LyondellBasell acquires polypropylene (PP) compounds manufacturer SJS Plastiblends
THE Netherlands-based LyondellBasell, one of the world's largest plastics, chemical and refining companies, has entered into a definitive agreement to acquire Aurangabad (Maharashtra) based polypropylene (PP) compounds manufacturer SJS Plastiblends Pvt Ltd. This strategic acquisition will expand LyondellBasell's existing footprint in India and further enhance the company's position in India's growing automotive market.
“This acquisition will expand our global PPC manufacturing footprint and allow us to better compete in the long-term growth of India's automotive market. We are very proud of the strong, global reputation we have built by manufacturing high-quality products and providing excellent service to our customers. We look forward to continuing this tradition in India through this expansion,” said Bhavesh V (Bob) Patel, CEO and chairman of the Management Board of LyondellBasell.
Globally, India represents the fourth largest growth market for automobiles, with three million new vehicles produced each year. According to IHS Inc, India's automotive market is expected to continue growing by 6-8% annually through 2021.
LyondellBasell has supplied the Indian market through imports and tolling arrangements since 2009. SJS was established in 1996 to create products that improve the performance and aesthetics of plastics in automotive supply. SJS has approximately 60 employees and one manufacturing site with production capacity of approximately 12,000-tpa of PPC.
HSIL Ltd to invest Rs 217 cr to set up plastic pipes & packaging products plants
HINDUSTAN Sanitaryware & Industries Limited (HSIL Ltd), the Kolkata-based manufacturer known for its Hindware range of sanitaryware products, will invest Rs 217 crores for setting up two plants to produce plastic pipes & fittin (used in plumbing) and caps & closures (required for packaging), respectively.
HSIL Ltd will spend Rs 105 crores to build a plant for manufacturing of CPVC and UPVC pipes and fittin used in plumbing and sanitation. This product line is extension of building product portfolio. The company has entered into agreement with Japan's Sekisui Chemical Co Ltd (a $ 9-billion turnover company) for supply of chlorinated polyvinyl chloride (CPVC) resin. Interestingly, Sekisui Chemical on July 15, 2015 had announced that it will use its recently constructed CPVC resin and compound plants at Map Ta Phut in Thailand to export CPVC compound in India & Middle East.
HSIL Ltd will set up the second plant, with an investment of Rs 112 crores, to manufacture security caps and closures required for protection of products from counterfeiting. This product will be a value addition to the existing portfolio of HSIL's packaging products division. In this regards, the company has also filed for necessary product patents.
HSIL Limited constitutes two primary business divisions - building products and packaging products. Within the building products division, the product line includes sanitaryware, faucets, wellness and other allied products, kitchen appliances and vents. While HSIL's packaging products division is one of the leading glass bottle manufacturers, the division added PET bottles to its portfolio with the acquisition of Garden Polymers Private Limited (GPPL) in 2011.
FICCI proposes exclusive industrial estates for MSMEs
The Government should consider developing industrial estates exclusively for MSMEs with transport, power, water, road, etc. and adequate support from budgetary allocation, according to FICCI- Confederation of Micro, Small and Medium Enterprises (FICCI-CMSME).
The chamber, which presented an action agenda paper titled 'Ease of Doing Business: Recommendation for the MSME Sector' to the Prime Minister's Office, has also suggested that the state governments should look at developing 'flatted factories' with a 'plug and play' concept. “The Centre should incentivise states for building flatted factories at existing industrial estates at least in urban areas for MSMEs,” it added.
“The process of land acquisition remains cumbersome and long drawn…. There is an urgent need for a stable land policy that balances interest of all stakeholders. Industry needs confirmed availability of land at an affordable rate over the long term,” the paper said. The chamber also suggested steps to boost affordable housing complexes for workers near the industrial areas by compulsorily allocating 20 per cent land of industrial belt for low-cost housing, fast-tracking the change of land use for housing purposes, and reducing the land registration charges for affordable housing to 20 per cent of the rates applicable in other cases. The industry lobby also urged the Government to consider allotting ' rented accommodation' to MSMEs in an industrial area, giving them the option of purchasing the same after a stipulated time period.
Over 3,500 tonnes plastic waste generated daily
OVER 3,500 tonnes of plastic waste is generated every day in 60 major cities, Lok Sabha was informed. Environment Minister Prakash Javadekar said that as per available information, consumption of plastic was 11 million tonnes in 2013-14. “The total quantum of plastic waste generated from 60 major cities is estimated to be 3,501 tonnes per day. Delhi, Chennai, Kolkata, Mumbai, Bengaluru, Ahmedabad and Hyderabad are generating maximum quantity of plastic waste,” he said during question hour.
Javadekar said the environmental impact of plastic waste has been examined by various committees in recent years, which indicate that plastic bags, if not collected systematically, choke drainage system and create unhygienic conditions. Meanwhile. the Indian Beauty and Hygiene Association (IBHA) undertook a zero waste sachet recycling pilot project recently and succeeded in collecting 600 kg of sachet waste last year. The same is to be turned into oil and carbon. Mumbai generates nearly 7,500 tonnes of waste every day, of which nearly 9 per cent is plastic waste.
IBHA is a national trade association comprising of companies in the cosmetics and personal care sector such as P&G, Johnson & Johnson, Wipro, Godrej, Marico, Hindustan Unilever, L'Oreal India, among others.
Dinesh Dayal, President, IBHA, said as an industry, “we have decided to highlight the fact that flexi layer plastic such as sachets, chips packets can be recycled and do not need to be banned completely, or dumped in Mulund or Deonar (Mumbai suburbs).”
The BMC's Environment Status Report for 2013-14 had shown that plastic accounted for around 675 tonnes of the city's total daily waste. The first of its kind in the country, the cosmetic industry has been looking at ways to reduce its carbon footprint and tackle the menace of plastic sachet waste. In alignment with the 'Swachh Bharat Abhiyan movement', IBHA decided to look at sustainable and innovative solutions to recycle flexi plastic waste.
Government bans import of electronic, PET scrap
THE Ministry of Environment, Forests & Climate Change has banned the import of polyethylene terephthalate (PET) bottles, plastic scrap and other waste items, including electronic waste, coming from overseas for recycling. The ban was enforced as experts believe that it will help jumpstart a waste management ethos in the country by forcing better utilisation of waste generated at home.
