Dow Chemical ponders master-limited partnership for new Texas plants

MOSCOW (MRC) -- Dow Chemical, the largest US chemical maker by sales, is considering the creation of a tax-advantaged partnership for two plants it’s building in Texas to boost returns for investors, reported Hydrocarbonprocessing.

The plants in Freeport, Texas, are slated to produce ethylene and propylene, two petrochemicals that are used to make plastics. They could fit into a master-limited partnership structure, partly because the plants haven't been depreciated, said Howard Ungerleider, Dow’s executive vice president for advanced materials.

"We are actively studying it," he said at Goldman Sachs Group's Basic Materials Conference in New York. "There are issues to be worked through."

The partnerships, also known as MLPs, are common in the pipeline industry and have become increasingly popular with investors as the companies generally don't pay income taxes.

Dow is divesting as much as USD6 billion of low-return assets as Dan Loeb, the activist investor who leads Third Point, pressures the Midland, Michigan-based company to improve earnings from commodity chemicals. The jump in Westlake Chemical shares after its April 29 announcement of a planned ethylene MLP "gives us pause," Ungerleider said.

Interest rates will probably rise, depressing the value of an MLP structure, he said. Having multiple ventures also increases the complexity of strategic decisions, he said.

Air Products, the world’s largest hydrogen producer, probably won't pursue an MLP because it wouldn't add much value for shareholders, chief financial officer Michael Scott Crocco said in a separate session at the conference.

As MRC informed previously, as part of its ongoing commitment to innovation, The Dow Chemical Company announced in March 2014 that a new research and development (R&D) facility will be built in Lake Jackson, Texas, near its largest manufacturing site in Freeport, Texas. 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 Dow Chemical Company is an American multinational chemical corporation headquartered in Midland, Michigan, United States. Dow is a large producer of plastics, including polystyrene (PS), polyurethane, polyethylene (PE), polypropylene (PP), and synthetic rubber. In 2012, Dow had annual sales of approximately USD57 billion. The сompanyэs more than 5,000 products are manufactured at 188 sites in 36 countries across the globe.
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MOSCOW (MRC) -- PolyOne Corporation, a premier provider of specialized polymer materials, services and solutions, has announced two executive appointments where Mark Crist will become senior vice president, president of Distribution, and Kurt Schuering will serve as vice president, global key account management, as per the company's press release.

Mr. Crist will be responsible for driving profitable growth and customer service for PolyOne's USD1.1 billion distribution business. PolyOne distributes a diverse portfolio of engineering and commodity grade polymers on behalf of its world-class suppliers in North America, Asia and Central America.

Mr. Crist joined PolyOne in 2008 as a global commercial director. He was later promoted to vice president, key account management, where he was responsible for building and growing PolyOne's largest multinational customer relationships. He also served as vice president of Asia, while based in Shanghai, where he led PolyOne's growth in the region to unprecedented levels in 2013. Prior to PolyOne, Mr. Crist spent 20 years with Nalco Chemical Company, serving in various sales, marketing and general manager roles focused on specialty markets in Europe and North America. He earned a bachelor's degree in industrial management from Purdue University in Lafayette, Indiana.

As MRC wrote previously, PolyOne Corporation announced in March that its Board of Directors had appointed Robert M. Patterson, president and chief executive officer, effective May 15, 2014. Mr. Patterson, 41, succeeds Stephen D. Newlin, 61, who will retire as president and CEO and remain executive chairman of the PolyOne Board of Directors. Mr. Patterson has also been nominated for election to the PolyOne Board of Directors at the 2014 Annual Meeting of Shareholders.

PolyOne Corporation, with 2013 revenues of USD3.8 billion, is a global provider of specialized polymer materials, services, and solutions. PolyOne is a provider of specialized polymer materials, services and solutions with operations in specialty polymer formulations, color and additive systems, polymer distribution and specialty vinyl resins.
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MOSCOW (MRC) - A Koch Industries Inc unit will take PetroLogistics LP (PDH.N) private in a deal worth USD2.1 billion, including debt, gaining control of a plant that can convert cheap U.S. shale gas into propylene, a key petrochemical used to make plastics, said Reuters.

PetroLogistics' propane dehydrogenation plant produces about 1.45 billion pounds of propylene per year. Propylene is also used to make paints, coatings, building materials, clothing, automotive parts and packaging, among other things.

The unit, Flint Hills Resources LLC, a refining, chemicals and biofuels company, will also buy all of the membership interests in PetroLogistics general partner PetroLogistics GP LLC.

A number of companies, including Dow Chemical Co (DOW.N), Enterprise Products Partners LP and BASF SE, are building plants in the United States to convert natural gas into propylene. Natural gas is about three times cheaper in the United States than in Europe, thanks to the shale boom, giving U.S. petrochemical companies a significant advantage over their oil-dependent European rivals. Propylene has traditionally been made from the oil distillate naphtha, but cheap shale is gaining importance as a feedstock.

