SABIC mulls investments into US amid European slowdown

MOSCOW (MRC) -- SABIC, the world’s biggest petrochemicals maker by market value, is studying investment opportunities in the US as the economic slowdown in Europe and China hurt its second-quarter sales, reported SaudiGasette.

SABIC’s plan for US investments comes as the economic slowdown in Europe and China ebbed demand from clients and affected earnings at the company and its affiliates.

"It is very important that SABIC is not left out from investments in the US as it is a huge market in terms of the presence of shale gas and also proximity to other markets," Chief Executive Officer Mohamed Al-Mady said in Riyadh today. "We are studying opportunities in the US to expand SABIC’s presence in the chemical and polymer businesses," he said, declining to give further details until the plans crystallize.

SABIC would be joining companies including Dow Chemical Co. and Exxon Mobil Corp. in seeking to take advantage of the US shale boom that has helped drive down natural-gas prices. Cheap gas is doubly advantageous to chemical makers because it’s used as a raw material and to power factories.

As MRC wrote previously, SABIC plans to cut about 1,050 positions and close some assets in Europe as the company responds to diminished demand. The job cuts will take place across Europe, a third of which will be contracting staff and two- thirds Sabic employees.

SABIC Americas, the company’s unit, provides chemicals and fertilizer products to industries in the US, Canada, Mexico, Central America, South America and the Caribbean, according to the company’s website. It also operates a research and technology center in Houston, Texas.

Saudi Basic Industries Corporation (SABIC) ranks among the world’s top petrochemical companies. The company is among the world’s market leaders in the production of polyethylene, polypropylene and other advanced thermoplastics, glycols, methanol and fertilizers. SABIC recorded a net profit of SR 24.72 billion (USUSD 6.59 billion) in 2012, down 15,5% year-on-year. Sales revenues for 2012 totalled SR 189 billion (USUSD 50.40 billion). Total assets stood at SR 338 billion (USUSD 90.13 billion) at the end of 2012. SABIC manufactures on a global scale in Saudi Arabia, the Americas, Europe and Asia Pacific.
MRC

MOSCOW (MRC) -- Clariant, a leading specialty chemical company, has announced that it signed a distribution agreement with Connell Brothers, the largest marketer and distributor of specialty chemicals and industrial ingredients in Asia Pacific, to market and distribute ingredients from Clariant’s Business Unit (BU) Additives to all states in Australia, according to the company's press release.

The agreement was effective as of May 1, 2013.

Darren Soo, Head of Sales, ASEAN, BU Additives Clariant said, "We believe that Connell Brothers will be able to offer the highest level of professionalism and an exceptional level of service. Their capabilities and full market coverage will enhance and further develop this important sector of the Clariant business."

As MRC reported earlier, in June 2013, Clariant introduced AddWorks, its new brand for polymer additives solutions. It consists of: AddWorks, application oriented solutions specifically designed by segments of the plastics industry
AddWorks LXR, a new range of polymer additives designed to provide particular effects in a wide variety of applications. AddWorks are developed by matching the needs of companies engineering technologies for polymerization, polymer producers, compounders, and even converters.

Clariant’s Business Unit Additives is a major supplier of products for functional effects in plastics, coatings and printing inks. Its non-halogenated flame retardants provide environmentally compatible protection for buildings, electric and electronic equipment as well as textiles and other materials used in airplanes, trains, buses and ships. Clariant’s high quality waxes are used in protective coatings, plastics, polishes and in a range of highly specialized applications like hot melts. It also produces polymer additives such as antioxidants, processing/ light stabilizers, and antistatic agents to give plastics flexibility and durability, or to improve the heat, light and weather resistance of coatings.

Clariant AG is a Swiss chemical company and a world leader in the production of specialty chemicals for the textile, printing, mining and metallurgical industries. It is engaged in processing crude oil products in pigments, plastics and paints.
MRC

MOSCOW (MRC) -- Petrobras, Brazilian state-run energy giant, has announced that its Board of Directors approved the restructuring of its petrochemical portfolio and the subsequent merger of its wholly-owned subsidiaries Comperj Participacoes, Comperj Estirenicos, Comperj MEG. and Comperj Poliolefinas, reported the company on its site.

The referred transactions will be submitted to a vote by shareholders in a Special Shareholders Meeting to be convened in due time.

The merger of Petrobras' affiliates is primarily designed to streamline the company’s corporate structure and restructure its petrochemical portfolio, since the transaction will lead to the consolidation of the petrochemical assets held by Petrobra and invested in Comperj Participacoes, Comperj Estirenicos, Comperj MEG and Comperj Poliolefinas, resulting in lower management costs, improved streamlining and alignment of business decisions, rationalization of the company’s activities and the simplification of procedures that reallocate investment resources.

