European polymer firms may face more pressure from US shale

MOSCOW (MRC) -- European polymer markets would continue to come under pressure from new capacity in the US that is being driven by shale gas and other cheap feedstock and energy regions, as per Plasticsnews.

The group, which transports dry and liquid goods and materials around the world, said its dry bulk division had been heavily impacted by what it called "weakness and volatility in the European polymer markets" and plant closures in the UK. Its overall revenue for the year to 30 September 2014 of GBP256.3 mln was 6% lower than in 2013, "mainly due to closures of manufacturing units in the European polymer industry". Interbulk said this included the closure of production plants by its customers, both on a temporary and permanent basis, which affected volumes and equipment balances. Transportation activity, as measured by moves performed, was down 11% year-on-year, and the revenue from temporary storage declined by 18%.

"The major factor was plant closures in the UK," the group said in a statement. "Export opportunities as a result reduced leading to higher empty repositioning back to the continent. It will take some time to mitigate these plant closures given the continued pressure on European polymer producers from regions with access to cheap feedstock and energy.” Interbulk said the European polymer market was still adjusting to the pressures on global flows and pricing from substantial capacity additions using cheap feedstock in the Middle East, "and the wave of new plastics capacity being constructed in the US Gulf based on ethane from shale gas will simply heighten this pressure on the European producers in the coming years".

Loek Kullberg, Interbulk’s chief executive, said the group believed there would be some expansion of European production in the PET sector, where it had a large market share, next year. "However, this market also continues to be challenged by increased imports from outside Europe coinciding with sluggish demand growth from the wider economic issues in Europe. As a result, the revenue outlook remains both uncertain and volatile depending on the success in highly competitive export markets.

As MRC wrote before, most of European chemical industry will face closure within the next 10 years, if regulators do not move to increase the region’s competitiveness, said INEOS' Chairman Jim Ratcliffe in his open letter to President of European Commission Jose Manuel Barroso. Worldwide, the chemicals sector has revenues of USD4.3 trillion. That’s bigger than the GDP of Germany and considerably bigger than the automotive sector at USD2.6 trillion. In Europe, chemicals and automotives share top billing with USD1 trillion each.
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MOSCOW (MRC) -- Impack Pratama Industri, a newly listed construction materials and plastic manufacturer, forecasts slower profit growth next year as the company gears up its expansion plans, reported GV.

"We’re targeting a range of 10 percent to 15 % growth for sales and 10 % for net income," said Lindawati, a director at Impack Pratama Industri, during a press conference in Jakarta on 17 Dec. 2014.

Impack Pratama’s profit jumped almost 60% to Rp 121 billion (USD 9.5 million) in the first half of the year, compared to Rp 76.4 billion in the same period in 2013. Revenue rose 27% to Rp 696 billion.

The company forecasts as much as Rp 290 billion in net income this year, which would reflect a 57% increase from 2013, Lindawati said, adding that revenue is forecast to grow 11% to Rp 1.38 trillion.

As MRC informed before, in late 2013, Thailand’s PTT Global Chemical (PTTGC) signed a joint-venture agreement with Indonesian state-owned energy company Pertamina to set up a petrochemical complex with an investment of around USd4-5 billion (Bt127 billion to Bt158 billion. Both companies will have a 50:50 stake in this downstream-to-upstream project. They will also sign a deal to market products from the project jointly.

Earlier last year, Pertamina signed an agreement to purchase petrochemical products from PTT Global Chemical. The agreement serves as a pre-marketing strategy for Pertamina and PTT’s joint Indonesian petrochemical business. Under the agreement, PTT will deliver at least 5,000 tonnes of polyethylene and polypropylene products each month to Pertamina for sale in Indonesia.

Jakarta-based Impack Pratama Industri first started operations in 1982, when it manufactured products ranging from roofing to building facades. The company primarily serves the domestic market. Around 30 % of its sales are from exports. The company recently went public, offering 150 million of its shares - or 31.04 % of its equity - at Rp 3,800 apiece.
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MOSCOW (MRC) -- Swedish rubber compounder Hexpol AB has made its first North American plastics acquisition, buying the plastics compounding business of RheTech Inc. for USD112 million, said the company in its press release.

