INEOS and Sinopec mulls JV a construction of a new phenol plant in China

MOSCOW (MRC) -- INEOS Phenol and Sinopec Yangzi Petrochemical Company have signed a letter of intent to study and negotiate a joint venture to build and operate a phenol/acetone manufacturing site at the Nanjing Chemical Industrial Park in Jiangsu Province, China, reported INEOS on its site.

The expected annual capacity of the new facility will be 400,000 tonnes of phenol and 250,000 tonnes of acetone making it the largest plant of its kind in China. The facility will also include 550,000 ton/year of cumene capacity. The location of the plant in Nanjing places it at the center of China's strongest market for both phenol and acetone. It is currently expected that the project will be completed in 2013.

China is the world's fastest growing market for phenol and acetone and Sinopec is China's leading producer of phenol and acetone with two production sites in Shanghai and Beijing and a third under construction in Tianjin. INEOS Phenol currently has manufacturing sites in Germany, Belgium, and USA (Alabama). Following the completion of this project INEOS Phenol will further strengthen its leading position and will be the only company to have global manufacturing capability, with phenol and acetone production in Europe, the USA, and Asia.

We remind that, as MRC informed earlier, Ineos technology had become very popular with Chinese polymer producers, among which are Chemical Xinjiang Coal Chemical, Shenhua Group. Besides, INEOS is also Sibur's licensor of engineering of largest ethylene pyrolysis in integrated complex ZapSibNeftehim in Tobolsk. Besides, in September, eleven employees from Tobolsk-Polymer were trained in INEOS, Houston, Texas (USA). Moreover, another Russian petrochemical major, Nizhnekamskneftekhim, signed a licensing agreement for the technology of polyethylene (PE) production with INEOS Technologies in late October, 2012.

INEOS Phenol is the world's largest phenol and acetone producer and Sinopec is China's largest refining and petrochemical company.
MRC

MOSCOW (MRC) -- Socar, the state oil company of Azerbaijan, has awarded KBR a contract to provide project management services for the front end engineering design (FEED) phase of the gas processing plant being built as part of Socar’s Oil-Gas Processing and Petrochemical Complex (OGPC), according to GV.

Socar’s OGPC project involves a 10-million-t/y refinery with 20 processing units, a gas processing facility to produce 10-billion cu m/y of ethane, propane, butane and methane, and the production of up to 2-million t/y of petrochemicals, including 670,000 t/y of polyethylene (PE) and 550,000 t/y of polypropylene (PP).

Oil products are being developed as strategic domestic assets, while the petrochemical production is being developed primarily for the export market.

Earlier reports said the Azerbaijan government would fund one-third of the USD15-billion project. KBR said the FEED phase for the gas processing plant is expected to be completed in October 2013, and the entire OGPC is due to begin operations in late 2020.

SOCAR includes production association Azneft (companies producing oil and gas on land and sea) and Production Association Azerkimya (chemical industry), production association Azerigas (gas distribution).
The State Oil Company is the only producer of oil products in the country (it has two refineries on its balance sheet) and also owns petrol stations in Azerbaijan, Georgia, Ukraine and Romania. SOCAR possesses a network of petrol stations in Switzerland and is the co-owner of the largest Turkish petrochemical complex Petkim.
MRC

MOSCOW (MRC) -- Bayer Group has reported a very successful year of 2012, as it continued to grow dynamically and achieved its targets. All subgroups posted gains in sales and earnings before special items, reported GV with reference to Dr. Marijn Dekkers, Chairman of the Board of Management, Bayer AG.

"We expect to continue our record development into 2013 and beyond," added Dr. Dekkers.

Bayer expanded its business sharply in emerging markets. Group sales rose 8.8 % to a record level of EUR 39.8 billion, or by 5.3 % when adjusted for currency and portfolio effects. EBIT declined 4.6 % to EUR 3,960 million due to the effect of special items such as litigation expenses in connection with Yasmin/YAZ contraceptive products.

Growth in sales of PU materials helped to improve the earning of this division. Savings of EUR 170 million, resulting from the division’s continuous efficiency programme also contributed to improved profitability. These efficiency savings are needed to allow BMS to adapt to the increasing commoditisation of many of its materials. Polycarbonate sales came under pressure from growing global capacities and the resulting lower prices. Increased energy and raw material costs could not all be passed onto customers which impacted profitability.

