Braskem continues to raise the capacity utilisation rate of its petrochemical complexes

MOSCOW (MRC) -- The capacity utilization rate of Braskem's petrochemical complexes reached 94% in the second quarter, maintaining the recovery observed in the previous quarter, when the average capacity utilization rate stood at 90%. This is the highest rate since the third quarter of 2009, according to the ccompany's press release.

This performance reflects the gains in operating efficiency in the period and also benefitted from the stimulus measures adopted by the government, which published a provisional presidential decree that has not yet been approved by Congress that reduces the tax rate on raw material purchases for first and second generation chemical producers in Brazil as of May 8, with the aim of making them more competitive.

Apparent consumption of thermoplastic resins in the domestic market reached 1.4 million tons in the second quarter and 2.7 million tons in the first half of the year, for growth of 10% and 15% on the year-ago periods, respectively.

Three factors contributed to this result: the restocking trend in the chain, the strong inflow of imported resins benefitting from tax incentives before the end of the so-called port wars, and the solid performance of certain sectors of the economy, such as agribusiness, automotive and infrastructure. Braskem also increased its domestic sales to 947,000 tons in the second quarter, growing 19% on the same period last year.

With the improvement in operating efficiency, the Company's EBITDA reached RUSD1.1 billion in the second quarter, growing 12% from the first quarter, driven by the higher sales volume, better margins for thermoplastic resins in export markets and positive impact of the tax cuts.

Braskem's consolidated net revenue amounted to RUSD9.5 billion in the second quarter, increasing 6% from the second quarter of 2012, driven by the higher sales of resins and basic petrochemicals, the increase in international resin prices and the average appreciation in the U.S. dollar against the Brazilian real.

Braskem's consolidated net debt decreased 5% in the second quarter to USD6.9 billion on June 30, 2013. The company's financial leverage, measured by the ratio of net debt to EBITDA in the last 12 months, stood at 3 times after excluding the Mexico project, representing a reduction of 10% from the prior quarter.

In line with its commitment to making investments with returns above its cost of capital, Braskem invested just over RUSD1.0 billion in the first half of 2013.

"In the near term, we will remain focused on creating a more favorable business environment for the petrochemical and plastic industries in Brazil through approval of the tax cuts on raw materials and programs to develop the plastics chain," said Braskem CEO Carlos Fadigas. "At the same time, we will continue to work on growth projects with access to competitive raw materials by advancing construction on the Mexico project, ensuring the feasibility of Comperj and evaluating opportunities in the United States," he added.

As MRC reported earlier, the Sao Paulo-based Brazilian petrochemicals producer Braskem S.A. purchased holdings at the plant, which is located in Pennsylvania. The facility belongs to the Philadelphia-based (USA) company Sunoco Inc. Braskem is going to manufacture propylene at its polypropylene (PP) unit. This acquisition demonstrates the company's PP plant importance and viability in the North America market.

Braskem is Brazil's main producer of polyethylene and polypropylene. In addition with ongoing plants located in both petrochemical complexes, in April 2008 Braskem opened a 300,000 metric ton polypropylene plant in the city of Paulinia (Sao Paulo).
MRC

MOSCOW (MRC) -- Huntsman Corporation, the US chemicals producer founded by Jon Huntsman Sr., has announced its intention, subject to market and other conditions, to seek commitments for USD100 million in aggregate principal amount of additional term loans (the "Additional Term Loans") through its wholly owned subsidiary, Huntsman International LLC (the "Borrower"), according to the company's statement.

The Additional Term Loans will be arranged by Citigroup Global Markets Inc., as lead arranger, and HSBC Securities (USA) Inc., as co-manager, and made as additional term loans under the credit agreement, dated as of August 16, 2005, as amended, among the Borrower, the guarantors party thereto, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent, pursuant to which term loans were previously extended to the Borrower.

We remind that, as MRC reported earlier, in July 2013, Huntsman Corporation announced that it had acquired the remaining ownership of Russian joint venture Huntsman NMG (HNMG), giving it full ownership of the company. HNMG is a leading supplier of polyurethane systems to the adhesives, coatings and footwear markets in Russia, Ukraine and Belarus.

