BASF increases sales and earnings slightly in the second quarter

MOSCOW (MRC) -- BASF, the world's largest chemicals firm by sales, posted 2% higher operating profit for the second quarter on Friday, as demand for specialty plastics for the automotive and construction industry outweighed lower oil and gas earnings, said the producer in its press release.

The group's earnings before interest and tax (EBIT), adjusted for one-off items, rose to 2.04 billion euros (USD2.24 billion) in the quarter to June, below the average estimate of 2.12 billion euros in a Reuters poll.

Operating profit at its Functional Materials and Solutions division, which mainly serves the automotive, electrical, and construction industries, jumped 29 percent to 458 million euros, while businesses such as oil and gas, crop chemicals and less specialised chemicals saw earnings decline.

The group unveiled plans on Thursday to set up separate legal entities for its underperforming pigments businesses and look into all options.

BASF, whose products include car coatings, foam chemicals, catalytic converters and mining chemicals, confirmed its 2015 forecast for flat operating profit and slightly rising sales.

As MRC informed earlier, ASF will form a global business unit (GBU) combining all of its pigments activities effective January 2016. In the second half of 2016, BASF intends to carve out its pigments business and establish separate legal entities.

BASF is the largest diversified chemical company in the world and is headquartered in Ludwigshafen, Germany. BASF 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 over EUR74 billion in 2014 and over 113,000 employees as of the end of the year.

MRC

Reliance profit rises as oil price plunge boosts fuel margins

MOSCOW (MRC) -- Reliance Industries Ltd. (RIL), operator of the world’s biggest oil-refinery complex, said first-quarter profit rose 12% as lower crude costs boosted earnings from fuel sales, as per Hydrocarbonprocessing.

Net income increased to 63.2 billion rupees (USD987 million) in the three months ended June 30 from 56.5 billion rupees a year earlier, the Mumbai-based company said Friday in a stock exchange statement. That beat the
62.5 billion-rupee median of 16 analyst estimates compiled by Bloomberg.

The company's sales fell 32% to 658.2 billion rupees.

As MRC reported before, RIL will invest up to USD700 mln in its shale gas venture in the current fiscal and also ramp up spends under the USD13 bln capex programme in the petrochemical and refining business.

Reliance Industries is one of the world's largest producers of polymers. The company's polymer production in 2010-11 (polypropylene, polyethylene and polyvinyl chloride) made 4,094 kilo tonnes.
MRC

Uponor launches streamlining programme in its European building solutions segment

MOSCOW (MRC) -- Uponor is embarking on a streamlining programme to adjust the operations of Building Solutions – Europe to the weak demand prevailing in Europe, said Globenewswire.

The segment’s business is being hampered by a lengthy period of subdued demand in the building industry and, more recently, intensifying competition in the largest market sector, residential new builds in Germany.

The company is targeting annual savings of around EUR3 million within Building Solutions – Europe. For instance, it plans to adjust its sales network as well as to centralise and outsource some support functions to a greater extent than now. It is estimated that these initiatives will incur a total of EUR4–5 million in non-recurring costs, which will be booked during 2015.

The planning has been initiated and more details will be communicated when the plans are ready. In sum, the measures are expected to account for around 100 man years of work in Building Solutions - Europe. As a first step in June, Uponor launched a codetermination process in Sweden aimed at a reduction of 20 permanent and 20 temporary jobs.

As MRC informed earlier, Uponor is to invest in the construction of a plant for the manufacture of plastic pipes for the water supply systems of the Leningrad Region. According to a source from Uponor Rus, plant capacity will amount to 1 million m of pipes per year.

Uponor is an international market leader, striving to provide better plumbing, indoor climate and infrastructure solutions across Europe, North America and in other international markets. In close partnership with building industry professionals we are continuously seeking out innovative ways to ensure our systems offer the most efficient, reliable and high-performing solutions available to residential and commercial structures around the globe.

MRC

Repsol weighs sale of downstream assets

MOSCOW (MRC) -- Repsol is considering selling assets in countries including Venezuela as the Spanish oil company seeks to reduce debt after its USD13 billion purchase of Talisman Energy last year, said Hydrocarbonprocessing.

As part of its plan to reduce peripheral assets, Madrid-based Repsol may also look at divestments in Alaska, Bolivia and the Gulf of Mexico, two of the people said, asking not to be identified as the matter is private. No final decision has been made and the company is still deciding which units to sell, or whether to keep the assets, they said.

After acquiring Talisman in the biggest foreign acquisition by a Spanish company since 2006, Repsol CEO Josu Jon Imaz is focusing on integrating the two companies while increasing cash flow and reducing costs.

Repsol aims to sell about USD1 billion in assets over 12 months, Imaz said in December after the company announced its offer to acquire Talisman Energy. Repsol has subsequently said it is looking to sell peripheral assets.

A spokesman for Repsol declined to comment on asset sales.

Production from Talisman’s assets is expected to almost double Repsol’s output to around 700,000 bpd. To avoid growing too big as new projects come on-stream and dilute the contribution of refining, the company has said it plans to divest certain assets over time.

Repsol also needs to maintain its credit rating, which stands at BBB- at Standard & Poor’s, the lowest investment grade. The Talisman deal included almost USD5 billion of debt owed by the Canadian producer. With crude trading near USD50/bbl, the company is reluctant to sell production assets and will start with downstream assets like pipelines, CEO Imaz has said.

As MRC informed earlier, Repsol recently lifted force majeure on delivery of high-density polyethylene (HDPE) at Sines (Sines), Portugal. The company resumed production of HDPE in normal mode on July 17.

Repsol S.A is an integrated Spanish oil and gas company with operations in 28 countries. The bulk of its assets are located in Spain.

MRC

Petrobras identifies irregularities in 2009 Braskem naphtha contract

MOSCOW (MRC) -- Brazilian state-controlled oil company Petrobras said it has identified "irregularities" in the 2009 naphtha supply contract with local petrochemicals company Braskem, a sign that a widespread bribery scandal may have tainted the deal, as per Plastemart.

Petrobras said that it is "adopting the necessary administrative measures" and has also shared the results of their internal investigations with authorities. Braskem said in a statement to the local securities regulator that it is conducting its own independent investigation and does not believe that the Petrobras investigation can be considered conclusive because Braskem employees did not participate.

The two companies are currently negotiating a long-term naphtha supply contract, which needs to be signed by 31 August. In February, the two companies reached a last-minute agreement to extend its naphtha supply contract for six months. This was the third contract extension.

Braskem depends on Petrobras for 70% of its naphtha requirements and imports the rest from other suppliers. Because of logistical constraints, Braskem cannot increase its naphtha imports.

As MRC informed previously, Braskem plans to build a new polyethylene (PE) plant at its existing complex in La Porte, Texas. The new plant will manufacture ultra-high molecular weight polyethylene (UHMWPE), making it the first time for Braskem to produce UHMWPE outside of its home base in Brazil. Construction on the plant will begin in the third quarter of 2014, with completion expected in the first half of 2016.

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).
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