Flint Hills Resources completes purchase of PetroLogistics

MOSCOW (MRC) -- Flint Hills Resources, LLC announced it is moving forward with a significant expansion of its chemicals business with the completion of its acquisition of PetroLogistics LP and its general partner, PetroLogistics GP LLC, said the producer in its press release.

The USD2.1 billion transaction is the largest in the company’s history and the first chemical asset it has acquired since purchasing Huntsman Corporation’s U.S. commodity chemical business in 2007.

The acquisition was finalized through the merger of Flint Hills Resources’ subsidiary, FHR Propylene, LLC, with and into PetroLogistics. As a result of the merger, all of PetroLogistics’ outstanding common units were converted into the right to receive USD14.00 per common unit in cash, except for those common units owned by Lindsay Goldberg LLC, York Capital Management, MLP GP’s Executive Chairman and its President and Chief Executive Officer, which were acquired for USD12.00 per common unit in cash.

Flint Hills Resources will operate PetroLogistics’ propylene facility, which is located in Houston, as part of its chemical and refining business.

PetroLogistics began operations in 2010 and has an annual production capacity of approximately 1.45 billion pounds. Propylene is one of the basic building blocks for petrochemicals and is used in the production of a variety of end uses including paints, coatings, building materials, clothing, automotive parts, packaging and a range of other consumer and industrial products.

Flint Hills Resources is a leading refining, chemicals and biofuels company with operations primarily in Texas and the Midwest. Its manufacturing capability is built upon six decades of refining experience. The company has expanded its production capacity through acquisitions and capital projects worth more than USD8.6 billion since 2002. Flint Hills Resources is a subsidiary of Koch Industries Inc., one of America’s largest private companies. As a result of the merger, PetroLogistics will cease to be a publicly traded company and its common units will no longer be traded on the New York Stock Exchange or any other securities exchange.

PetroLogistics is a major producer of propylene with operations in the vicinity of the Houston Ship Channel. The company owns and operates the only propane dehydrogenation facility in the US, and its plant is among the largest of its kind in the world. The facility employs about 100 people.

Flint Hills Resources, through its subsidiaries, is a leading refining, biofuels and chemicals company. Its subsidiaries market products such as gasoline, diesel, jet fuel, ethanol, biodiesel, olefins, polymers and intermediate chemicals, as well as base oils and asphalt.
MRC

MOSCOW (MRC) -- Kureha Corp.'s first polyvinylidene fluoride plant outside of Japan has started production.
The wholly owned subsidiary, Kureha (Changshu) Fluoropolymers Co. Ltd., held an inauguration ceremony on July 4, said Plasticsnews.

The Changshu, Jiangsu province, facility was established in response to rising demand for PVDF as binder materials for lithium-ion batteries and also as an engineering plastic for various industrial uses, Kureha said in a news release.
Kureha supplies 70% of the PVDF binder for lithium-ion batteries in the global market, according to a release by the Haiyu, Changshu government.

With 7.5 billion Japanese yen (USD73.7 million) of capital investment, construction of the 5,000-ton-per-annum plant began in June 2012 and was completed in April 2014. It has since been conducting test operation.

Combined with its Iwaki, Japan, site, Kureha has boosted its global PVDF annual production capacity to 9,000 tons. The company said it allows the delivery of a stable supply of the material to growing demand worldwide.

President and CEO Yutaka Kobayashi noted that Kureha has received highly positive feedback from customers in the Chinese lithium-ion battery industry, in particular batteries for electric vehicles. He expects to see stronger demand as the Chinese government pushes forward policies that encourage the development of alternative fuel vehicles, according to the local government.
Kureha is based in Tokyo.
MRC

MOSCOW (MRC) -- Royal DSM, the global Life Sciences and Materials Sciences company, has announced plans to invest in a new polymerization plant in North America to manufacture Akulon polyamide 6 polymer for film grades used in flexible food packaging and other segments, as per Plastemart.

Financial details of the investment will not be disclosed. With construction scheduled to start in Q4 2014 and completion targeted for mid-2016, site locations for the plant are currently being evaluated.

With these high viscosity extrusion grades of Akulon polyamide 6 (PA6), DSM provides solutions to the world’s growing food packaging industry. Roughly 1.3 billion tons of food is lost or wasted worldwide every year, mostly in industrialized countries1. In North America 40% of the food loss occurs at retail and consumer levels and this is where better packaging can make a difference. Flexible films based on Akulon polyamide 6, with its strong barrier against oxygen and aromas and exceptional mechanical strength and durability, will help to reduce food lost or wasted during its journey from farm to fork.

"This new plant is our first polymerization plant for high viscosity grades in North America for Akulon polyamide 6, besides our existing infrastructure in Europe and Asia. It thus fits perfectly with our growth strategy for Materials Sciences, as it strengthens our global position in PA6 based films. This investment is also a demonstration of DSM’s strong commitment to both our global and North American customers and supports our further growth ambitions in the Americas for engineering plastics," comments Roelof Westerbeek, President DSM Engineering Plastics.

