Petrobras mulls sale of Braskem stake

MOSCOW (MRC) -- Brazil's state-controlled oil producer Petrobras is seeking to sell its 5.8 billion Brazilian real (USD1.4 billion) stake in petrochemical producer Braskem SA, said Reuters.

Petroleo Brasileiro SA (Petrobras) has hired Brazilian bank Banco Bradesco SA as a financial adviser and has started to pitch the sale to foreign investors, Folha said, without naming sources.

Petrobras owns a 36 percent stake in Braskem, Latin America's largest petrochemical producer. The sale would help Petrobras meet its target of selling USD15.1 billion worth of assets in 2015-16, a key part of its plan to cut debt as oil prices plunge to 12-year lows.

Petrobras Chief Executive Aldemir Bendine late last year said the pace of divestments in 2016 would likely be faster than originally expected.

Representatives of Petrobras, Braskem and Bradesco were not immediately available to comment.

Petrobras has also cut its 2015-2019 capital spending budget by a quarter to USD98.4 billion from USD130 billion in June, according to a securities filing on Tuesday, and trimmed its outlook for oil production in Brazil this year by nearly 2 percent to 2.145 million barrels per day.

As MRC informed earlier, Petroleo Brasileiro SA is delaying its exit from Argentina’s petrochemical business as it focuses on a graft case in Brazil, two people familiar with the process said. Petrobras, as the Rio de Janeiro-based producer is known, received a joint offer for its 34% stake in Cia. Mega SA from partners YPF and Dow Chemical, said the people, who asked not to be named because the talks are private. Buenos Aires-based YPF owns 38% of Mega and Dow has 28%.

Headquartered in Rio de Janeiro, Petrobras is an integrated energy firm. Petrobras' activities include exploration, exploitation and production of oil from reservoir wells, shale and other rocks as well as refining, processing, trade and transport of oil and oil products, natural gas and other fluid hydrocarbons, in addition to other energy-related activities.
MRC

MOSCOW (MRC) -- Saudi Kayan Petrochemical Co. reported a net loss in the fourth-quarter, the fourth straight quarter it failed to achieve a profit, hurt by product prices that have tumbled along with feedstock oil, as per Reuters.

The company, an affiliate of Saudi Basic Industries Corp (SABIC) and the first major petrochemicals firm in the kingdom to report earnings, had a net loss of 624.1 million riyals (USD166.3 million) in the three months to Dec. 31, it said in a bourse statement. That compared with a profit of 11.78 million riyals in the same period of 2014.

Kayan cited a drop in the average selling prices of most products as the main reason for the fourth-quarter loss, as well as an impairment on its spare parts inventory. These factors outweighed the benefits of a drop in feedstock costs, an increase in overall sales volume and a drop in marketing fees from SABIC, it said, without providing sales figures.

Saudi companies issue brief earnings statements early in the reporting period before publishing more detailed results later. Like many petrochemical firms in the kingdom, Kayan's earnings have been hit hard by falling product prices as they are closely tied to the price of oil, which is languishing at 12-year lows. Saudi producers have also benefited from subsidised energy and feedstock costs, so lower crude prices compress their profit margins.

Kayan's results could have been worse. Maintenance work at some of its plants originally due to take place in October to March 2016 was rescheduled. This had been expected to cost the firm 340 million riyals.

Its 2015 annual loss widened substantially to 1.24 billion riyals, which Kayan blamed on lower product prices as well as a drop in production and sales from maintenance work in February. The company had expected maintenance to cost them 62 million riyals.

It reported a loss of 44.5 million riyals in 2014. Parent firm SABIC, one of the world's largest petrochemical companies, reports its fourth-quarter earnings on Monday.

As MRC wrote before, Saudi Arabia’s Oil Ministry allocated an additional 10m cbf/d (2.8m cbm) of ethane to Saudi Kayan Petrochemical Co (Al Jubail / Saudi Arabia) to enable an expansion of capacity at its Al Jubail complex. The company plans to widen its ethylene production by at least 93,000 t/y and its ethylene oxide capacity by 61,000 t/y from the second quarter of 2017.

