Key investor seeks removal of Dow Chemical CEO

MOSCOW (MRC) -- Dan Loeb, the founder of hedge fund Third Point, is calling for the removal of Dow Chemical CEO Andrew Liveris, days after the company agreed to combine with DuPont in the largest-ever chemicals merger, according to a person familiar with the matter, reported Hydrocarbonprocessing.

Loeb supports the deal but, in a letter sent to Dow’s board on Saturday, questioned the timing of its announcement on Friday, just two days before the expiration of a standstill agreement between Dow and the hedge fund, said the person, who asked not to be identified because the letter hasn’t been published.

Loeb is concerned the merger may have been rushed to beat the expiry of the accord, the person said. Loeb declined to comment on the letter.

Third Point holds a 2% stake in Dow and last year criticized its financial performance. Loeb had urged Liveris to separate Dow’s plastics and petrochemicals operations from faster-growing businesses such as crop seeds. In November 2014, soon after Third Point initiated a proxy contest, Dow agreed to turn over two board seats to nominees of the hedge fund. The two sides also agreed to the standstill arrangement, which barred either one from publicly disparaging the other.

Dow and DuPont said their all-stock merger of equals will create a company, DowDuPont, valued at about USD130 billion, a first step toward eventually creating three new businesses focused on agriculture, plastics and materials, and specialty-chemical products. Liveris, who’s also chairman of Dow, is slated to become executive chairman of the merged company. DuPont chairman and CEO Ed Breen will become CEO of the new company.

Directors of Midland, Michigan-based Dow, including the two nominated last year by Third Point, "are unanimously and fully supportive of the announced merger," Dow said in an e-mailed statement. "We stand by both our and DuPont’s boards’ unanimous decisions to conduct this transaction." Nine of Dow’s 12 board members excluding Liveris issued individual statements supporting management and the merger, including Raymond Milchovich and Robert S. Miller, the Third Point nominees who became directors in January.

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.

The Dow Chemical Company is an American multinational chemical corporation. Dow is a large producer of plastics, including polystyrene, polyurethane, polyethylene, polypropylene, and synthetic rubber. In 2014, Dow had annual sales of more than USD58 billion and employed approximately 53,000 people worldwide.
MRC

MOSCOW (MRC) -- Saudi Arabia's Petro Rabigh will be restarting its monoethylene glycol (MEG) production unit in Saudi Arabia after it was shut for a turnaround in October, an industry source told TPS.

According to the source, the unit will be restarted sometime in H2 Dec.

This translates to about 73 standard-sized parcels. Rabigh 1 on Saudi Arabia's western coast comprises a 400,000 b/d refinery and a 1.3 million mt/year ethane cracker.

It also contains a 300,000 mt/year of high density polyethylene (HDPE) plant, a 600,000 mt/year of linear low density polyethylene (LLDPE) plant, a 600,000 mt/year of polypropylene (PP) plant and the 600,000 mt/year MEG plant.

As MRC reported previously, in early October 2015, PetroRabigh took off-stream its LLDPE plant for maintenance turnaround. It remained off-stream for around 45 days. Located in Rabigh, Saudi Arabia, the plant has a production capacity of 600,000 mt/year.

Petro Rabigh Corp, also known as Rabigh Refining & Petrochemical Co., is a joint venture between Saudi Aramco and Sumitomo Chemical. Each company holds a 37.5% stake, with the rest of the company’s shares floated on the Saudi Stock Exchange. The company has an annual output capacity of 18 million tonnes of refined products and 2.4 million tonnes of petrochemicals.
MRC

MOSCOW (MRC) -- South Korea's Lotte Chemical has shut its No. 3 monoethylene glycol (MEG) production unit in Yeosu, an industry source told TPS Monday.

The unit, which produces 160,000 mt of MEG a year, was shut due to its low production volume and weak margins, the source told TPS. The unit is expected to remain offline for a month.

"They have to buy C2 to make MEG, but the margin of MEG has been very bad," the source said.

Lotte Chemicals, South Korea's largest MEG producer, operates five MEG production facilities in the country; three in Yeosu and two in Daesan. Daesan No. 1 has an annual operating capacity of 250,000 mt/year, while Daesan No. 2, which was originally scheduled to restart on Nov 6, produces 400,000 mt of MEG a year.

