Monthly Archives: April 2013

Company Perspectives

Top Competitors: BASF SE, Exxon Mobile Chemical Company, Chevron Phillips Chemical Company LP (Source: Google Finance/Hoovers.com)

Union Carbide Corporation is a chemical and polymers company with over 3,800 employees. The company possesses some of the industry’s most advanced process and catalyst technologies, and operates some of the most cost-efficient, large-scale production facilities in the world. Union Carbide primarily produces chemicals and polymers that undergo one or more further conversions by customers before reaching consumers. Some of these materials are high-volume commodities, while others are specialty products meeting the needs of smaller market niches. The end-uses served include paints and coatings, packaging, wire and cable, household products, personal care, pharmaceuticals, automotive, textiles, agriculture and oil and gas.

(Answers.com got it’s source information from The Gale Group, Inc.)
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Chronology of Union Carbide

In detail timeline of Union Carbide’s history till current day occurances

http://www.endgame.org/carbide-history.html

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Chemical Manufacturing Industry Overview

Since Union Carbide is in the chemical manufacturing industry it is important for us to have information on the industry itself so that we are knowledgeable at every angle involving Union Carbide.

The chemical manufacturing subsector is part of the manufacturing sector.

The Chemical Manufacturing subsector is based on the transformation of organic and inorganic raw materials by a chemical process and the formulation of products. This subsector distinguishes the production of basic chemicals that comprise the first industry group from the production of intermediate and end products produced by further processing of basic chemicals that make up the remaining industry groups.

North American Industry Classification System

The chemical manufacturing subsector consists of these industry groups:

  • Basic Chemical Manufacturing: NAICS 3251
  • Resin, Synthetic Rubber, and Artificial Synthetic Fibers and Filaments Manufacturing: NAICS 3252
  • Pesticide, Fertilizer, and Other Agricultural Chemical Manufacturing: NAICS 3253
  • Pharmaceutical and Medicine Manufacturing: NAICS 3254
  • Paint, Coating, and Adhesive Manufacturing: NAICS 3255
  • Soap, Cleaning Compound, and Toilet Preparation Manufacturing: NAICS 3256
  • Other Chemical Product and Preparation Manufacturing: NAICS 3259″

http://www.bls.gov/iag/tgs/iag325.htm

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Union Carbide Not Liable for Bhopal Tragedy

Since Union Carbide is most notable for the Bhopal Tragedy this article is definitely important to note.

“In a setback to the victims of the Bhopal gas tragedy, a US court has held that neither Union Carbide nor its former chairman Warren Anderson were liable for environmental remediation or pollution-related claims emanating from the world’s worst industrial accident.

US District Judge John Keena in Manhattan dismissed a lawsuit accusing the company of causing soil and water pollution around the Bhopal plant due to the disaster, and ruled that Union Carbide Corporation (UCC) and Anderson were not liable for remediation or pollution-related claims.

The court ruled that it was Union Carbide India Ltd, and not its parent company UCC that was responsible for the generation and disposal of the waste that polluted drinking water, and the liability rests with the state government.

Plaintiffs Janki Bai Sahu and others had alleged that “toxic substances seeped into a ground aquifer, polluting the soil and drinking water supply in residential communities surrounding the former Bhopal Plant site”.

They alleged that exposure to soil and drinking water polluted by hazardous waste produced Union Carbine India Ltd caused injuries.

“The summary judgement record certainly indicates that UCIL consulted with UCC about its waste disposal plans and on non-environmental business matter like its strategic plan. However, nothing in the evidence suggests the necessity of UCC’s approval for the actions about which plaintiffs complain,” the court said in its order.

“Moreover, there is no evidence in this extensive record indicating that UCIL manufactured pesticides on UCC’s behalf, entered into contracts or other business dealings on UCC’s behalf, or otherwise acted in UCC’s name,” it said.

In his written opinion, Judge Keenan concluded that – even when viewing the evidence in the most favourable light for the plaintiffs – UCC is not directly liable, nor liable as an agent of UCIL, nor liable under a veil-piercing analysis.

The world’s worst industrial accident led to the leak of poisonous methyl isocyanate, claiming thousands of lives in the Madhya Pradesh capital.

Over 3,000 people are believed to have died due to the immediate after effects of the tragedy. According to independent estimates, several thousands have subsequently died over the years due to ill-effects of the toxic waste in the environment.

Citing a 1998 court verdict in a case involving KFC, the court said that legally the mere assertion that a corporate parent is or was involved in the decision-making process of its subsidiary, or that it controlled the legitimate policies of its subsidiary, will not shift liabilities among distinct corporate entities.

