PET imports in Russia increased by 14% in January-November 2014

MOSCOW (MRC) -- November imports of suspension polyvinyl chloride (SPVC) into Russia fell by almost four times from October. The overall imports of polymer decreased over the first eleven months of 2014 by 19% year on year, according to MRC DataScope report.

Imports of suspension PVC to the Russian market decreased almost four times from October (33,400 tonnes) on the back of seasonal factors and the rouble devaluation and totalled 8,700 tonnes. The overall SPVC imports to Russia fell to 278,700 tonnes from January to November 2014, while during the same period of 2013 this figure was 342,200 tonnes. Only Chinese polyvinyl chloride (PVC) producers managed to increase their sales of resin to Russia by 35% this year because of low export prices, whereas imports from other markets decreased.

The geography of shipments looks the following way over the stated period.

Shipments of acetylene PVC from China slumped to 4,300 tonnes in November versus 24,700 tonnes a month earlier. The rouble devaluation was the main reason for such a major reduction in imports of Chinese resin, which made purchasing of this material unprofitable for Russian companies. The overall imports of Chinese acetylene resin to the Russian market increased to 174,000 tonnes from January to November 2014 versus 128,600 tonnes a year earlier. Stable pricing of Chinese producers for several months was the main reason for such high sales in Russia. But, given the rouble depreciation, the situation with imports from China will change dramatically in the coming months.

Last month's PVC imports from the US fell to 2,400 tonnes from 5,500 tonnes in October. The overall PVC shipments to the local market from the US decreased to 58,300 tonnes over the stated period, down by 65% year on year. With the launch of RusVinyl, the need of Russian companies to purchase North American PVC declined, and the recent month's devaluation only strengthened this factor.

PVC imports from Europe have maintained low since early 2014 because of high prices, imports fell to 1,600 tonnes in November (2,300 tonnes in October). The overall imports of European suspension PVC to the Russian market exceeded 32,600 tonnes over the first eleven months of the year versus 35,300 tonnes over the same period of 2013.

Imports are expected to go down further in December and early 2015. The following factors will influence purchasing of resin in foreign markets: seasonally weaker demand (many converters will shut down their production for maintenance in January) and devaluation (prices of imported material are by Rb9,000-10,000/tonne higher than prices of Russian resin).

MRC

MOSCOW (MRC) -- The Dow Chemical Company has announced that it has signed definitive agreements to sell its global Sodium Borohydride business to Vertellus Specialty Materials LLC (Vertellus) and its polyolefin films plant in Findlay, Ohio to Valfilm North America, Inc. (Valfilm), a wholly-owned subsidiary of VALGROUP Packaging Solutions, as per the company's press release.

Both transactions are expected to close in the first quarter of 2015 pending regulatory approvals. Combined proceeds from the transactions total approximately USD225 million.

Dow had previously announced its intent to divest its Sodium Borohydride business on Oct. 2, 2014, as part of the company’s ongoing focus to maximize value across its integrated portfolio by reducing exposure to non-strategic businesses and assets. Both transactions are part of Dow’s ongoing drive to deliver USD7 billion to 8.5 billion in gross proceeds by mid-2016.

"We continue to demonstrate our market-driven focus by selectively shifting our portfolio away from businesses that - while valuable - are no longer a strategic fit," said Andrew N. Liveris, Dow's chairman and chief executive officer. "By narrowing our market participation and preferentially funding those businesses in which we have strong competitive positions in attractive markets, we continue to increase value that can be redirected for more strategic uses, such as funding targeted growth, reducing debt and rewarding shareholders."

The sale of the Findlay plant includes assets and technology that produce a wide-variety of polyolefin films. In September 2014, Dow decided to close the facility at the end of January 2015, impacting approximately 70 employees. Valfilm intends to restart the facility in February 2015. The transaction is dependent on the final approval for all incentives by the State of Ohio.

The divestiture of Sodium Borohydride includes a manufacturing facility located in Elma, Washington, the associated business, inventory, customer contracts and lists, process technology, business know-how and certain intellectual property.