Flint Hills Resources LLC operates as a refining, chemicals, and bio-fuels company. The company offers petrochemicals products such as ethanol, aromatics, intermediates and EPS, olefins, and polymers. The company is headquartered in Wichita, Kansas. Flint Hills Resources LLC operates as a subsidiary of Koch Industries, Inc. Koch, with annual revenue of USD115 billion, was the second-largest private company in the United States in 2013, according to Forbes.

PetroLogistics LP is a major producer of propylene and is the only independent dedicated propylene producer in the United States. PetroLogistics LP owns and operates the world’s largest propane dehydrogenation facility, based on production capacity, located in the vicinity of the Houston Ship Channel.
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MOSCOW (MRC) -- Royal Building Products will invest USD24 million to expand PVC pipe production in Newbern, Tenn, said Plasticsnews.

Royal and Tennessee officials announced the project May 22. Royal recently converted the Newbern operation to PVC pipe from vinyl siding production. The boost in pipe production will create 85 new jobs in Dyer County.

"The Newbern location provided our PVC pipe business with an opportunity to establish a manufacturing presence near growth markets in the southern United States and take advantage of western Tennessee’s strength as a transportation and distribution center," noted Paul Czachor, Royal’s vice president and general manager of pipe and fittings, in a news release.

Czachor said Newbern employees have experience with building products and vinyl extrusion which will help smooth the way for transition to extruding PVC pipe.

Royal’s other PVC pipe plants are in Woodbridge, Ontario, where it is headquartered, and in Abbottsford, British Columbia. The Abbotsford location’s involvement with pipe dates back to 1913, when it began making clay pipe.
Royal did not disclose where it relocated vinyl profile production from Newbern. In 2011 it expanded its profile product offerings and production capacity by acquiring the Columbus, Ohio, siding business of Crane Group.
Tennessee Economic and Community Development, the Tennessee Valley Authority, the city of Newbern and Dyer County are assisting Royal’s pipe project. Royal is a division of Axiall Corp. of Atlanta.

As MRC wrote before, Axiall Corp. is considering building a USD3 billion ethane cracker and chemical plant somewhere in Louisiana. The Atlanta-based chemical manufacturer says it could make a decision sometime early next year. Axiall would invest USD1 billion of its own money, while an unnamed partner would put in USD2 billion.

Axiall Corporation is a leading integrated chemicals and building products company. It is an international manufacturer of chlor-alkali and derivatives, chlorovinyls and aromatics products including chlorine, caustic soda, vinyl chloride monomer, chlorinated solvents, calcium hypochlorite, ethylene dichloride, muriatic acid, phosgene derivatives, polyvinyl chloride, vinyl compounds, acetone, cumene and phenol. It also manufactures vinyl-based building and home improvement products, including window and door profiles, mouldings, siding, pipe and pipe fittings, and decking. Axiall, headquartered in Atlanta, Georgia, has manufacturing facilities located throughout North America and in Asia to provide industry-leading materials and services to customers.
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MOSCOW (MRC) -- Evonik Industries has inaugurated a new building to house precipitated silica applied technology for tire and rubber at its Wesseling site near Cologne, reported the company on its site.

In so doing, the leading specialty chemicals company has added applied technology to the world’s largest facility for precipitated silica production and research. Evonik invested an amount in the low tens of millions of euros in the new building.

A combination of precipitated silica and sulfur-functional silanes produced for the tire and rubber industry enables tire manufactures to reduce their products’ rolling resistance and improve their wet-grip. This can reduce fuel consumption by up to 8% in comparison to conventional tires.

Evonik supplies precipitated silica to the tire industry globally from Wesseling where silica production and research were previously located. Thus it made sense to re-locate application engineering to the Wesseling site.

Innovative products for the rubber industry are being developed and tested in the new 2,500 square meter building. Strict quality control, which is standardized worldwide, is applied to several thousand mixtures annually.

To be closer to its worldwide customers and provide them with first-class products, Evonik has undertaken a robust worldwide capacity expansion. In March 2014, it opened an expanded precipitated silica facility in Thailand; in May 2013, it initiated planning for a new facility in Brazil; and it will begin operations later this year in an expanded facility in Chester, Pennsylvania, USA.

As MRC wrote previously, Evonik’s global silica production capacity will increase by approximately 30% over its 2010 capacity by the end of 2014.

Moreover, as part of the company's strategic portfolio expansion, Evonik has recently announced its plans to launch a new generation of PVC plasticizers. Apart from its product lines expansion, the company will also develop a new brand of products. Thus, Evonik is broadening its range of sustainable plasticizers.

Evonik, the creative industrial group from Germany, is one of the world leaders in specialty chemicals. Its activities focus on the key megatrends health, nutrition, resource efficiency and globalization. Evonik benefits specifically from its innovative prowess and integrated technology platforms. Evonik is active in over 100 countries around the world. In fiscal 2013 more than 33,500 employees generated sales of around EUR12.7 billion and an operating profit (adjusted EBITDA) of about EUR2.0 billion.
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