Hungarian petrochemicals output to see a modest improvement in 2013

MOSCOW (MRC) -- Hungarian petrochemicals output will struggle with poor market conditions, but following a 23% drop in olefins and polyolefins in 2012, it should see a modest improvement, according to BMI forecasts.

However, the industry is far from a recovery and it could be at least two years before it approaches pre-recession production levels. Diversification of production in isocyanates and butadiene should enable Hungarian petrochemicals producers to capitalise on the country's position as a production centre for the European automotives industry.

Hungarian petrochemicals producer MOL reported a sharp drop in petrochemicals output in 2012, indicating that it has been badly hit by the downturn in EU demand, particularly at its domestic operations. In the olefins segment, ethylene and propylene output slumped 20% year-on-year (y-o-y) to 628,000 tonnes and 321,000 tonnes respectively. The reductions were largely in response to a 20% fall in polymer sales - with low density polyethylene (LDPE) output down 33% y-o-y to 165,000 tonnes, high density polyethylene (HDPE) output down 17% to 447,000 tonnes and polypropylene (PP) also down 17% to 447,000 tonnes. The broad-based decline followed the trend reported in H211. The situation in H212 picked up slightly following a dismal Q212, but was still poor by historical standards.

A better than expected performance in Q412 ensured that the decline in petrochemicals output was slightly below BMI's forecast of 25%, at 23%.

2013 is likely to remain challenging and output will continue to remain below par due to poor market performances, although due to base effects the industry is not expected to contract further.

TVK's 65,000 tonnes per annum (tpa) LDPE No.2 installation in Tiszaujvaros remained out of action in Q113 following a fire that broke out at the plant in October 2012. The company stated that the plant was continuing with reconstruction, but the start-up schedule could be delayed until the beginning of August. This will weigh on petrochemicals output in 2013.

MRC

MOSCOW (MRC) -- Total Petrochemicals & Refining USA has shut two sulfur-recovery units, or SRUs, at its Port Arthur Refinery in Texas, reported 4-traders with reference to the filing to local environmental regulators made available Wednesday.

SRUs 819 and 836 were taken out of service Tuesday to minimize emissions caused by a malfunction at the 819 unit.

The report to the Texas Commission on Environmental Quality didn't specify when the units would be returned to service; the current status is not clear.

Total's Port Arthur refinery is able to process up to 174,000 barrels of crude oil a day.

We remind that, as MRC informed previously, in April 2013, Total Petro Chemicals and Refining USA reported an a regional power failure caused upsets at multiple units at its Port Arthur Refinery, including a fire at one of the Vacuum Distillation Units. Earler, in January 2013, the company unveiled a malfunction in the sulfur recovery unit of its Port Arthur refinery. The malfunction resulted in increased emissions at the 225,500-barrel-a-day refinery.

Total, one of the world's leading petrochemicals companies with business in Europe, the United States, the Middle East and Asia. Total has two main product groups: base chemicals and the consumer polymers (polyethylene, polypropylene and polystyrene) that are derived from them.
MRC

MOSCOW (MRC) -- Dow Chemical celebrates with customers and local authorities the 5th anniversary of production launch in Ramenskoye, Russia, reported the company on its site.

Registered in 2003 and with the first batch produced in 2008, LLC FINNDISP, affiliate of The Dow Chemical Company, is a recognized supplier in Russia and CIS of polymer dispersions used in variety of applications ranging from scotch packaging, to architectural and industrial coatings, and applied as lubricants in primers and water-based adhesives.

"The manufacturing facility in Ramenskoye is one of Dow’s key assets in Russia and CIS - a region where we have been continuously present for almost 40 years," commented Peter de Groot, country manager of Dow in Russia and CIS. "Our Ramenskoye plant is state of the art and has high quality and EH&S standards - which is the outstanding achievement and result of hard work and continued commitment of every single employee. We are extremely proud to welcome today our customers and local authorities at our premises to share the excitement and jointly celebrate the business success," concluded Peter.

"5 years of sustainable operations is a significant milestone for our company, every single employee, our customers and the local community of Ramenskoye. During these years we have been providing our customers with the differentiation they need to succeed, earning their respect daily," said Sergey Bendenko, general director and site leader of LLC FINNDISP.

Employees, customers, local authorities and journalists attended the official ceremony, held on June 26, 2013 at the site location in Ramenskoye, Moscow Region. The attendees were also invited to join the plant tour and learn more about the manufacturing process, product portfolio and various applications in the industry.

With almost 40 years of continued presence in Russia and CIS, and supported by its experience, size and global presence, Dow is passionately committed to further developing closer partnership with the local companies to keep growing the business, while significantly accelerating the growth of the chemical industry in the region and to jointly increasing its competitiveness in an international context.

