Alpek Q1 profit down year-on-year, up sequentially

MOSCOW (MRC) -- Alpek, the petrochemicals arm of Mexican conglomerate Alfa (BMV: ALFA), reported a profit attributable to controlling interests of USD61mn in the first quarter, down 22% year-on-year as a result of a 23% decrease in operating income, to USD119mn, said Bnamericas.

Compared to the fourth quarter, profit increased 100% due to improving export markets outside North America after the fourth quarter and a decrease in financing expenses due to the company's 2012 debt refinancing, Alpek said in a statement.

Ebitda declined 18% to USD160mn in the first quarter from USD196mn a year earlier. Compared to 4Q12, Ebitda rose 14%.

Sales in the quarter were down 4% year-on-year but up 9% sequentially to USD1.83bn.
Capex for the quarter was USD66mn, increasing 370% year-on-year driven by the ongoing investment in the Cosoleacaque cogeneration plant and the first payment related to the IntegRex PTA license agreement and a PTA-PET sourcing agreement with Italian chemicals group M&G.

Net debt at end March amounted to USD747mn, down 38% or USD461mn from a year ago, while gross debt declined by 21% over the period.

Alfa also owns Nemak (aluminum auto components), Sigma (refrigerated foods) and Alestra (telecommunications).

As MRC wrote earlier, M&G Group signed a Licensee Agreement with Alpek, S.A.B. de C.V. (Alpek) for IntegRex PTA technology. 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.

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.

MRC

MOSCOW (MRC) -- Wacker Chemie AG has officially ramped up its new production plant for vinyl acetate-ethylene copolymer (EVA) dispersions at its Nanjing site (Jiangsu province, China), according to the company's press release.

With the additional 60,000 tonnes from the second reactor line, the local EVA dispersion capacity is doubling to total 120,000 tonnes per year. The plant complex is thus one of the largest of its kind in China. This fully integrated site manufactures VINNAPAS dispersions and dispersible polymer powders as binders for sectors such as construction, coatings and adhesives.

The dispersion-plant expansion is WACKER’s response to the rising demand for high-quality VAE dispersions, especially in China and Southeast Asia’s emerging markets. WACKER is thereby strengthening its position as the world’s largest manufacturer of VAE dispersions.

"The expansion is another important milestone in the continued growth of our polymer business in China," explained Dr. Rudolf Staudigl, CEO of Wacker Chemie AG.

"The market for high-quality VAE dispersions is continually growing - both globally and, in particular, in China. After all, our VAE technology is outstandingly suitable for formulating low-emission, eco-friendly products or substituting for other binders."

Besides, due to the growing EVA market, WACKER ramped up a new EVA production plant - with an additional 40,000 tonnes annually - at its Ulsan site in South Korea back in February. As MRC reported previously, the production capacity of the site has, thus, almost doubled, making the plant complex one of the biggest of its kind in South Korea - thereby solidifying the company's global leading position in this segment.

At the same time, the Group is currently building a new plant at Nanjing to produce polyvinyl acetate (PVAc) solid resins with an annual capacity of 20,000 metric tons. It is scheduled to come on stream in late 2013. Capital expenditures for both projects will amount to some EUR40 million.

Wacker Chemie AG is a worldwide operating company in the chemical business, founded 1914. The company is controlled by the Wacker-family holding more than 50 percent of the shares. The corporation is operating more than 25 production sites in Europe, Asia, and the Americas. The product range includes silicone rubbers, polymer products like ethylene vinyl acetate redispersible polymer powder, chemical materials, polysilicon and wafers for semiconductor industry.
MRC

MOSCOW (MRC) -- In March, Russian producers increased the output of bottle polyethylene terephthalate (PET) granulate by 20% from February and reached 41,300 tonnes, according to MRC ScanPlast.

Growth in consumer activity and strong sales amid tightened supply have allowed producers to increase their capacity utilization and enlarge the supply of granulate in the domestic market.

Russian companies in March have produced 41,300 tonnes of PET granulate, up by 5,600 from February.

The increase in production resulted from the increased capacity utilization of Alco-Naphtha, Kaliningrad, and a larger number of calendar days in the month. Sibur-PETF, Senezh and Polyef kept the same level of their capacity utilisation.

For the Q1 2013 Russia's production of PET granulate made about 112,000 tonnes, which is slightly more than in the same period last year - 110,000 tonnes.

As the demand on the back of the high season should grow, MRC analysts expect that in the second quarter 2013 Russian producers will increase their capacity utilisation, which results in even greater increase in the production of bottle PET.


MRC

MOSCOW (MRC) -- South Korea's paraxylene exports for January-March totaled 806,657 mt, surging 60.5% from a year earlier and up 41.4% from the previous quarter, as reported by the Korea Customs Service by Plastemart.

The sharp increase was due to the startup of a new PX plant there. South Korea's HC Petrochem, a 50:50 joint venture between Hyundai Oilbank and Japan's Cosmo Oil, started commercial operations at its new 800,000 tpa PX plant in Daesan on January 8. Most of the new output from the plant is shipped to China.

As a result, South Korea's PX exports to China jumped 49.2% quarter on quarter to 762,382 mt over January-March. Tracking this, the CFR Taiwan/China PX price benchmark rose 3% from the previous October-December 2012 quarter to average at USD1635.04/mt in January-March.

But demand from China is likely to slow from April, as Chinese purified terephthalic acid producers have started reducing their operating rates amid bearish demand for polyester production, market sources said Monday. In addition, the turnaround season for aromatics plant in South Korea would likely reduce PX exports, they added. In the middle of March, GS Caltex shut its No. 2 aromatics plant in Yeosu for one month of annual maintenance.

The plant is able to produce 400,000 tpa of PX. In April, HC Petrochem shut its No. 1 aromatics plant in Daesan for 30 days of annual maintenance, while S-Oil will shut its No. 2 aromatics unit from the middle of April for around 36 days.
MRC

MOSCOW (MRC) -- Idemitsu Kosan, one of Japan’s largest refining and petrochemical companies, has selected Honeywell’s Experion process knowledge system (PKS) to modernize the integrated control room at its Tokuyama refining and petrochemical complex to promote operational efficiency, safety and reliability, according to Hydrocarbonprocessing.

"This modernization project will give us greater effectiveness and efficiency as we work to meet Japan’s need for energy diversification," said Takashi Matsushita, general manager of the manufacturing and technology department for Idemitsu Kosan.

As a part of this modernization effort, the company will deploy abnormal situations management, alarm management, and cyber-security solutions.

The implementation of Experion PKS began in late 2012 and is expected to be completed by the end of 2014.

We remind that, as MRC wrote previously, Dow Chemical has recently 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. 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.

Idemitsu Kosan is a Japanese petroleum company. It owns and operates oil platforms, refineries and produces and sells petroleum, oils and petrochemical products. The company runs two petrochemical plants in Chiba and Tokuyama. The two naphtha crackers can produce up to 997,000 tonnes of ethylene per year.
MRC