As MRC informed previously, Lotte Chemical, a subsidiary of the South Korean Lotte Group, shut its low density polyethylene/ethyl vinyl acetate (LDPE/EVA) swing plant for a maintenance turnaround on October 12, 2015. It remained off-stream for around one month. Located at Daesan in South Korea, the plant has a production capacity of 135,000 mt/year.

Lotte Chemical Corporation manufactures a wide range of petrochemical products such as high density polyethylene, polypropylene, and ethylene glycol. The company's products are used in manufacturing general housewares, pipes, films, fabrics, bottles, containers, and automotive parts.
MRC

MOSCOW (MRC) -- China’s crude processing climbed to a record after some refineries resumed operations following maintenance, said Bloomberg.

Refineries in the world’s second-largest oil consumer processed 43.92 million metric tons of crude last month, 3.3% higher than a year earlier, according to data released Saturday by the Beijing-based National Bureau of Statistics. That’s about 10.73 million bpd and up 2.6%, on a daily basis, from October. Last record was June’s 10.59 million barrels a day.

Higher oil processing in China coincided with record oil-product exports in November as refiners tapped overseas markets to reduce fuel stockpiles. Net fuel exports rose for a fifth month to 2.22 million tons last month, 77% higher than the previous month.

"For refineries, processing more oil is good for their margins, but in the meantime, they need to be able to sell," Jean Zou, an analyst with ICIS China, said before the data were released. "They may keep their runs high as long as they can find export markets for their products."

China Petroleum & Chemical Corp. restarted Yangzi refinery’s crude-distillation unit at the end of October, while Sinochem Group’s Quanzhou plant boosted runs to more than 80% of capacity last month following maintenance, industry website Oilchem.net said.

China’s power production last month rose 0.1% from a year earlier to 466 billion kilowatt hours, Saturday’s data showed. China’s crude output fell 0.5% from a year earlier to 17.66 million tons, while natural gas production climbed 0.2% to 11.1 billion cubic meters. Coal output declined 2.7% to about 320 million tons.

As MRC informed earlier, Shell Nanhai B.V. (Shell) and China National Offshore Oil Corporation (CNOOC) signed a Heads of Agreement (HOA) to expand their existing 50:50 joint venture (JV) in Huizhou, Guangdong Province, China.

MRC

MOSCOW (MRC) -- Kuwait's Equate has recently lowered the operating rate for its Kuwait-based monoethylene glycol (MEG) production units to between 70-80%, industry sources told TPS.

A company source from MEGlobal, EQUATE's trading arm, confirmed with TPS that its operating rates had been lowered, but could not comment further.

Industry sources told TPS that the plants were shut over the weekend due to supply tightness for upstream feedstock. Unconfirmed reports of the shutdown first surfaced last Friday afternoon, and triggered a rebound on MEG spot prices.

Equate runs two MEG plants in Shuaiba, Kuwait, with a combined operating capacity of 1.45 million mt/year. Its No. 1 MEG plant has an annual production capacity of 530,000 mt/year, while its No. 2 MEG unit produces 615,000 mt of MEG a year.

As MRC informed previously, Equate Petrochemical Company President and CEO Mohammad Hussain said a project aimed at increasing polyethylene (PE) production would be completed in the first half of next year. The first phase of this project regarding production of ethylene would end this year, while the second phase, the PE plant, would be completed next year, he said. Hussain, answering a KUNA question in a news conference on fringes of the 10th session of the forum of the Gulf Petrochemicals and Chemicals Association (GPCA), said this project would contribute to boosting polyethylene production from 825,000 tons to a million tons.

Established in 1995, Equate Petrochemical Company is an international joint venture between Petrochemical Industries Company (PIC), The Dow Chemical Company (Dow), Boubyan Petrochemical Company (BPC) and Qurain Petrochemical Industries Company (QPIC). Commencing production in 1997, Equate is the single operator of a fully integrated world-scale manufacturing facility producing over 5 million tons annually of high-quality petrochemical products which are marketed throughout the Middle East, Asia, Africa and Europe.
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