German chemical firms see more recovery in 2014

MOSCOW (MRC) -- German chemical companies are expecting further recovery in 2014 after production growth accelerated in the fourth quarter of last year, said Hydrocarbonprocessing, citing Utz Tillmann, head of the VCI German chemical lobby group.

Chemical production rose 2.6% in January year-on-year, after a 3.7% gain in the fourth quarter, according to Tillmann.

VCI, which represents 1,650 German chemical companies including BASF and Lanxess, reiterated a full-year forecast for chemical sales to gain 1.5%, as the industry sells more for a lower average price. The increase in production at the end of last year and the beginning of this year looks like a real recovery in demand and not a sign that customers are just refilling inventories, Tillmann said.

As MRC informed before, sales of BASF Group in 2013 rose by just under 3% to reach EUR74.0 billion. EBIT before special items in 2013 rose by EUR543 million to EUR7.2 billion. Net income amounted to EUR4.8 billion, slightly above the previous year’s level.

"At the moment, the prospects for 2014 are good for the industry," Tillmann said at a press conference in Frankfurt, where the organization is based. "The upward trend from the end of the year is continuing. All segments of the chemical industry are noticing a revival. We expect increasing demand for chemicals at home and abroad, especially from European industrial customers."

Chemical production will probably increase 2% with selling prices dropping 0.5%, leading to the gain of 1.5% in sales to 191.5 billion euros (USD265.6 billion), VCI reiterated.

Fourth-quarter sales in Germany’s chemical industry rose 3% compared with a year earlier, while selling prices dropped 2.6%, VCI said. The industry employed 436,500 people at the end of the quarter, 0.5% more than a year earlier.

MRC

MOSCOW (MRC) -- Kronos Worldwide, Inc. reported net income for the fourth quarter of 2013 of USD2.9 million,compared to a net loss of USD18.1 million, in the fourth quarter of 2012, said the producer in its press release.

For the full year of 2013, Kronos Worldwide reported a net loss of USD102.0 million, compared with net income of USD218.5 million in 2012. Comparability of the full year periods was impacted by lower income from operations in 2013, principally due to lower average TiO2 selling prices, higher raw materials and other production costs and a litigation settlement charge in 2013, as discussed further below.

Net sales of USD368.6 million in the fourth quarter of 2013 were USD28.2 million, or 7%, lower than in the fourth quarter of 2012. Net sales of USD1,732.4 million in the full year of 2013 were USD243.9 million, or 12%, lower than in the full year 2012. Net sales decreased in the full year of 2013 primarily due to lower average TiO2 selling prices, partially offset by higher sales volumes.

As MRC wrote before, Kronos is also one of the largest suppliers of TiO2 to the Russian market. Russian converters' most popular grade is Kronos 2220, which is used in the production of rigid compounds.

Kronos Worldwide, Inc is a global producer and marketer of titanium dioxide pigments (TiO2), a base industrial product used in a range of applications. The company produces more than 40 grades of TiO2. The company deliveres TiO2 to more than 100 countries in the world, but most of them are supplied to Europe and North America.
MRC

MOSCOW (MRC) -- Germany-based Veka Group will take over one of its competitors, Gealan Holding GmbH, in a deal that will move all Gealan subsidiaries and activities in Europe to one of the leading extruders of PVC-U profile systems for doors and windows, according to the press release of Veka.

Veka will see its staff grow by 1,150 employees and expects its annual turnover to increase from EUR793 million (USD1.1 billion) in 2013 to more than EUR1 billion (USD1.4 billion) following the acquisition of Gealan from financial investor Halder Beratungsbeteiligung.

The pending takeover still needs approval from authorities. The parties have agreed to keep the terms confidential.
Veka officials say they will bolster their position in Germany, Europe and the world by acquiring an established, well-known competitor that recently adopted a differentiation strategy.

"As an essential partner for European window manufacturers, we have to face the challenges of the market. That’s why we are strengthening our own competitive situation and, by combining our extensive expertise in profile technology, we will tap further market potential and opportunities for turnover," Veka Group CEO Andreas Hartleif said in a statement.

The acquisition also contributes to consolidation of the market place, he added. Internationally, Veka sells PVC-U structural elements to more than 2,200 specialized companies.

The family-owned business currently employs more than 3,600 people at 25 subsidiaries on three continents around the world. The North American operations are known as Veka Inc. and are based in Fombell, Penn.

