The European Commission is allowing Kem One to continue its investments

MOSCOW (MRC) -- By agreeing to the support measures from the French government, the European Commission is allowing Kem One to continue the implementation of its investment plan, as per the company's press release.

Ten months after an in-depth investigation was launched, the European Commission recently approved the support measures from the French government as part of the recovery plan financing for Kem One. These measures consist of:

- a loan from the French Economic and Social Development Fund (Fonds de developpement economique et social, FDES), totalling 30 million euros;
- a reimbursable advance payment of 80 million euros, to be used as partial financing for the Lavera electrolysis conversion;
- and an investment subsidy of 15 million euros.

In recent months, the Kem One management, with the support of the government and State services, has made every possible effort to show the relevance of its industrial project and the importance of preserving the 3rd-largest European producer of PVC in the competitive landscape.

"This is excellent news", said a delighted Alain de Krassny, President of KEM ONE."I never doubted the strengths of our case. Moreover, the marked improvement of our financial results shows that we are on the right track and that all efforts undertaken within the company are starting to bear fruit."

While waiting for the green light from Brussels, Kem One has not delayed in making investments on its own. The company has received new boilers for generating steam at its Balan site (Ain,France) and has initiated the Lavera (Bouches-du-Rhone,France) electrolysis conversion project, in which it has already invested 45 million euros. The availability of loans will allow Kem One to continue its investment plan in full confidence.

This decision comes at the right time, as Alain de Krassny and OpenGate Capital have just finalised an agreement with Gary Klesch, a former shareholder in the company, for the sale of the chain's downstream activities (PVC compounds, profiles and tubes).

As MRC reported earlier, in late July 2015, The European Commission approved the acquisition of PVC compounds and profiles producer Kem One Innovative Vinyls, based in France, by OpenGate Capital Group Europe, the Luxembourg-based offshoot of US private equity group OpenGate Capital.

In 2013, previous owner Klesch Group placed Kem One’s upstream business, Kem One SAS, which includes PVC polymer plants in France and Spain, into receivership. This business was acquired by OpenGate in early 2014 in partnership with Alain de Krassny, president of Vienna-based Donau Chemie, who became president of Kem One. OpenGate and Krassny also had the option to acquire the downstream business, which was given clearance by the European Commission in an announcement on 7 July.

Kem One, a fully integrated vinyl production company, was established mid-2012 following the acquisition of Arkema's vinyl products division by the Klesch Group. The company employs 2,600 people at 22 manufacturing sites, primarily in Europe but also in Asia and North America. Europe’s third-largest producer of PVC with revenues in excess of one billion euros, Kem One continues to grow and build on its numerous strengths with a view to becoming market leader for integrated vinyl solutions.
MRC

Growth in global automotive plastic market to be propelled by demand from Asia Pasific

MOSCOW (MRC) -- Asia Pacific is the largest market for automotive plastic followed by Europe and North America. Higher concentrations of passenger vehicle manufacturing industries and growing demand of passenger cars, three-wheeler and two wheelers in China and some of the other countries of Asia Pacific such as India and Japan are contributing to the industry growth, reported Plastemart.

Automotive Plastic holds the key to a host of safety and performance advancement in modern cars, minivan, SUVs and even HMVs. Automotive plastics are generally durable, strong, recyclable, scratch resistance, resistance to abrasion, improve vibration and noise control and allows design, molding and integration of components in automobiles. In modern cars plastic constitute almost 50% of the total volume of the car but contribute only 10% of the total weight of cars which makes cars lighter and increase the overall fuel efficiency. Modern automotive plastic however have much broader application including passenger safety, passenger convenience and overall manufacturing cost reduction. Automotive plastic are used in bumpers seats, dashboard, fuel systems, body panels, under-bonnet components, interior trim, electrical components, exterior trim, lighting, upholstery and liquid reservoirs.

Further, the developments in the field of tough and durable automotive plastic are expected to increase use of plastic in modern cars. As for interiors, plastics have proven to be a great material for making comfortable, durable and aesthetically gratifying interior components.

Asia Pacific is the largest market for automotive plastic followed by Europe and North America. Germany and Italy are the leading manufacturers of passenger vehicle in Europe whereas USA accounts for single largest market in North America.

The key drivers of automotive plastics markets are potential of automotive plastic in mass reduction of fuel consumption by reducing the overall weight of the vehicle, increasing prices of iron and steels and improved strength and durability of modern automotive plastic.

The major factors restraining the growth of market are high material cost and increasing investment in plastics-alternative material research (such as carbon fibers) especially by automobile companies. The opportunities for automotive plastic is cited in the development of new materials such as polymethyl methacrylate (PMMA), Lighted PP, blended thermoplastic materials, biodegradable plastics and reinforced composites such as "GB 266 WG", a hard, light material with perfect heat resistance and mechanical properties, suitable for automotive parts used in high stress areas.

As MRC wrote before, as per Transparency Market Research, growing demand from automotive and electronics is expected to boost growth in the global plastics market. Thus, demand is expected to rise exponentially in Latin America, due to this region’s flourishing automobile industry. Moreover, the demand for molded plastics is currently high in Asia Pacific, which is one of leading regions for automotive manufacturing at present, with a 35% share in 2012.
MRC

Global wood-plastic composites market anticipated to reach USD5.39 bln in 2019

MOSCOW (MRC) -- The global wood-plastic composites market was valued at USD2.64 bln in 2012 and is anticipated to reach USD5.39 bln in 2019, expanding at a CAGR of 10.8% between 2013 and 2019, as per Plastemart with reference to Transparency Market Research.