Richard Pieters, President DSM Engineering Plastics Americas, states: "We are determined to grow further in the packaging industry where we have already proven to meet our customers’ demand with our in-depth application know how and innovative solutions. Adding locally produced Akulon polyamide 6 grades for film to our North American portfolio complements our offering and strengthens our position to optimally serve our global and local customers." He concludes: "In addition to Akulon and Novamid® 6 and 6,66 polyamides, DSM serves customers with a range of specialty high performance engineering plastics including Arnitel TPC copolyester, Arnite PBT and PET polyesters, Stanyl high performance polyamide 46 and 4T, and our bio-based engineering plastics EcoPaXX polyamide 410 and Arnitel Eco copolyester."

As MRC reported earlier, last October Royal DSM signed a partnership agreement with long fibre thermoplastic (LFT) specialist Plasticomp (Winona, Minnesota/USA) to develop bio-based LFT composite materials based on DSM’s "EcoPaXX" polyamide 4.10.

Royal DSM is a global science-based company active in health, nutrition and materials. DSM delivers innovative solutions that nourish, protect and improve performance in global markets such as food and dietary supplements, personal care, feed, pharmaceuticals, medical devices, automotive, paints, electrical and electronics, life protection, alternative energy and bio-based materials.
MRC

MOSCOW (MRC) - Calculated consumption of polyethylene terephthalate (PET) in Russia increased 346,000 tonnes in January-June 2014, up 12% compared to the first half of 2013, according to MRC ScanPlast.

PET consumption has been growing, despite the stagnation in the beer industry. According to Rosstat, beer production in Russia in the first half of the year decreased by 6.4%. The production of mineral waters in Russia increased by 4.1% over the reported period.
Besides the integration of PET bottles in the segment of dairy and dairy products continued to grow, displacing the polyethylene (PE) packaging, according to MRC analyst Igor Gryshchenko.

Growing market demand was met by increasing imports. The share of imported PET consumption increased to 37% from the total consumption in the country, up 7% compared to the first half of 2013. As it was previously reported, Russia's PET imports increased to 128,000 tonnes in the first half of the year, up 40% relative to the first half of 2013.

The total production volume of PET at the Russian facilities has not changed. Russia's PET production was 218,000 tonnes in January-June 2014. The average capacity utilisation at PET plants in Russia was 71.4%, down 12.2% compared to the same time in the previous year. Russia's PET production increased by 90,000 tonnes in 2014, reaching 610,000 tonnes/year.

Polief has installed the second production line. Despite the stable operation at Polief and steady production capacities at Senege and SIBUR-PET, production volumes at Alco-Naphtha declined.

Exports of Russian PET to foreign markets exceeded 9,000 tonnes over the reported period, down 32% year on year.

Calculated consumption of PET does not include the carryovers.

According to our estimates, the real growth rates of market capacity will be 4-5% in 2014. PET consumption in Russia will decrease in the second half of the year because of the seasonal factors and carryovers in the warehouses of the market players. Therefore, the real growth rate of consumption in the end of the year will be slightly lower.

MOSCOW (MRC) -- Negotiations over August contract prices have begun in the Russian polyvinyl chloride (PVC) market. Some Russian producers have announced price increases of Rb4,000-5,000/tonne on the back of a shortage, according to ICIS-MRC Price report.

Negotiations over contract PVC prices for August shipments already started a week earlier. Demand for suspension polyvinyl chloride (SPVC) was strong in the market because of seasonal factors. At the same time, there was virtually no alternative for many local converters to Russian material at the moment. As a result, companies were forced to accept Kaustik's (Volgograd) higher contract PVC prices for August, up by Rb4,000-5,000/tonne from July.

Tight supply was caused by a major fall in imports (47% over the first six months of 2014), as well as a series of upcoming outages for maintenance at Russian plants.

Thus, SayanskKhimplast with the capacity of 280,000 tonnes per year, Russia's largest PVC producer, plans to shut down its production for virtually a one-month turnaround in early August. The plant has not had stocks in recent months because of a slump in imports and was forced to limit its shipments to contract customers in July. August shipments of SayanskKhimplast's resin will be scarce.

Bashkir Soda Company will shut down its production (210,000 tonnes per year) for 20 days in mid-September. Kaustik (Volgograd) will stop its PVC production (90,000 tonnes per year) for two weeks in early October.

All these factors led to a shortage of material on the back of reduced purchasing in foreign markets, particularly, in the United States. At the same time, only those companies that are not able to use Chinese acetylene resin in their production (supply of resin with K = 65 is more than sufficient in the market) were experiencing tight supply in the market.

Bashkir Soda Company will begin next week negotiations over contract PVC prices for August shipments. According to unofficial information, the company also intends to raise prices further.

In general, August and September will be quite hard for Russian converters in terms of material availability and prices. US imports are unlikely to help to reduce the shortage of PVC in the market because of long delivery. The start-up a new plant RusVinyl (JV of SIBUR and Solvin) in Nizhny Novgorod region, which, according to unofficial information, is to be held in late July - early August, is unlikely to improve the situation either.
MRC