Saudi Kayan Petrochemical Company is a manufacturing affiliate of the Saudi Basic Industries Corporation (Sabic).
MRC

MOSCOW (MRC) -- The French multinational corporation Saint-Gobain will invest around Euro 135 million (about Rs 975 crores) to expand its flat glass production capacity in the country by setting up a new production facility at its Sriperumbudur (Chennai) site, said Business-standard.

"Saint-Gobain is to invest around Euro 135 million over the next two years to develop production capacity at its glass facility near Chennai, India’s largest such facility," said the company in a press release.

Saint-Gobain will built its third flat glass production facility (the group’s fifth float in India) and a second coater for the construction market at the facility. The plant will produce premium high-performance, energy efficient glass using leading-edge technologies which contribute to the environment protection.

"This initiative bolsters Saint-Gobain’s position in flat glass as leader of the fast-growing Indian market, and is in line with the Group’s strategy to increase the share of its industrial assets located outside Western Europe," said the company.

The expansion, which is expected to be completed by 2018, will increase the capacity by around 1,000 tonnes a day at Sriperumbudur site, which currently produces 1,500 tonnes of glasses.

As mRC informed earlier, Saint Gobain Sekurit India decided to shut down its plant in Maharashtra as the facility had become economically unviable.
MRC

MOSCOW (MRC) -- Global demand for polypropylene is expected to increase at an average annual growth rate of about 5% pa up to 2020, led mainly by extrusion applications, according to a report released Wednesday for the GPCA Plasticon 2016, said Pastemart, citing Platts.

Extrusion applications accounts for about 60% of global PP consumption, followed by molding applications (34%), out of which injection molding grade was the single largest application. Other sources did not have a clear idea on the actual percentage increase, but said it usually follows a country's GDP.

"I estimate Middle East demand to be around 3 million-4 million mt/year and globally to be around 60 million mt/year," a distributor in Dubai said. According to the report, PP production capacities in the Gulf Cooperation Council grew 11.7% last year and accounted for around 7.4 mil mt or 10% of global capacities. This year's figures are not yet available.

Capacity additions are projected to be fastest in India, China and Africa in the next five years, with almost half in China. According to Platts, some of the new capacities include 300,000 mt/year Shenhua coal-based PP in Yulin and Sinopec's Zhongtian Hechuang 700,000 mt/year coal-based PP unit in Ordos in the second half of 2016.

Demand is not expected to catch up with supply additions by 2017, turning China into a net exporter, as there would be an increase of coal-based PP capacities slated to come online during these two years, sources said.

As MRC informed previously, global demand for plastic pipe will rise 8.5% annually through 2017 to 11.2 billion meters, according to a report by Cleveland-based Freedonia Group Inc. Growth will be the result of increased construction spending, a rebound in the U.S. market, and gains in market share from copper, concrete, and steel, thanks to lower cost, installation ease and performance advantages.
MRC

MOSCOW (MRC) -- China’s Ningbo Mitsubishi Chemical Company (NMC) has shut its purified terephthalic acid (PTA) plant in for a 10-day maintenance, industry sources told TPS Thursday.

The company's plant in Ningbo, Zhejiang province, has a nameplate capacity of 600,000 mt/year, but usually operates at a rate of 700,000 mt/year.

Based on TPS estimates, assuming the plant runs at a rate of 700,000 mt/year, a 10-day halt in production would result in a stoppage loss of 19,178 mt of PTA or 19 standard size parcels.

Ningbo Mitsubishi's plant is a joint venture between China’s CITIC Group (10%) and Ningbo PTA Investment Company (NPI, 90%)). The stakes in NPI is split between Mitsubishi Chemical Company (61%), Itochu (35%) and Mitsubishi Corp (4%).

As MRC informed previously, Mitsubishi Gas Chemical Co. decided to discontinue its purified terephthalic acid (PTA) business. Mitsubishi currently operates a 260,000-t/y PTA plant at Mizushima, Japan, through its Mizushima Aroma joint venture with Toyobo Co.

Mitsubishi Chemical with headquarters in Tokyo, Japan, is a diversified chemical company involved in petrochemicals, polymers, agrochemicals, speciality chemicals and pharmaceuticals. The company's main focus is on three business pillars: petrochemicals, performance and functional products, and health care.
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