Cytec closing three plants, shutting down China JV

MOSCOW (MRC) -- Composites maker Cytec Industries Inc. is taking several actions related to last year's purchase of Umeco plc. Woodland Park, N.J.-based Cytec is closing three former Umeco plants in California, shutting down a Chinese joint venture and is selling off a Umeco distribution unit, said Plasticsnews.

The three California plants being closed are in Costa Mesa, Adelanto and Huntington Beach. About 120 jobs will be eliminated as a result of the closings, Cytec officials said in a July 15 news release. Work done at those plants will be moved to Cytec sites in Winona, Minn., and Tulsa, Okla.

Closing the plants and transferring equipment will cost Cytec about USD27 million, officials said. The California sites are expected to be closed by mid-2015. The affected plants made films and similar products based on epoxies, phenolics and other thermosets for aerospace and related industries. The move is expected to save Cytec between USD3 million and USD4 milllion annually.

Umeco's Process Materials joint venture in China will be liquidated. The JV served the Chinese wind market, which has struggled. The closure will result in a second-quarter pretax charge of USD3.3 million for Cytec. Umeco formed the JV in 2010 along with partner Shanghai Leadgo Technology Co. Ltd. Umeco had invested about USD4 million in the JV, which operated a plant in Shanghai making vacuum-bagging films.

The Umeco distribution products unit has been sold to private equity firm Cathay Investments for USD8.6 million. The business distributes polyester, vinyl ester, acrylic and phenolic resins, as well as premium gel coats and low-profile additive products, for Ashland Inc. and other supply partners worldwide. The unit posted sales of about USD20 million in the first five months of 2013, Cytec officials said in the release.

Cytec will take a second-quarter pretax loss of USD12.5 million on the sale. Cytec paid almost USD440 million for Umeco, a British firm founded in 1917. The deal — announced in April 2012 — is expected to increase Cytec's annual sales by more than USD300 million.

As MRC wrote before, Cytec Industries Inc., reached the decision to sell its coating resins unit instead of separating the business. The assistant in its sale process is the New York-headquartered company J.P. Morgan Securities LLC.

In 2012, Cytec's sales rose 20% to more than USD1.7 billion, but the firm's profit fell 9% to less than USD200 million.
MRC

MOSCOW (MRC) -- Synthetic rubber specialist Lanxess will be adding not one but five new grades to its portfolio of "green" ethylene-propylene-diene elastomers (Keltan Eco) before the end of 2013, reported the company on its site.

This will lead to a further significant increase in the range of applications for this synthetic rubber using ethylene from a state-controlled, biobased source. The five new grades are "drop-in" variants of conventional EPDM rubber grades from Lanxess that are already in widespread use. If all goes according to schedule, they will be commercially available in the second half of 2013.

"Since the market launch of the first Keltan Eco grade in 2011, we have received a huge amount of positive feedback from the rubber sector," says Oliver Osborne, Head of Global Marketing at Lanxess' Keltan Elastomers business unit. "Numerous market players - and not only our own customers - are delighted that there is finally a synthetic rubber with a key component from a renewable source. We are seeing clear signs of considerable interest in greener rubber solutions and this has led us to significantly expand our range of Keltan Eco grades," he adds.

The first Keltan Eco variant, which is now marketed under the name Keltan Eco 5470, is made from biobased ethylene at Lanxess’ Triunfo site in Brazil.

"From July, we will be launching no fewer than five additional grades," reveals Osborne.

We remind that, as MRC wrote previously, Lanxess is strengthening its product portfolio for biocides to serve the megatrend urbanization. In line of the company's strategy, in April 2013, the German specialty chemicals group has acquired Singapore-based PCTS Specialty Chemicals for an undisclosed amount. Through the acquisition, Lanxess is now one of the leading suppliers of biocides for paints and coatings in the rapidly-growing Asia-Pacific region.

LANXESS is a leading specialty chemicals company with sales of EUR9.1 billion in 2012. The company is currently represented at 50 production sites worldwide. The core business of Lanxess is the development, manufacturing and marketing of plastics, rubber, intermediates and specialty chemicals. Lanxess' first-quarter sales were down by 12% year-on-year to EUR2.1 billion, mainly due to lower volumes and fallen selling prices.
MRC

MOSCOW (MRC) -- Swiss industrial conglomerate Wifag-Polytype Holdings Ltd. has purchased Italian thermoforming machinery maker OMV Machinery srl., said Plasticsnews.

Wifag-Polytype, based in Fribourg, Switzerland, runs a global group of companies that makes production lines for aluminum and steel aerosol containers, beverage bottles, tubes and sleeves, plastic cup and lid printing machines, coating lines for flexible packaging and films/foils, and newspaper and book printing machines. The privately held group employs 1,200.

OMV, based in Verona, Italy, employs 45. In a deal announced July 17, Wifag-Polytype bought OMV shares from Verona-based ISAP Packaging SpA. Terms were not disclosed.

OMV, found in 1963, makes high-output thermoforming equipment and integrated lines, including extruders and tooling. The company has been known for its large-platen thermoforming machines, but in recent years has targeted food packaging and in-mold labeling.

Officials of OMV and Wifag-Polytype were not immediately available for comment.

