ALTANA to expand its additives portfolio with acquisition of rheology business of Rockwood

MOSCOW (MRC) -- The specialty chemicals group ALTANA has signed a definite agreement to acquire the global rheology business of Rockwood Holdings Inc., said ALTAN in its press-release.

The unit, currently part of Rockwood's "Performance Additives" segment, is one of the world's leading manufacturers of rheology additives that optimize the flow characteristics of various materials. With about 340 employees at four production sites in the U.S., the UK and Germany the rheology business generated sales of USD 191 million in 2012. After approval by the relevant antitrust authorities, ALTANA will integrate the business into its BYK Additives & Instruments division.

The purchase price amounts to USD 635 million. The closing of the transaction is expected to take place in the fourth quarter of 2013.

With the acquisition ALTANA is expanding its existing additives portfolio. "The acquisition of Rockwood's rheology business is fully in line with our focus on true specialty chemicals and opens up new growth opportunities," ALTANA CEO Dr. Matthias L. Wolfgruber said. Rheology additives are amongst others used in coatings, construction materials and personal care products. They can, for example, ensure that coatings have the right viscosity and that they can be applied without forming droplets or bubbles.

ALTANA develops and produces high-quality, innovative products in the specialty chemicals business. The ALTANA Group has four divisions: BYK Additives & Instruments, ECKART Effect Pigments, ELANTAS Electrical Insulation, and ACTEGA Coatings & Sealants. All of these divisions occupy a leading position in their target markets with respect to quality, product solution expertise, innovation and service.

BYK Additives & Instruments is one of the world's leading suppliers in the additives and measuring instruments sector. Approximately 87% of sales are generated by foreign countries. The major export markets are Europe, the United States, and the Far East.

Rockwood Holdings, Inc. is a leading global specialty chemicals and advanced materials company. Rockwood has a worldwide employee base of approximately 10,200 people and annual net sales of approximately USD3.5 billion in 2012. Rockwood focuses on global niche segments of the specialty chemicals, pigments and additives and advanced materials markets.

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) -- Jiaxing Petrochemical will be shutting its purified terephthalic acid (PTA) plant for maintenance turnaround, said Apic-online.

A source in China informed that the plant will be shut on August 15, 2013. It is likely to remain off-stream for around one month.

Located in Jiaxing, Zhejiang province, China, the plant has a production capacity of 1.5 million mt/year. The company started commercial production at the plant on September 2, 2012.

Jiaxing Petrochemical’s parent firm – Tongkun Group – runs six polyester yarn plants at Tongxiang in Zhejiang province, with a total capacity of 1.6m tonnes/year.

PTA is the primary feedstock of polyester production. A 1.5m tonne/year PTA plant can meet requirement for the production of 1.7m tonnes/year polyester products.
MRC

MOSCOW (MRC) -- Sinochem Group, Chinese fourth-largest oil and gas company by assets, has delayed the start of its USD4.8-billion refinery on the southeast coast of China, said Hydrocarbonprocessing.

Sinochem has pushed back trial operations at its refinery from June due to construction delays, the person said. The new refinery, based in the port city of Quanzhou, has the capacity to process 12 million metric tons, or 240,000 bpd, of crude oil each year, and it will mainly produce high-quality gasoline, kerosene and diesel fuel.

Sinochem said Wednesday in a statement that it purchased its first crude cargo for the refinery, which would ship in late September and arrive only in early November. The crude was purchased from Angola, it said, which primarily sells sweet crude.

In 2008, Sinochem signed a preliminary agreement to purchase sour crude from Kuwait and Saudi Arabia for the proposed refinery. Sour crude is typically cheaper than sweet crude because it contains more impurities. However, this makes sour crude more difficult and costly to refine.

The Quanzhou refinery will only process sweet crude during trial operations as a way to minimize damage to the refinery.

Sinochem is the largest chemicals company in China by production, but ranks a distant fourth in the oil and gas sector.

MRC

MOSCOW (MRC) -- Formosa Petrochemical is in plans to shut two crude units for maintenance at its Mailiao refinery, said Apic-online.

A source in Taiwan informed that an 80,000 bpd vacuum distillation unit (VDU) and 84,000 bpd residual fluid catalytic cracking unit (RFCC) are planned to be taken off-stream. The units are likely to be shut in October 2013. They are expected to remain off-stream for around three weeks.

The Mailiao refinery in Taiwan operated by Formosa Petrochemical has a crude processing capacity of 540,000 bpd.

As MRC wrote before, Formosa Plastics USA has lifted force majeure declarations on its output of high molecular weight film polyethylene and polypropylene. The company issued the force majeure declaration on all of its high molecular weight film polyethylene products on May 6 following a fire that injured 14 workers at its Point Comfort, Texas, petrochemical complex. The company previously said the investigation did not uncover significant damage to its production equipment, but there was some damage to ancillary equipment.

Formosa Petrochemical is involved primarily in the business of refining crude oil, selling refined petroleum products and producing and selling olefins (including ethylene, propylene, butadiene and BTX) from its naphtha cracking operations. Formosa Petrochemical is also the largest olefins producer in Taiwan and its olefins products are mostly sold to companies within the Formosa Group.

MRC

MOSCOW (MRC) -- Lanxess AG, which until today had lost 30% since joining German benchmark DAX index in September, cut its profit forecast for 2014 as it sees no sign of a demand recovery in the second half of this year, said Businessweek.

Earnings before interest, tax, depreciation, amortization and one-time items of 1.4 billion euros (USD1.85 billion) next year is no longer a realistic goal, the company said. Earnings this year will probably be 700 million euros to 800 million euros, excluding potential inventory devaluations.

Lanxess, based in Cologne, Germany, has cut costs as clients reduce inventories, especially in Asia, and it already idled factories in the first half to counter falling auto industry demand. Chief Executive Officer Axel Heitmann said today he’ll review strategy for less competitve products and present the results in mid-September. Measures include short-and long-term cost savings as well as structural changes, he said.

The chemical maker is cutting costs at the performance chemicals unit, which makes preserving agents, pigments, leather and rubber chemicals. It is consolidating production for vulcanization accelerators, used in the tire industry, at sites in Belgium and the U.S. and an antidegradants factory in Isithebe, South Africa is being closed.

Heitmann declined to give further details on cost and job cuts, saying the strategy review will be presented in September.

Ebitda excluding one-time items fell 45% to 198 million euros in the second quarter. Analysts had predicted 191.2 million euros, according to estimates compiled by Bloomberg. Sales fell 12% to 2.14 billion euros, in line with the average analyst estimate. Net income plunged 95% to 9 million euros.

Lanxess is still aiming to meet a target for 1.8 billion euros in earnings by 2018, although the goal has become more challenging, it said today. The company is also reducing its capital expenditure and is planning to spend about 600 million euros instead of the previously envisaged 650 million euros to 700 million euros, it said in May.

As MRC wrote before, Lanxess has developed a new polyester material grade based on polyethylene terephthalate (PET). The new material grade - Pocan TP 555-001 - is excellently suited to manufacturing housings, sockets and other components for light-emitting diodes (LED). What makes the product unique is its excellent light reflection, which hardly declines at all over time, and its high heat stability. Besides, it is reinforced with glass fibers and contains special additives.

Lanxess is a leading specialty chemicals company with sales of EUR9.1 billion in 2012 and roughly 17,400 employees in 31 countries. 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