Piperea: "Oltchim's privatisation won't be postponed"

MOSCOW (MRC) -- Oltchim Ramnicu Valcea’s privatisation will take place this autumn, not early next year as PCC had stated, lawyer Gheorghe Piperea, one of the plant’s trustees in bankruptcy, said Nineoclock.

Wojciech Zaremba, the representative of PCC SE, Oltchim’s significant minority shareholder, stated that the authorities postponed for the winter the selection of a private investor and for the spring the plant’s actual privatisation, against the backdrop in which a quick sale was expected this autumn. Zaremba emphasized that Oltchim needs a new business model in the current context of the world petrochemical market, and in order to survive it has to be privatised as soon as possible.

Lawyer Gheorghe Piperea pointed out: "We are waiting for the evaluation report on Oltchim’s assets, in order to be able to create that special purpose vehicle (SPV) that we have called Oltchim 2 and that will be cleaned of debts. These days we are expecting the evaluation report in order to put it up for the creditors’ committee’s approval. After we obtain the creditors’ approval we will know what Oltchim 2 will include and we will start negotiations with the interested investors."

In other developments, the tender for the sale of Ramplast, the PVC profiles producer owned by Oltchim, is taking place today. The starting price has been set at approximately EUR 6 M, yesterday being the last day in which offers were accepted, Gheorghe Piperea informed.

According to the same source, the Galati Dynamic Selling Group and Russia’s Oil Gas Trade (OGT) LLC, a company that also entered the race for Oltchim’s privatisation, are interested in Ramplast. Russia’s OGT promised investments of EUR300 mln at Oltchim. The sale of Ramplast is seen as an extremely important step for the future of Oltchim, which, according to the trustees in bankruptcy and the authorities, needs a minimum of EUR15 mln in order to hike the production. Piraeus Bank and Transilvania Bank are willing to finance Oltchim by up to EUR 10 M, the two banks’ condition being the creditors’ committee’s green-light for the sale of Ramplast, sources from within the plant inform.

As MRC wrote before, until recently, the government has claimed that the company is viable and there are prospective buyers for it. PM Victor Ponta, however, there is no buyer and that EC has warned the government not to bail out the plant.

At stake there are not only Oltchim's 3,200 employees - but also part of the 20,000 people working for Oltchim's suppliers. Oltchim's industrial site includes vast and technically viable production facilities that might be interesting for strategic investors. But the company owes some EUR 800mn in debt - out of which EUR 250mn to the government and EUR 150mn to state-controlled electricity supplier Electrica.

Based at Ramnicu Valcea in southern Romania, Oltchim produces caustic soda, petrochemicals, agrochemicals, inorganic products and building materials, including insulating PVC for panels, doors and window frames.
As per MRC, Oltchim at the present does not supply PVC to the Russian market. Insignificant amounts of PVC-S had been delivered from 2005 to 2009 and on average made 1,900 tonnes per year.
MRC

MOSCOW (MRC) -- Russian gas monopoly, Gazprom, in order to fill the underground gas storage facilities has reduced the price for natural gas from about USD 390-400 to USD 260 per thousand cubic meters for the Ostchem Holding, which belongs to the Group DF of businessman Dmitry Firtash, said Ukrainian News agency.

The source has noted that the Naftogaz of Ukraine national joint-stock company, which also imports gas to Ukraine had not obtained gas discounts from Gazprom. Earlier, Minister of Energy and Coal Industry Eduard Stavytskyi had said that under preliminary data, the price for gas acquired by national joint-stock company from Gazprom will make up about USD 410 per thousand cubic meters in October-December 2013.

On October 8, Russian President Vladimir Putin told a press conference that Gazprom had lowered gas price for Ukraine to USD 260 per thousand cubic meters in order to pump it into underground gas storage facilities.
"Having informed the Russian authorities, Gazprom helped Ukraine to pump in the required amount of gas into underground gas storage facilities at the discount of USD 260 per thousand cubic meters. Approximately, and I may be mistaken in some, several dollars, when recently the price for Ukraine had been USD 400, and now it is about USD 380-390 per thousand cubic meters," he said.

At the same time, Putin did not specify the name of the importer, who obtained the said discount. In September, Firtash said that Ostchem planned to accumulate 6-6.5 billion cubic meters of natural gas in the Ukrainian underground gas storage facilities by November (then there were about 1.3 billion cubic meters of Ostchem's gas).
Besides, he added that in view of the increase in gas pumping into underground gas storage facilities, Gazprom would increase the transit of the fuel through the territory of Ukraine.

In August, the average customs cost of the natural gas imported by Ukraine (taking in account supplies from Europe) decreased by 3.2% to USD 393.5 per thousand cubic meters as against July. In July 2013, Ukraine imported natural gas from Europe at the price of USD 394.92 per thousand cubic meters and from Russia at USD 401.52 per thousand cubic meters.

As Ukrainian News earlier reported, in May the Cabinet of Ministers approved the expected balance of importation and distribution of natural gas for 2013 with the amount of imports of 27.3 billion cubic meters of gas.
Of the total amount of importation, Gazprom will deliver 18 billion cubic meters, RWE Supply & Trading (Germany) - 1.3 billion cubic meters, Ostchem (from Russia) - 8 billion cubic meters.