The deal adds thermoforming to Wifag-Polytype’s extensive portfolio of packaging-related equipment. Polytype makes dry offset printing machines that can print from six to nine colors on plastic cups and lids.
Its other plastics-related equipment includes machinery to make tubes and sleeves for packaging. Wifag-Polytype also manufacturers coating and laminating equipment for flexible packaging applications such as barrier film, metalized paper, labels and tapes, blister foils and backsheets for solar cells.

As MRC wrote before, OMV has announced that it will withdraw from the Italian market by selling its subsidiary, OMV Italia S.r.L. and its network of 96 service stations by the end of the year.

OMV Machinery is an Italian company in the field of thermoforming and extrusion of plastic materials and our advanced technology is recognized all over the world.

Wifag-Polytype Holdings is a Swiss engineering company. Its core expertise and market leadership cover metal packaging, printing on plastic cups and tubes, high-precision plant engineering for the production of multilayer films and papers and the manufacture of book and newspaper printing presses and large-format digital presses.

MRC

MOSCIW (MRC) -- Two major factors influence commodity bi-oriented polyester (BOPET) film prices – the cost of raw materials (PTA and MEG) and supply/demand dynamics in the global BOPET film industry, according to PCI Films Consulting’s Quarterly Business Report.

After the supply shortages and rapid increases in commodity BOPET film prices in 2010/11, US buyers are relieved to see a recent return to a degree of 'normality'.

Prices for polyester raw materials are hardly moving and with US demand for flexible packaging only now returning to historic levels. It is the increasing volume of commodity BOPET film which is being made available that is driving current prices.

New thin film extrusion capacity has been commissioned by Flex Americas S.A. de C.V. in Mexico, and there are two new thin film lines to be added in the US by the end of the year. As a result, 50% more volume should be available to film buyers in 2013, which should increase competition and help keep film costs more stable.

In fact there has been virtually no upward price movement in the US over the past three quarters in any of the five flexible packaging substrate materials monitored by leading UK-based films experts PCI Films Consulting.

Trends over the past year to eighteen months have also been influenced by buyers at both the converter and packer level purchasing only what they immediately require in order to cut costs and reduce working capital.

The quarterly price series editor, Paul Gaster notes, “In a number of cases, buyers of film were caught out by the rapid rise in prices of BOPET film because they were monitoring raw material costs i.e. PTA and MEG, which hadn’t moved. The recent spike in film prices was purely supply/demand driven and therefore our series is likely to be more timely at picking up and understanding these key drivers”.

We remind that, as MRC reported earlier, Atlas has commissioned an 8.7m wide Atlas CW984AP primary film slitter at Surat Metallics Ltd., in Surat (Gujarat State, India), which is located approx. 250 km north of Mumbai. The slitter rewinder was installed in conjunction with a new BOPET (bi-oriented polyester) film production line which is the first film production line to have been installed by Surat Metallics. The film line commenced production in February 2012 and has the capacity to produce up to 32,000 tonnes of BOPET film per annum.
MRC

MOSCOW (MRC) -- A catalytic cracking and hydrotreating unit and light naphtha isomerisation unit have been put into operation at Gazprom Neft’s Moscow refinery, said Yourpetrochemicalnews.

Commissioning of the new units enabled the refinery to switch to the production of Class-5 fuels, according to Russian motor fuel specifications (Russian equivalent of Euro-5) in 2013, 2,5 years ahead of schedule.

The catalytic cracking and hydrotreating facility has a capacity of 1.2 million tonnes per annum and is designed to produce fuels with an extremely low sulphur content. This is 15 times less than in Class-3 fuels permitted in Russia today and complies with the Euro-5 emission standard. The total cost of construction was RUB 5.7 billion.

The light naphtha isomerisation unit has an annual capacity of 650,000 tonnes and will contribute to an increase in the Moscow refinery’s throughput of class-5 Au-95 fuels. The unit produces a high-octane component for fuels with zero sulphur or aromatic and unsaturated hydrocarbons. Blending the isomerised product with other fuel components reduces the aromatic, benzene and olefin content, while increasing the octane rating and reducing the environmental impact. The total cost of construction was RUB 10.9 billion.

The launch of both units marks completion of the first stage of the Moscow refinery modernisation programme aimed at improving the quality of its products. The next stage involves major projects focused on improving the refining yield and increasing production volumes and output of light oil products.

Alexander Dyukov, Chairman of the Management Board of Gazprom Neft, said: "Completing the first stage in the Moscow refinery’s modernisation plan is a significant achievement for Gazprom Neft. Now all of the company’s refining assets have switched to Euro-5 standard fuel production, 2,5 years ahead of regulation requirements. The refinery will supply Moscow and Central Russia with better quality gasoline and diesel which meet European standards. This will contribute to the reduction of harmful emissions and have a positive effect on the environment. The next stage in the modernisation of the Moscow refinery will aim at increasing throughput and supply of high-quality fuels to the Moscow market."

As MRC wrote before, Gazprom will soon announce another "fundamentally new" liquefied natural gas (LNG) project," said Alexei Miller, the company's chief executive. "We will have another fundamentally new project that you do not know of yet," he said. Gazprom is already building a gas liquefaction plant in Vladivostok, eastern Russia, to supply the Asia-Pacific region. Companies from Japan, a large consumer of LNG, are in talks on purchasing supplies from the facility. We remind that, as MRC informed earlier, Gazprom can return to the construction of LNG plant with the nominal capacity of 7 million tonnes in Primorsk (Leningrad region).
MRC