“Moreover, there is no evidence to suggest that UCC’s approval power extended beyond the strategic plan to other areas of UCIL’s operations,” the court said.

The court observed that after the 1984 catastrophic gas leak claimed thousands of lives, the Government of India closed the Bhopal Plant.

In 1994, UCC sold its stake in Union Carbide India Ltd, after which time UCIL changed its name to Eveready Industries India Ltd (EIIL). In 1998, EIIL terminated its lease of the Bhopal Plant site and surrendered the property to the state government of Madhya Pradesh.

“As discussed in connection with the direct liability, the expanded summary judgement record demonstrates that UCC played a minimal role, if any, with respect to the decision to back-integrate the Bhopal Plant, the design of the plant’s waste disposal system, the choice and development of process technology used at the plant, and the burial of waste in a landfill.

“There is no need to pierce the corporate veil to prevent fraud or injustice because, even if there were evidence that UCC dominated UCIL, there is no allegation or evidence that UCC did so to commit a fraud or wrong that harmed Plaintiffs,” it said.

A statement from UCC following the verdict said: “In summary, yesterday’s court decision not only dismisses plaintiffs’ claims against UCC, but also clarifies that UCC has no liability related to the plant site and further acknowledges the matter of site ownership and liability as being the responsibility of the State Government of Madhya Pradesh”.”

http://news.outlookindia.com/items.aspx?artid=767127

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Strategy

According to my last post on long term objective, Union Carbide uses the strategy of divestment to reach its goal.

Divestment also known as divestiture is the reduction of some kind of asset for financial, ethical, or political objectives or sale of an existing business by a firm. A divestment is the opposite of an investment.

After the Bhopal incident, Union Carbide added diversification, simplification, and joint ventures to its strategy.

In the early 1990s, Union Carbide launched a “work simplification program.” This program had a cost reduction goal of $400 million a year by the end of 1994. Union Carbide acted on this goal by repurchasing 20 million shares, spinning off two small businesses and selling 50% of its carbon business in 1990.

 

“A New Union Carbide Is Slowly Starting to Gel,” Business Week, April 18, 1986, p. 68.

http://global.factiva.com.remote.baruch.cuny.edu/aa/?ref=tmsc000020011207dh8102ed8&pp=1&fcpil=en&napc=S&sa_from=

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Long Term Objective

Union Carbide drew up a five year plan in 1979. It was intended that sales and earnings in 1983 should be respectively $14bn and $940m. In 1980 the group’s figures were $10bn and $673m. To reach its five-year goal, the group estimated that annual capital expenditure of $1.2bn would be required. It now expects actual capital expenditure to be running at $1.3bn-$1.4bn a year by 1983.

Recent activities have been characterised by a series of divestments. But now the group has a number of projects for expansion in hand. These include the building of a carbon fibres plant in California, consideration of a carbon fibres project in France, construction of a silicones plant in Italy, and expansion of battery operations in Europe.

 

 

http://global.factiva.com.remote.baruch.cuny.edu/aa/?ref=ftft000020011206de1500knz&pp=1&fcpil=en&napc=S&sa_from=

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Different Businesses

According to this http://global.factiva.com.remote.baruch.cuny.edu/aa/?ref=ftft000020011206dea400wwa&pp=1&fcpil=en&napc=S&sa_from=

Union Carbide has two different segments. Commodities and Specialties.

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Union Carbide Products

Thought this would be necessary information to have on hand especially for the environmental portion of the profile since a lot of these products are used in peoples everyday lives.

“Union Carbide both produces and purchases ethylene, a basic building-block chemical, from components of crude oil and natural gas. We convert ethylene to polyethylene or react it with oxygen to produce ethylene oxide, the precursor to many of the products we sell: ethylene glycol and hundreds of solvents, alcohols, surfactants, amines and specialty products.

Some of the chemicals we make go directly into products used every day: polyethylene and polypropylene into food containers or toys; ethylene glycol into automotive antifreeze, and isopropanol into rubbing alcohol. Others are used in manufacturing processes to enhance quality and performance: ethyleneamines for wet-strength in paper towels; biocides as bacteria-growth inhibitors in cosmetics, and surfactants for soil removal in industrial cleaning. Other essential products include: deicing and anti-icing fluids to remove or prevent ice buildup on airplanes; amines for removing impurities in oil and gas refining processes; solution vinyl resins for industrial coatings to prevent corrosion, and polyethylene glycols to make tablets and pills easier to swallow

Whether they are adding strength to stretch wrap, or smoothness to paint, removing static from laundry or simply making a teddy bear more cuddly, the products of Union Carbide make great chemistry a part of daily life.”

http://www.unioncarbide.com/products

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