The government has asked recyclers to rely on similar waste generated within the country. The ministry has also taken a policy decision to ban import of all kinds of household waste, non-exportable electrical equipment and computers & accessories that don't have a clearly pre-set residual life.
The move is part of a two-pronged drive to push for better waste management in India while at the same time prevent the country from turning into a dump-yard for global waste. The order, which was issued by the ministry's Hazardous Substance Management (HSM) Division, followed a meeting of an expert committee held last May, which rejected all proposals to import used PET and other plastic waste on the grounds that there was enough plastic scrap available in the country, most of which remains unutilised and therefore created a disposal issue.
Investment firm KKR to invest $ 150 mn in polyester maker JBF Group
JBF Industries Ltd (JBF), a leading manufacturer of polyester value chain products, has signed a definitive agreement with global investment firm KKR under which KKR will invest $150 million (approximately Rs 960 crores) into JBF Group, an entity that includes JBF's international subsidiaries.
While a portion of the proceeds will be used by KKR to acquire a 20 percent stake in JBF, the remaining proceeds will be invested into zero-coupon convertible preference shares with 14.5 percent voting rights in JBF Global Pte Limited, Singapore, an unlisted subsidiary. KKR will primarily make its investment from the KKR Special Situations Fund II.
JBF Group manufactures polyester value chain products ranging from polyester chips, polyester yarn and films which are used in the fast-moving consumer goods, textile and packaging industries. JBF Group is one of the leading global players in the polyester segment, with six manufacturing facilities across India, Bahrain, Belgium and the United Arab Emirates. JBF, which is among the top-10 producers of polyethylene terephthalate (PET) chips and of BOPET films globally, operates three domestic facilities - one in Gujarat and two in Silvassa.
In addition, JBF is setting up a purified terephthalic acid (PTA) plant in Mangalore SEZ having 1.25 million metric tonne per annum capacity, which it claims to be among the largest in India.
"The funding provided by KKR will help JBF complete our ongoing projects. KKR's support will better enable JBF to grow our international presence and support the Make in India campaign,” said Bhagirath Arya, founder and executive chairman of JBF. NEWS ROUND-UP
Sanjay Nayar, Member & CEO of KKR India, said, "This type of investment into a world-class company such as JBF is a great example of how KKR can support Indian manufacturing companies providing value to global customers."
The transaction is subject to customary closing conditions, including the receipt of shareholder approval and regulatory approvals from competition authorities.
JBF Group's products include PET chips which are of bottle grade, textile grade and film grade; polyester yarn, such as partially oriented yarn (POY), polyester filament yarn (PFY), full drawn yarn (FDY) and other specialised yarn; and PET films, which are of thin grade, thick grade and metallised grade.
Arkema expands Bostik adhesives capacities in Bengaluru
BOSTIK, a subsidiary of French chemicals major, Arkema, has announced capacity expansion of hot melt pressure sensitive adhesives (HMPSA) at its manufacturing facility in Bengaluru with the opening of a new plant.
“This new HMPSA production unit will enhance the global adhesives specialist ability to serve customers in the disposable hygiene market,” said Arkema. Bostik supports global manufacturers of baby diapers, feminine hygiene and adult incontinence products, and supplies solutions for demanding applications including elastic attachment, wetness indication and stretch.
Bostik's Senior Vice President of Asia, Mr. Jeffrey Merkt, said, “Development in high growth geographic markets remains one of the central components of Bostik's future growth strategy and this new facility will ensure we maintain our close ties with customers in India while meeting the growing demands of this important market.”
A cross-regional approach was adopted to design the plant with engineering and operations expertise from other Bostik HMPSA production sites heavily utilised. The new unit features a fully automated packing operation ensuring the quality and efficiency required by customers in the disposable hygiene sector. Bostik has been active in India since 2001 and manufactures a range of adhesives and related products for the industrial manufacturing and construction markets. The Bengaluru plant expansion follows recent plant openings in China, Malaysia and Brazil.
HPCL drops plan to build refinery in AP; to go ahead with petchem unit
HINDUSTAN Petroleum Corp Ltd. (HPCL) has shelved a plan to build a refinery in Andhra Pradesh, although it will go ahead with a proposed petrochemical unit. “We will just do the petrochemical plant,” said Ms. Nishi Vasudeva, Chairman and Managing Director of HPCL, adding that the company's refinery at Visakhapatnam is being almost doubled, obviating the need to add capacity in the state at present.
HPCL will build the petrochemical plant in partnership with GAIL Ltd., the government-owned gas distributor. The two companies had discussed the possibility of setting up a refinery-cum- petrochemical complex for years, but the inability to find foreign partners to fund the project has kept the plan from taking off. Ms. Vasudeva said a final decision was yet to be taken on inducting a foreign partner, a funding plan or even an equity structure between GAIL and HPCL for the project.
The two companies had evaluated the prospects of setting up a refinery-cum- petrochemical complex costing Rs. 85,000- 95,000-crore as well as only a petrochemical unit for about Rs. 35,000- crore. Due to the huge investment required and a glut in the country's oil refining capacity, the companies have been wary of adding capacity. Their search for a foreign partner is still on and talks with potential partners are being held, the official said.
Rising demand from plastic industries to boost calcium carbonate market
RISING applications in the FMCG and packaging sector has fuelled the demand for calcium carbonate, according to a new market research report by Transparency Market Research.
The report expects the global calcium carbonate market size to grow from $15.66-bn in 2012 to $25.01-bn by 2019, registering a healthy CAGR of 7.0% from 2013 to 2019. In terms of volume, the calcium carbonate market was pegged at 86.5-mn in 2012.
Calcium carbonate is used in industries such as paper, plastic, agriculture, building and construction, and pharmaceutical. By product, the calcium carbonate market is divided into precipitated calcium carbonate (PCC) and ground calcium carbonate (GCC). PCC is estimated to record a 3.9% CAGR during the forecast period owing to its properties of brightness, opaque visibility, and whiteness. GCC, on the other hand, is projected to develop at a 2.9% CAGR during the same period owing to its applications in non-traditional end-use industries.