As MRC wrote before, Mr. Dmitry Firtash, Head of the Board of Directors Group DF, projected that the volume of domestic mineral fertilizers market will double by 2017. According to the outlooks published by OSTCHEM (a company operating Group DF"s nitrogen chemical productions), by 2017 the nitrogen fertilizers consumption volumes will rise from the current 950 thousand tons up to 2 million tons, phosphates - from 225 up to 460 thousand tons, potassium fertilizers - from 125 up to 270-280 thousand tons.

OSTCHEM is an asset management company consolidating efforts of Group DF"s nitrogen chemical industries: STIROL Concern (Gorlovka), Severodonetsk Azot, Cherkassy Azot, Rivneazot.
MRC

MOSCOW (MRC) -- The Performance Products division of Huntsman Corporation has announced plans to re-focus its surfactants business in Europe, according to the company's press release.

The company plans to transition away from a number of surfactant assets and product lines that have commoditized and to focus on developing and growing the remaining differentiated surfactants business in Huntsman’s strategic markets. Relevant authorities and social partners will be fully consulted.

Stu Monteith, President of Huntsman’s Performance Products division said: "We expect the restructuring to be complete by end-2014. It will result in a European surfactants business more closely aligned to our chosen markets and more integrated with the rest of the division’s business processes and chemistries." He added: "We are in discussions with potential partners for certain facilities and every effort will be made to ensure a smooth and seamless transition for customers and other stakeholders."

It is estimated that about 250 Huntsman Performance Products European positions could potentially be affected by these changes during the next 18 months.

Upon completion the company expects the annual EBITDA benefit to be approximately USD20 million.

Huntsman’s surfactants business in other parts of the world as well as other product lines in the Performance Products division (including amines, maleic anhydride and carbonates) will not be affected by the proposals.

As MRC reported earlier, this summer, Huntsman Corporation acquired the remaining ownership of Russian joint venture Huntsman NMG, giving it full ownership of the company. The financial terms of the deal were not disclosed. 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 with 2012 revenues of over USD11 billion. 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. Noting improvements across the chemical maker's main product lines, Moody's Investors Service has lifted its outlook on Huntsman Corp. to Ba3, up three notches; the outlook was raised to positive from stable.
MRC

MOSCOW (MRC) -- Evonik Corporation, the German specialty chemicals company, has appointed Jason Fox as director of Evonik’s Oil & Gas Group, which the company formed to boost the resource-efficiency of products it supplies to the oil and gas industries, reported the company on its site.

"I am very happy to welcome an experienced professional such as Jason to Evonik’s Oil & Gas Group," said Ted Pettijohn, senior vice president of growth and development at Evonik. "Global demand for energy is projected to rise with oil and natural gas becoming the top two energy resources. A tremendous amount of investment and advances in technology will be required to meet these demands. Jason’s role will be to develop and execute Evonik’s strategy to leverage our products and technology to support these industries."

Fox joins Evonik after more than 10 years at oilfield chemicals company Nalco Champion. Fox supported the company in various roles including marketing, business development, strategic market planning, and pricing management.

As MRC wrote previoulsy, at its last meeting the Supervisory Board of Evonik Industries AG, the German speciality chemicals group, unanimously passed resolutions relating to the successful focusing of the group on specialty chemicals and its future growth targets. Over the past five years Evonik has been restructured from an integrated conglomerate to a listed specialty chemicals company. Following the refocusing of the business, the next step is to consolidate management and administrative processes.

As part of the company's strategic portfolio expansion, Evonik plans to launch a new generation of PVC plasticizers. Evonik started construction of the production facilities with the estimated production capacity of 40,000 tpa at the Marl Chemical Park this summer.

Evonik Industries is an industrial corporation in Germany and one of the world's leading specialty chemicals companies. Company's specialty chemicals activities focus on high-growth megatrends, especially, health, nutrition, resource efficiency, and globalization, and on entering attractive future-oriented markets. In 2012 Evonik generated sales of EUR13.6 billion and an operating result (adjusted EBITDA) of EUR2.6 billion. The international rating agency Moody's has upgraded the credit rating of the German speciality chemicals group Evonik Industries AG from Baa3 with a positive outlook to Baa2 with a positive outlook.
MRC

MOSCOW (MRC) -- Formosa Chemicals & Fibres Corp (FCFC), a Taiwanese producer of polyvinyl chloride (PVC) resins and other intermediate plastic products, has restarted its No.2 styrene monomer (SM) unit, as per Apic-online.

A Polymerupdate source in Taiwan informed that the unit restarted on October 4, 2013. It was shut in August 2013 for maintenance turnaround.

Located in Kaohsiung, Taiwan, the unit has a production capacity of 350,000 mt/year.

As MRC wrote previously, FCFC's No.1 SM plant, located in Mailiao, Taiwan, with the capacity 250,000 mt/year was taken off-stream in early September for more than 40 days of maintenance works.

Formosa Chemicals & Fibre Corporation (FCFC) is a subsidiary of Formosa Plastics Group, the largest private owned enterprise in Taiwan, with annual revenue of USD13.5 billion.

Formosa Plastics Corporation is a Taiwanese company based in Taiwan that primarily produces polyvinyl chloride (PVC) resins and other intermediate plastic products.
MRC