VCM plant to be shut by Tosoh for maintenance

MOSCOW (MRC) -- Tosoh is in plans to shut its No.1 vinyl chloride monomer (VCM) plant for maintenance, said Apic-online.

A source in Japan informed that the plant will be shut on May 16, 2013. It will remain off-stream till June 25, 2013.
Located in Nanyo, Japan, the plant has a production capacity of 260,000 mt/year.

In addition, Tosoh also produces VCM at its complex in Yokkaichi to the tune of 250,000 t/y. Once the expansion at Nanyo's number 3 plant is completed, this facility alone will turn out 600,000 t/y of VCM.

As MRC wrote earlier, Tosoh's proposed restructuring of operations in Nanyo could lead to a net loss of 320,000 tpa of vinyl chloride monomer (VCM) capacity, thereby tightening feedstock supply to the polyvinylchloride (PVC) industry. Almost one year after a fire seriously damaged its complex in Nanyo, Tosoh Corporation (Tokyo, Japan) has touted plans to raise output at the site"s number 3 vinyl chloride monomer plant. The building phase of the 200,000 t/y capacity expansion was to kick off in November last year, with completion scheduled for October 2014.

Tosoh is one of the largest chlor-alkali manufacturers in Asia. The company supplies the plastic resins and an array of the basic chemicals that support modern life. Tosoh's petrochemical operations supply ethylene, polymers, and polyethylene.

MRC

MOSCOW (MRC) -- Aker Solutions has decided to disclose preliminary information on its performance in the first three months of 2013 as the results considerably lag current consensus market estimates, said the producer.

Aker Solutions expects to report revenue of NOK 11.1 billion and earnings before interest, tax, depreciation and amortisation (EBITDA) of NOK 868 million for the first quarter of 2013.

Aker Solutions will present a full set of first-quarter earnings on May 8, 2013. The figures reported today are preliminary and have not been discussed or approved by the Aker Solutions Board of Directors.

"The slow start to 2013 is truly disappointing," says Oyvind Eriksen, Executive Chairman of Aker Solutions ASA. "As lost or postponed contract awards are part of the game, some of the quality issues are, simply speaking, unacceptable. We have worked hard to avoid such mistakes, but there is still a way to go. My hope is that the customers appreciate our efforts to deliver according to our commitments to safeguard their commercial interests and that we ultimately will be able to find amicable solutions to some of the additional costs."

The slow start to 2013 reflects both increased market uncertainty and portfolio sensitivities. While Aker Solutions still experiences a high level of tender activity, the order intake in the next quarters is more at risk than in previous quarters because of recent postponements or cancelations of some projects. We expect greater clarity in the next three months on how significant portfolio sensitivities, such as Ekofisk Zulu and Skandi Aker, will develop. Provided that these projects are completed as planned and that the various business areas have a normal capacity utilisation, Aker Solutions expects the financial performance, excluding one-off items, to be better in the third and fourth quarters of 2013 than in the corresponding quarters a year ago and in line with the company's five-year plan.

"Notwithstanding the recent setbacks, we are committed to developing and growing Aker Solutions in line with our five-year plan," says Oyvind Eriksen.

As per MRC, Aker Solutions has invested heavily to support the growth of the Asia Pacific region. This service base is a response to several new orders and recognition of the growing market demand in the region. Recently, Aker Solutions announced several investments in Malaysia including a new umbilical and a subsea service base, in addition to new equipment for its high-tech subsea manufacturing centre in Port Klang.

Aker Solutions provides oilfield products, systems and services for customers in the oil and gas industry world-wide.

MRC

MOSCOW (MRC) -- LyondellBasell Industries, the world's largest maker of polypropylene, has posted that its first-quarter profit rose 50% as the plastics and chemicals company reported lower input costs that outweighed a slump in revenue, while logging fewer charges, as per The Wall Street Journal.

LyondellBasell, which makes chemicals and polymers, emerged from Chapter 11 bankruptcy in 2010. The company, like others in the chemicals industry, has benefited from low U.S. natural-gas prices, with its North America olefins segment logging strong margins due to low-priced natural gas liquid raw materials. But LyondellBasell has said the global olefins industry outside of North America has hurt its European olefins and commodity polyolefin businesses.

Chief Executive Jim Gallogly said that "the situation in European olefins and polyolefins continued to be difficult," noting that although "results improved from recent quarters, underlying economic and industry conditions have not."

LyondellBasell posted a profit of USD901 million, or USD1.55 a share, versus a profit of USD600 million, or USD1.04 a share, a year earlier. The year-ago period included charges of USD22 million tied to impairments and USD10 million tied to warrants. Revenue fell 9.1% to USD10.67 billion. Analysts polled by Thomson Reuters most recently forecast earnings of USD1.45 a share on USD11.14 billion in revenue.

The company's input costs dropped 13%.

