Crude units to be shut by Formosa for maintenance turnaround

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

MOSCOW (MRC) -- French chemicals specialist Arkema said it swung to a net profit in the second quarter and said it aims to post strong results for the rest of the year despite deteriorating market conditions in its home country France, said The Wall Street Journal.

"Market conditions in Europe are challenging, in particular in France where growth prospects have deteriorated since the end of last year and where the group continues to consider ways to improve its productivity," Thierry Le Henaff, Chairman and CEO, said in a statement.

In this environment, Arkema should achieve in the second half of the year an EBITDA similar to the record level of the second half of 2012. Compared to 2012, the third quarter EBITDA should be lower than the high reference of last year and the fourth quarter stronger.

Arkema continues to implement its focused growth strategy with several progresses and confirms its ambition for 2016 to achieve EUR8 billion sales and 16% EBITDA margin while maintaining gearing below 40%. Sales in the second quarter fell 5.2% to EUR1.63 billion from EUR1.72 billion in the same period last year.

Net profit in the first half totaled EUR112 million compared with a loss of 12 million in the same period a year ago. EBITDA fell 11% to EUR273 million from EUR306 million.

As MRC wrote before, Arkema announced a comprehensive range of PEKK (Poly Ether Ketone Ketone) ultra high performance polymers comprised of three families of products whose properties meet the requirements of aerospace, oil exploration and electronics applications.

Arkema is a leading European supplier of chlorochemicals and PVC. Kynar and Kynar Flex are registered trademarks of Arkema Inc. As MRC reported previously, Moody's Investors Service had upgraded Arkema S.A.'s senior unsecured rating to Baa2 from Baa3. The outlook on the rating was changed to stable from positive.

MRC

MOSCOW (MRC) - The capacity of caustic soda market in Russian fell by 2.6% in the first half of the year, year on year and totalled 467,000 tonnes, according to MRC Monthly Report.

The decline in Russia's caustic soda consumption in line with reduction in production volumes. Production of caustic soda in Russia in January-June 2013 totalled 527,300 tonnes, down by 3% year on year.

The share of KAUSTIK (Volgograd), the largest producers of caustic soda in Russia, accounted for 22% from the total Russia's production of the material in June. The market share of KAUSTIK (Volgograd) in Russian market of caustic soda in the first half of the year accounted for 20%.

Russia's exports volumes of caustic soda have decreased on the back of the decline in production volumes. Russian exports of caustic soda in the first half of the year have decreased by 1% year on year and totalled 83,340 tonnes.

The capacity of caustic soda market in Russia amounted to 969,000 tonnes in 2012. The share of domestic producers in the structure of consumption of caustic soda exceeded 96%.

MRC