Indorama reports fall in third-quarter profits

MOSCOW (MRC) -- Indorama Ventures (Bangkok) reports a 48.4% fall in profits for the third quarter of 2014 compared with the third quarter of 2013, to 618 million baht (USD19 million), as per the producer's press release.

Third-quarter sales increased 7.5%, however, to baht63.60 billion. Volumes and sales increased in the third quarter as a result of recent acquisitions and the completion of the debottlenecking project in the company’s polyethylene terephthalate (PET) plant at Wloclawek Poland, at the start of the third quarter of 2014.

The acquisition of all the shares in PET resin producer Artenius TurkPET (Adana, Turkey) was completed on 2 June for about USD24 million. Artenius has a production capacity of 139,000 m.t./year. The acquisition of an 80% stake in PHP Fibers (Wuppertal, Germany) was completed on 30 April for USD87 million. PHP Fibers is Europe’s largest producer of nylon-6,6 industrial yarn for airbag application, tires, and mechanical rubber goods and is a leading producer of polyester industrial yarns.

In the first nine months of 2014, Indorama’s profits increased 35% compared with the first nine months of 2013, to baht2.66 billion, and nine-month sales increased 10.4%, to baht189.28 billion. Core Ebitda increased 32% in the first nine months, to baht14.4 billion. Higher volumes and sales during the period were mainly as a result of the recent acquisitions, debottlenecking projects, and improvement in plant utilization rate.

Indorama’s PET resins business segment reports sales of baht37.21 billion in the third quarter of 2014 compared with sales of baht38.22 billion in the year-ago quarter. The PET segment reports core Ebitda of baht1.92 billion compared with baht1.93 billion in the year-ago period.

Indorama Ventures is a leading producer in the polyester value chain in Thailand with strong global network and manufacturing across Asia, Europe and North America. Its products serve major players in diversified end use markets, including food, beverages, personal and home care, health care, automotives, textile, and industrial. The company"s main products are PTA, PET and polyester fibre, which are distributed across the world.

MRC

MOSCOW (MRC) -- Brazilian petrochemical firm Braskem says construction work on its Etileno XXI complex in Mexico is 82% complete as it targets a 4Q15 startup for the USD4.5bn project, said Bnamericas.

In its third quarter earnings report, Braskem said over 50,000t of material and 660 pieces of equipment had been delivered to the site in the Coatzacoalcos region of Veracruz state.

The announcement came as Braskem reported a Q3 profit of 230mn reais (USD91mn), down 42% year-on-year. The company said plummeting global oil prices were beginning to impact the value of its petrochemicals.

A centerpiece of Braskem's project pipeline, Etileno XXI is a joint venture with Mexican industrial conglomerate Idesa, which owns a 30% stake. The ethane cracker will have an annual polyethylene (PE) production capacity of 1.05Mt.

"The integrated project continues to advance and the completion of construction and the plant's startup are expected by end-2015," Braskem said.

Meanwhile Braskem said it was still conducting feasibility studies for the proposed Ascent complex in the US state of West Virginia. The project's blueprint includes an ethane cracker, three polyethylene plants and associated infrastructure for water treatment and energy cogeneration. The Sao Paulo-based firm said the project aimed to maximize opportunities offered by US shale gas.

"Around 50% of the feedstock supply has been guaranteed already and the project team continues to make progress on finalizing new agreements," Braskem said.

Braskem cited geopolitical tensions in major oil-producing countries and higher hydrocarbon production in the US as "main risk factors" to its future performance. The company said its immediate priorities include securing new contracts for feedstock and power supply.

Braskem is Brazilian main producer of polyethylene and polypropylene. In addition with ongoing plants located in both petrochemical complexes, in April 2008 Braskem opened a 300,000 metric ton polypropylene plant in the city of Paulinia (Sao Paulo).
MRC

MOSCOW (MRC) -- Styrolution, the global leader in the styrenics industry, has concluded the placement of a new First Lien Term Loan B of approx. EUR1.05 billion equivalent with institutional investors, reported the company on its site.

