Dow Chemical inks agreement with Idemitsu and Mitsui to enhance performance plastics

MOSCOW (MRC) -- Dow Chemical has signed a long-term ethylene off-take agreement with a new Japanese joint venture that will allow the chemical producer to enhance its performance plastics franchise, according to The Wall Street Journal.

The joint venture is being formed between Japanese companies Idemitsu Kosan and Mitsui & Co. to construct and operate a Linear Alpha Olefins unit on the U.S. Gulf Coast.

Dow - the world's second-largest chemical producer by revenue - is a large consumer of linear alpha olefins and utilizes them within its performance plastics franchise for the production of high-performance materials. The company said it expects the agreement with the joint venture will enable a long-term supply and purchase relationship for linear alpha olefins, which will enhance its performance plastics franchise.

Dow billed the agreement as marking the next milestone in its strategy to integrate cost-advantaged feedstocks to support the profitable growth of its performance plastics franchise. It said the joint venture will utilize an integrated supply of ethylene from Dow's production grid on the U.S. Gulf Coast to produce linear alpha olefins used as comonomers throughout Dow's performance plastics franchise, and will contribute "significant capital" for these rights.

Financial terms of the agreement weren't however disclosed. The company noted that location options for the linear alpha olefins unit are currently being explored. Construction and start-up of the new unit is targeted for 2016.

Dow's latest announcement comes after its said last week that it is accelerating its divestiture of noncore businesses and is targeting nearly USD1.5 billion of proceeds over the next 18 months.

The chemical producer had already unveiled plans to shut 20 facilities and eliminate 2,400 jobs in Europe, the U.S. and Japan. It also is trimming capital expenditure as part of efforts to boost cost savings to USD2.5 billion from a target that had already been doubled to USD1.5 billion over the past year.

The Dow Chemical Company is an American multinational chemical corporation headquartered in Midland, Michigan, United States. Dow is a large producer of plastics, including polystyrene (PS), polyurethane, polyethylene (PE), polypropylene (PP), and synthetic rubber. In 2012, Dow had annual sales of approximately USD57 billion. The Company"s more than 5,000 products are manufactured at 188 sites in 36 countries across the globe.
MRC

Ube, Lotte and Mitsubishi form JV to produce polybutadiene in Malaysia

MOSCOW (MRC) -- Ube Industries Ltd., Lotte Chemical Corp., Lotte Chemical Titan Holding Sdn Bhd and Mitsubishi Corp. have established Malaysian Synthetic Rubber Sdn Bhd as a new joint venture to produce and market polybutadiene rubber (BR) in Pasir Gudang, Johor, Malaysia, said Apic-online.

Malaysia Synthetic Rubber will build a plant to pro-duce 50,000 t/y of BR using Ube's technology. The venture plans an expansion to 72,000 t/y, as demand dictates. Lotte Chemical Titan will supply butadiene feedstock for the new plant, which is scheduled to begin production in 2014.

As MRC wrote earlier, Lotte Group currently has a presence in Indonesia via its subsidiary, Honam Petrochemicals, which acquired Malaysia’s polyolefin major Titan Chemicals in July 2010. Included in the acquisition was Titan’s Indonesian subsidiary - PT Titan Petrokimia Nusantara (TPN), which has a polyethylene (PE) production capacity of 450,000 tonnes/year.

Ube and Lotte Chemical Corp. each hold a 40% interest in Malaysia Synthetic Rubber, while Lotte Chemical Titan and Mitsubishi each hold a 10% stake. The new venture is headed by Ki Young Hwang as president.

Ube, noting that it is seeking to further strengthen its presence in the growing Asian market, said this joint venture will enable the company to "fully leverage" the capacities of its four global BR production bases. Ube has a 110,000-t/y plant in Chiba, Japan; a 72,000-t/y facility in China, and a 72,000-t/y plant in Thailand. The Chiba BR plant will be expanded to 126,000 t/y later this year.
MRC

Arkema choses SpecialChem to support the global growth of its Kynar Aquatec business

MOSCOW (MRC) -- Arkema, a France-based chemical manufacturer, has selected SpecialChem’s Commercial Acceleration Solutions to support the global growth of its water-based fluoropolymer Kynar Aquatec latex in the exterior building and construction markets, according to Arkema's press release.

Arkema has recently entered into a partnership with SpecialChem for commercial acceleration support. Arkema’s Kynar Aquatec fluoropolymer latex platform greatly improves the weatherability and durability for exterior water-based coatings.

