Braskem faces losses from Brazil blackout

MOSCOW (MRC) -- Braskem SA will lose nearly BRL50 million (USD21.9 million) due to a blackout in Brazil's northeast last week that interrupted production at its plants, President Carlos Fadigas said Friday during an event in Sao Paulo, as per Plasticsnews.

The financial loss, which Fadigas deemed a preliminary calculation, will impact Braskem's third quarter financial results. A blackout hit Brazil's northeast last week for around three hours, affecting a majority of cities in the region.
The financial value represents the cost of interruption at the company's plants in the states of Bahia and Alagoas, the length of time the plants were idle, and the cost of restarting machinery. Braskem plants in the two states required four to five days to resume operations.

Braskem's estimated losses do not take into consideration the potential increase in costs that will occur in the near future, to the tune of a few million reais, if more costly power must be purchased by the company's plants. A majority of Brazil's energy in the northeast comes from hydroelectric and wind power plants.

Braskem's losses could have been worse, the company's president said, if not for investments that had already been made to ready its plants for blackout scenarios.

The company has invested in loss prevention and blackout recovery plans since February 2011, when the country's last major blackout resulted in Braskem needing four months to return some plants to full production.

As MRC wrote before, Braskem is participating in the bidding to acquire the polyvinyl chloride (PVC) assets of Belgium's Solvay in South America. Braskem said the negotiations had not yet concluded and it could not say when they would be completed.

Braskem is the leading producer of thermoplastic resins in Latin America and the US, following its purchase of polypropylene assets of Dow Chemical. The company serves 70% of Brazilian demand in PP, PE and PVC resins, but foreign resin imports have gained Brazilian market share in recent years. Brazil's annual consumption of PP is estimated at 1.4 million tons this year. Braskem has been a target of criticism by plastics processors over its perceived dominance of the resins market. Brazil's import tariff on foreign PP is 14%, but could increase. Brazil's federal government raised the import tariff on PE in late 2012 from 14-20%.
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MOSCOW (MRC) -- LyondellBasell Industries NV shares slumped, after Apollo Global Management LLC'sAPO 0.00% offering of USD1.1 billion in stock in the chemical company, said Bloomberg.

LyondellBasell slumped 1.5% to USD69.45 in midday trading. Late Tuesday, it disclosed Apollo’s plans to sell 16 million of its shares, the buyout firm’s third such sale this year. Apollo is exiting a turnaround bet it made on LyondellBasell in the wake of the financial crisis.

More broadly, private equity firms have been taking advantage of stock index’s rise to record highs this year to cash out of past years’ investments.

The deal saw aggressive pricing, with the shares pricing at USD69.50 each, according to people familiar with the matter, a 1.4% discount to LyondellBasell’s latest close.

On average, follow-on offerings of U.S. stock have priced at an average discount of 6.8% this year, according to Dealogic. Such discounts help cushion investors in the deal against the risk the stock will fall.

The offering trims Apollo’s stake in the company to 5.2%, according to a regulatory filing.

As MRC wrote before, LyondellBasell, one of the major petrochemical global producers and the world's largest maker of polypropylene, will raise its ethylene capacity in North America by 18% in coming years through several debottlenecking projects. Locations where ethylene capacity will be expanded include crackers in Corpus Christi, La Porte and Channelview, Texas, according to the company. The projects are scheduled to be finished in 2014 and 2015.

LyondellBasell Industries 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) - Imports of suspension polyvinyl chloride (SPVC) to Russia fell on the back of oversupplied market and weaker prices of Russian material. SPVC imports in August decreased by 42% to 20,200 tonnes compared to July (34,500 tonnes), according to a MRC DataScope report.

Such a serious decline in the external supply resulted from a weaker prices of Russian resin and excess supply in the market. The main fall in imports accounted for US resin, which in the past month fell to 9,800 tonnes against 20,800 tonnes in July.

Stronger export prices in the United States and the devaluation of the rouble made many Russian companies reduce significantly the volume of purchases. Some of the companies even stopped all their purchases of resin in the United States.

Overall, imports of North American PVC to Russia in the eight months of this year totalled a little more than 150,000 tonnes. Imports of acetylene PVC from China also declined, but not as much as of the US resin. Deliveries of Chinese resin in August exceeded 6,000 tonnes against 8,500 tonnes in July.


