Samsung Engineering wins Uzbekistan deal amid losses

MOSCOW (MRC) -- Samsung Engineering said Tuesday it was aiming to make a deal to build a petrochemical plant in Uzbekistan based on a conceptual study it will conduct for the country's state project, said Koreantimes.

"We have agreed with Uzbek Neftegaz, Uzbekistan's state-owned oil company, to conduct a conceptual study for a benzene-toluene-xylene plant. It is a kind of rough sketch of the facility, not yet a deal to build," said a company official.

Samsung Engineering will make every effort to earn the contract to build the BTX plant on an engineering, procurement and construction (EPC) base grounded on its partnership with Uzbekistan, he said. But the official didn't say anything about the value of the rough planning for the BTX plant.

Samsung Engineering, an affiliate of Samsung Group, plans to expand into member countries of the Commonwealth of Independent States, such as Uzbekistan, Kazakhstan and Azerbaijan, based on the possible EPC project in Uzbekistan, the official said.

"As we successfully built a polymer plant for Uzbek Neftegaz in a USD700 million EPC deal in July, the state company placed an order for the conceptual study for the BTX plant," he said.

In Azerbaijan in 2013, Samsung Engineering built a USD500 million fertilizer plant for the State Oil Company of the Azerbaijan Republic.

Korean engineering companies largely win EPC projects but the high value-added front and end engineering and design (FEED) projects are mostly taken by global majors such as Flour from the U.S., Technip from France, Saipem from Italy.

That's mainly due to the technology gap which still runs deep between Korean builders and their counterparts in Europe and the U.S.

Hit by snowballed manufacturing costs and declines in orders in past years, Samsung Engineering shifted to a net loss of 1.32 trillion won (USD1.1 billion) in the January-September period from a net profit of 64 billion won a year earlier, according to regulatory filing.

It also swung to an operating loss of 1.476 trillion won from an operating profit of 139.9 billion won during the same period, said the filing.

We remind that, as MRC wrote previously, in November 2014, South Korea's Samsung Group said it is selling stakes in four chemical and defence firms for 1.9 trillion won (USD1.72 billion) to Hanwha Group, the latest move in the massive task of restructuring the country's largest conglomerate.

Later, in the first decade of March 2015, South Korea's Fair Trade Commission (KFTC) gave conditional approval to Hanwha's proposed acquisition of Samsung General Chemicals.
MRC

MOSCOW (MRC) -- Huntsman Corporation has announced that the company’s board of directors has declared a USD0.125 per share cash dividend on its common stock, as per the company's press release.

The dividend is payable on December 31, 2015, to stockholders of record as of December 15, 2015.

As MRC reported earlier, in October 2014, Huntsman Corporation completed the acquisition of the Performance Additives and Titanium Dioxide (TiO2) businesses of Rockwood Holdings, Inc.

And in February 2015, Huntsman announced that it plans to reduce its TiO2 capacity by approximately 100,000 tons, representing 13% of Huntsman's European TiO2 capacity. The plan will generate approximately USD35 million of annual savings. As part of the plan, Huntsman is proposing to close certain operations at its site in Calais, France. Huntsman says it will close the 'black end' manufacturing operations and ancillary activities during 2015.

Huntsman Corporation is a publicly traded global manufacturer and marketer of differentiated chemicals with 2013 revenues of over USD11 billion. Huntsman is a global manufacturer and marketer of differentiated chemicals. The company's operating companies manufacture products for a variety of global industries, including chemicals, plastics, automotive, aviation, textiles, footwear, paints and coatings, construction, technology, agriculture, health care, detergent, personal care, furniture, appliances and packaging.
MRC

MOSCOW (MRC) -- The production value of Taiwan's petrochemical industry is expected to increase between 3.1 percent and 4.2 percent in 2016 as oil prices stabilize, said Chinapost.

According to the Industrial Economic and Knowledge Center (IEK) under the Industrial Technology Research Institute, most research institutes believe oil prices will stabilize and remain low in 2016. This will help the profitability of Taiwan's petrochemical companies, which use naphtha as raw material, the IEK said.

Also, demand for petrochemical products in mainland China and other emerging markets such as India and Vietnam will support capacity utilization of Taiwan's petrochemical industry, the IEK said.

