Petkim opens plastic packaging factory in Turkey

MOSCOW (MRC) -- Turkish petrochemicals major Petkim Petrokimya Holdings has staged an official opening for a new plastic packaging factory at its petrochemical complex in the western Turkish town of Aliaga, reported SeeNews with reference to the company's statement.

The factory was built in five months, Petkim said in a statement, adding that the bulk of its output will be exported.

Petkim is constantly investing in new facilities, as well as in expanding the capacity and raising the efficiency of the existing ones, its general manager Sadettin Korkut said.

Petkim has made capital expenditures of more than USD500 million (EUR370 million) since its privatisation in 2008 and plans to invest an average of USD100 million annually until 2018, Korkut added. The company targets 6.0 million tonnes of gross production annually and a 40% share in the domestic market by 2023.

As MRC informed previously, The production capacity of the Turkish Pektim Petrochemical Holding where SOCAR, Azerbaijan’s state energy company has equity participation will increase from 3.2 million tons to 3.6 million tons in 2014. An increase in production capacity will be possible thanks to the improved capacity of ethylene and purified terephthalic acid (PTA) production enterprises. In particular, the ethylene production enterprise's capacity will increase from current 520,000 tons to 587,000 tons by late 2014. The PTA production capacity will increase from 70,000 tons to 105,000 tons which will require investments worth USD25 million.

Petkim is the leading petrochemical company of Turkey. Specializing in petrochemical manufacturing, the company produces ethylene, polyethylene, polyvinyl chloride, polypropylene and other chemical building blocks for use in the manufacture of plastics, textiles, and other consumer and industrial products.

PE imports to Kazakhstan fell by 27% in H1 2014

MOSCOW (MRC) -- Imports of polyethylene (PE) into Kazakhstan fell by 27% over the first six months of 2014. Demand for high density polyethylene (HDPE) and linear low density polyethylene (LLDPE) subsided, according to MRC DataScope report.

June PE imports to Kazakhstan grew to 7,800 tonnes on the back of the seasonal factor (6,800 tonnes in May). The overall imports of ethylene polymers to the local market dropped from January to June 2014 to 42,300 tonnes versus 57,600 tonnes over the same period of 2013. Demand for HDPE and LLDPE subsided, whereas demand for low density polyethylene (LDPE), on the contrary, increased.

The structure of PE imports by grades over the stated period looks the following way.

June HDPE imports rose to 6,400 tonnes (5,500 tonnes in May) on the back of increased imports from Russia, while shipments from other countries continued to decline. Overall, HDPE imports to Kazakhstan fell over the first six months of the year to 31,500 tonnes from 48,100 tonnes over the same period of 2013. Pipes producers accounted for more than 80% of the total HDPE consumption in Kazakhstan.

Weaker demand for HDPE in the key consumption sector- pipe extrusion - was caused by three factors this year. Firstly, the end of the regime of preferential pipe grade PE imports (0% duty for importers of pipe grade HDPE was in effect up to 1 January 2014). Currently, the import duty is 9.1%, and it will be reduced to 6.5% from September 2014. Secondly, the February 20%-devaluation of the national currency, which automatically led to a proportional increase in feedstock prices. And, thirdly, a further reduction of investments into infrastructure by the state.

Last month's LDPE imports rose up to 1,300 tonnes (1,100 tonnes in May) on the back of increased supplies from Russia. The overall LDPE imports to Kazakhstan totalled about 8,900 tonnes from January to June 2014 versus 7,500 tonnes over the same period of 2013. Russian producers are the key LDPE suppliers, their share in the total imports rose to 92% this year.

June LLDPE imports fell to 173 tonnes (316 tonnes in May). The overall LLDPE imports to Kazakhstan dropped over the first six months of the year to 1,900 tonnes, down by 7% year on year. Producers from Asia and Uzbekistan are the key PE suppliers to the republic.


Nan Ya Plastics investments drive earnings of Formosa Plastics Group

MOSCOW (MRC) -- The 4 units of Formosa Plastic Group - Nan Ya, Formosa Plastics Corp., Formosa Chemicals & Fibre Corp. and Formosa Petrochemical Corp., posted TWD 54.6 billion (USD1.83 bln) in net profit for the past six month, said Plastemart.

This shows a rise of over 30% from a year earlier. Nan Ya Plastics Corp.'s investments in the memory chip industry helped drive earnings growth at four listed subsidiaries of FPG over the past six months, as per CNA.
Over the six-month period, Nan Ya recorded TWD 19.35 bln in net profit, a huge increase of 79.1% from a year earlier.

Nan Ya said that as the global dynamic random access memory (DRAM) industry benefited from a tight supply, its investments in Nanya Technology Corp., which has turned a profit, have paid off.