Despite the relatively high level of export prices in China, some Russian companies can not refuse to purchase acetylene resin, in particular, consumers of PVC with a K value of 70. Russia's imports of Chinese acetylene PVC from in January - August exceeded 114,000 tonnes.
Overall, PVC imports to Russia totalled more than 301,000 tonnes in the eight months of this year, up by 16% year on year.


MRC

MOSCOW (MRC) -- BASF, a world leader of petrochemical industry, has developed new XSpark coating for automotive industry, reported the company on its site.

The BASF experts have developed this new automotive OEM coating. It contains very fine glass particles that reflect the light with greater precision, thus creating a pronounced sparkle. It glitters in an even more focused and intensive manner than any other currently known special-effect coating.

"With XSpark, we have achieved a level of exclusive effect previously unknown," explained Stephan Schwarte, head of Basecoat Pigments/Dispersions & Color Design Lab.

The special feature is that the distinctive sparkle is particularly effective only in light and therefore looks exceptionally luxurious and elegant without being intrusive.

XSpark is targeted especially at premium car manufacturers and their customers.

"We see great potential of the special-effect coating for carmakers, because end consumers will perceive it as something special and it will generate enthusiasm," said Meike Flock, Marketing for Automotive OEM Coatings, describing the results of a market research study among new vehicle buyers.

With XSpark, BASF is putting another special-effect innovation in the "XColors - designed by BASF" product family on the market.

XColors are innovative colors that feature remarkable special effects or exceptional color depth while being highly suitable for series production. They include the XFine coatings, which emphasize the shape of the body particularly strikingly thanks to its intensive metallic effect. For these color innovations, BASF won an award in the 2011 Automotive Brand Contest and the Materialica Design & Technology Silver Award in the surface and technology category.

As MRC informed previously, BASF is going to expand its production capacity for waterborne coatings in the Demarchi Coatings Site, located in Sao Paulo state, Brazil. The EUR2 million investment will increase its capacity of both waterborne primer and basecoats. The expansion is expected to be finished in early 2014.

BASF is the largest diversified chemical company in the world and is headquartered in Ludwigshafen, Germany. BASF produces a wide range of chemicals, for example solvents, amines, resins, glues, electronic-grade chemicals, industrial gases, basic petrochemicals and inorganic chemicals. The most important customers for this segment are the pharmaceutical, construction, textile and automotive industries.
MRC

MOSCOW (MRC) -- Perstorp, pioneer in formalin chemistry, plastics and surface materials, has launched Pevalen as a non-phthalate plasticizer meeting market demand in sensitive applications, as per Plastemart.

Pevalen is a plasticizer based on well-proven, reliable chemistry. As a non-phthalate plasticizer alternative it does not compromise performance in any way. In fact performance is equal to or better than other plasticizers used today.

Pevalen is very efficient, which means your formulation requires less plasticizer. In combination with low migration and volatility the performance is unmet by other plasticizers. It also displays excellent UV stability making it a perfect choice in applications exposed to sunlight. It is easier and faster to blend with PVC than most other plasticizers. This reduces processing time, helps to increase capacity of the existing production line, and maintains a low production cost ensuring a robust manufacturing process.

It is a well-proven product that is REACH-registered. It is based on food-approved raw materials and the process for obtaining food contact approval for Pevalen is underway. As a high performance non-phthalate plasticizer Pevalen contributes to a more sustainable PVC solution.

As MRC wrote previously, Evonik has recently launched a new generation of PVC plasticizers under the ELATUR product brand. With this strategic portfolio expansion, Evonik is consistently developing its range of sustainable plasticizers.

Plasticizers are a vital component in soft PVC plastics where durability and flexibility are important properties - in flooring, artificial leathers, tarpaulins, toys, automotive interiors, and cables.

Perstorp is one of the world leaders in various sectors of the specialty chemicals market, it's pioneer in formalin chemistry, plastics and surface materials. Perstorp was founded in 1881 and is controlled by PAI partners,a major European private equity company. The company has around 1,500 employees in with 22 production plants in Europe, Asia and North America.
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