"Using SpecialChem's assets will benefit Arkema in expanding our global promotion of water-based Kynar Aquatec coatings for metal and non-metal substrates," said James Feorino, Global Market Manager for Arkema's Kynar coatings. "This will enable Arkema to grow its sales beyond traditional solvent-based metal coatings," he noted.

Kynar and Kynar Aquatec are registered trademarks of Arkema Inc.

As MRC informed recently, Arkema had developed technology to manufacture Kynar PVDF foam structures for wire and cable jacketing and insulation applications. The technology is based on the patent-pending foam concentrate Kynar Flex 2620 FC masterbatch resin.

Arkema is a leading European supplier of chlorochemicals and PVC. Kynar and Kynar Flex are registered trademarks of Arkema Inc. As MRC reported recently, Moody"s Investors Service had upgraded Arkema S.A."s senior unsecured rating to Baa2 from Baa3. The outlook on the rating was changed to stable from positive.
MRC

Petrobras unveils its five-year investment plan which releaves investors

MOSCOW (MRC) -- Petroleo Brasileiro (Petrobras), Brazil's state-controlled energy giant, kept its five-year investment plan flat for the first time in years, reported The Wall Street Journal.

Petrobras' new investment plan is a relief to those investors who'd feared another increase.

Petrobras has one of the largest investment budgets of any firm in the world at USD236.7 billion for the next five years, as it seeks to develop some of the biggest oil discoveries the world has found in decades. But its ambitions have weighed heavily on its share price in recent years, as production increases have failed to materialize and some projects have been mired by delays and cost overruns.

Investors and analysts lauded the company for focusing on boosting crude-oil production and cutting spending on new refineries, although they warned the firm still needs to demonstrate tangible progress. Next year could prove to be something of an inflection point, as new projects that come online later this year will add to production, although the company could still be spending more than it earns.

"If that production becomes reality, the increases will be significant over the next decade," said Joao Pedro Brugger, who manages USD100 million at Porto Alegre's Leme Investimentos.

"The new plan, at least on paper, puts the company in the right direction," said Credit Suisse in a research report. "Now it's time for management to turn it into reality."

Petrobras warned its financial picture will deteriorate further in 2013 as the large investment comes just as revenues are at a low. That's bad news for investors who watched the company post its worst annual net profit since 2004 last year. The company blamed the depreciation of the real against the dollar and higher operational costs for falling profits over the past year among the other reasons.

Petroleo Brasileiro S.A. or Petrobras is a semi-public Brazilian multinational energy corporation headquartered in Rio de Janeiro, Brazil. It is the largest company in the Southern Hemisphere by market capitalization and the largest in Latin America measured by 2011 revenues.
MRC

Imports of polyethylene to Ukraine slashed in February by 17%

MOSCOW (MRC) -- In February, weak demand and oversupply in the Ukrainian market resulted in a decline in polyethylene (PE) imports. PE imports fell to 26,300 tonnes, down 17% from January figure, according to MRC DataScope Report.


In December 2012-January 2013, Ukrainian companies were actively purchasing PE in the foreign markets in anticipation of price increases. In those months, imports of PE totaled 33,800 tonnes and 31,500 tonnes, respectively.

In February, low seasonal demand and significant carry-over stocks from last months led to a decrease in purchases of polyethylene in the foreign markets with the only exception of high density polyethylene (HDPE). Last month, HDPE imports to Ukraine amounted to 11,600 tonnes, up 4% from January.

The growth of exports is registered in all sectors of consumption and is mostly due to the desire of some companies to form cheap stocks of raw materials in anticipation of the start of the season.


The outage of the domestic HDPE production at Karpatneftehima resulted in a major rise in imports of film HDPE and geographic expansion of shipments. In February, exports of the film material exceeded 6,100 tonnes. Meantime, in January-February this year, the total volume of film HDPE import made more than 12,100 tonnes, up 62% year-on-year. Ukrainian companies have started to actively ship polyethylene from the U.S., the Middle East and Asia.

Last month, supplies of low-density polyethylene (LDPE) decreased by 32% from January and amounted to 8,800 tonnes. In February, LDPE imports are traditionally reduced, the peak of procurement acconuts for December-January, when PE price in the foreign markets are at their bottom. This year was no exception with about 70% of the total volume of imports to account for polyethylene produced in Russia, Belarus and Azerbaijan.

As expected, imports of linear polyethylene (LLDPE) to Ukraine reduced from 6,500 tonnes in January to 4,800 tonnes in February. The main reason is the decline in purchases by producers of irrigated stretch films. At the same time, over the two months of this year, exports of LLDPE made 11,400 tonnes, up 5% year-on-year.

In January-February, the total volume of PE imports to Ukraine amounted to 57,800 tonnes, down 15% year-on-year.

MRC