This will help increase Taiwan's production in the sector by 3.1-4.2 percent, it said. The IEK noted that in August 2014, the average price of Brent crude oil was US$101 per barrel, but the price plunged to USD46.9 in January 2015, falling 53.6 percent in just five months.

The drop in crude oil prices also led to a drop in naphtha prices, it said. The average price of naphtha was USD902.5 per metric ton in August 2014, but it fell to USD455 in January 2015, according to IEK.

The price difference between ethylene and naphtha was USD414 per metric ton in January 2015, and the difference widened to USD850 in June, IEK said.

In the first half of 2015, although the total revenue of the four major subsidiaries of the Formosa Plastics Group decreased 20.2 percent year-on-year to NTD770.74 billion, their total net profit jumped 36.1 percent to NT$74.42 billion, IEK said.

The group's four major subsidiaries are Formosa Plastics Corp., Nan Ya Plastics Corp., Formosa Chemical & Fibre Corp. and Formosa Petrochemical Corp.
MRC

MOSCOW (MRC) -- Brazil's state-run oil company Petroleo Brasileiro SA has announced two amendments to its contract to supply naphtha to Braskem SA, Latin America's largest petrochemical company are worth 950 million reais (USD252 million), as per Reuters.

The contract amendments extend the terms of an agreement for Petrobras to supply Braskem with naphtha, to Braskem operations in the Brazilian states of Sao Paulo, Bahia and Rio Grande do Sul for 45 days starting Nov 1. Petrobras maintains discussions with Braskem, seeking in these talks a naphtha price that reflects balanced commercial and exchange conditions for both companies, referencing international market prices for petroleum derivatives," Petrobras said in a statement.

Petrobras and Braskem have been negotiating a multi-billion-dollar naphtha-supply contract for months. A lack of a final agreement has led to a series of temporary extension agreements. Braskem, with 36 plants, 29 in Brazil and the rest abroad, including factories in the United States and Germany, is controlled by Brazil's Odebrecht Group.

Odebrecht is one of about two dozen construction and industrial companies involved in a giant price-fixing, bribery and political kickback scandal that has cost Petrobras and its government and non-government investors billions of dollars. Braskem depends on naphtha from Petrobras to operate its Brazilian plants, the dominant supplier of polyethylene, polypropylene and poly-vinyl-chloride (PVC) to Brazil, the world's seventh-largest economy.

Braskem's Brazilian plants, though, are in regions where Brazil's government, Petrobras' controlling shareholder, is keen to preserve jobs, making the naphtha contract politically sensitive. The scandal at Petrobras, and related investment and job cuts, has helped deepen Brazil's worst recession in decades.

Petrobras said it agreed to buy 82,000 cubic meters (515,764 barrels) of gasoline from Braskem, bolstering supplies of the fuel as Petrobras faces its biggest strike in 20 years.

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).
MRC

MOSCOW (MRC) -- BASF is reorganizing its paper, water, oilfield and mining businesses within the Performance Chemicals division to foster customer and industry focus and increase competitiveness, said the company on its site.

In the Water Solutions and Paper Chemicals businesses cost leadership, operational and commercial excellence as well as efficient and reliable supply are key success factors. Thus, BASF is combining these two businesses to form a new global business unit "Paper & Water." Merging the two businesses will enable efficiency gains and create additional market opportunities.

The Oilfield and Mining Solutions businesses operate in markets that are driven by differentiation to create sustainable industry solutions together with customers. Success factors for suppliers to these industries are technology and innovation leadership as well as engineering and application expertise. "Oilfield & Mining Solutions" will operate as a global business unit. Dedicated industry teams will increase effectiveness and focus on developing and commercializing innovative and sustainable products to support the predominantly global customers in optimizing their yields.

Both global business units will be headquartered in Ludwigshafen, Germany. The changes will be effective as of January 1, 2016. The company expects overall a reduction of about 120 positions worldwide until the end of 2016 resulting from the alignment and refocussing of business structures.

"The further development of our organization will strengthen customer focus. The stepwise expansion of our polymer production network and investments in bio-acrylamide raw materials as well as the launch of innovative products will accelerate profitable growth," said Prof. Dr. Christian Fischer, President of the Performance Chemicals division.

As MRC informed earlier, BASF is expanding its Elastollan portfolio (TPU, thermoplastic polyurethane) to include special Food Contact (FC) grades which are suitable for use in applications involving contact with food.

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