BMS contributed to a very good full year performance with sales increasing by 3 % over 201 to EUR 11.5 billion. EBITDA increased by nearly 7 % to EUR 1.3 billion. Polyurethanes sale was mentioned for its especially positive contribution through increased sales and prices during 2012, resulting from rising demand and more satisfactory capacity utilisation leading to improved earnings.

MaterialScience is expected to increase sales slightly during 2013 to EUR 12 billion. Bayer anticipates it will be able to achieve a volume driven expansion greater than the growth rate of the global economy.

We remind that, as MRC wrote previously, Bayer MaterialScience has recently developed and introduced new medical-grade polycarbonate (PC) to fulfills medical device OEMs’ flow requirements.

Headquartered in Pittsburgh, Pa., BMS is part of the global Bayer MaterialScience business with approximately 14,800 employees at 30 production sites around the world. The company’s 2011 sales in North America were USD2.9 billion.

Bayer AG is a German chemical and pharmaceutical company founded in Barmen, Germany, in 1863.
MRC

MOSCOW (MRC) -- The rising Australian dollar and cost pressures have pushed global packaging manufacturer Amcor Ltd. to shut two manufacturing sites and to downsize another site, said Plasticsnews.

The company said market pressures mean the plants are now "unsustainable."

Amcor Australasia Managing Director Nigel Garrard made the announcement Feb. 18 while briefing investors on the company's half-year results for the six months ending Dec. 31.

Melbourne-based Amcor makes PET beverage containers, flexible packaging for the food and health-care markets, tobacco packaging, and corrugated boxes. It also has recycling operations.

Amcor is shutting down a Thomastown, Australia, plant that makes metal and plastic beverage closures. The company will divest its small metal closures operation and outsource plastic closures manufacturing to a third party, which a spokeswoman would not identify.

Amcor estimates it will cost USD7.1 million to close the Thomastown plant in mid-2013. Eighty jobs will be lost.
Amcor will downsize another facility in North Laverton, Victoria, which supplies Thomastown with decorated metal products used to manufacture metal closures. Phased downsizing will occur March through June, costing 17 jobs.
Amcor will shut a recycled cartonboard mill in Petrie, Queensland, by the end of the year, costing 220 jobs. "Due to several structural changes in the competitive environment, the mill is no longer covering its cash costs," the company said in a report to investors.

As MRC wrote earlier, Amcor sold three of its flexible packaging plants in Australasia in late 2012. The sites were acquired as part of the Aperio acquisition and focused on non-core industrial and agricultural markets.

Amcor Limited is an Australian-based multinational packaging company. It operates manufacturing plants in 42 countries. It is the world's largest manufacturer of plastic bottles.
MRC

MOSCOW (MRC) -- Ferrostaal has signed a Letter of Intent with the Ministry of Industry of the Republic of Indonesia on cooperation for the development of a downstream petrochemical investment project in the West Papua region of Indonesia, said Plastemart.

A petrochemical plant complex for the production of methanol, propylene and polypropylene from natural gas is due to go into production in the Teluk Bintuni Regency in 2019. Ferrostaal’s role in the project is that of project developer and investor, in addition to which it will be responsible for structuring the investments planned by the foreign and local Indonesian investment partners. German engineering firm Ferrostaal AG plans to build a petrochemical plant in West Papua at a cost of USD 900 mln (see MRC news).

According to the Letter of Intent, the allocation of the principal gas supply from local reserves as well as the allocation of building land within an industrial park planned by the Ministry of Industry of the Republic of Indonesia in Teluk Bintuni will follow within the next months.

After completion of the plant, annual output is expected to be in the region of 400,000 tons of polypropylene. The plastic as well as the by-products petrol (approx.150,000 tons) and liquefied natural gas (approx. 34,000 tons) are to be sold on the local market in order to meet the growing local demand and support growth in the country through this import substitution.

The project supports the implementation of a master plan adopted by the Republic of Indonesia (MP3EI), which provides for sustainable industrialisation in the period to 2030 in order to accelerate economic development, particularly in the east of Indonesia. Indonesia will particularly benefit from the alternative polypropylene production technology. Production will be based exclusively on local natural gas from reserves in West Papua, which have the potential to keep the plant complex supplied for at least 25 years.

MRC