AkzoNobel Q2 results 2013 down 4%

MOSCOW (MRC) -- Akzo Nobel N.V. reported a 4% decrease in revenues in the second quarter compared with the same period last year, said Coatingsworld.

The company reported that this was due to divestments and adverse currencies against a backdrop of continued challenging market conditions. Operating income for Q2 was 17 percent lower at EUR322 million. Net income attributable to shareholders for the quarter rose to EUR429 million, buoyed by recognition of a deferred tax asset and profit on the divestment of Decorative Paints North America. The acceleration of AkzoNobel's performance improvement program is on track to achieve the full EBITDA benefit of EUR500 million by the end of this year, while additional charges are expected in the second half of the year as restructuring activities are stepped up.

Decorative Paints second quarter revenue declined 1%, mainly due to negative price/mix and unfavorable currency effects. The slowdown in global markets continues to affect the top line. In general volumes stabilized, with some markets, in particular China, making a positive contribution in the quarter. Operating income for the second quarter totaled EUR102 million, 9% lower than the previous year, mainly as a result of restructuring costs in mature markets.

Revenue in Performance Coatings declined one percent on largely stable overall volumes compared with the previous year as a result of adverse currency effects. Operating income was down five percent at EUR163 million due to investments in growth and business excellence initiatives, partially mitigated by margin management and structural cost benefits.

Revenue in Specialty Chemicals was 12% lower as a result of the divestment of Chemicals Pakistan and lower overall volumes. Operating income was down 21% at EUR121 million, mainly due to the lower volumes and the conclusion of value chain issues from the previous quarter. During the quarter, the Functional Chemicals Business Unit initiated a large restructuring program as part of the performance improvement program, the implementation of which will start as of Q3.

As MRC wrote before, AkzoNobel and Solvay have signed a three-year agreement whereby AkzoNobel will increase the use of renewable raw materials in its paints and coatings, building on an existing partnership between the two companies.

Akzo Nobel N.V., trading as AkzoNobel, is a Dutch multinational, active in the fields of decorative paints, performance coatings and specialty chemicals. Headquartered in Amsterdam, the company has activities in more than 80 countries, and employs approximately 55,000 people.
MRC

MOSCOW (MRC) -- LG Chem’s second quarter earnings reflected an improvement from the first quarter, with operating profit growing 22.6% to 501.5 billion won, while net profit rose 17.8% to 401 billion won, reported Koreaherald with reference to the company's regulatory filing.

Sales rose by 3.4% to reach 5.9 trillion won.

LG Chem attributed the growth to product innovation, an upturn in demand based on anticipated economic growth, combined with the falling Japanese currency that helped stabilize raw material prices.

"It was a combination of all these things, along with a product differentiation achieved with improved productivity," said Sung Hwan-doo, a spokesman for LG Chem. He added that this led to bigger sales of high-return products such as film patterned retarders for 3D panels and indium tin oxide for touch panels.

Compared to the same period in the previous quarter, the improvement was not as marked, but analysts said the results were nevertheless heartening, especially since the results beat the market consensus that had put sales at 5.89 trillion won and operating profit at 483.9 billion won.

LG Chem had been suffering from languishing demand for petrochemicals amid sluggish global and local economic conditions.

The battery market had not been of help either to the company, which is the world’s top maker of lithium-ion batteries, with carmakers failing to unleash orders on account of weak consumer demand.

We remind that, as MRC informed previously, South Korea's petrochemical and electrical engineering company LG Chem plans to strengthen its position in the Russian market, considering the possibility of joint investments along with Russian partners into various Russian companies. Besides, the company is planning to build an ethylene production plant in Atyrau, Kazakhstan.

LG Chem Ltd., often referred to as LG Chemical, is the largest Korean chemical company and is headquartered in Seoul, South Korea. According to ICIS report, it is 15th biggest chemical company in the world in 2011. It has eight domestic factories and global network of 29 business locations in 15 countries. LG Chem is a manufacturer, supplier, and exporter of petrochemical goods, IT&E Materials and Energy Solutions.
MRC

MOSCOW (MRC) -- The global petrochemicals market was valued at USD472.06 bln in 2011 and is expected to reach USD791.05 bln by 2018, growing at a CAGR of 6.7% from 2012 to 2018, said Plastemart.

In terms of volume, the global petrochemicals consumption was 436.86 mln tons in 2011 and is expected to reach 627.51 mln tons by 2018, growing at a CAGR of 5.4% from 2012 to 2018, as per Transparency Market Research.
Growing consumption from major end use industries including construction, packaging, transportation, textile, plastics, healthcare and so on coupled with favorable operating conditions mainly in the Middle East and Asia Pacific is expected to drive the global market for petrochemicals over the next five years.

Government initiatives in India and China to set up petrochemical complexes in the region are also expected to fuel the market growth. The rapid exploration and development of unconventional gases such as shale gas is also expected to provide feedstock advantage to petrochemical producers. However, volatile raw material prices and growing environmental concerns regarding the production and usage of various petrochemicals are expected to be a key challenge for market participants.

