Grangemouth refinery stays shut as labor talks fail

MOSCOW (MRC) -- The Grangemouth refinery will probably stay shut for the time being after talks broke down between its owner Ineos Group Holdings and the Unite union over plans to cut costs and changes to wages and pensions, as per Hydrocarbonprocessing.

Ineos, which operates the 210,000 bpd facility and a petrochemical plant, said the union refused to rule out industrial action during a 60-day consultation on the company’s cost-cutting plan. Unite, the UK's largest union, said it would only return to talks if the company suspends the proposal.

"For any negotiations to take place they have to drop the imposition on the workers," Peter Welsh, a spokesman for Unite, said by phone.

Employees already offered to hold off on any industrial action until December 31 in the last round of mediated talks, which ended without a deal this week, Welsh said.

As MRC wrote previously, Unite called off a 48-hour strike on October 16 which threatened to cut about 45 % of United Kingdom’s crude production. The site supplies power and steam to BP’s neighboring Kinneil processing plant, which handles crude from the Forties Pipeline System, gathered from more than 80 offshore fields.

"The union refused to accept Ineos offer to restart the Grangemouth plant in exchange for a commitment that there will be no further industrial action this year" Ineos said in an e-mailed statement after a meeting with Unite.

The facility will continue to supply steam to Kinneil while the refinery is offline, Richard Longden, a spokesman for Ineos said by phone from London. The Grangemouth oil refinery is jointly owned by Ineos and PetroChina, while Ineos is the sole owner of the petrochemical site, which has a capacity of 1 MMtpy.

Scotland’s First Minister Alex Salmond met with both parties, urging Ineos to restore production and calling on the union to pledge not to strike until the end of the year, according to a statement from the Scottish government.

Restoring full production after the outage could take weeks, Ineos said. During the eight weeks it took to reach normal refinery operations after the 2008 strike, a compressor caught fire and crude oil leaked, the company said.

As MRC reported before, Ineos Grangemouth plant is likely to be shut down in the next three years if it continues losing over GBP100 million every year, as per Ineos chairman of Olefins and Polymers Europe. The main reasons for the massive losses are the decline in North Sea petrochemical feedstocks and the site’s pension scheme deficit of GBP200 million, two issues Ineos is now working to address.

INEOS Group Limited is a privately owned multinational chemicals company consisting of 15 standalone business units, headquartered in Rolle, Switzerland and with its registered office in Lyndhurst, United Kingdom. It is the fourth largest chemicals company in the world measured by revenues (after BASF, Dow Chemical and LyondellBasell) and the largest privately owned company in the United Kingdom.
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MOSCOW (MRC) -- Saudi Arabia's Yanbu National Petrochemical Co. reported a doubling of its third-quarter net profit on Tuesday, attributing the rise to increased production and sales as well as higher prices for its products, said Arabnews.

Yansab made SR864.8 million (USD230.6 million) in the three-month period to Sept. 30, it said in a bourse filing, up from SR435.7 million during the same timeframe in 2012.

The profit was ahead of the average forecast of eight analysts polled by Reuters, who expected the petrochemicals firm to make SR749.6 million in the period.

As MRC wrote before, Yansab announced in its interim financial results for the first quarter of 2013 that its net income was SR 667.07 million compared to SR 720.27 million for the same quarter last year with a decrease of 7.4%, and compared to SR 640.77 million for the previous quarter with an increase of 4.1%.

Yansab produces 400,000 tonnes/year each of high density PE (HDPE), linear low density PE (LLDPE) and polypropylene (PP).

Yansab, a joint-stock company, is 51%-owned by petrochemical giant Saudi Basic Industries Corp (SABIC).

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MOSCOW (MRC) -- Brazilian trade deficit in chemicals in the first nine months of 2013 was 19.7% greater than in the same period in 2012, said Bnamericas, citing chemical industry association Abiquim.

The total deficit of USD23.8bn for the year to September reflected a 10.8% increase in chemical imports to USD34.4bn, and a 4.9% drop in Brazil's chemical exports to USD10.6bn. Abiquim expects Brazil to post a record annual trade deficit in chemicals in 2013 of more than USD33bn.

In the month of September, Brazil's imports of chemical products decline by 12% from August to USD3.9bn. Imports were 3.5% higher than in September 2012.

The most imported chemical products were intermediate products for fertilizers, with USD686mn of imports in September.

Brazil exported USD1.2bn of chemical products in September, 2.5% more than in August but 0.7% less than in September last year.

As MRC wrote before, Brazilian trade deficit in plastic resins and raw materials surged in the first eight months of 2013 to USD615mn from just USD6.7mn in the same period last year. Producers of polyolefins outside Brazil, especially in the US, used their lower production costs to increase their share of a fast growing market.

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MOSCOW (MRC) -- Henkel Bautechnik’s new factory in Russia’s Stavropol region is now open for production, reported the company on its site.

