Dow to optimize its ownership in Kuwaiti JV, expands relationship with Greater EQUATE on US Gulf Coast

MOSCOW (MRC) -- The Dow Chemical Company has announced ist intention to restructure its participation in its group of Kuwaiti Joint Ventures with the objective of optimizing its investment and expanding its relationship with Greater EQUATE on the US Gulf Coast, reported Dow on its site.

This announcement aligns with Dow’s prior stated commitments to optimize its investments in certain joint ventures.

The optimization is expected to occur in two phases. Under the first phase, EQUATE would acquire MEGlobal for a total equity consideration of USD3.2 billion. The transaction will result in Dow receiving USD1.5 billion in pre-tax proceeds. Following completion of this acquisition, which is expected to close by year-end 2015, Dow will retain a 42.5% ownership stake in MEGlobal through its ownership of Greater EQUATE. This acquisition is also expected to drive efficiencies and cost savings due to existing synergies between MEGlobal and EQUATE.

In the second phase, Dow and PIC have agreed that Dow will further reduce its overall ownership interest in Greater EQUATE. The target to complete this second phase of the transaction is mid-2016.

In a related move, MEGlobal will build an MEG plant on the US Gulf Coast - enabling MEGlobal and its parent companies to enjoy growth in a highly strategic region of the world and drive significant expansion of MEGlobal’s geographic footprint and capacity. Final location of the asset is contingent upon pending incentives.

"This announcement demonstrates Dow’s commitment to evaluate our joint venture portfolio to unlock value for shareholders and simultaneously expand our relationship with a key strategic partner," said Andrew N. Liveris, Dow’s chairman and chief executive officer. "This transaction allows Dow to maximize shareholder value, while maintaining our commitment to these industry-leading joint ventures."

MEGlobal is a world leader in the manufacture and marketing of monoethylene glycol and diethylene glycol (EG), and is headquartered in Dubai, UAE. Established in July 2004, MEGlobal currently markets over 2.5 million metric tons of EG per year globally. EG is used as a raw material in the manufacture of polyester fibers (clothing and other textiles), polyethylene terephthalate (PET) resins, antifreeze formulations and other industrial products. MEGlobal is a joint venture between Dow and Petrochemical Industries Company (PIC) of Kuwait.

Established in 1995, EQUATE is the operator of an integrated world-scale manufacturing facility producing more than 5 million tons annually of high-quality petrochemical products, including polyethylene, ethylene, and EG, that are marketed throughout the Middle East, Asia, Africa and Europe. Formed in 2004, The Kuwait Olefins Company (TKOC) is an international joint venture among Dow, Petrochemical Industries Company (PIC), Boubyan Petrochemical Company (BPC) and Qurain Petrochemical Industries Company (QPIC). EQUATE is the single operator of Greater EQUATE, which includes TKOC, The Kuwait Styrene Company (TKSC), and Kuwait Paraxylene Production Company (KPPC) under one fully integrated operational umbrella at Kuwait’s Shuaiba Industrial Area.

These transactions are subject to negotiation of definitive agreements and satisfaction of certain conditions, including obtaining and maintaining of certain customary regulatory approvals.

As MRC wrote before, Dow Chemical and Olin Corporation completed their chlor-alkali, chlorinated organics and epoxy asset merger at the beginning of the third quarter and appointed new executives to the combined company that will operate under the Olin umbrella.

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) -- Specialty chemicals company Lanxess has developed a further high-tech heat stabilizing system for Durethan polyamides - XTS3 (Xtreme Temperature Stabilization), said the producer on its site.

It is aimed primarily at applications in the electrical and electronics sectors and under the hood, particularly in the oil circulation system.

As with the XTS1 system already launched on the market by Lanxess, it raises the continuous service temperatures that polyamides 6 and 66 can withstand by around 60 C to approximately 200 C. Yet its heat stabilization properties are based not on an inorganic but on an organic additive system that is metal- and halide-free.

"The material grades of Durethan incorporating this stabilizer system are ideal for manufacturing plastic parts that are subjected to high thermal loads and come into direct contact with metal components. The metal- and salt-free stabilization ensures there is no contact corrosion," explains Thomas Linder, expert in Durethan product and applications development at Lanxess High Performance Materials business unit.

The first materials with the new stabilization are two polyamide 6 and 66 grades reinforced with 30 percent short glass fibers that will be marketed in the future under the names Durethan BKV 30 XTS3 and AKV 30 XTS3. Potential applications in the engine compartment include oil filter housings, oil pans, housings of transmission control systems and sensors that come into contact with oil, while those in the electrical/electronics sectors include plug connectors, plug strips and housing parts.

The two new polyamides are easy to process in a single robust production process. The processing range is comparatively wide, with hardly any susceptibility to moisture, and is similar to that of established standard Durethan grades. The high flowability of the two polyamides deserves special notice. "It opens up greater processing flexibility for injection molders. For example, production can be carried out at lower temperatures and thus cycle times and energy costs can be cut. Alternatively, with the same injection pressures, molders can achieve longer flow paths compared to similar standard polyamides, which enables the use of simpler molds, for instance," explains Linder.

We remind that, as MRC reported earlier, Saudi Arabia's state oil company is taking a 50%-stake in the synthetic rubber business of German chemicals groups Lanxess in a deal that values the entire unit at EUR2.75bn, including debt.

