Sinopec in talks to buy USD3 billion chemical plant shut over safety

MOSCOW (MRC) -- Chinese state energy giant Sinopec Corp is in advanced talks on taking a controlling stake in petrochemical firm Dragon Aromatics, which operates one of the country's biggest chemical plants, said Reuters, citing three sources with knowledge of the matter.

The discussions come after the independent petrochemical firm suffered a second major fire in less than two years at the USD3 billion plant in Fujian and sources said local authorities want Sinopec to participate before allowing the plant to reopen.

The tough line shows how Beijing is putting pressure on provinces to ensure better industrial safety standards and protect the environment after a series of accidents has stirred protests from residents opposed to plants in their backyard. Dragon Aromatics, owned by Taiwan's Xianglu Group, was forced to shut the plant with a capacity to produce 1.6 million tonnes a year of paraxylene (PX), a chemical used to make polyester fiber and plastics, after the fire in April.

Sinopec could take up to 80 percent of the stake, the source added. Sinopec spokesman Lu Dapeng declined to comment.

The PX plant is located on a peninsular called Gulei, part of Zhangzhou city and a site where state firms including Sinopec and China National Offshore Oil Corporation (CNOOC) had previously tried to build petrochemical plants.

To supply the PX plant, Dragon Aromatics also runs a 100,000 barrels per day condensate splitter and a 3.2 million tonnes per year hydrocracker at the site.

Dragon Aromatics has been one of the biggest buyers of Iranian condensate, a very light crude oil, and the plant shutdown has forced the Middle Eastern producer to store more of its oil.

Dragon Aromatics, owned by Xianglu Group, a Taiwanese petrochemical group, is one of the largest independently-run PX producers in China.

Sinopec Corp. is one of the largest integrated energy and chemical companies in China. Its principal operations include the exploration and production, pipeline transportation and sale of petroleum and natural gas; the sale, storage and transportation of petroleum products, petrochemical products, coal chemical products, synthetic fibre, fertiliser and other chemical products; the import and export, including an import and export agency business, of petroleum, natural gas, petroleum products, petrochemical and chemical products, and other commodities and technologies; and research, development and application of technologies and information.
MRC

MOSCOW (MRC) -- Belgian PVC window frame maker Deceuninck posted an 18% increase in sales in the third quarter, driven by strong markets in the United States and Turkey and a rebound in construction and renovation activity in Europe, said Reuters.

Sales in its Western European unit grew by double digits, as most markets started to improve with the exception of France.

In Central Europe sales fell, because tough competition from imports into Germany and a weak Russian rouble outweighed growth in Poland and the Czech Republic.

The North American market increased sales by almost a third, as both construction and renovation markets strengthened.

Sales in Turkey and emerging markets grew by 48.6%. The group repeated its July outlook, saying it expected further growth of net profit in 2015, with sales trends of the past quarters continuing in the Oct-Dec period.

Overall, third-quarter sales grew 18.2% to 167.1 million euros (USD189.8 million).

Deceuninck added that it had appointed a new CFO, Wim Van Acker, to take over at the start of 2016.

As MRC informed earlier, Deceuninck North America added three PVC lineal lamination lines to its existing lamination capabilities to meet consumer demand for a wider variety of color customization options.

Deceuninck NV is a Belgian designer and producer of PVC systems for windows and doors, interior, roofline & cladding and terraces. The company extrudes PVC and the single base material Twinson. Founded in 1937, with its headquarters in Hooglede-Gits, the Deceuninck Group operates in more than 75 countries and has 35 subsidiaries across Europe, North America and Asia, including the United States, United Kingdom, Russia and Turkey.

MRC

MOSCOW (MRC) - Consumption of polycarbonate (PC) in the Russian market was about 66,200 tonnes in the first nine months of the year, down 8% year on year, according MRC ScanPlast.