Joe Peilert, president and CEO of Veka Inc., sees immediate advantages coming out of the Gealan acquisition.
"It means that we will soon benefit from the rich, comprehensive experience and profound expertise of both companies in the areas of extrusion, profile technology, and market development," Peilert said in a statement.

As MRC wrote before, Veka Recycling is investing almost Euro 1.2 million (USD1.6 million) in its south-east England facility to produce high-quality recyclate suitable for PVC extruded products. A new compounding line will enable the company to supply European markets with PVC pellets derived from post-industrial or post-consumer window frame material.

VEKA is a world leader in PVC extrusion technology with 18 plants worldwide, and is headquartered in Sendenhorst, Germany. VEKA Inc., based in Fombell, Pennsylvania, is corporate headquarters for North America and heads up three manufacturing facilities as well as various product divisions.
MRC

MOSCOW (MRC) - Royal Dutch Shell will cut spending in its American exploration and production business by a fifth and could sell more of its shale assets, in another sign that oil majors are struggling to make profits in the booming sector, said Hydrocarbonprocessing.

Oil and natural gas pumped from North American shale has boosted the fortunes of smaller energy firms, but the world's biggest oil companies, including BP and Exxon Mobil, have been slower to realize the full potential of the prolific rock.

London-based BP announced last week it was spinning off its onshore U.S. oil and gas assets into a separate business to help it improve performance.

Shell, which is already selling more than 700,000 acres of U.S. shale assets, said in a strategy update on Thursday that it would reduce spending in its American upstream business by 20% compared with last year.

"Shell's ongoing restructuring of this portfolio, could potentially lead to future asset sales and/or impairments," the company said.

In North America, the oil companies have broad exposure to profit-sapping natural gas, a commodity whose price fell to the lowest level in a decade in 2012 but has since rebounded as a cold winter depleted gas in storage.

Sentiment about the fuel's prospects is improving with the prospect of liquefied natural gas (LNG) exports and increased industrial use, but uncertainty remains.

The Anglo-Dutch oil major stuck to its 2014-15 divestment target of USD15 billion, of which USD4.5 billion has already been announced, including the USD2.6 billion sale of its Australian refinery and petrol stations business to oil trader Vitol.

Some analysts said they were disappointed the company was not stepping up its disposal programme to raise more cash.

Royal Dutch Shell plc is an Anglo-Dutch multinational oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the biggest company in the world in terms of revenue and one of the six oil and gas "supermajors". Shell is vertically integrated and is active in every area of the oil and gas industry, including exploration and production, refining, distribution and marketing, petrochemicals, power generation and trading.

MRC

MOSCOW (MRC) -- As part of its ongoing commitment to innovation, The Dow Chemical Company has announced that a new research and development (R&D) facility will be built in Lake Jackson, Texas, near its largest manufacturing site in Freeport, Texas, reported Dow in its statement.

The Texas Innovation Center will house state-of-the-art laboratory facilities and technical expertise centers to enable ongoing innovation that supports the commercialization of solutions across the various high-growth end-use markets, such as food packaging, personal care and automotive.

"The Freeport site has long been an important research and development location for Dow, providing breakthroughs that have paved the way for a more sustainable future," said Andrew N. Liveris, Dow’s chairman and chief executive officer. "The enhanced capabilities at our new location will continue the tradition of R&D expertise in Texas by delivering leading edge technology."

The new center replaces several of the company’s existing R&D facilities in Freeport, Texas. Upon completion in 2016, the Texas Innovation Center will be a global research and development hub of modern lab and office facilities for more than 2,000 people from Dow R&D, businesses, functions and manufacturing.

"In the next five years our site will see remarkable growth in manufacturing and the Texas Innovation Center will bolster our R&D operations on a long-term path forward as well," said Earl Shipp, vice president of US Gulf Coast Operations.

The Texas Operations site employs more than 12,000 people and has more than 65 manufacturing plants working together to produce 44 percent of Dow’s products sold in the United States and about 21% of the company’s products sold globally. It is also home to one of the largest R&D centers in Dow.

As MRC informed previously, in February 2014, CB&I was awarded a contract to provide pipe fabrication for Dow Chemical's US Gulf Coast investment program. Dow's investment plan includes construction of a new propylene and ethylene production unit in Texas and four new polyethylene plants in Texas and Louisiana.

The Dow Chemical Company is an American multinational chemical corporation headquartered in Midland, Michigan, United States. Dow is a large producer of plastics, including polystyrene, polyurethane, polyethylene, polypropylene (PP), and synthetic rubber. The company's more than 5,000 products are manufactured at 188 sites in 36 countries across the globe.
MRC