DuPont may sell segment that produces titanium dioxide, teflon

MOSCOW (MRC) -- DuPont Co.is considering a spinoff or sale of its performance chemicals unit, which makes titanium dioxide pigment and Teflon coatings, to focus on less cyclical products and boost shareholder returns, said Businessweek.

DuPont, the biggest U.S. chemical maker by market value, may pursue different paths for each business in the segment, which had sales of USd7.2 billion last year, the Wilmington, Delaware-based company said today in a statement. The unit makes white pigment for paints, cyanide, Freon refrigerants and Teflon coating for nonstick pans, among other products.

"The attractive financial strength and cash-generating capabilities of these businesses must be continuously weighed against their higher volatility, cyclicality and lower growth profile," Chairman and Chief Executive Officer Ellen Kullman said on a conference call.

Under Kullman’s leadership, DuPont has continued its shift away from traditional commodity chemical products toward higher-margin businesses that capitalize on meeting global demand for food, energy and security. The company acquired Danish food ingredients and enzyme maker Danisco A/S in 2011 for about 33.4 billion kroner (USD5.9 billion). DuPont sold its auto paint unit this year for USD4.9 billion.

Volatile earnings from performance chemicals prevent DuPont from realizing the higher valuation inherent in more stable, growing businesses such as agriculture, said Matt Arnold, a St. Louis-based analyst at Edward Jones who has a buy rating on the shares.

The segment’s second-quarter operating profit fell 56% because of lower prices for refrigerants, fluorpolymers and titanium dioxide, a white pigment used in paints and plastics. Titanium dioxide demand has begun to recover, rising 12% from a year earlier, the company said.

The titanium dioxide industry is going through a period of upheaval. Princeton, New Jersey-based Rockwood Holdings Inc.plans to sell or spin off its unit that makes the commodity while Stamford, Connecticut-based Tronox Ltd. said in February it was interested in adding to its titanium dioxide assets. Huntsman Corp., another U.S. producer, has said it wants to participate in the industry’s consolidation.

As MRC wrote before, Huntsman Corp, the U.S. chemicals producer founded by Jon Huntsman Sr., is considering an offer for Rockwood Holdings Inc. titanium-dioxide pigments business. Such a deal would create a titanium-dioxide maker with about 15% of global capacity, vying with Cristal Global as the world’s second-largest, after market leader DuPont Co.

MRC

MOSCOW (MRC) - The Russian market of emulsion polyvinyl chloride (EPVC) undergoes a shortage following an emergency stop of production of Khimprom (Volgograd), according to ICIS-MRC Price Report.

Khimprom (Volgograd) stopped its production of EPVC on 14 July after the falling of one-third of the roof in the workshop production (about 540 meters).

According to unofficial information,the producer will restart PVC production in late August.

Though the share of Khimprom in the Russian EPVC market accounts less than 15%, the emergency halt has caused shortage in the spot market and led to increase in prices.

The offers of the material have practically disappeared in the end of July. Small stocks of Russian resin were immediately bought after the accident.

The deals for small volumes of European resin were contracted at Rb67,000/tonnes FCA.
MRC

MOSCOW (MRC) - The production of polyethylene (PE) in Russia in the first half of 2013 increased by 30%, on the back of a stable work of Stavrolen (group Lukoil) in the current year, according to MRC ScanPlast.

In the first half of the year Russia's PE output totalled about 860,600 tonnes, while last year this figure was about 664,300 tonnes.
Such a serious increase in production has resulted mainly from the stable production of Stavrolen, which was shut from December 2011 to October 2012 following a serious accident.

Gazprom neftekhim Salavat and Angarsk polymer plant also have significantly increased their PE production over the first half of the year.

In terms of PE grades the production results over the first six months of 2013 are as follows. The output of high-density polyethylene (HDPE) made 518,700 tonnes, up by 51% year on year. Gazprom neftekhim Salavat has increased its HDPE production by 67% to 36,400 tonnes.