Regulatory intervention has resulted in the industry shifting focus towards developing bio-based alternatives for petrochemicals. Ethylene dominated the petrochemical market and accounted for over 28% of the total consumption in 2011. Growing demand for polyethylene, a major derivative of ethylene, mainly from packaging industry is expected to boost the global market for ethylene over the forecast period. However, widening supply- demand gap due to capacity addition in the Middle East and Asia Pacific is expected to put pressure on ethylene prices, globally. In terms of volume, methanol is expected to be fastest growing petrochemical at an estimated CAGR of 10.3% from 2012 to 2018. The growth of methanol is largely driven by its emerging application in gasoline blending and conversion of methanol to olefins (MTO).

China was the leading consumer of petrochemicals and accounted for over 25% of the global consumption in 2011. Along with being the largest market, China is also expected to be fastest growing market, at a CAGR of 6.7% from 2012 to 2018, owing its significant downstream processing capacity. Asia Pacific including China accounted for over 45% of the total demand in 2011. North American market for petrochemicals is expected to be driven by rapid development of shale gas in the U.S. The global market for petrochemicals is highly fragmented in nature. Top ten companies accounted for just over 49% of the total petrochemicals market in 2011. BASF, Sinopec and Exxon Mobil were the largest petrochemical manufacturers and together accounted for nearly 20% of the total market share in 2011.

Major industry participants have fully integrated operations from extraction of crude oil and natural gas to production of petrochemical derivatives. Some of the other players operating in the global petrochemical market include Chevron Phillips, Dow Chemical, Company, Ineos, LyondellBasell, National Petrochemical Co., PetroChina, SABIC, Shell Chemicals and Total among some other companies.

MRC

MOSCOW (MRC) -- The Board of Directors of PolyOne Corporation (NYSE: POL) has declared a quarterly cash dividend of USD0.06 per share on the common stock outstanding, to be paid on October 3, 2013, to shareholders of record on September 13, 2013, said Reuters.

As MRC wrote before, PolyOne announced it will realign its North American manufacturing assets to better serve customers, improve efficiency, and deliver previously announced synergy-related cost savings in connection with its March 2013acquisition of Spartech Corporation. Over the next several months, the company will close six manufacturing plants and relocate production to other PolyOne facilities. These actions are expected to be completed by the end of 2014 and generate annualized pre-tax savings of approximately USD25 millionin 2015.

PolyOne Corporation, with 2012 revenues of USD2.9 billion, is a premier provider of specialized polymer materials, services and solutions. The company is dedicated to serving customers in diverse industries around the globe, by creating value through collaboration, innovation and an unwavering commitment to excellence.
MRC

MOSCOW (MRC) -- State energy firm Pertamina is abandoning a deal with Chandra Asri Petrochemical, the country’s largest petrochemical producer, to establish a joint venture to build a petrochemical plant, as per GV.

In December, Pertamina and Chandra Asri signed a memorandum of understanding to perform a feasibility study for building a petrochemical facility. The agreement was predicated on the establishment of a joint venture.

"After conducting joint studies, Pertamina and Chandra Asri Petrochemical agreed to end the memorandum of understanding out of mutual interest for the reason that both parties can not reach an agreement on terms of the planned joint venture," said Ali Mundakir, Pertamina’s vice president for corporate communication, refusing to disclose further details.

Pertamina and Chandra Asri initially planned to build a petrochemcial plant to produce 250,000 tons of polypropylene a year. The cost of investment for the deal was estimated at USD 200 million.

The latest development comes just weeks after Pertamina announced a petrochemical business agreement with Thailand’s PTT Global Chemical and Chandra Asri signed a USD435 million joint-venture agreement with Paris-based Michelin to produce synthetic rubbers.

As MRC informed earlier, last month, Pertamina signed an agreement to purchase petrochemical products from PTT Global Chemical, as part of the pre-marketing strategy of the companies’ joint Indonesian petrochemical business.

Pertamina and PTT Global Chemical have already entered a joint venture agreement to build a petrochemical facility with an annual production capacity of 1 million tons and estimated cost of USD5 billion. The facility will produce ethylene and polypropylene, as well as polyethylene and polyvinyl chloride. Construction of the facility is expected to start next year, with production beginning in 2018.

Pertamina has said it plans to make petrochemicals a key part of its business and become a regional leader by 2025. The state-owned company holds a 10% share of the domestic petrochemical market, which, due to low refinery capacity, relies on around USD 5 billion a year in imports. Pertamina expects to hold 30% of the market when the facility, expected to be built near one of its existing refineries, commences operation.

Pertamina is an Indonesian state-owned oil and natural gas corporation based in Jakarta. It was created in August 1968 by the merger of Pertamin (established 1961) and Permina (established 1957). Pertamina is the world's largest producer and exporter of liquefied natural gas (LNG).

PTT Global Chemical is a leading player in the petrochemical industry and owns several petrochemical facilities with a combined capacity of 8.45 million tonnes a year.
MRC