In 2012, Dow in Russia and CIS had annual sales of over USD700 million. In addition to its representation offices in Moscow and Sochi (Russia), Kiev (Ukraine) and Astana (Kazakhstan), the company has two manufacturing facilities in Ramenskoye (Moscow Region) for the production of additives for paints and coatings, and in Vladimir where the Dow Izolan joint venture company inaugurated in 2009 its new, large and state-of-the-art manufacturing plant for the production of polyurethane systems.

We remind that, as MRC informed previously, 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, polyurethane, polyethylene, polypropylene, 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

MOSCOW (MRC) -- Braskem, one of the leading thermoplastic resin producers in the Americas and among the world's largest biopolymer producers, is the first Brazilian company to join the "Green Industry Platform", an initiative of the United Nations Industrial Development Organization (UNIDO) and the United Nations Environment Programme (UNEP), as per the company's press release.

The platform aims to promote and disseminate environmental, climate and social initiatives in the operations of companies around the world. It brings together companies, governments and civil society to work in a coordinated fashion on fostering the development of greener industries and global policies that support sustainable development.
Braskem is the world's fifth chemical company to join the group.

"The platform's objective is fully aligned with Braskem's commitment to people and the environment. Pursuing economic development while utilizing resources more efficiently allows us to contribute directly to accelerating progress on sustainable development," said Jorge Soto, director of Sustainable Development at Braskem.

Growing in a balanced way by combining economic, social and environmental aspects is part of Braskem's vision, which has led it to be recognized for its commitment to sustainability. In May, the company was the first in Brazil's petrochemical industry to make public the carbon footprints of its products by disclosing data on the greenhouse gas (GHG) emissions of its polypropylene, polyethylene (low density, low linear density and high density) and PVC resins.

We remind that, as MRC wrote previously, Braskem has recently announced the expansion of its portfolio of renewable products with the launch of its new line of green low-density polyethylene (LDPE), with this new product family complementing its already well known Green Plastics. Annual production of the new resin will amount to approximately 30,000 tpa and the product will be made available in the market starting in January 2014.

Braskem is Brazilian main producer of polyethylene and polypropylene. In addition with ongoing plants located in both petrochemical complexes, in April 2008 Braskem opened a 300,000 metric ton polypropylene plant in the city of Paulinia (Sao Paulo).
MRC

MOSCOW (MRC) -- Braskem has announced that Mario Augusto da Silva is its new Chief Financial and Investor Relations Officer, succeeding Marcela Drehmer, according to the company's press release.

The change is a natural part of the process of renewing leaderships and planned succession that characterizes the Odebrecht Entrepreneurial Technology (TEO). The main pillars of Braskem's financial management, which include a firm commitment to financial discipline and supporting the growth plan, remain the Company's key priorities.

Awarded a bachelor's degree in Business Administration from the University of Salvador (Unifacs) in Bahia in 1998, Mario Augusto da Silva has extensive knowledge of the petrochemical industry and Braskem, where he began working while the Company was still being formed company, in 2001, where he stayed until 2005, when he left to pursue his MBA at Harvard Business School (concluded in 2007).

Upon returning, he became chief financial officer at Construtora Norberto Odebrecht. Later, he served as chief financial officer at the companies Odebrecht Oleo & Gas and Odebrecht Infraestrutura - America Latina, where he worked until recently.

Marcela Drehmer, after having served three years as chief financial officer of Braskem, will assume the new challenge of serving as chief financial officer of Odebrecht S/A, replacing Felipe Jens, who will become the new leader of Odebrecht Properties. While she was at the helm of Braskem's financial department, the company obtained investment grade ratings from the three major rating agencies: S&P, Moody's and Fitch.

In recent months, Braskem has been strengthening its focus on reducing the level of financial leverage and maintaining its long debt profile, which will remain the priorities of the incoming administration.

We remind that, as MRC wrote previously, biopolymer producer Braskem has recently expanded its distribution agreement with German bioplastics manufacturer FKuR beyond Europe to include the United States and Canada.

Braskem is the leading producer of thermoplastic resins in Latin America and the US, following its purchase of polypropylene assets of Dow Chemical. The company serves 70% of Brazilian demand in PP, PE and PVC resins, but foreign resin imports have gained Brazilian market share in recent years. Brazil's annual consumption of PP is estimated at 1.4 million tons this year. Braskem has been a target of criticism by plastics processors over its perceived dominance of the resins market. Brazil's import tariff on foreign PP is 14%, but could increase. Brazil's federal government raised the import tariff on PE in late 2012 from 14-20%.
MRC