Asia Pacific dominates the worldwide market in terms of volume and is also anticipated to be the second fastest growing regional market for calcium carbonate by the end of 2019. Rising demand for GCC and PCC from emerging economies such as India and China is largely responsible for the growth of the calcium carbonate market in this region. APAC is projected to register a CAGR of 4.4% from 2013 to 2019, according to the research report.
North America held a 20.7% share of the global calcium carbonate market in 2012, while the market in Europe accounted for 20.5 million tonnes. The European calcium carbonate market is estimated to pick up pace by the end of the forecast period thanks to growing demand from the pharmaceutical sector and various non-traditional end-use industries. The Rest of the World region is forecast to be the most rapidly developing calcium carbonate market by 2019, registering a 4.5% CAGR from 2013 to 2019.
Some of the prominent participants of the global calcium carbonate market were identified as Minerals Technologies, Schaefer Kalk, Excalibar Minerals, Great Lakes Calcium Corp, Okutama Kogyo, Imerys, Solvay, Maruo Calcium, Omya, Mississippi Lime Company, Huber Engineered Materials, and Shiraishi Kogyo Kaisha.
Solvay makes a step-change in its transformation with the acquisition of Cytec
Solvay has entered into a definitive merger agreement with U.S.-based Cytec to acquire 100% of its share capital for US$ 75.25 per share in cash. The total cash consideration will amount to US$5.5 billion, corresponding to an enterprise value of US$ 6.4 billion and representing a 2015 estimated EBITDA multiple of 14.7x and of 11.7x when considering synergies potential linked to the transaction. The transaction price per share represents a premium of 28.9% compared to the closing price of Cytec on 28th July 2015 and a premium of 26.9% compared to the volume weighted average closing share price over the last three months. Cytec's and Solvay's boards of directors have unanimously recommended the transaction.
"The proposed acquisition of Cytec marks a major step change in Solvay's portfolio upgrade. It is a unique opportunity for Solvay to boost its customer offerings in lightweighting with advanced materials in aerospace and automotive, as well as to strengthen its know-how with activities in mining chemicals," said Jean-Pierre Clamadieu, CEO of Solvay. "Cytec is a high-growth, high-quality group with leading market positions. We are looking forward to working with its excellent teams. This acquisition will create value for our stakeholders and will support our ambition to become a leader in sustainable chemistry. This transaction will lead us to further accelerate our transformation."
"We are excited to be joining with Solvay, a leading player in the chemical industry with over 150 years of success. Their strategic focus is perfectly aligned with our businesses, while the technology synergies with their specialty polymers and formulations expertise should accelerate our growth. Our customers and our employees should expect to see continuity and strong support of our current strategy," said Shane Fleming, CEO of Cytec.
Headquartered in New Jersey with 4,600 employees across the globe, Cytec generated sales of US$ 2.0 billion and a 20% REBITDA* margin in 2014. It sources almost half of its sales from North America, nearly a third from EMEA and the remainder from Asia Pacific and Latin America.
Cytec is among the world leaders in composite materials and in mining chemicals, recognized by its customers as a consistently successful innovator and provider of high-performance and value- added solutions. In the fast-growing composite materials sector, which represents two thirds of its sales, its principal market is primary and secondary structures for aircraft. It is also developing new technological applications for composites in automotive. Cytec is the leader in tailored specialty chemical formulations to enhance mining separation processes.
Through the acquisition of Cytec, Solvay will gain critical scale and immediate customer intimacy in aerospace. In the automotive market, Solvay's strong positions with original equipment manufacturers and tier-one suppliers will help bolster Cytec's growth.
Moreover, Cytec will significantly reinforce Solvay's sustainability profile as its offerings are addressing planet's challenges. With Cytec, Solvay will stand out stronger in reducing CO2 emissions through its lightweighting solutions and in dealing with the increasing scarcity of resources through more efficient and cleaner mining technologies.
Cytec's composites businesses will be integrated into Solvay's Advanced Materials operating segment. Its mining chemicals as well as its niche additives and phosphine specialty chemical businesses will become part of Solvay's Advanced Formulations segment.
This transaction will underpin Solvay's REBITDA growth momentum, by driving top line growth and margin expansion. Solvay expects annual synergies of more than € 100 million, to be substantially realized within three years chiefly through cost savings and excellence. Significant cross-selling opportunities have been identified with Specialty Polymers, both in aerospace and automotive, as well as with Novecare in oil & gas, agrochemicals and electronics. The non-recurring implementation costs are estimated at €75 million. The acquisition of Cytec will be accretive to Adjusted EPS after the first year and to CFROI in the mid-term.
Solvay has arranged committed bridge financing for the transaction which it plans to fund with a € 1.5 billion rights issue, € 1.0 billion of additional hybrid instruments and a senior debt issuance. The intended financing structure will help Solvay maintain its financial flexibility and strengthen its capital structure. This will allow the Group to sustain its long- standing policy of growing its dividend over time, while preserving its investment grade credit rating.
Solvay will convene, in due course, an extraordinary general meeting of its shareholders to vote on the proposed rights issue. The Board of Directors of Solvac, Solvay's main shareholder, has unanimously confirmed its support for the transaction and its intention to vote in favor of the capital increase. It plans to exercise its rights as part of the capital increase to maintain its 30% stake in Solvay's shareholding structure.
This acquisition is structured as a cash merger between Cytec and a subsidiary of Solvay. The merger is subject to customary closing conditions, including regulatory approvals and Cytec shareholders' approval. The transaction is expected to close in the fourth quarter of 2015.
PolyOne announces further investments to integrate, improve and grow designed structures and solutions
POLYONE Corporation (NYSE: POL), a leading global provider of specialty polymer materials, services and solutions, continues to take strategic integration actions with the former Spartech business to improve service, quality and on-time delivery to customers. The company is further realigning assets and investing in commercial and operational excellence initiatives to streamline production and gain efficiencies.
PolyOne continues to make investments in new equipment, information systems and processes at several DSS manufacturing plants. Examples include further capacity improvement and technology expansion planned for its Greenville, Ohio facility with the addition of new specialty PETG and RoyaliteT sheet manufacturing lines in 2016, and increasing prototyping capability at its St. Louis Innovation Center to help accelerate the design and formulation process for customers.
