M&G to use Alpek technology for Texas PTA plant

MOSCOW (MRC) -- M&G Group, announces it has signed a Licensee Agreement with Alpek, S.A.B. de C.V. (Alpek) for IntegRex PTA technology, said the producer in its statement.

The technology will be used in the construction of M&G's previously announced 1,200,000 MT per annum PTA plant at Corpus Christi, Texas. M&G also announces today, Alpek has purchased for a price of USD350,000,000, a multiyear sourcing agreement covering rights to 400,000 MT of PET (made with 336,000 MT of integrated PTA) per year.

M&G will fully own and independently construct and operate both the PET and PTA plants, will use the vast majority of the plants' output - 600,000 MT of PET and 864,000 of PTA - to grow with its PET clients in North America and to captively source part of its other PTA requirements in North America.

Both the PTA plant and M&G's proprietary 1,000,000 MT per annum PET plant are expected to begin production in 2016.

Marco Ghisolfi, CEO of M&G stated, "Thanks to the unique and experienced world class engineering of Chemtex and Sinopec we will be the first to scale up IntegRex PTA technology to this level. It is through the combination of the up-scaled IntegRex PTA technology and the innovative M&G Easy-up PET Technology that we will be introducing at Corpus Christi the most efficient, state of art, PTA-PET plants in the Americas."

Alpek is the largest petrochemical company in Mexico and the second largest in Latin America. The company operates through two business segments: Polyester chain products (PTA, PET and polyester fibers), and Plastics and Chemicals products (PP, EPS, caprolactam, polyurethanes and other specialty and industrial chemicals). Alpek is a leading producer of PTA and PET worldwide, operates the largest expandable polystyrene plant in America and one of the largest polypropylene plants in North America. It is also the only producer of caprolactam in Mexico. In 2012, Alpek reported revenues of USD7,277 million and EBITDA of U.S. USD728 million. The company operates 20 plants in Mexico, USA and Argentina, and employs 4,700 people. Alpek is a publicly traded company listed on the Mexican Stock Exchange.

M&G Group is a family owned chemical engineering and manufacturing group headquartered in Tortona, Italy. M&G Group operates in the PET resin industry in the Americas through its wholly-owned holding company, Mossi & Ghisolfi International S.A. (M&G International). M&G International is presently a leading producer of PET resin for packaging applications in the Americas, with a production capacity in 2012 of approximately 1.6 million tons per year. Thanks to its proprietary Easy-up PET Technology M&G International currently owns the world's largest single line PET plants in Altamira, Mexico (single line of 490,000 MT/year nominal capacity) and Suape, Brazil (single line of 650,000 MT/year nominal capacity).

Moody affirmed the rating of China at Aa3, outlook lowered to "stable"

MOSCOW (MRC) -- Moody's Investors Service, the international rating agency, has changed China's outlook to stable from positive, reported the agency on its site.

Meantime, the rating agency affirmed China's government's bond rating of Aa3. The main reasons for this were a strong economic growth of the country, strong central government finances and an exceptionally strong external payments position.

However, the pace of China's economic growth was lower than expected. Besides, the positive reforms, conducted by the new leadership, will require a longer time, and the desired outcomes for the country's rating improving will be visible not earlier than after 12-18 months.

Thus, in the near future, the agency has no plans to increase the rating of China's economy.

"Underpinning China's credit fundamentals is the country's continued robust economic growth against a background of low inflation," - pointed out Moody's experts.

According to their estimates,China's real GDP will grow 7.5-8.0% in 2013 and 2014. Beyond this period, Moody's considers that urbanization and productivity gains will likely support growth in the 6-7% range through the rest of this decade.

As MRC wrote earlier, another international rating agency Fitch Ratings has recently downgraded China's credit rating from "AA-" to "A+". Fitch explained the decline in the country's bond rating by "deep-seated structural problems", including low income, inadequate governance and growing overcrediting.