In the first half of the year, Formosa Plastics posted TWD 10.93 bln in net profit, up 27.1% from a year earlier, while Formosa Chemicals & Fibre's net profit fell 24.8% from a year earlier to TWD 9.16 bln. During the same period, Formosa Petrochemical registered TWD 15.19 billion in net profit, up 49.3% from a year earlier.

As MRC wrote before, Formosa Plastics Corp, the nation’s largest producer of polyvinyl chloride, said that it is considering building a factory to make 1.2 million tonnes of ethylene a year in the US state of Louisiana, using shale gas. The company did not disclose how much it might invest because it needs to conduct further studies to evaluate the project.

Formosa Petrochemical is involved primarily in the business of refining crude oil, selling refined petroleum products and producing and selling olefins (including ethylene, propylene, butadiene and BTX) from its naphtha cracking operations. Formosa Petrochemical is also the largest olefins producer in Taiwan and its olefins products are mostly sold to companies within the Formosa Group. Among the company's chemical products are paraxylene (PX), phenyl ethylene, acetone and pure terephthalic acid (PTA). The company's plastic products include acrylonitrile butadiene styrene (ABS) resins, polystyrene (PS), polypropylene (PP) and panlite (PC).

Westlake Chemical Partners LP launches initial public offering

MOSCOW (MRC) -- Westlake Chemical Partners LP (the "Partnership"), a Westlake company, has announced the commencement of its initial public offering of 11,250,000 common units representing limited partner interests in the Partnership, at an anticipated initial public offering price between USD19.00 and USD21.00 per common unit, pursuant to a registration statement on Form S-1 previously filed with the U.S. Securities and Exchange Commission (the "SEC"), as per the company's press release.

The Partnership also expects to grant the underwriters a 30-day option to purchase up to an additional 1,687,500 common units. The Partnership has been approved to list its common units on the New York Stock Exchange (NYSE) under the symbol "WLKP," subject to official notice of issuance.

The common units being offered represent an approximate 44.3% limited partner interest in the Partnership (or an approximate 47.8% limited partner interest if the underwriters exercise in full their option to purchase additional common units). Westlake Chemical Corporation and its affiliates will own the remaining approximately 55.7% limited partner interest in the Partnership (or approximately 52.2% limited partner interest if the underwriters exercise in full their option to purchase additional common units), the general partner of the Partnership and the Partnership's incentive distribution rights.

Barclays and UBS Investment Bank will act as joint book-running managers and structuring agents for the offering. BofA Merrill Lynch, Morgan Stanley and Deutsche Bank Securities will also act as joint book-running managers. Goldman, Sachs & Co., J.P. Morgan and Wells Fargo Securities will act as co-managers for the offering.

As MRC reported earlier, in early May 2014, Westlake Chemical Corporation announced that one of its wholly owned subsidiaries, Westlake Chemical Partners LP, had filed a Registration Statement on Form S-1 with the US Securities and Exchange Commission ("SEC") relating to its proposed initial public offering of common units representing limited partner interests.

Westlake Chemical Partners LP is a limited partnership formed to operate, acquire and develop ethylene production facilities and related assets. It is headquartered in Houston, Texas.

Technip sees rising cost pressures stopping some industry projects

MOSCOW (MRC) -- French company Technip, Europe’s largest oilfield-services provider by market value, has warned that energy companies are "putting pressure" on suppliers to lower costs and said profit margins may be trimmed by Russian sanctions, reported Hydrocarbonprocessing.

"There is greater uncertainty for all players," CEO Thierry Pilenko said on a conference call after the Paris-based company reported a decline in second-quarter earnings. "Some of our customers are taking a much slower and more combative approach."

Technip, which supplies equipment and builds installations for oil and natural-gas producers, had until now maintained orders were strong even as some companies reduced investment and pledged to lower costs.

With Total, Royal Dutch Shell and Chevron among Technip’s clients that plan to rein in spending, Pilenko acknowledged contracts could be fewer and harder to win.

As MRC informed before, in May 2014, Technip was awarded a front-end engineering design contract with Shell for work on a demonstration project in Scotland. The company will design a number of onshore elements for the Peterhead Gas Carbon Capture and Storage project in Aberdeenshire. The project is designed to capture, compress and transport 1 million tonnes of carbon dioxide per year via a pipeline to an offshore gas reservoir for storage below the North Sea.

Technip changed financial targets for this year, raising the outlook for margins in the subsea division and lowering it for the onshore-offshore section, in part due to uncertainty about how sanctions on Russian companies could affect the Yamal LNG project in Arctic waters.

Second-quarter net income declined to EUR158 million (USD213 million) from EUR162.4 million a year earlier, the company said in an earnings statement. That beat the EUR154.1 million-euro average of 15 analyst estimates compiled by Bloomberg.