The borrowings consist of equally sized Euro and US Dollar tranches, each with a maturity of five years and priced at EURIBOR/LIBOR +550 basis points, respectively. Styrolution Group GmbH and Styrolution US Holding LLC are the borrowers. Standard & Poor's and Moody's have rated the facilities B and B2, respectively.

The loan financing is complemented by a Second Lien PIK Toggle Loan from Ineos Holdings Limited to Styrolution Holding GmbH of EUR200 million with a coupon of 9.5% cash (or, under certain specified conditions, 10.25% PIK).

The net proceeds will be used, along with the Second Lien PIK Toggle Loan proceeds and cash at hand, to finance:
the Ineos purchase price payment for BASF's 50% stake in Styrolution and the redemption of the existing 7.625% Senior Secured Notes of EUR480 million due 2016 on November 10, 2014, as well as related fees and expenses.

The acquisition is expected to close in the fourth quarter of 2014 pending regulatory approval.

As MRC wrote previously, in order to further strengthen its polystyrene (PS) business in Europe, the Middle East and Africa (EMEA), Styrolution intends to close its 80,000 tonne PS production site located in Trelleborg, Sweden.

The Styrolution Group GmbH is a global provider of styrenics , headquartered in Frankfurt am Main. The company is a joint venture between BASF (50%) and INEOS (50%), were merged into the main styrene operations of the two partners. Its main focus is on the production of monomer, polystyrene, styrenic specialties, and ABS. The company offers styrene plastics for a variety of everyday products from different industries, such as automotive, electronics, construction, household, leisure, packaging, medicine and health.
MRC

MOSCOW (MRC) -- "Neftekhimia", a joint venture between Gazprom Neft-MNPZ and SIBUR Holding) has resumed production of polypropylene (PP) after a scheduled maintenance, reported MRC analytics.

"Neftekhimia" had resumed PP production by 11 November after a scheduled turnaround. The plant was shut down for maintenance works on 9 October 2014. The plant's annual production capacity is 120,000 tonnes of polypropylene. The plant produced 87,400 tonnes of PP over the first nine months of 2014.

NPP "Neftekhimia", Ltd. was founded in 2003. The plant received the status of a joint venture of OAO "Gazprom Neft-MNPZ" and JSC "SIBUR Holding" on 1 September 2010. The plant produces polypropylene and markets it under the registered trademarks "Kaplen" and "Rispol." Tecnimont (Italy) is a general designer of the complex.
MRC

MOSCOW (MRC) -- Demand for bottle grade polycarbonate (PC) decreased from January to October 2014 by 11% year on year to 2,500 tonnes, according to MRC ScanPlast.

The main reason for weaker demand was the devaluation of the national currency. Firstly, it led to increases of domestic PC prices, as this segment is 90% dependent on imports from the Asian region. Traders and converters have been losing their margins. The rouble depreciation also resulted in a drop of buying activity in the market of finished products. Consumers are not yet ready to accept the price increase.

Thus, now we have a situation when PC supply exceeds demand. It is rather difficult to sell stocks from warehouses. Converters reported a further reduction of consumption next year if the situation with the exchange rate remains the same.

Asian PC makers made concessions to the market in this situation and reduced their export prices for the Russian market by USD150/tonne in October and November. Thus, prices of bottle grade PC granules in the eastern ports of the country were at USD2,600/tonne, excluding VAT. Despite this, domestic prices did not allow some converters to overcome the breakeven point and to continue operations.

Buyers faced a situation when in some cases prices of European material were lower than prices of Asian PC, because of the dollar strengthening in the world market. About 190 tonnes of bottle grade PC granules arrived in the Russian market from Europe at the end of the third quarter. Traders said they would not be able to sell these quantities until late 2014.

MRC