excel in working with public and private industries, including chemical companies, to improve public safety and chemical awareness. Representatives from the chemical industry, previous winners, media, and government agencies serve as awards judges.

The program, which attracts communities with public safety programs from around the nation, requires applicants to describe their overall strategic plans and community outreach activities. Nominations from the chemical industry, emergency planning groups, government agencies, and others must be received by May 1, 2001.

Winners will be recognized during the National Association of Chemical Distributors annual Operations Seminar and Trade Show, set for Sept 20, 2001, in Charlotte NC.

Refer to www.chemed.org/nomination.html for instructions on nominating, or phone Jennifer Aleknavage, CEF director of education and training programs, at 703-527-6223.

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