The market gradually reestablishes previous consumption and the players believe that next year it may return to the pre-crisis level if the the economic situation stabilises. Mostly, consumption may grow due to an increase in imports, which over the reported period fell by nearly half due to the devaluation of the rouble and the unreadiness of end-markets to accept the price rise for finished products.

Thus, the segment of extrusion PC granules in the reporting period decreased by 12%. Demand amounted to 54,600 tonnes. At the same time, imports fell by 38% to 12,900 tonnes, while production remained at the same level as last year (41,700 tonnes).

Russia's calculated consumption of injection moulding PC granules increased to 10,300 tonnes over the reported period, up 31% year on year. The index calculated consumption is overestimated because of the formation of stocks of the producer and traders. According to market players, the demand in the segment remained unchanged compared to the previous year.

Consumption in the sector of bottle grade PC granules has gradually increased in the last couple of months, largely due to growth in the European PC supply. However, if we consider the market for three quarters, it sagged by 46% and amounted to 1,300 tonnes. In general, market players reported a very healthy demand and high sales activity as for the crisis economy.

A seasonal revival in PC market will be seen until mid-November, driven by growing buying interest in PC sheets from the construction segment. A lull in the market is expected in the end of the quarter.


MRC

MOSCOW (MRC) --Annual increase in revenues by almost 10% to 2.5 billion CZK (EUR 92,6 mil.) and creating a net profit of 71 milion CZK (EUR 2,6 mil) has been achieved within first six months of 2015 by key Czech chemical producer SPOLCHEMIE, based in Usti nad Labem, Northern Bohemia, said the company in its press-release.

Key factors behind positive economic results of the company were caused not only by strong demand from its European customers, but also due to a consistent implementation of the restructuring plan, the stabilization of working capital and reducing of operating costs. "We have significantly exceeded our annual plan in the first half of 2015. Compared to the last year, we have almost doubled EBITDA from CZK 130 mil. (EUR 4,8 mil) for the first 2Q of 2014 to CZK 280 mil. (EUR 10,37 mil.) this year," said Daniel Tamchyna, CEO of SPOLCHEMIE. In addition, EBITDA for the first seven months of this year amounted to a total of CZK 353 mil. (EUR 13 mil.) compared to CZK 160 mil. (EUR 5,9 mil.) in 2014.

"We have significantly changed the structure and number of suppliers and signed long-term strategic agreements, thanks to which we are successful in filling up our production capacity. In addition, we have managed to increase sales not only of commodity epoxy resins, but also sales of specialities. This has resulted in gradually increasing the overall profit margin," explained Daniel Tamchyna.

As it was written earlier, SPOLCHEMIE restarted epichlorohydrin (ECH) production following planned maintenance at its Usti nad Labem site on 13, October.

Spolek pro chemickou a hutni vyrobu, a.s., has been manufacturing high-quality chemicals for no less than 160 years. Our business has always been driven by in-company research, development and innovations. The company producers special epoxy resins and systems, commodity epoxy resins, potassium hydroxide and inorganic derivatives, alkyd resins, polyesters.

MRC

MOSCOW (MRC) -- Erdos Chlor-Alkali Chemical has shut its polyvinyl chloride (PVC) plant for a maintenance turnaround, as per Apic-online.

A Polymerupdate source in China informed that the plant was taken off-stream early last week. It is expected to remain off-stream for around 7 days.

Located in Erdos,Inner Mongolia, the plant has a production capacity of 400,000 mt/year.

As MRC informed previously, in mid-June 2015, Erdos Chlor-Alkali Chemical restarted its PVC plant in Erdos following maintenance turnaround. It was shut on May 14, 2015.

We also remind that Formosa Plastics Corp (FPC), an affiliate of Formosa Petrochemical, is in plans to shut its PVC plant for a maintenance turnaround in end-October 2015. It is planned to remain shut for around 7 days. Located at Ningbo in Zhejiang province of China, the plant has a production capacity of 400,000 mt/year.
MRC