As MRC wrote before, in line with this strategy Dow plans to reduce its equity position in all of its Kuwait joint ventures, which will release capital for other strategic purposes including shareholder remuneration. The company also announced the signing of a definitive agreement for the divestiture of its ANGUS Chemical business for USD1.215 billion in net proceeds.

The Dow Chemical Company is an American multinational chemical corporation. As of 2007, it is the second-largest chemical manufacturer in the world by revenue (after BASF) and as of February 2009, the third-largest chemical company in the world by market capitalization (after BASF and DuPont). Dow is a large producer of plastics, including polystyrene, polyurethane, polyethylene, polypropylene, and synthetic rubber.
MRC

MOSCOW (MRC) -- BASF, the German chemicals giant, has entered into a definitive agreement to fully acquire the business and assets in Taiwan and Mainland China of Taiwan Sheen Soon (TWSS), a leading manufacturer for thermoplastic polyurethanes (TPU) adhesives base material, as per BASF's statement.

"The acquisition is part of our efforts to systematically pursue growth in the attractive TPU market. It is a valuable addition to our existing TPU portfolio; strengthening our manufacturing footprint in Asia," said Mr Raimar Jahn, President, Performance Materials, BASF. "As TWSS has been at the forefront of TPU adhesives innovation, the acquisition is a strategic move that will strengthen BASF’s competences in this important growth field."

The acquisition of the adhesives business of TWSS complements BASF’s established position in TPU extrusion as well as injection molding grades for various segments, such as footwear. An example of TPU application in the footwear segment is the "Energy Boost" running shoe from adidas, made with expanded TPU, which BASF markets under the name Infinergy.

With the acquisition, the company will become an integrated solution provider for TPU and TPU adhesives, which enhances its value proposition to customers.

The acquisition is expected to close in 2015, pending necessary internal and external approvals. The integration will take effect in 2015. The parties have agreed not to disclose financial details of the agreement.

We remind that, as MRC informed previously, in October 2014, BASF and Archroma agreed on the sale of BASF’s global textile chemicals business to Archroma, a supplier of specialty chemicals to the textile, paper and emulsions industries.

Taiwan Sheen Soon Co., Ltd (TWSS) is a leading TPU manufacturer, specialized in TPU for solvent based adhesive and hotmelt. Established in July 1997, TWSS’s products currently reach over 25 countries worldwide. In 2009, it won the title of the 12th Rising Star in Taiwan.

BASF is the leading chemical company. It produces a wide range of chemicals, for example solvents, amines, resins, glues, electronic-grade chemicals, industrial gases, basic petrochemicals and inorganic chemicals. The most important customers for this segment are the pharmaceutical, construction, textile and automotive industries. BASF had sales of about EUR74 billion in 2013 and over 112,000 employees as of the end of the year.
MRC

MOSCOW (MRC) -- German chemical-industry production and sales will rise 1.5% next year, matching gains in 2014, with growth from abroad outpacing domestic demand, reported Hydrocarbonprocessing with reference to the VCI trade group.

The decline of selling prices in the chemical and pharmaceutical industry is likely to slow to 0.5% in 2015 from a 1% drop this year, VCI said today at a press briefing in Frankfurt, where the group is based.

VCI, which represents more than 1,650 German chemical companies including BASF and Bayer, said it expects economic stabilization in the euro zone to continue next year. Sales in the second half of this year have turned out better than September forecasts, leading VCI to raise its revenue-growth target for 2014 back to 1.5% to a total of about 193.6 billion euros (USD237.3 billion).

The group had predicted an industry revenue gain of 1% for this year.

"On the domestic market, we can count on stable demand from our customers in the industrial network," VCI president Marijn Dekkers said. "Demand continues to rise in Europe, our most important market outside Germany. Business with the US is turning out very good."

Dekkers, who is also CEO of Bayer, called for politicians to strengthen innovation policies and ensure that energy is affordable.
MRC