Starting the year Russian PP prices fell by Rb2,000-3,000/tonne

MOSCOW (MRC) -- The excess supply and low seasonal demand for polypropylene (PP) in Russia have resulted in price cuts by Rb2,000-3,000/tonne from the beginning of the year. Previously the price of polypropylene in the spring, on the contrary, grew, according to ICIS-MRC Price Report.

Buying activity in PP market is low. In addition, PP prices were affected by substantial imports (more than 60 mln tonnes in Q1 2013, up 16% from Q1 2012) and the launch of a new 180,000 tonnes/year PP production by Polyom (Titan Group) in February.

If in the mid-January the price of PP in the Russian market was at Rb62,000-64,500 /tonne, CPT Moscow, including VAT, for raffia, and Rb63,500-65,500/tonne, CPT Moscow, including VAT, for PP injection -homo, then by the middle of April due to the oversupply and low demand polypropylene prices had dropped to Rb60,000-61,500/tonne, CPT Moscow, including VAT, and Rb61,500-63,000/tonne, CPT Moscow, including VAT, respectively.

Part of the local converters continue to limit their purchases of polypropylene on weak demand for finished products in the key sectors of consumption, in particular, the construction and agriculture, and also are waiting for further price reductions.

Other converters in April have increased their purchases of PP on rising demand for their products, but also keep the volume of purchases under the current needs.

Sabic unit SAFCO quarterly profit climbs 18%

MOSCOW (MRC) -- Saudi Arabian Fertilizer Co., (SAFCO) an affiliate of Saudi Basic Industries Corp., posted an 18%increase in first-quarter profit, missing analysts’ estimates, said Businessweek.

Net income of the company also known as Safco climbed to 932 million riyals (USD249 million) from 787 million riyals a year earlier, the Jubail, Saudi Arabia-based company said in a statement. The mean estimate of 10 analysts was for profit of 992 million riyals, according to data compiled by Bloomberg.

The company’s net income decreased 19% from the fourth quarter as maintenance work at one of the plants affected sales and ammonia prices fell, the company said. Saudi Basic Industries, the world’s biggest petrochemicals maker by market value, known as Sabic (SABIC), owns 43% of Safco.

Safco is the third associate company of Sabic to report first-quarter results. Saudi Kayan Petrochemical Co. (KAYAN)’s loss widened to 155 million riyals from 71 million riyals, missing analysts’ estimates. Yanbu National Petrochemical Co. posted a 7.4% decline first-quarter profit.

Sabic may report first-quarter results on April 16, according to data compiled by Bloomberg. Quarterly profit is set to decline 10 %, the data show.

As MRC wrote earlier, SABIC subsidiary SAFCO has appointed Saipem as its E&C contractor for its expansion project. Saipem was awarded the Safco (Saudi Arabian Fertilizer Company), lump sum turnkey contract for the project "Safco V". The contract encompasses the fifth expansion of the industrial complex of Al-Jubail, by the development of a new urea plant located approximately 100 kilometres north of Dammam, on the eastern coast of Saudi Arabia.

Recticel considers to close its converting unit in UK

MOSCOW (MRC) -- Recticel Limited (UK) announced its intention to streamline its Flexible Foams converting activities in the United Kingdom, resulting in the potential closure of its foam converting factory in Nelson (Lancashire) before the end of Q3/2013, said Recticel.

The activities of this site are under consideration for integration into the conversion capacities at the converting unit in Alfreton (Midlands).

All 95 employees at the site have been put under risk of redundancy. During the consultation period, which will start soon, the Group is committed to search together with employee representatives for the most appropriate social support measures, including mobility to other Recticel UK Flexible Foams’ plants. The Flexible Foams’ activity employs 485 people in the United Kingdom.

The costs will be charged to the first half year of 2013.

The company, which makes interiors for cars as well as bedding and mattresses, said it could move some of the workers to other factories in the country.

As MRC wrote earlier, Recticel (Brussels) in mid-2012 closed its comfort foam converting plant in Bladel, Netherlands.
At the end of 2011, the Belgian PU foam specialist had shut down its foam converting plant in North Shields/UK.