In addition, PolyOne recently commenced the closure of its Granby, Quebec, Canada facility and will shift production to other existing sheet and rollstock facilities within the company's manufacturing network.
"A core focus in transforming DSS is aligning our manufacturing assets with the voice of the customer while continually making investments for the future," said Robert M. Patterson, president and chief executive officer, PolyOne Corporation. "Our latest actions provide a more stream lined and sustainable manufacturing footprint from which we can better serve our customers. At the same time, we're also investing in our operations and commercial capabilities consistent with what is required to drive specialty transformation within DSS and achieve our 2020 Platinum Vision."
Rich Altice, president, Designed Structures and Solutions, PolyOne Corporation, stressed that DSS continues to focus on the same four-pillar strategy that originally transformed PolyOne Corporation into a specialty company.
"Compared to the early part of the year, our recent performance in key metrics such as on-time delivery and scrap rates is improving, and our Lean Six Sigma based process improvements have gained traction." said Mr. Altice. "I'm encouraged by our team's initiative, our customer interactions and new business gains, as well as the cross-business unit activity within PolyOne to help us grow within the specialty space."
SABIC highlights progress on integrating sustainable practices in its operation in 2014 sustainability report
SAUDI Arabia based chemicals giant, SABIC, has released its 2014 Sustainability Report, entitled Foundation for the Future, highlighting the progress made by the company in integrating sustainable practices into its global business operations.
The report outlines the latest information on the company's progress on various dimensions of sustainability value creation. It highlights performance in integrating the environmental, social and economic dimensions of sustainability into the company's core business approach.
Commenting on the development, Mr. Yousef Al-Benyan, SABIC's acting Vice Chairman and CEO, said, “This is our fourth report. It reflects our ongoing journey toward achieving the highest level of performance possible in sustainability, which is fundamental to our business strategy. We are continually looking for new ways to integrate it into our business, allowing us to improve, grow, innovate and transform to achieve our goals.”
Commenting on what steps SABIC is taking to drive sustainable innovation, he said, “We have invested in relationships with multiple globally acclaimed universities and are expanding our internal innovation resources – both by building and expanding technology centres and by attracting and growing talented scientists. In addition, we have embedded sustainability assessments into our research and development process to grow our portfolio of more sustainable products.” Some of the topics covered in the report are sustainability governance, ethics and compliance process, how sustainability is creating economic value, SABIC's approach to protecting natural capital, developing and protecting human capital, and building social and community relationships.
Global high density polyethylene market to reach $84 bn in 2023
HIGH density polyethylene (HDPE) market is expected to grow from $ 56.13 billion in 2014 to $ 84.79 billion in 2023, expanding at a CAGR of 4.5 percent between 2015 and 2023, according to a Transparency Market Research (TMR) report. In terms of volume, demand for high density polyethylene stood at 39,254.6 kilo tonnes in 2014.
High density polyethylene, one of the major polyethylene products consumed globally, is used in numerous applications in various end-user industries across the globe. The demand for HDPE is primarily driven by growth in plastic packaging, and agriculture films & pipes industries across the globe. Furthermore, growth in construction activities is estimated to fuel the high density polyethylene market globally. These factors are anticipated to boost the high density polyethylene market in the near future. Limitations pertaining to supply and volatility in prices of raw materials are anticipated to offer key challenges to market players.
Blow moulding was the dominant product segment of the HDPE market, accounting for over 25 percent of the global demand in 2014. Demand for blow moulded products is estimated to rise significantly in the next few years due to its increasing usage in packaging applications across the globe. “Usage of blow-moulded high density polyethylene in rigid packaging applications is anticipated to propel the global high density polyethylene market during the forecast period,” added the TMR report.
Asia Pacific constituted more than 40% share of the global high density polyethylene market in 2014, followed by Europe and North America. It is likely to be the fastest-growing region in terms of production and consumption of high density polyethylene products. This can be attributed to increase in industrial and agricultural activities in Asia Pacific.
Asia Pacific has emerged as a key destination for HDPE producers due to economic development coupled with increasing disposable income in the region. This has encouraged various manufacturers to establish new capacities in the region. The Middle East & Africa is another key region where demand for high density polyethylene products was high in 2014. In terms of volume, the market for high density polyethylene in the Middle East & Africa is likely to expand at a CAGR of over 4 percent between 2015 and 2023.
Shandong Chambroad commissions first propylene and isobutylene coproduction plant in China
SHANDONG Chambroad Holding Co Ltd has become the first company in China to commission a combined C3/C4 (propylene and isobutylene) dehydrogenation unit to meet growing demand in Asia for plastics, high-octane gasoline and synthetic rubber. The new unit, which is the first of three in China, uses Honeywell UOP's C3/C4 Oleflex process technology to produce propylene (C3), a building block for making plastics, packaging and synthetic fibre, and isobutylene (C4), a component used for high-octane gasoline and synthetic rubber. The unit, which is only the second of its kind in the world, successfully started up in May and all production targets have been accepted. Two other Chinese producers have also licensed the technology for start-up in 2017.
“As the demand for transportation fuels and petrochemicals continues to grow in China, petrochemical companies there see a real benefit from integrating processes. The start-up of the first combined C3/C4 Oleflex unit in China is a milestone in the region's petrochemical production, and it will help Chambroad manage market conditions more efficiently,” said Mike Millard, vice president and general manager of Honeywell UOP's process technology and equipment business.
China consumes more than 15 percent of the world's propylene and its demand is growing more than 4 percent per year, according to the US Energy Information Administration. At the same time, gasoline demand is expected to grow in China as a result of a growing middle class and higher car sales.
Honeywell UOP's C3/C4 Oleflex technology use scatalytic dehydrogenation to convert propane to propylene and isobutane to isobutylene. Using mixed dehydrogenation, the processes are combined to produce both materials in a single unit. The technology is proven to have the lowest cash cost of production and the highest return on investment compared with competing technologies.
Located in Binzhou City, Shandong Province, the new unit will produce 1,16,000 metric tonnes per year of propylene and 1,04,000 metric tonnes per year of isobutylene.
