Shell Chemicals seeks permits for ethylene expansion at Deer Park, TX

MOSCOW (MRC) -- Shell Chemicals has asked the Texas Commission on Environmental Quality (TCEQ) for permission to expand ethylene production capacity at its Deer Park, TX, facility, said Chemweek.

The company noted that several steps remain before it would make a final investment decision, ranging from concluding preparatory engineering and design work and seeking permits from Texas regulators, to evaluating downstream product support and any other potential global investments.

In late June, Shell Chemical received the air emissions permit for its proposed ethane cracker in Beaver County, Pennsylvania. The proposed USD4 billion ethane cracker would be the first of its kind in the US Northeast. The cracker, expected to be completed in 2019, would feed production of 1.5 million mt/year of ethylene, 500,000 mt/year of gas-phased high density polyethylene, 500,000 mt/year of slurry HDPE, and 500,000 mt/year of linear low density polyethylene.

Royal Dutch Shell plc is an Anglo-Dutch multinational oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the biggest company in the world in terms of revenue and one of the six oil and gas "supermajors". Shell is vertically integrated and is active in every area of the oil and gas industry, including exploration and production, refining, distribution and marketing, petrochemicals, power generation and trading.
MRC

EREMA GmbH to add Russian subsidiary

MOSCOW (MRC) -- EREMA GmbH is all set to announce the founding of the subsidiary "OOO EREMA" at Interplastica Moscow which will see it investing in its presence in the Russian-speaking area, said Recyclingtodayglobal.

Kalojan Iliev, who can turn to many years of experience in the CIS area and has been responsible for this territory for EREMA for some time, will be appointed Managing Director of OOO EREMA. The 268 mln inhabitants of the CIS member states use around 9.1 mln tons of plastic every year.

Additionally, some 7 1 mln tons are processed to make plastic products and Austria supplies in the region of 1 billion euros of plants and machinery annually to Russia alone. Kalojan Iliev, Managing Director of the new subsidiary OOO EREMA explains: "With the foundation of its own subsidiary, EREMA is strengthening its presence in what is a very large territory which, due to its history as the Soviet Union and Russian as a widespread language, represents a region of its own. This means that EREMA is available as a central, Russian contractual partner with local presence and this is not only an advantage in terms of managing the purchasing process, our customers will also benefit from improved service."

Together with his team, Kalojan Iliev will be responsible for the further development and marketing of EREMA in the CIS region and support activities of the local representatives in the individual countries. The EREMA representatives Irina Zubkova (Moscow) and Valentina Gritschina (Kiev) who are known in the market will continue to act as local sales partners. Furthermore, the established offices of TEXTIMA in Belarus, the Baltic states, Ukraine, Kazakhstan, Uzbekistan, Azerbaijan and the Russian offices in St. Petersburg, Moscow and Ufa will likewise be available for local market support.

The EREMA Group expanded already in January 2015 with the foundation of PURE LOOP, a new sister company of EREMA and 3S. One year later, in January 2016, EREMA is now founding a subsidiary of its own within the EREMA Group. Besides EREMA China and EREMA North America, OOO EREMA in Moscow, Russia, is now the third subsidiary of the world's leading producer of plastics recycling systems.

Erema Engineering Recycling Maschinen und Anlagen Ges.m.b.H. located in Ansfelden near Linz offers plastic recycling systems for both the in-house recycling of production waste and strongly contaminated post-consumer waste.
MRC

Kraton on track to close purchase of Arizona Chemical

MOSCOW (MRC) -- Kraton Performance Polymers Inc. has agreed to acquire Arizona Chemical Holdings Corp. for USD1.37 billion, said Plasticsnews.

A company spokesman said the deal is on track to close by the end of 2015 or early 2016, pending a few more regulatory approvals.

The spokesman said the combined business projects to save about $65 million in overlap costs, expected to be achieved by 2018. However, he said there are no plans to reduce Arizona's product portfolio or employee base, which sits at nine manufacturing sites in the U.S. and Europe with technical centers in Savannah, Ga.; Almere, Netherlands; and Shanghai. The firm employs more than 1,000 worldwide.

