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

PE production in Russia grew by 6.1% in January-September 2015

MOSCOW (MRC) - Production of polyethylene (PE) in Russia increased by 6.1% in the first nine months of the year compared to the same period of 2014 and reached 1.165 mln tonnes, according to MRC ScanPlast.

September PE production in Russia decreased to 91,700 tonnes, compared with 124,700 tonnes in July on the back of scheduled shutdowns and technical problems at some sites. Total PE production in Russia reached about 1.165 mln tonnes in the first nine months of this year, compared with 1.099 tonnes year on year. The most significant increase in the volume of production fell to linear polyethylene.

Structure of PE production over the reported period looked as follows.

September high density polyethylene (HDPE) production in Russia decreased to 60,700 tonnes, compared with 78,000 tonnes in August 2015 because of the scheduled maintenance works at Kazanorgsintez and short shutdown at Stavrolen. Total HDPE production in Russia in the first nine months of the year reached 660,000 tonnes, up 6% year on year. Such a significant increase in production figures provided Stavrolen, thus offsetting the decrease in production volumes at Nizhnekamskneftekhim (a company in the current year significantly increased the production of linear polyethylene).

September low density polyethylene (LDPE) production in Russia decreased to 31,000 tonnes, compared with 46,700 tonnes in August on the back of scheduled shutdowns at Angarsk ZP, Kazanorgsintez and Tomskneftekhim. Total LDPE production In Russia slightly exceeded 465,100 tonnes in the first nine months of 2015, up by 1% year on year.

In September linear low density polyethylene (LLDPE) was not produced in Russia. The only producer in Russia of LLDPE - Nizhnekamskneftekhim produced it in May - July, the final figure for this kind of polyethylene in the first nine months amounted to about 40,000 tonnes. Total LLDPE production in Russia was about 16,200 tonnes in 2014.


MRC

Eni seeks JV partner to run Versalis Chemical unit

MOSCOW (MRC) -- Eni is looking for a partner to help it run its wholly-owned chemical unit Versalis, the Italian oil major's CEO said on Oct. 22, as per Midstream Business.

"We are looking for a joint venture to extract value from the business," Claudio Descalzi said on the sidelines of a conference.

A press report earlier this week said Eni was working with Barclays on a potential sale of Versalis, which may fetch as much as 1 billion euros.

As MRC informed previously, in April 2014, Eni announced that it would invest EUR125 million in its Versalis plant in Mantua to under the Group 2014-2017 four-year strategic plan. Versalis is an environmentally and economically sustainable plant which links the industrial areas in Porto Marghera, Ferrara and Ravenna via a pipeline. The planned investment will be used to optimise the plants industrial processes and produce further energy savings. Funds will also be used to expand the Group’s research and development into innovative products and technologies.

Eni is an Italian multinational oil and gas company headquartered in Rome. It has operations in in 79 countries, and is currently Italy's largest industrial company with a market capitalization of 68 billion euros (USD 90 billion), as of August 14, 2013. The Italian government owns a 30.3% golden share in the company, 3.93% held through the state Treasury and 26.37% held through the Cassa depositi e prestiti. Another 39.40% of the shares are held by BNP Paribas.
MRC

Lanxess introduced new Durethan system for high temperature stability

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

ContiTech opens rubber compounding centre in China

MOSCOW (MRC) -- The ContiTech business unit Compounding Technology has officially commissioned its new production facility for rubber compounds in Changshu, China, according to GV.

According to ContiTech, the plant has 3,000 square metres of production space and is the company’s first compounding centre for general applications other than tyres or conveyor belts outside of Europe. Until now, the company has produced rubber compounds for applications such as drive belts, hoses, and car tyres at its three plants in Germany and Hungary.

At a total of EUR 10 million, the plant is one of the biggest investments in the history of the business unit. First to start operations is a compounding line with a capacity of 10,000 t/y.

Furthermore, the company operates an extrusion line that produces one tonne of rubber compounds every hour. Internal customers are being supplied at first. ContiTech says the plant is structured in a way that will enable the company to double the site capacity in the years to come. The long-term objective is to offer the entire range of services locally. This also includes building up research and development capacity in Changshu, says the company.

As MRC informed previously, ContiTech is investing some EUR13 mln in a new plant for air-conditioning and power steering lines in the Russian city of Kaluga.
MRC