Honeywell UOP's C3/C4 Oleflex technology has also been licensed by two other Chinese producers. Dongming Petrochemical Group will produce 265,000 metric tonnes per year of propylene and isobutylene, and Dongying Liyuan will produce 220,000 metric tonnes per year of propylene and isobutylene using the process. Both facilities also will use Honeywell UOP's Butamer process, which converts normal butane into isobutane to increase feedstock flexibility for the Oleflex process
LANXESS raises guidance for 2015 following a strong second quarter
FOLLOWING a strong second quarter, specialty chemicals company LANXESS again raised its guidance for the full year 2015. The company now expects to achieve EBITDA pre exceptionals within a corridor of EUR 840 million and EUR 880 million. It had previously assumed that EBITDA pre exceptionals for the full year would come in at between EUR 820 million and EUR 860 million.
“LANXESS is returning more and more to the right course. In the second quarter of this year, we posted a very good operating result to which all segments of our company contributed,” said Matthias Zachert, Chairman of the Board of Management of LANXESS. “On the basis of these strong figures and the rapid implementation of our realignment program, we assume that our annual result will be higher than previously anticipated.”
Sales improved by 4.3 percent in the second quarter of 2015 to EUR 2.1 billion, compared with EUR 2.0 billion in the prior-year quarter. Higher volumes and positive currency effects more than offset the raw material induced lower selling prices. EBITDA pre exceptionals increased by 13 percent from EUR 239 million to EUR 270 million. This development was driven by increased volumes, savings generated by the realignment, and positive currency effects due to the strong U.S. dollar. The EBITDA margin pre exceptionals rose accordingly to 12.8 percent, against 11.8 percent in the prior-year quarter.
Net income improved by a substantial 58.2 percent to EUR 87 million from EUR 55 million a year earlier. Operational development and proceeds from the sale of noncurrent assets contributed to this increase.
Capital expenditures significantly reduced
At around EUR 1.4 billion, net financial liabilities were almost at the same level as at the end of 2014. Following the completion of major projects in Asia, capital expenditures declined by more than half in the second quarter against the prior- year quarter from EUR 154 million to EUR 73 million. “The financial consolidation measures we have implemented as part of our realignment process are taking effect,” said LANXESS CFO Michael Pontzen. “ This development was recently rewarded by the rating agencies Moody's and Standard & Poor's when both confirmed our investment-grade rating with stable outlook.”
Business development by segment
Higher volumes, positive currency effects and raw material induced lower prices characterized business development in the Performance Polymers segment and resulted overall in sales of around EUR 1.1 billion. This represents an increase of 3.5 percent against the prior-year figure of around EUR 1 billion. EBITDA pre exceptionals for this segment climbed by 22.1 percent to EUR 149 million, compared with EUR 122 million in the second quarter of 2014.
In light of continued good demand in almost all customer markets, sales of the Advanced Intermediates segment advanced by 3.1 percent from EUR 454 million to EUR 468 million. EBITDA pre exceptionals for this segment came to EUR 80 million, 2.6 percent higher than the prior-year level of EUR 78 million.
The Performance Chemicals segment also saw very good performance for the quarter, with sales rising by 6.8 percent to EUR 553 million after EUR 518 million a year earlier. EBITDA pre exceptionals advanced by a substantial 35.8 percent from the prior-year level of EUR 81 million, to EUR 110 million. Low raw material prices during the reporting period, positive currency effects and savings especially contributed to this improvement in earnings.
Realignment remains fully on schedule
The three-phase realignment program initiated by LANXESS last year continues to progress on schedule. The company has already successfully implemented the first phase. Measures of the second phase, aimed at improving operational competitiveness, have also been initiated. They include the reorganization of the production networks for its rubber types EPDM (ethylene propylene diene monomer) and Nd-PBR (neodymium- based performance butadiene rubber).
The third phase of the program is focused on improving the competitiveness of the business portfolio, especially through potential alliances in the rubber business. “In this connection, we are currently engaged in very constructive discussions and assume that we will achieve concrete results in the course of the second half of the year,” said Zachert.
LANXESS has initiated a carve-out process to transfer its rubber business to a legally independent business entity within the LANXESS Group. “In this way, we are creating the conditions that will enable us to bring the rubber business into an alliance,” continued Zachert. The new entity is supposed to comprise the Tire & Specialty Rubbers (TSR) and High Performance Elastomers (HPE) business units, with their 20 production facilities and some 3,700 employees as well as supporting administrative functions.
Sneak preview: highlights of the 10th European Bioplastics Conference 2015 Focus: new policy frameworks, market developments, and new products & materials
THE European Bioplastics Conference will be celebrating its 10th anniversary this year and has put forward an exciting two- day agenda to celebrate the achievements of Europe's bioplastics industry over the past decade.
The European Bioplastics Conference has been witness to and a driving force behind the outstanding developments in one of the most innovative and exciting sectors of the European bioeconomy over the past decade. Today it is the leading business and networking event for the bioplastics industry in Europe. The 10th edition of the conference will take place on 5/6 November 2015 in Berlin with more than 350 delegates, speakers, and exhibitors expected to attend. The preliminary programme is now available online.
“The agenda of the 10th edition of our conference is starting to take shape, and we are excited to present you with a programme that will live up to the industry's expectations to celebrate this exciting milestone”, says Hasso von Pogrell, Managing Director of European Bioplastics. The agenda will cover a wide range of areas including the current EU policy landscape, the latest technological innovations in materials and conversion of bioplastics, advances in standardisation and labelling, biobased feedstock, end-of- life solutions, as well as the end-user and brand perspective.
Some of the highlights this year include: Kevin Vyse, Primary Foods Packaging Technologist and Innovation Lead at Marks & Spencer will outline the UK retailer's 'Plan A 2020', a self-imposed sustainability programme consisting of 100 commitments to reducing the social and environmental footprint of M&S and becoming the world's most sustainable retailer, and the role of bioplastics in achieving this ambitious goal.
The morning session of the first day is dedicated to the European policy landscape and in particular the revised Circular Economy Package (CEP) and its ramifications for the bioplastics industry. After first-hand insights from senior representatives of the European institutions, Joachim Quoden, Managing Director of the Extended Producer Responsibility Alliance (EXPRA), will dissect the CEP with regards to producer responsibility when it comes to product design and waste management for bio- plastic packaging.
