Just one word — plastics

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: It was 30 years ago that the world first chortled at the scene in The Graduate in which a smug Los Angeles businessman takes aside the baby-faced Dustin Hoffman and declares, “I just want to say one word to you—just one word—‘plastics.’” To sneer at all things plastic was to offer an instant definition of oneself as among the young, hip, truth-seeking cognoscenti locked in a moral power struggle with an older generation of square, corrupt, greedy, warmongering materialists. More than any other touch, its ridicule of plastic defined The Graduate as a film about the 60’s generation gap.

Struggling chemical plants rarely shut down completely. Most keep ticking over until they can find a new buyer. Creditors of LyondellBasell, which was forced to seek bankruptcy protection for its US arm and a German subsidiary, have been waiting for their white knight for some time.

Two of Europe’s biggest, LyondellBasell and Ineos, have got a Bunsen burner to their feet, thanks to huge debts. Meanwhile, Dow Chemical, the biggest US chemicals group, made a fatal error by agreeing to buy specialty chemicals firm Rohm & Haas for $15.3bn, at a steep 74% premium, just before valuations collapsed. The company issued $7bn in preferred stock and borrowed $9.23bn from a short-term loan to fund the deal. It compounded the error by planning to pay in part with proceeds from a $9.5bn cash infusion it expected this month from its K-Dow commodity chemical joint venture with a state-owned Kuwaiti firm. Blindsided by Kuwait’s withdrawal from the $17.4bn deal a month after agreeing to new terms, Dow has been facing a financing crunch since then.

Further consolidation among the chemical giants was inevitable as companies seek deeper integration and better access to feedstocks as long funds to repay for their past acquisitions made at lofty valuations.