Huntsman is a global manufacturer and marketer of differentiated chemicals. Our operating companies manufacture products for a variety of global industries, including chemicals, plastics, automotive, aviation, textiles, footwear, paints and coatings, construction, technology, agriculture, health care, detergent, personal care, furniture, appliances and packaging. Moody's Investors Service has lifted its outlook on Huntsman Corp., noting improvements across the chemical maker's main product lines. Moody's backed Huntsman's corporate family rating at Ba3, three notches into junk territory. The outlook was raised to positive, from stable.
MRC

MOSCOW (MRC) -- Moody's Investors Service raised the firm's ratings on LyondellBasell Industries N.V., one of the major petrochemical global producers and the world's largest maker of polypropylene, calling the decline in Apollo Global Management LLP's (APO) stake in the plastics and chemicals company a "credit positive", according to The Wall Street Journal.

The upgrade comes after asset-management firm Apollo recently reduced its ownership stake in LyondellBasell, a move that will result in the resignation of one of Apollo's two nominees on the company's supervisory board. LyondellBasell earlier this month priced an offering of 16.5 million shares on behalf of affiliates of Apollo Management.

"This largely removes the corporate governance concerns that had held back the rating since its emergence from bankruptcy in 2010," wrote Moody's senior vice president John Rogers.

LyondellBasell's senior unsecured debt rating was raised by one notch to Baa1, placing it three levels into investment-grade territory. The outlook is stable.

The company's rating is tempered by a limited operating history post-bankruptcy, which will slow any further upside to the ratings. While corporate governance concerns have eased, Moody's still views the ability of the two largest shareholders to nominate three members to the supervisory board as "unusual for a large public company." In addition to Apollo, Access Industries owns a 16% stake in the company and can nominate two members to the board.

LyondellBasell's ratings are supported by the company's size, operating diversity, leading market positions in key commodities and management team with a track record of conservative fiscal stewardship.

Moody's upgrade also comes a few weeks after the company reported its second-quarter profit jumped 21% as prior-year results were bogged down by charges. Core earnings and revenue, however, declined.

As MRC informed previously, in May 2013, Moody's Investors Service upgraded its rating on LyondellBasell Industries N.V. one notch further into investment grade, citing recent changes to the chemical company's board and the further decline in equity ownership by private-equity firm Apollo Global Management LLC. Moody's lifted the company's rating to Baa2, two steps into investment grade, from Baa3. The outlook is positive.

LyondellBasell Industries NV is a manufacturing company. The Company produces chemicals, fuels, and polymers used for packaging, clean fuels, durable textiles, medical applications, construction materials, and automotive parts. LyondellBasell Industries operates globally and is headquartered in the Netherlands. LyondellBasell is also a leading licensor of polypropylene and polyethylene technologies. The more than 250 polyolefin process licenses granted by LyondellBasell are twice that of any other polyolefin technology licensor.
MRC

MOSCOW (MRC) -- DuPont, the biggest U.S. chemical maker by market value, declared a third quarter common stock dividend of 45 cents per share payable 12 September, 2013, to stockholders of record 15 Aug, 2013, reported the company on its site.

This dividend is the same as what was paid in the second quarter 2013. This is the 436th consecutive quarterly dividend since the company’s first dividend in the fourth quarter of 1904.

Regular quarterly dividends of USD1.12-1/2 per share on the USD4.50 series preferred stock and 87-1/2 cents per share on the USD3.50 series preferred stock also were declared, both payable Oct. 25, 2013, to stockholders of record 10 October, 2013.

As MRC wrote previously, 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.
MRC

MOSCOW (MRC) -- Hengli Petrochemical is in plans to shut its No.1 purified terephthalic acid (PTA) line for maintenance turnaround, reported Apic-online.

A Polymerupdate source in China informed that the line is likely to be shut in H2 August, 2013. It is slated to remain off-stream for around two weeks.

Located in Dalian, China, the line has a production capacity of 1.1 million mt/year.

As MRC wrote previously, in October 2012, Hengli Petrochemical commissioned the first phase of a world-scale purified terephthalic acid (PTA) project in Changxing Island of Dalian, Liaoning Province, China. Hengli Petrochemical which is utilizing PTA technology from Invista, claims that the plant is the world's largest monomer production plant.

PTA is feedstock which is used in production of polyethylene terephthalate (PET).
MRC