The Open-Bio project investigates how markets can be opened for biobased products through standardisation, labelling, and procurement. Antonis Mistriotis, Senior Researcher at the Dept. of Natural Resources at Agricultural University of Athens and Lara Dammer, Dissemination Officer and Work Package Lead on labelling at Open-Bio will present their results on labelling opportunities for bioplastics, especially with regards to extending the EU Ecolabel to biobased categories. We will also hear the latest updates on the progress of the project's research into marine biodegradability, which no doubt will be of huge interest.
Another highlight will be the presentation of the 2015 bioplastics market data update, conducted by nova-Institute and IfBB on behalf of European Bioplastics. Followed by an extensive session on the 'Latest Advances in Materials, Products, and Processes' featuring a host of frontline R&D and marketization players, including the likes of BASF SE, Perstorp, Corbion, BioAmber, Innovia Films, Cargill, NatureWorks, and Floreon, presenting their latest advances in their fields. And in keeping with a well-received tradition, the Bioplastics Magazine will announce the winner of the 10th Annual Global Bioplastics Award.
The full preliminary conference programme is now available on the conference website at www.conference.european- bioplastics.org.
Festive fringe programme to celebrate the 10th anniversary:
The programme of the 10th European Bioplastics Conference will be complemented by a number of networking opportunities and festive fringe events, such as the Conference Anniversary Lottery, friendly sponsored by Braskem, as well as a Gala Dinner on 5th November, sponsored by Belgian certifier Vinçotte co- locating their OK Compost logo's 20th anniversary celebrations with the conference, to which all attendees are cordially invited.
We would like to emphasise the support of this year's conference partners Vinçotte, Perstorp, BASF, Braskem, EREMA, and BioAmber, who are officially sponsoring the conference, showing their dedication to the advancement of the bioplastics industry.
If you would like to participate or present your organisation in the exhibition alongside the conference you can secure your places via the online registration. To find out more, please go to www.conference. european - bioplastics.org or simply contact conference @ european- bioplastics.org.
ARMO 2015: largest rotational moulding event set to open on 13th Sept
ARMO 2015 will take place in Nottingham, England from 13th to 15th September 2015, which means that there are just over three weeks to go until the highly-anticipated rotational moulding event kicks off!
The conference is set to be the largest rotational moulding event globally this year, attracting over 400 attendees from 35 different countries. In addition to this, 51 companies are set to exhibit their products and over 30 world-class speakers will be presenting over the course of the two day event. Delegates will also have the opportunity to visit design exhibits and view the ARMO Student Design Competition winners.
During the evening, the ARMO dinner will take place in a pub converted from a Unitarian Church. This gives attendees and exhibitors alike the chance to wind down, as well as partake in crucial networking.
Further information can be had from the website: www.armo2015.com or contact Paul Baxter of the BPF Events team via email; email@example.com or telephone ;0207 457 5047.
Covestro Management Board named
Patrick Thomas and Frank H. Lutz confirmed as CEO and CFO / Klaus Schäfer (Industrial Operations) and Markus Steilemann (Innovation) newly appointed / Chairman of the MaterialScience Supervisory Board Richard Pott: "Best team for Covestro as a stand-alone company"
The Supervisory Board of Bayer MaterialScience AG (in future: Covestro) has named the members of the future Covestro Board of Management effective September 1, 2015. Patrick Thomas (57) has been confirmed as Chairman of the Board of Management of Covestro. He has been CEO of Bayer MaterialScience since 2007. Frank H. Lutz (46), who joined Bayer MaterialScience in October 2014, will remain Chief Financial Officer of Covestro. Moreover, he will assume the function of Labor Director from Michael Bernhardt (48), who will leave the Board of Management to head an expanded Human Resources function for Covestro.
Newly appointed to the Covestro Board of Management are Dr. Klaus Schäfer (52) and Dr. Markus Steilemann (45). Schäfer will hold Board responsibility for Industrial Operations (Chief Industrial Operations Officer) covering production and technology. Steilemann will initially be the Board member responsible for Innovation and, until December 31, 2015, will also retain his function as Head of the Polycarbonates Business Unit. From January 1, 2016, he will additionally assume Board responsibility for the Polyurethanes Business Unit. Dr. Joachim Wolff, who is currently responsible for the Polyurethanes Business Unit, will retire on December 31, 2015. Daniel Meyer, the present Head of Coatings, Adhesives and Specialties, will remain responsible for this business unit's operations. The new Head of the Polycarbonates Business Unit will be announced at a later date.
"We are convinced we have made the right personnel decisions for the success of Covestro as a stand-alone company.
Steered by this experienced management team, we intend to position Covestro as a leading company in the global arena and continue to grow dynamically in the future," said Dr. Richard Pott, Chairman of the Supervisory Board of Bayer MaterialScience AG. Patrick Thomas added: "Going forward we aim to further strengthen customer proximity, innovative capability, efficiency and profitability - all of which are of crucial importance to Covestro. I am greatly looking forward to working with the new Management Board team."
From September 1, 2015, Bayer MaterialScience will be known as Covestro. Bayer aims to float this business on the stock market by mid-2016 at the latest. The plans for the carve-out of Bayer MaterialScience were announced in September 2014.
Patrick Thomas has been Chairman of the Board of Management of Bayer MaterialScience AG since January 1, 2007. He was born on September 30, 1957 in Portsmouth, United Kingdom. Thomas graduated with an engineering degree from Oxford University in 1979. In the same year, he began his career at British chemical company Imperial Chemical Industries (ICI) and, until 1989, held a number of positions for ICI Pharmaceuticals and Agrochemicals (which became Zeneca in 1993) in the United Kingdom. In 1989 Thomas transferred to ICI Polyurethanes in Belgium, where he undertook various managerial assignments until his appointment as Regional Director for Europe, Africa & Middle East in 1993. Four years later, he was named global CEO of ICI Polyurethanes.
In 1999 Thomas joined U.S. chemical company Huntsman as President of Polyurethanes, Performance and Advanced Materials Divisions, also based in Belgium. He was then appointed Corporate Executive Vice President of Huntsman Matlin Patterson in 2003. After a brief spell as a management consultant for private equity companies in the industrial sector, Thomas joined Bayer MaterialScience on August 15, 2006.