Operating income in olefins and polyolefins in the Americas rose 58%, while in the Europe, Asia and International segment this surged to USD93 million from USD3 million a year ago.

Meanwhile, in the intermediates and derivatives segment, operating income fell 13%, while the refining swung to an operating loss.

As MRC wrote previously, global major LyondellBasell had posted higher profits both for the fourth quarter and the full year of 2012 as strong profits from the company’s operations in the Americas help offset the operating losses seen in their European business. For the full year, LyondellBasell’s profits rose from USD2.14 billion in 2011 to USD2.83 billion in 2012. The company reported that profitability in their North American olefins and polyolefins business more than doubled over the same period of last year to reach USD693 million in the fourth quarter, helping to offset steeper losses outside the Americas. The company’s olefins and polyolefins business outside the Americas witnessed an operating loss of USD94 million in the fourth quarter of 2012 after the same segment had recorded a loss of USD73 million for the same period of 2011.

Headquartered in the Netherlands, LyondellBasell is one of the world's largest plastics, chemical and refining companies. LyondellBasell manufactures products at 58 sites in 18 countries. The company produces chemicals, fuels, and polymers used for packaging, clean fuels, durable textiles, medical applications, construction materials, and automotive parts. LyondellBasell is also a leading licensor of polypropylene and polyethylene technologies. The more than 250 polyolefin process licenses granted by LyondellBasell are twice that of any other polyolefin technology licensor.
MRC

MOSCOW (MRC) -- German chemicals company BASF, a leading global manufacturer of petrochemicals, increased its sales and income from operations (EBIT) before special items in the first quarter of 2013, according to the company's press release.

At EUR19.7 billion, sales exceeded the level of the previous first quarter by 5%. Sales volumes grew particularly as a result of intensified demand for crop protection products and increased volumes in the Oil & Gas segment. EBIT before special items rose by 10% to EUR2.2 billion.

One of the reasons for the increase in EBIT before special items in the first quarter was considerable earnings improvement in the company's chemicals segment thanks to higher margins, according to Dr. Kurt Bock, Chairman of the Board of Executive Directors of BASF SE, at the Annual Shareholders’ Meeting in the Congress Center Rosengarten in Mannheim.

Compared with the previous first quarter, EBIT declined by EUR429 million to around EUR2.2 billion. Special income from the divestiture of the fertilizer business of EUR645 million in the first quarter of the previous year was primarily responsible for this reduction. Income from operations before depreciation and amortization (EBITDA) thus decreased by EUR450 million to around EUR2.9 billion. The financial result amounted to minus EUR126 million compared with minus EUR158 million in the first quarter of 2012.

Income before taxes and minority interests decreased by EUR397 million to EUR2.0 billion compared with the previous first quarter. Net income declined by EUR257 million to EUR1.4 billion.

Cash provided by operating activities rose to over EUR2.0 billion in the first quarter of 2013, up by EUR502 million compared with the first quarter of the previous year. Net debt was reduced to about EUR10.9 billion as of the end of the first quarter of 2013, compared with about EUR11.2 billion as of December 31, 2012.

BASF's chemicals segment posted a decline in sales in the first quarter. This was mostly due to lower sales volumes, which were mainly attributable to plant shutdowns in the company's petrochemicals division. Sales volumes in the company's monomers and intermediates divisions increased thanks to higher demand. As a result of better margins, earnings considerably surpassed the level of the first quarter of 2012.

The company’s expectations for the global economic environment in 2013 remain unchanged:

Growth of gross domestic product: 2.4%
Growth in industrial production: 3.4%
Growth in chemical production: 3.6%
An average euro/dollar exchange rate of USD1.30 per euro
An average oil price for the year of USD110 per barrel

Bock: "We expect global economic growth to pick up only slightly in 2013. The chemical industry will increase production again compared to 2012 because the emerging markets are growing. However, we do not expect a straight-line trend. The market environment remains volatile." Economic growth would be impaired by an intensification of the debt crises in the eurozone and the United States as well as by lower demand in Asia.

"We stand by our outlook for 2013: We continue to aim to exceed the 2012 levels in sales and EBIT before special items," said Bock.

As MRC wrote previously, BASF had revised its 2012 figures and mid-term outlook due to new reporting and accounting standards, which the company has applied since Jan. 1.

BASF adjusts 2012 net profit to 4.82 billion euros (USD6.24 billion) from EUR4.88 billion, and sales to EUR72.13 billion from EUR78.73 billion. It adjusts earnings before interest and taxes to EUR6.74 billion from EUR8.98 billion, while 2012 adjusted Ebit now stands at EUR6.65 billion from EUR8.88 billion

BASF is the leading chemical company. It produces a wide range of chemicals, for example solvents, amines, resins, glues, electronic-grade chemicals, industrial gases, basic petrochemicals and inorganic chemicals. The most important customers for this segment are the pharmaceutical, construction, textile and automotive industries.
MRC