Czech petrochemical plants restart as floods subside

MOSCOW (MRC) -- Petrochemical and chemical plants, that were forced to shut down last week under the impact of devastating floods spreading across central Europe, are struggling to re-launch production as the flood waters recede, said Plastemart.

Some, like the polystyrene and synthetic rubber units of the Polish Synthos group at Kralupy and Vltavou, which shut down on 3 June as the River Vltava burst its banks, began a phased restart this week.

As per a brief stock market announcement by the company, the Kralupy facility had suffered "no significant material damage" as a result of the floods. But, smooth restart will be hindered by difficulty in procuring raw materials and shipping products in the short term due to widespread infrastructure disruption caused by flood damage to roads and railways in Germany, Austria as well as across the Czech Republic.

As MRC wrote before, in 2012, Synthos was among the three largest suppliers of EPS to the Ukrainian market. Despite the scale of the disaster in Central Europe, EPS shipments to the Ukrainian market will not be affected in June 2013. The plants are located in the Polish Oswiecim, whose territory was not exposed to the negative effects of the disaster.

Since the beginning of the year, supplies of Synthos EPS were reduced because of the general passivity of the Ukrainian market in January-April 2013. However, Ukrainian consumers bacame active in May and resumed purchases of Polish EPS, to which favorable prices of the producer contributed a great deal.

Operations will not resume immediately at Neratovice plant of Polish owned PVC producer Spolana that was affected by the rising waters of the River Elbe. The company plans not resume production until the site had received a thorough inspection. It has decided to suspend raw material procurement and product collection at least until 20 June.

The Spolchemie chemicals plant at Usti nad Labem, also near the Elbe, began to restart some production last weekend after it escaped serious flooding. The firm said that thanks to a phased shutdown of the entire site, the impact of the flood was kept to a minimum.

On Tuesday, although the level of river level remained at 7 metres, Spolchemie reported it had been able to resume manufacturing fully and was taking orders once more.
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MOSCOW (MRC) -- Formosa Petrochemical Corp (FPC), a major global manufacturer of petrochemicals, will restart its No.2 residue fluid catalytic cracker (RFCC), reported Apic-Online.

A Polymerupdate source in Taiwan informed that the unit will restarted in end-June 2013. The delayed restart has been attributed to continued maintenance work.

Located in Mailiao, Taiwan, the unit has a processing capacity of 84,000 bpd.

As MRC wrote previously, Formosa Plastics had declared force majeure on all its polypropylene (PP) grades after an unplanned shutdown at the company's plants in Point Comfort (Texas, USA). The reasons for the outage and the duration of limited sales was not specified. At present the company estimates the possible impact of the force-majeure situation.

Formosa Plastics - a major global chemical manufacturer headquartered in Taiwan, which mainly produces polyvinyl chloride (PVC), polypropylene (PP) and other petrochemical products.
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MOSCOW (MRC) -- Petrobras, Brazilian state-run energy giant, has won a reprieve after a Brazilian court suspends an order for the company to pay USD3.4 billion back taxes, as per Upstreamonline.

A Brazilian appeals court reversed itself and suspended an order requiring state-led oil company Petrobras to pay 7.39 billion reais (USD3.4 billion) in back taxes, a court statement said.

Without the suspension on Friday, Petrobras would have to pay the debt before its appeal of the assessment is complete, Reuters reported.

This would drain scarce cash and likely force an increase in debt if the company wants to meet a USD237 billion five-year investment plan, the world's largest corporate spending programme.

The amount owed is equal to nearly 40% of the company's record USD11 billion bond sale in May and would serve to pay for more than four of the seven floating oil production platform systems the company plans to install in offshore fields this year.

If left unpaid, the debt would prevent Petrobras from bidding at auction in October for the giant offshore Libra prospect and would prevent the company from obtaining licenses to import or export fuel, according to Reuters.

The court, which rejected a request to suspend the payment on Thursday, has frozen the payment order until it can more fully debate the original suspension request, a statement from the court in Brasilia said.

Under Brazilian law companies that have final debt-payment orders against them from the federal Treasury are unable to receive many and services benefits from the government.

As MRC wrote previously, earlier this year, Petrobras Chief Financial Officer Almir Barbassa said that the company expects to raise about USD20 billion in 2013 from debt issues and bank loans to fund the company's ambitious USD237 billion multi-year investment plan. Petrobras will tap global debt markets to finance its latest five-year investment plan that covers the 2013-2017 period.

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.
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MOSCOW (MRC) -- PetroLogistics LP (the "Partnership"), the dedicated American prolylene producer, has announced that it has successfully completed repairs to its propane dehydrogenation facility, reported the company in its press-release.

The facility resumed propylene production on 18 June, 2013.

Total costs for all completed repairs will be less than USD2.5 million.

As MRC informed previously, the company had temporarily brought down its propane dehydrogenation facility on Saturday, June 8, 2013, for repairs pertaining to two of the eight reactors at the plant. While the facility was down, the company also completed certain other maintenance items.

According to the company's statement, the company anticipates total Q2 sales of approximately 260 mln lbs of propylene, due to the declared force majeure.

PetroLogistics LP is a limited partnership, which owns and operates the only U.S. propane dehydrogenation facility producing propylene from propane. The Partnership's headquarters and operations are located in Houston, Texas.
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MOSCOW (MRC) -- Spain's La Seda de Barcelona, LSB, which makes plastic bottles in Europe, Turkey and North Africa, said on Monday it would begin insolvency proceedings after failing to reach a deal with creditors, said Reuters.

A record 2,500 Spanish companies squeezed by a deep recession filed for insolvency in the first three months of this year, hurting lenders as they take ever bigger provisions against losses on loans, eating into profits.

Catalonia-based LSB said it has been in talks with its lenders since September last year after its business ran into trouble because of high raw materials costs and excess supply of the PET plastic containers that it makes.

La Seda had a debt load of just EUR600 million (USD800 million) at the end of 2012, including debt to providers, according to company filings.

U.S. hedge fund Anchorage is La Seda's single biggest creditor, after it bought 37% of the company's syndicated loans on the secondary market, a source familiar with the restructuring talks said.

The group has EUR462 million in syndicated loans from banks, according to Reuters loan market news and analysis service RLPC. Of that, a EUR235 million portion needed to be restructured, the source close to the talks said.

Portuguese banks Caixa Geral and BCP are also big lenders, while HSBC and Spain's nationalised Catalunya Banc also feature among prominent creditors.

RLPC reported in late May that La Seda would face insolvency if creditors failed to back a restructuring plan put forward by Anchorage, which offered to inject EUR30 million in the business in exchange for 82% of its equity.

La Seda de Barcelona said in a statement that a refinancing plan had failed to get the backing it needed from 75 percent of creditors.
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