Thomas is President of PlasticsEurope, the European association of plastics producers, and of the Oxford University Business Economics Program (OUBEP). He also chairs the advisory board of the European Institute for Industrial Leadership and is a non-executive director of BG Group plc.
Frank H. Lutz became a member of the Board of Management and Executive Committee of Bayer MaterialScience on October 1, 2014, where he was made responsible for finance one month later. His responsibilities on the Executive Committee also include administration and services along with the Europe, Africa and Middle East regions (EMEA / EEMEA).
Lutz was born in Stuttgart, Germany, on December 14, 1968. He studied economics and business administration with a focus on banking at the University of St. Gallen in Switzerland. Lutz started his career at Goldman Sachs in 1995, holding various positions of increasing responsibility in London, Frankfurt and New York up until December 2004. After a period working for Deutsche Bank, he was appointed Senior Vice President for Finance at MAN. Three years later he became Chief Financial Officer of MAN SE, Munich, Germany. On May 1, 2013, Lutz was appointed to the Coordination Council of the Aldi Süd group of companies, where as CFO he had responsibility for the retailer's finances.
Dr. Klaus Schäfer has been a member of the Executive Committee of Bayer MaterialScience and Head of Industrial Operations since January 1, 2015. Schäfer was born in Brühl, Germany, on September 2, 1962. He studied physics and obtained his doctorate at Cologne University. In 1991, he began his career as an operations engineer at Erdölchemie, a former joint venture between Bayer and BP. After various posts in Production and Technology, he transferred to BP in Grangemouth, Scotland, in 2000. He was responsible there for the technical infrastructure of the refinery and petrochemicals site.
Schäfer joined Bayer in 2001, holding global responsibility for process control technology in the Plastics Business Group. Over the course of the company's evolution - first the formation of Bayer Polymers in 2002, then the founding of Bayer MaterialScience - he was responsible for technical services and the provision of infrastructure services for the company's production facilities. In 2006, Schäfer was appointed member and Chairman of the Board of Management of Bayer Industry Services (now Currenta, a joint venture of Bayer and Lanxess).
Five years later, he joined Bayer MaterialScience as Senior Country Representative for China. In 2013, Schäfer became Head of Production and Technology in the Polyurethanes Business Unit before assuming responsibility for Industrial Operations.
Dr. Markus Steilemann is a member of the Executive Committee of Bayer MaterialScience and has been Head of the Polycarbonates Business Unit since April 1, 2013. A PhD chemist, Steilemann joined Bayer as an internal consultant in the company's former Corporate Planning Division in 1999. He held various positions of increasing responsibility and gained broad experience of business modeling, organizational development and supply chain.
In January 2008, he transferred to the Polycarbonates Business Unit in Hong Kong, where he headed a number of regional business segments. Steilemann relocated to the global headquarters of the Polycarbonates Business Unit in Shanghai in August 2011. He was appointed Head of Global Industrial Marketing for the Polycarbonates Business Unit in July 2012.
Steilemann was born in Geilenkirchen, Germany, on April 30, 1970. He studied chemistry at RWTH Aachen University, Germany, and the University of Zurich, Switzerland. He holds a PhD in technical chemistry and a master's degree in industrial chemistry from RWTH Aachen University.
Evonik seeks buyer or partner for acrylics business
SPECIALTY chemicals maker Evonik Industries AG is looking to sell off or find a partner for its Performance Materials unit, which includes acrylic sheet and resin, as well as other specialty plastic materials.
In an Aug. 17 interview with Dow Jones Newswires, Evonik Finance Director Ute Wolf said the Essen, Germany-based firm can't achieve the economies of scale that would be necessary for the long-lasting competitiveness of the Performance Materials unit.
“There are certainly other investors, corporations and industry groups which could make more of it,” she added.
Based on sales, Performance Materials was the smallest of Evonik's three operating units in the first half of 2015. The unit posted sales of 938 million euros ($1.07 billion), down 4 percent vs. the first half of 2014. That amount represented about 27 percent of Evonik's first-half sales total.
Performance Materials' adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) in the first half essentially was flat at 82 million euros ($93.2 million).
Officials with Evonik in Essen could not be reached for comment. In June 2014, the firm resumed production of nylon 12 resin at a plant in Marl, Germany, that had been damaged by an explosion and fire in 2012.
Tosaf adds to US base with Adtec acquisition
ISRAEL-BASED Tosaf Group, a manufacturer of additives, compounds and masterbatches, has announced that it has finalized its acquisition of Texas-based Adtec Colorant Corp. The financial details of the deal were not disclosed.
The company states that Adtec specializes in color concentrates, liquid and additive masterbatches for the injection molding, blow molding, film and extrusion markets.
Amos Megides, chairman and CEO of Tosaf said: “This transaction represents another step in the fulfilment of our U.S. market entry strategy following our earlier announcement of the construction of a new additives, white and color masterbatch plant in Bessemer City, N.C. Adtec's specialty color concentrates, liquid and additive masterbatches add to Tosaf's comprehensive portfolio of products for the plastics industry.”
Mahesh Parikh, founder and CEO of Arlington, Texas-based Adtec said: “We are excited to become a part of such a successful and rapidly growing organization. This acquisition will provide rapid growth for Adtec Colorant by utilizing Tosaf group's additional product line while maintaining our excellent reputation for service and quality in the southwest region. This partnership will enhance our products and technologies that we provide to our customer base and will bring brighter futures to our long term employees.”
The Tosaf group is a joint-venture between Megides Holding and the Ravago group, based in Kfar Yona, Israel. The company has ten factories in Israel, Turkey, Germany, the U.K., the Netherlands and China, employing 900 people..
BPN develops Zealafoam as an alternative to polystyrene
NEW ZEALAND-based research company Biopolymer Network (BPN) is developing a sustainable alternative to polystyrene, a synthetic aromatic polymer - and one of the most widely used plastics in the world.