Increasing demand for wood-plastic composites in the manufacture of building & construction products is estimated to boost the overall wood-plastic composites market over the next few years. Additionally, rising demand for wood-plastic composites to manufacture several interior components of automobiles is projected to fuel market growth. Wood-plastic composites help in reduction of the overall weight of the vehicle and in turn enhance its fuel efficiency. Furthermore, implementation of stringent environmental regulations restricting the use of 100% plastic or wood is expected to boost the demand for global wood-plastic composites. However, the development of other natural fiber composites such as straw fiber, fruit fiber, leaf fiber and seed fiber is likely to hamper the overall growth of wood-plastic composites market in the near future.

Polyethylene wood-plastic composites dominated the global wood-plastic composites market in 2012. The major application of polyethylene wood-plastic composites is in building & construction industry. Polyvinyl chloride wood-plastic composite is expected to be the fastest growing product segment of the market during the forecast period owing to its growing application in window and decking applications.

Building & construction was the largest application segment of the wood-plastic composites and accounted for over 70% of the total volume demand in 2012. Exterior building & construction products manufactured using wood-plastic composites offer high resistance to staining, fading and scratching. Additionally, automotives is expected to be the fastest growing application of the market owing to the increasing substitution of conventional materials such as metals by wood-plastic composites.

North America was the largest market for wood-plastic composites in 2012 and the trend is expected to continue into the forecast period. However, Asia Pacific is anticipated to witness the fastest growth in the market over the forecast period. The Asia Pacific wood-plastic composites market is expected to grow at a CAGR of over 10% between 2013 and 2019. China plays a key role in driving Asia Pacific market due to huge production capacities for wood-plastic composites products.
MRC

Jurong Aromatics hopes to restart operations by negotiating debt deals

MOSCOW (MRC) -- Jurong Aromatics Corp., operator of one of the world’s largest petrochemical plants, can't service its interest payments and is negotiating a debt restructuring with bankers amid a plunge in oil prices, people familiar with the matter said, according to Hydrocarbonprocessing.

Operations at the USD2.4 billion plant have been stalled since December as the Singapore-based group remains locked in talks with lenders including BNP Paribas and Standard Chartered, as well as suppliers Glencore, BP and SK Energy, the people said, asking not to be identified because the details are private.

Production began in September last year, according to Jurong Aromatics’s website, and the plant was targeting to produce 1.5 million tpy of aromatics and 2.5 million tpy of transportation fuels.

Singapore’s national plan to leverage upon its geographical position and become a regional refining hub has been dented by the recent falls in commodity prices. From the establishment in 2001 of tax breaks for trading companies to the hollowing of part of the island to store oil, the country has worked to become one of the world’s biggest energy hubs.

Jurong Aromatics had USD1.53 billion in liabilities and USD68.7 million of accumulated losses as at the end of 2013, according to the company’s latest available financial records. BP, Glencore, SK Energy have secured claims against the firm, while BNP Paribas led a USD1.73 billion loan facility in 2011 that has yet to be repaid, the records show.

As MRC wrote previously, in mid-December 2014, Jurong Aromatics Corp shut its aromatics plant in Singapore for around 30-45 days. Located in Jurong Island, Singapore, the plant has a PX production capacity of 800,000 mt/year, benzene production capacity of 400,000 mt/year and OX production capacity of 200,000 mt/year.
MRC

Chemours to cut titanium dioxide capacity, close Delaware plant

MOSCOW (MRC) -- Chemours Co., the performance-chemicals company spun off from DuPont Co. in July, said Thursday that it will close its titanium dioxide plant in Delaware as it struggles with weak titanium dioxide pricing, as per the company's press release.

The Edge Moor plant, which makes titanium dioxide for the paper industry, has 200 employees and 130 contractors. Chemours said it would redeploy employees where possible.

Chemours said it would also shut down a titanium dioxide line at its plant in New Johnsonville, Tenn. Together, the moves will cut its titanium dioxide capacity by 150,000 metric tonnes.

Chemours expects the closures to reduce annual costs by USD45 million. The company will book USD110 million in charges in the third quarter related to the closures, with another USD75 million to USD85 million in restructuring and severance charges over the next few years.

The announcement comes two weeks after Chemours announced plans to cut USD350 million in costs by 2017 and review options for its chemical solutions business.

Chemours's products are used in things like plastics, coatings and air conditioning. Its brands include Teflon, Ti- Pure and Krytox. The company has struggled lately with weak titanium dioxide pricing and currency headwinds.

As MRC informed before, DuPont has announced that the US Securities and Exchange Commission has declared effective the Registration Statement on Form 10 of The Chemours Company. The Registration Statement on Form 10 includes information regarding the business and spin-off of Chemours, which is expected to be completed on July 1, 2015. In addition, on June 12, 2015, the New York Stock Exchange authorized Chemours for listing on the exchange, with "regular way" trading to commence on July 1, 2015.

DuPont is an American chemical company that was founded in July, 1802. The company manufactures a wide range of chemical products, leading extensive innovative research in this field. The company is the inventor of many unique plastics and other materials, including neoprene, nylon, Teflon, Kevlar, Mylar, Tyvek, etc. DuPont was the developer and main producer of Freon used in the production of refrigeration equipment.
MRC