The plant was officially opened on October 16, at a ceremony attended by customers, local officials, journalists and employees.

It is setting the standard for sustainable manufacturing of construction adhesives and bringing Henkel’s world-leading dry mix products closer to new and existing customers in the fast-growing Russian market.

The new site is Henkel Bautechnik’s fourth plant in Russia and will supply more than twenty regional distributors in this attractive market. Adhesive Technologies is optimizing its logistics and stock-management in Russia to reduce delivery times, decrease costs and drive down its footprint by cutting fuel consumption. This is the reason Russia’s Stavropol region was selected: The area is a magnet for investment thanks to its abundant local resources, reliable transport infrastructure and proximity to large distribution markets. The new factory brings Henkel closer to its customers geographically, and opens up new opportunities for partnering and customer collaboration.

The plant’s facilities include five automated production lines, warehouse space covering 8,500m2 and an overall annual production capacity of 160,000 tons.

The project is part of Henkel’s commitment to expanding its presence in emerging markets, including Russia, where it is already the number one supplier of adhesives: Ceresit and Thomsit brand products were used on more than 250 Russian construction sites in 2013 alone.

As MRC wrote previously, in September Henkel inaugurated the world’s largest adhesives factory in Shanghai, China. With this new production facility the company says it is expanding its production capacity in a major emerging market and will deliver its adhesive technologies more quickly to the growing number of customers based in China and the Asian region. The new factory comprises 150,000 square meters of space and is now the central production site for the company's industrial adhesives in China and the Asia-Pacific region.

Henkel operates worldwide with leading brands and technologies in three business areas: Laundry & Home Care, Cosmetics/Toiletries, and Adhesive Technologies. Founded in 1876, Henkel holds globally leading market positions both in the consumer and industrial businesses with well-known brands such as Persil, Schwarzkopf and Loctite.
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MOSCOW (MRC) -- DuPont Co., the biggest U.S. chemical maker by market value, posted third-quarter profit that beat analysts’ estimates on higher sales volumes at units that make materials for solar panels and bullet-resistant vests, said Bloomberg.

Profit excluding some legal and pension costs was 45 cents a share, Wilmington, Delaware-based DuPont said today in a statement, topping the 41-cent average of 19 estimates compiled by Bloomberg. Net sales climbed 4.7% to USD7.74 billion, trailing the USD7.77 billion average estimate.

Sales of films and metal pastes used in solar panels drove a 67% gain in operating profit at the electronics unit. Earnings rose 16% at the safety and protection division, where U.S. military demand helped sales of Kevlar anti-ballistic fibers, DuPont said in a slide presentation.

Third-quarter net income rose to USD285 million, or 30 cents a share, from USD5 million, or break even, a year earlier. Items DuPont excluded from its adjusted per-share earnings include some employee-retirement expenses, costs to reimburse customers whose trees were damaged by Imprelis herbicide, and expenses to settle a titanium-dioxide antitrust claim.

DuPont Chairman and Chief Executive Officer Ellen Kullman is under pressure to improve the company’s performance from Trian Fund Management LP. The New York-based hedge fund, co-founded by activist Nelson Peltz, raised its stake to more than 21 million shares, or about 2.3%, and met top DuPont executives to discuss ways to boost shareholder value, people familiar with the matter said in August.

Installations by the solar industry may increase 10% this year, DuPont said in its presentation. Sales at the world’s biggest solar-energy companies probably rose 17% in the third quarter, according to the median of analysts’ estimates compiled by Bloomberg.

The agriculture unit posted the biggest sales gain, rising 15% on Latin American pesticide demand and seed prices, the company said. That helped narrow the loss in the seasonally weak third quarter when farmers in the U.S. and Europe haven’t begun to buy supplies for the next planting.

The agriculture, safety and electronics units are the kinds of higher-margin businesses that Kullman is focusing on while continuing to move away from commodity chemicals. She said in July that DuPont is considering a spinoff or sale of its performance chemicals unit, which generated USD7.2 billion of revenue last year, because of slow-growing, volatile earnings. The unit makes cyanide, Freon refrigerants, Teflon coating for nonstick pans, and titanium dioxide, known by its chemical formula TiO2 and used in paints and plastics.

The performance chemicals segment posted a 38% decline in third-quarter operating profit as prices fell. The business is starting to recover, with sales volumes rising 25 percent, the third consecutive quarterly improvement, DuPont said.

As MRC wrote previously, in late 2012 DuPont reported of investments that the company were making in all its divisions kept on delivering results which were offset by the weakness in titanium dioxide (TiO2) markets. "Excluding the performance chemicals unit, which includes TiO2, the company expects earnings growth of at least high-teens in 2013 versus 2012. Performance chemicals margins are expected to fall six to seven percentage points in 2013," DuPont said.

DuPont, founded in 1802 to make gunpowder, produces thousands of products from genetically modified seeds to plastics for auto parts.
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