BPN is focused on developing a portfolio of intellectual property in products made from trees and plants. BPN's first commercial product is expected to be Zealafoam, an environmentally-friendly sustainable alternative to petroleum-based polystyrene. Zealafoam (polylactic acid foam) has been under development for the past nine years, and is currently is being tested by a large global company in the US.
Now that the product is fully developed, BPN will now work in partnership with Auckland plastics maker Barnes Plastics and the US company to prove that the technology works in large- scale volumes.
“The world polystyrene market is worth around US$38 billion," notes BPN chief executive Sarah Heine. "A bio-based alternative is not going to replace the whole market but even a thin slice of that is still a big number. There's big potential for it if we can get it right. We're the global leaders in this but a lot of people are trying to get this one out of the door because it's a real prize.”
“One of the bases for forming the company was that we could access scientific capability in the three organizations [the government's Crown Research Institutes: Scion, Plant & Food, and AgResearch] and bring it together to exploit research niches,” she said.
Taking Plant & Food's plant-based research into starches and proteins and adapting those extracts for use in natural personal care products;
Developing (and soon commercializing) a protein extract derived from the ancient grain amaranth that is being tested at commercial scale levels by NZ Extracts in Blenheim;
And 10 other technologies BPN is currently working on with the $3.4 million in annual government funding for targeted research.
BPN was named commercialization collaboration winner at the annual KiwiNet research commercialization awards. The judges noted that Zealafoam addressed a huge world environmental issue, and rewarded the company for actively engaging business partners to capture the value of the intellectual property.
Nanocellulose offers immense scope for Advanced Composites
HERTY Advanced Materials Development Center (HAMDC) at Georgia Southern University recently opened Advanced Chemical Processing facility that can help with the development of high performance and bio-based materials like nanocrystalline cellulose.
According to a release from Herty, the new center will be able to process materials ranging from minerals to polymers that have many advanced applications in automotive and aerospace industries.
Dr. Omar Ali, Director BioProducts at Herty stated, “nanocellulose has strength similar to Kevlar and is a promising biomaterial for advanced composite applications in the automotive and aerospace sectors.
The new facility has 500 L reactor that can be used for mixing, can undertake multicomponent reactions and has superior drying capability. The new reactor offers a powerful platform for giving the U.S. industry innovative materials from plastics to specialty coating, stated Walter Chappas, Herty's advanced materials group director.
Nanocellulose is strong, renewable raw material that can be used to develop advanced composites. In recent years, there is a growing interest in this material and organizations such as the Technological Association of the Pulp and Paper Industry (TAPPI) is providing many platforms to support the growth of the material.
According to FP Innovations, by 2020, the North American market for nanocellulose will be about US$250 million.
Platts: Global petrochemical prices followed crude oil, naphtha lower in july cost of production fell as feedstock prices dropped
Prices in the $3-trillion-plus global petrochemicals market fell for the first time in five months in July, following the decline in the energy complex, according to the just-released monthly Platts Global Petrochemical Index (PGPI). Petrochemical prices, expressed as a monthly average, fell $91 per metric ton (/mt) from June to $1,013/mt in July. The last time global petrochemical prices fell on a monthly average was January of this year, when prices fell 14% to $850/mt.
The PGPI is a benchmark basket of seven widely used petrochemicals and is published by Platts, a leading global provider of energy, petrochemicals, metals and agriculture information and a top source of benchmark price references.
“With crude oil prices down 9% and naphtha prices down 14%, there really wasn't anywhere for petrochemical prices to go but lower,” said Jim Foster, head of analysis for petrochemicals and agriculture at Platts, a leading global provider of energy and commodities information and benchmark price assessments. “Crude oil is now below $50 per barrel. That ripples through the petrochemical feedstock market, lowering the cost of production for everything from aromatics to polymers.”
The chart to the right shows the daily end-of-day Platts Global Petrochemical Index (PGPI) price in red and also displays the 20- day PGPI moving average (MA) in blue. If you have trouble viewing the graphic, visit this link: PGPI Averages.
On average, crude oil prices were down $6 per barrel in July from June, a drop of 9%. Naphtha prices were down 52 cents/gal, or 14%. Olefins prices tend to track naphtha prices since naphtha is the most widely used cracker feedstock worldwide.
Petrochemicals are used to make plastic, rubber, nylon and other consumer products and are utilized in manufacturing, construction, pharmaceuticals, aviation, electronics and nearly every commercial industry.
Prices of olefins – a group of hydrocarbon compounds which are the building blocks to many petrochemical products used to produce everyday goods – were lower last month. Propylene, which can be made at both the refinery and the cracker, slipped 11% to $819/mt in July, down $103 from June. Ethylene, which is primarily produced at crackers, fell 12% to $1,044/mt in July, down $141 from June.
Polyethylene and polypropylene, plastics manufactured from ethylene and propylene respectively, were both lower in July. Global polyethylene prices fell 5% to $1,435/mt, while polypropylene prices fell 7% to $1,312/mt.
Prices of aromatics – a group of scented hydrocarbons with benzene rings used to make a variety of petrochemicals – were also lower last month. Toluene posted the largest drop, falling 5% to $780/mt in July, down $43 from June. Benzene prices fell 1% in July to $814/mt, down $10 from June. Paraxylene, the final aromatic included in the PGPI, was down 3% in July to $869/mt, down $25 from June.
Petrochemical prices moved opposite of the global equity markets in July. The Dow Jones Industrial Average advanced 1% while The London Stock Exchange Index (FTSE) climbed 3%. The NIKKEI 225 was up 2%.
The PGPI reflects a compilation of the daily price assessments of physical spot market ethylene, propylene, benzene, toluene, paraxylene, low-density polyethylene (LDPE) and polypropylene as published by Platts and is weighted by the three regions of Asia, Europe and the United States. Used as a price reference, a gauge of sector activity, and a measure of comparison for determining the profitability of selling a barrel of crude oil intact or refining it into products, the PGPI was first published by Platts in August 2007.
Published daily in a real-time news service Platts Petrochemical Alert and other Platts publications, the PGPI is anchored by Platts' robust and long-established price assessment methodology and the firm's 100-year history of energy price reporting.
Platts petrochemicals experts are available for media interviews. A sample list of experts may be found at the Platts Media Center.
For more information on petrochemicals, visit the Platts website at www.platts.com.
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