Lanxess is a leading specialty chemicals company with sales of EUR 8.0 billion in 2014 and about 16,600 employees in 29 countries. The company is currently represented at 52 production sites worldwide. The core business of Lanxess is the development, manufacturing and marketing of plastics, rubber, intermediates and specialty chemicals.
MRC

MOSCOW (MRC) -- Construction is nearly complete on a USD4.5 billion petrochemical complex in the Mexican Gulf coast state of Veracruz that will provide big benefits in terms of import substitution and be the largest of its kind in Latin America, said Theapricity.

Etileno XXI is projected to produce around 750,000 tons of high-density polyethylene and 350,000 tons of low-density polyethylene annually starting in December, output that will serve to replace "70 percent of Mexico's polyethylene imports," Eduardo Lima de Rozendo, the top executive of the Odebrecht-led joint venture company building the complex, told EFE in an interview.

Lima de Rozendo, the Mexican representative of Brazil-based Odebrecht Engenharia e Construcao Internacional S.A., said the complex would have the capacity to process 66,000 barrels per day of ethane, which will be purchased from Mexican state-owned oil company Petroleos Mexicanos.

The complex near the port city of Coatzacoalcos will use that raw material to produce an annual total of nearly 1.1 million tons of polyethylene, used to make products such as plastic food containers, detergents, shampoos, bags, pipes, baby bottles, toys, diapers and even medical prosthetics.

Mexico was chosen as the site of the project because its Atlantic and Pacific coasts make it a "strategic location" and due to the trade treaties it has signed, the executive said.

A total of 26,000 workers have been involved in the construction stage, which kicked off in 2011. The complex currently occupies an area of nearly 900,000 sq. meters (220 acres), while an additional 300,000 sq. meters were used to store materials.

More than 330,000 cubic meters of concrete, four times the amount needed to build Mexico City's Aztec Stadium, have gone into its construction.

Enough steel to build four Eiffel towers was used, while materials and equipment from India, Germany, Italy, South Korea, Japan, the United States and Brazil entered the country via seven Mexican ports, Lima de Rozendo said.

Engineering, procurement and construction are the responsibility of the Etileno XXI joint venture company, which is led by Brazil-based Odebrecht Engenharia e Construcao Internacional S.A. and also includes ICA Fluor, the industrial engineering partnership between the Texas-based Fluor Corporation and Mexico's Empresas ICA; and Italy's Technip.

The complex will be operated by Braskem-Idesa, a joint venture between Braskem (the petrochemical arm of Brazil's Odebrecht Group and Latin America's largest producer of thermoplastic resins) and Grupo Idesa, a leading Mexican petrochemical company.

As MRC informed earlier, Brazilian petrochemical producer Braskem has lifted the investment forecast for its flagship Etileno XXI complex in Mexico by 13% amid rising construction costs. The overall outlay for the project in the Coatzacoalcos region of Veracruz state has been revised to USD5.2bn

MRC

MOSCOW (MRC) -- PTT Global Chemical (PTTGC) is in plans to resume operations at its No.2 aromatics complex following a prolonged shutdown, as per Apic-online.

A Polymerupdate source in Thailand informed that the complex was shut along with an upstream reformer and condensate splitter on July 29, 2015. As per earlier schedule, it was likely to remain off-stream for around 45 days. The plant is now scheduled to restart in early November 2015.

Located at Rayong in Thailand, the complex has a PX capacity of 655,000 mt/year and benzene capacity of 355,000 mt/year.

As MRC informed before, PTT Global Chemical PCL shut down for maintenance its olefins plant I-4/1 for 21 days from March 29, ahead of schedule. The shutdown, earlier planned for August, which involves cleaning up quench oil tower, will allow the plant to boost its efficiency faster and suit with the market situation.

PTT Global Chemical is a leading player in the petrochemical industry and owns several petrochemical facilities with a combined capacity of 8.45 million tonnes a year.
MRC

MOSCOW (MRC) -- Ube Industries will ramp up production of a chemical used in synthetic leather and other applications in response to demand from China and Southeast Asia, starting up a new plant this month in Thailand, said Nikkei Asian Review.

The Japanese chemical company plans to boost its production capacity for polycarbonate diol, for which it controls some 60% of the global market, to 16,000 tons a year in fiscal 2018. When used in car seats, synthetic leather made with polycarbonate diol is scratch-resistant and retains gloss well, according to the company.

Ube now churns out roughly 8,000 tons of the material a year in Japan and Spain. The plant opening in Thailand has a capacity of 3,000 tons. The company will spend nearly 1 billion yen (USD8.33 million) more to expand the facility, doubling its capacity to 6,000 tons a year by fiscal 2018. It plans to ship the chemical to autoparts makers in China and elsewhere. Efficiency at the Spanish factory will be boosted as well.

Ube aims to double polycarbonate diol sales from fiscal 2014 levels to about 8 billion yen by fiscal 2018.

As it was announced earlier, Ube Industries, Ltd. would expand its production capacity for lithium-ion battery separators by rebuilding existing facilities at its Ube Chemical Factory (Ube City, Yamaguchi Prefecture) while also establishing new production facilities for separators at Sakai Factory (Sakai City, Osaka Prefecture). The Company is taking these actions in response to growing demand for separators for automotive-use lithium-ion batteries.
MRC