RheTech is based in Whitmore Lake, Mich., operating a plant there, as well as plants in Fowlerville, Mich.; Sandusky, Ohio; and Blacksburg, S.C. The business employs 212 and posted sales of USD117 million in 2013.

The unit’s primary products are polypropylene-based compounds for the automotive market. It also ranks among North America’s 30 largest compounders and concentrate makers, according to a Plastics News estimate.
In a Dec. 22 news release, Hexpol President Georg Brunstam said RheTech "is a very good complement to our present polymer compounding business."

Malmo, Sweden-based Hexpol currently does plastic and rubber compounding in Europe and rubber compounding in North America.

In 2010, Hexpol paid more than USD200 million for Burton, Ohio-based Excel Polymers, the rubber compounding business of plastics compounding leader PolyOne Corp. Earlier this year, Hexpol added Portage Precision Polymers Inc. — a rubber compounder in Mogadore, Ohio — to its North American holdings.

Hexpol officials in 2011 told Plastics News the firm was looking for a North American plastics acquisition. The firm employs 3,700 worldwide and has annual sales of more than USD1 billion. In addition to rubber and plastics materials, Hexpol makes heat exchanger and other systems for the automotive, energy and medical industries.

Hexpol is buying RheTech from the Orley family, which founded the firm in Detroit in 1968.

As MRC wrote before, in early December Hexpol acquired the business of Portage Precision Polymers Inc. from the founder Mr. Doug Hartley and his family. Doug Hartley started Portage Precision Polymers in 2002 and Portage Precision is today a well-known Rubber Compounder in the US market.

Hexpol is a world-leading polymers group with strong global market positions in advanced polymer compounds (Compounding), gaskets for plate heat exchangers (Gaskets) and wheels made of plastic and rubber materials for forklifts and castor wheel applications (Wheels).

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MOSCOW (MRC) -- BASF’s Coatings division is now the sole supplier of automotive coatings for the new plant of the Chinese automaker Chery in Jacarei, Brazil, which started operations in August 2014, as per BASF's press release.

The shades that BASF will supply are red, white, black, silver and gray. Not only the metal, but also the plastic parts will be painted with BASF's technology. The supply agreement between BASF and Chery includes waterborne coatings and the cathodic e-coat CathoGuard 800.

Earlier this year, BASF has invested EUR2.5 million in its Demarchi Coatings site, located in the state of Sao Paulo, Brazil, to expand its capacity to service Brazil’s automotive industry with waterborne automotive coatings.

In these products, the water replaces most organic solvents, reducing emissions of VOCs (volatile organic compounds) without impairing the quality of the coating or the color tone. "This new technology developed by BASF is therefore an innovative and eco-efficient solution, which is becoming a trend in this market," said Fabian Garcia, BASF Key Account Manager for Automotive OEM Coatings in Brazil..

"For us, it is extremely important to establish a strong partnership with our customers. BASF is a company that focuses on innovation and which is always willing to seek the best solutions to suit the customer’s needs. In Chery’s case, with the first plant outside of China, we have a great opportunity to contribute with quality and sustainable products," said Garcia.

As MRC informed previously, in March 2014, BASF announced the development of a broad portfolio of raw materials for coatings destined for the paints, construction, furniture and flooring coatings as well as automotive and industrial coatings industries.

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.
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MOSCOW (MRC) -- Turkish petrochemicals major Petkim (part of SOCAR) is expected to float paraxylene (PX) tenders in January after a gap of six months, reported Apic-online with reference to a source close to the company.

The company usually sells its PX through tenders that offer the product in lots of 5,000 mt.

The company's aromatics plant in Aliaga can produce 119,000 mt/year of PX and 134,000 mt/year of benzene. The company shut the plant for a turnaround at the end of July and restarted it end-November.

Petkim is also currently in contract negotiations with PX buyers for 2015, the source said.

As MRC wrote before, in late July. Turkish petrochemicals major Petkim Petrokimya Holdings staged an official opening for a new plastic packaging factory at its petrochemical complex in the western Turkish town of Aliaga.

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.
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