Kazanorgsintez has increased its HDPE output by 3% to 243,000 tonnes. Nizhnekamskneftehim has actually kept the last year's production rate with 85,000 tonnes of HDPE over the six months of 2013.

Russia's production of low density polyethylene (LDPE) in January - June of this year totalled to 327,500 tonnes, while in 2012 this figure was 307,400 tonnes. Angarsk polymer plant has showed a significant increase in LDPE production: up by 37% to 22,900 tonnes.

Other Russian producers of LDPE also have increased their output by 3-8%, the exception was only Gazprom neftekhim Salavat, which LDPE production remained at the same level as last year. The production of linear polyethylene (LLDPE) totalled about 14,400 tonnes, which actually corresponds to the same period last year.


MRC

MOSCOW (MRC) -- The output of polypropylene (PP) in the first half of 2013 grew by 25% to 402,000 tonnes, according to MRC ScanPlast.

The first half of this year was a milestone for the Russian PP market. In February, Omsk Polyom (part of Titan Group) with the annual capacity of 180,000 launched PP poduction at its new site, and Tobolsk-Polymer (part of SIBUR) with the annual capacity of 500,000 tonnes started production in a test mode in late May. The launch of two new plants allowed to double PP output in Russia - from 680,000 tonnes to 1.36 mlon tonnes. However, low capacity utilisation of the new plants allowed to increase the PP output in the first half of the year only by 25% year on year to 402,000 tonnes.

Polyom increased its polypropylene production in June by 23% from May to 13,800 tonnes. The average capacity utilisation of Omsk plant was about 89% last month. In general, Polyom produced more than 44,500 tonnes of PP over less than five months of operations.

Tobolsk-Polymer has been running in test mode since May, the commercial production is not expected to begin until September.

The June capacity utilisation of other existing PP facilities virtually remained at May's level with the exception of Ufaorgsintez and Neftekhimia, which shut down their production in May for scheduled maintenance. The PP output by these plants in the first half of the year totalled 60,700 tonnes and 60,000 tonnes, respectively.

Nizhnekamskneftekhim and Tomskneftekhim reduced production slightly in the first six months of the year (approximately down 1% year on year), the PP output by these plants in the first half of 2013 amounted to 104,300 tonnes and 69,000 tonnes, respectively.

Stavrolen (part of Lukoil group) produced about 63,4000 tonnes of polypropylene in H1 2013.

MRC

MOSCOW (MRC) - Nordson Corporation (NDSN) made strategic acquisitions announcement that will enable the company to strengthen its operations in Germany, said Finance.

Financial terms of the transactions have not been made public. The acquisition agreement deals with the polymers processing companies of Kreyenborg Group, including Kreyenborg GmbH and BKG Bruckmann & Kreyenborg Granuliertechnik GmbH companies. Kreyenborg Group is a well renowned company based in Munster, Germany.

The acquired companies will add roughly Euro 62 million in revenue generation capacity to Nordson as well as provide easy access to their client base in Germany, China, Malaysia and USA.

These companies are expected to be integrated with Nordson’s Adhesive Dispensing Systems segment and be accretive to earnings in the initial full year of operations. Subject to closing conditions and regulatory approvals, completion of the transaction is anticipated in 60 days.

Acquisition is one of the preferred ways of expansion for Nordson and this has proved advantageous for the company over time. The company’s revenue rose by 16% in the second quarter of fiscal 2013 (ended Apr 30) and by roughly 17% in the first half of fiscal 2013 due to assets acquired in the past. For the third quarter, revenue is anticipated to increase 7% due to the first year effect of acquisitions.

As MRC wrote before, Nordson Corporation announced it has entered into a definitive agreement to acquire Chippewa Falls, Wisconsin-based EDI Holdings, Inc. (Extrusion Die Industries), a leading provider of slot coating and flat polymer extrusion dies for plastic processors and web converters.

Nordson Corporation currently has a USD4.8 billion market capitalization.
MRC