Since it involves the merger of its wholly-owned subsidiaries, Petrobras’ capital will not increase and no new shares will be issued.

We remind that, as MRC wrote earlier, Brazilian environmental regulators will join Petrobras in appealing an injunction that halted work on a major USD8 billion Comperj refinery project in Rio de Janeiro state. The suspension stems from a case brought by federal prosecutors in 2008 that regulators thought had been resolved in 2009. The Comperj refinery will have installed capacity to process 165,000 barrels of crude oil per day when it enters operation in April 2015. A second phase, expected to be completed by 2018, would double capacity.

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.
MRC

MOSCOW (MRC) -- Borealis and Borouge, the world's leading providers of innovative, value-creating solutions for the wire and cable industry, has announced the dedicated roll-out of the technology platform Borlink in Russia, according to the company's press release.

Borlink was introduced by Borealis and Borouge as a technology platform offering a complete global package of power cable compounds and expertise serving applications for medium and high voltage (MV, HV), including extra high voltage (EHV) and high voltage direct current (HVDC).

Key innovations of Borlink include a tailor-made high pressure (HP) process for the production of high purity low density polyethylene (LDPE) base polymers with superior electrical properties and the introduction of a closed or controlled loop (from monomer to final packaging) which avoids contaminants and ensures homogenous and high-quality, clean compounds.

The Borlink technology is a step change innovation in the power cable industry and serves as a platform for Borealis and Borouge to work together with the entire energy infrastructure value chain to establish innovative solutions that address the challenges of an increasingly connected world.

The dedicated Borlink roll-out in Russia underscores Borealis' long-term commitment to the Russian wire and cable industry. By working together with Borealis, wire and cable producers in Russia have access to high-quality, reliable and innovative power cable solutions in order to meet rising demand for electricity, and to facilitate rapid infrastructure growth.

"Russia remains one of the most attractive growth markets in Europe," says Gilles Rochas, Borealis Vice President for Energy & Infrastructure. "Our long-term commitment to the Russian wire and cable industry through our investment in innovation, resources and capacity is in fact an investment in the future. Borealis consistently offers the most reliable and innovative solutions that enable Russia's wire and cable industry to produce quality cables in accordance with the highest global industry standards, yet with maximum efficiency."

We remind that, as MRC informed previously, Borealis and Borouge have recently introduced a new grade of polypropylene (PP) specified for use in lightweight bumper applications for two new Renault automotive platforms.

Borealis is a leading provider of innovative solutions in the fields of polyolefins, base chemicals and fertilizers. Borealis is headquartered in Vienna, Austria, and operates in over 120 countries with around 5,300 employees worldwide, generating EUR7.5 billion in sales revenue in 2012.
MRC

MOSCOW (MRC) -- The total polypropylene resin market for local conversion in the GCC is expected to reach 1.366 billion in 2016 on the back of strong government support, said Menafn.

GCC governments' focus on diversification to generate employment and reduce reliance on the oil and gas sector presents a conducive regulatory environment for growth in the downstream polypropylene industry.

Saudi Arabia and the UAE, in particular, are anticipated to lead the pack towards downstream diversification.

In the GCC, strong governmental support has contributed to the development of polypropylene downstream industries. The growth of downstream applications such as films, non-wovens and geotextiles is expected to bolster polypropylene demand in GCC countries, which have long been a net exporter of polypropylene due to minimum local use.

The report finds that the total polypropylene resin market for local conversion in the GCC earned revenues of 983.1 million in 2011 and estimates this to reach 1.366 billion in 2016.

The key end-user segments covered in this research are bi-axially-oriented polypropylene films, casted polypropylene films, carpet yarns, nonwovens, geotextiles, woven bags, injection molding grade and polypropylene in tje automotive sector.

While companies in the region have been successful in developing world-scale petrochemical complexes, they lack the indigenous technologies required for certain downstream polypropylene products. This challenge is intensified by the nascent stage of research and development activities in the region.

As MRC wrote before, the petrochemical production by the six-member Gulf Cooperation Council (GCC) comprising of Saudi Arabia, Kuwait, the United Arab Emirates, Qatar, Bahrain, and Oman has risen by 5.5% in 2012.

Gulf Cooperation Council (GCC) was formed in 1981 to create economic, scientific and business cooperation among its oil-exporting members. These Middle East countries share the common faith of Islam, an Arabian culture, and an economic interest separate from OPEC. On a per capita basis, they are among the richest countries in the world. The Gulf Cooperatoin Council headquarters is in Riyadh, the capital of Saudi Arabia, its largest member. Together, they supply one third of U.S. oil and own up to USD225 billion of U.S. debt. These countries are seeking to diversify their rapidly growing economies away from oil.
MRC