Kraton's release said Arizona Chemical has a stable and attractive margin profile with adjusted EBITDA margins in excess of 20 percent for the past five years.

Fogarty said in the release that the firm expects to generate free cash flow of more than $450 million in the first three years of combined operations, which the company plans to be available for debt reduction and allocation to stockholders.

Arizona Chemical is a global producer of performance products and specialty chemicals derived from non-hydrocarbon, renewable raw materials. Its products are used in the adhesives, road and construction, and tire industries among other end markets. It reported about USD1.23 billion in sales for 2014. The Kraton spokesman said adhesives account for about 31 percent of its business.

In the adhesives market, Arizona makes tackifier resins that are combined with styrene-block copolymers — products that Kraton produces — to create adhesive formulations. He said while the firms compete in the same markets, their complementary technologies will strengthen the combined firm's position. The spokesman estimated that there is about a 50 percent overlap in common markets with similar customers.

As MRC informed earlier, Kraton Performance Polymers Inc. agreed to buy closely held Arizona Chemical Holdings Corp. for USD1.37 billion in cash. Arizona Chemical makes chemicals found in things like breakfast cereal packaging and car tires from renewable materials. Kraton, which makes polymers used in products such as baby diaper elastic and roofing materials, said it expects the acquisition to diversify its markets.

Kraton produces engineered polymers globally and is one of the world's largest producers of styrenic block copolymers. The firm manufactures its products at its facility in Belpre, Ohio, and at four others internationally - in Germany, France, Brazil and Japan. Its Japanese operation is an unconsolidated manufacturing joint venture.
MRC

Natpet took off-stream PP plant in Saudi Arabia

MOSCOW (MRC) -- National Petrochemical Industrial Company (Natpet) shuts a polypropylene (PP) plant, according to Apic-online.

A Polymerupdate source in Saudi Arabia informed that the plant was taken offstream recently on account of a mechanical issues. The plant is expected to remain shut for a period of around one week.

Located at Yanbu in Saudi Arabia, the plant has a production capacity of 400,000 mt/year.

As MRC wrote before, Natpet last shut down its PP plant in Yanbu on 25 January 2015 for a one-month turnaround.

We also remind that this plant is producing a wide range of PP product mix of (homopolymers, random & heterophasic copolymers) that is suitable for a wide variety of applications. Natpet has acquired state of the art Spheripol process to produce polypropylene from LyondellBasell, which is the world leader in polypropylene technology.
MRC

Latin American chemical sector buoyed by low oil, strong end markets in 2016

MOSCOW (MRC) -- Fitch Ratings expects the credit profiles of rated Latin American chemicals to remain stable during 2016 despite low petrochemical prices, said Hydrocarbonprocessing.

"Low oil prices should benefit Braskem's cost structure, which is reliant upon derivative oil product, naphtha," according to Gilberto Gonzalez, associate director at Fitch.

Producers in Mexico such as Alpek, Mexichem, and Grupo IDESA should benefit from solid North American demand.

"Growth in key automotive, building and construction, and packaging end markets remains robust." said Gonzalez.

Latin American chemical companies will likely maintain high capex relative to cash flow generation through 2016, according to the Fitch report. Aggregate investments for rated chemical companies in the region should remain high and total about USD1.7 billion in 2016, slightly above the USD1.6 billion projected for 2015.

The projected cash flow generation for companies remains solid, in part boosted by depreciating currencies. Additionally, liquidity remains sound for many companies. This combination should result in stable to lower net leverage in most cases, Fitch says.

As MRC informed earlier, Mexichem, Mexican PVC and specialty chemicals maker, completed the acquisition of Vestolit GmbH on 1 December 2014. Mexichem completed the acquisition after receiving all relevant regulatory approvals. Vestolit was acquired from funds managed by Strategic Value Partners LLC for a total purchase price of EUR219 million in cash and assumed liabilities.

MRC