DuPont forecasts higher 2016 earnings, helped by cost cuts

MOSCOW (MRC) -- Chemicals and seed producer DuPont forecast higher 2016 earnings, helped by aggressive cost-cutting to offset continued pressure from a strong dollar and weakness in its farm business, said Cnbc.

The company forecast full year operating earnings of USD2.95-$3.10 per share, including an expected benefit of 64 cents per share from its cost cutting and restructuring plan.

DuPont and Dow Chemical Co are in the process of a merger that would create a company with an estimated combined market capitalization of about USD130 billion as of Dec. 11, when the deal was announced. The companies plan to then break up into three separate standalone businesses.

"Our merger process is on track," DuPont Chief Executive Edward Breen said. "We are meeting key milestones and have begun our planning to create three strong, highly focused, independent businesses in agriculture, material science and specialty products."

As MRC informed earlier, Dupont reported a quarterly profit of 27 cents per share, excluding items, that slightly beat analysts' average estimate of 26 cents. However, including restructuring and other charges of USD622 million, the company reported a quarterly net loss. Net loss attributable to the company was USD253 million, or 29 cents per share, in the fourth quarter ended Dec. 31, from USD683 million, or 74 cents per share, a year earlier. Net sales fell 9.4 percent to USD5.3 billion.

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.

Saudi Sadara set to start up butyl glycol plant in H2

MOSCOW (MRC) -- Saudi Arabia’s Sadara Chemical Co. (Sadara) is on schedule to start up the new butyl glycol (BG) plant in the second half of 2016, said Argaam.

The Jubail-based plant will have a combined BG and and butyl di-glycol (BdG) capacity of 200,000 tons per year.

As MRC informed earlier, on 8, December 2015, Sadara Basic Services, fully owned by Sadara Chemical, started at its polyethylene (PE) plant in Jubail Industrial City II. The plant is designed to produce 375,000 metric tons per year of products used in specialty applications, such as the manufacture of food-grade plastics, industrial and consumer packaging and health and hygiene films, it said in a bourse statement.

The USD20 billion Sadara is 65 percent-owned by Saudi Arabian Oil Co. and 35 percent-owned by the United States' petrochemical major, Dow Chemical.

Located in Jubail Industrial City, Sadara is deemed the world’s largest chemicals complex built in a single phase with 26 integrated manufacturing plants.


PET market in North America to be driven by beverage bottles

MOSCOW (MRC) -- Replacement of traditional packaging applications and reduced atmospheric emissions are the reasons for increase in the demand of Polyethylene Terephthalate (PET) market, as per Research and Markets.

About 72% of the PET resin demand was from the bottle application, driven by the beverage bottles for mineral water, carbonated soft drinks, ready to drink tea, and functional, dairy, and energy drinks. It is expected that light weight PET bottle trend will continue in future as it is a cost saving measure. Polyethylene terephthalate (PET) are used in an increasing number of markets - from Packaging, Automotive, Electrical & electronics, Consumer Appliances and others.

The key drivers of PET industry are population growth, rise in disposable income, urbanization in developing economies, and growing fast moving consumer goods, and restraint such as being a capital and technology intensive industry.

Demand for PET is rising with polyester and food and beverages industries determining market behavior.
The market is and will be characterized by excessive capacity bringing it to oversupply. The influence of PET performs sector is decreasing as packaging industry witnesses change to lighter-weighted bottles and carbonated drinks consumption decline (especially in North America), besides the share of recycled material application is growing.

As MRC informed previously, global bio based PET market is expected to reach 5,800 kilo tons by 2020 , according to a new study by Grand View Research, Inc.

Mexican Etileno XXI cracker PE production inches closer

MOSCOW (MRC) -- Polyethylene production at Mexico's Etileno XXI petrochemical complex is on course to begin in Q1-2016, with resins available to the US market, said Plastemart, citing Platts.

"We hope to start production of the first PE grades in March and by Q2 we will have various grades available to export to the US,' the source said. Company officials previously said the cracker would begin operations in February, with the startup of output at the polyethylene plants coming in March. There was market talk that PE resins from the complex would not be available to the US market. However, that claim was dismissed as exports to the US have always played a part in the company's strategy.

The project is anchored by a 1 mln mt/year ethylene steam cracker and includes 1 mln mt/year of PE capacity.

The joint venture between Brazil's Braskem (with 75%) and Mexico's Grupo Idesa (25%) will focus on meeting Mexico's growing PE demand, with remaining output available for export, including to the US and South America.

As MRC wrote before, in 2012, Braskem Idesa announced the approval of a line of credit in the amount of USD700 million by the Brazlian National Economic and Social Development Bank - BNDES to finance the construction of the largest petrochemical complex being developed in the Americas: Braskem Idesa- Etileno XXI Project. The group of financial institutions will also include Mexico's development banks, Bancomext and Nafinsa- Nacional Financiera, and commercial whose loans are subject to the completion and closing of the formal documentation.

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).

BASF announced preliminary 2015 operating results

MOSCOW (MRC) -- BASF, the world's petrochemical major, has announced preliminary, non-audited figures for 2015. As forecast by BASF, sales and income from operations (EBIT) before special items for the full year 2015 are slightly below the level of the previous year, reported the producer on its site.

Thus, sales decline by 5% to EUR70.4 billion (2014: EUR74.3 billion). EBIT before special items in 2015 is expected to be EUR6.7 billion (2014: EUR7.4 billion). The decrease in sales is primarily due to the divestiture of the natural gas trading and storage activities. The decline in EBIT before special items is due in particular to significantly lower earnings in the Oil & Gas and Chemicals segments in the fourth quarter of 2015 compared with the same period of 2014. In the Chemicals segment, this is mainly due to lower margins in the Petrochemicals division.

For the full year 2015, EBIT of BASF Group is expected to be EUR6.2 billion. This significant decline compared with the level of the previous year (2014: EUR7.6 billion) is mainly due to impairments in the Oil & Gas segment. The company had previously expected only slightly lower EBIT in the full year 2015. The reason for the impairments in the Oil & Gas segment is the strong decline in oil and gas prices in the past months. BASF anticipates that prices for oil and gas will remain at a low level in 2016. The assumptions for oil and gas prices have also been reduced for subsequent years. This results in impairments of around EUR600 million in the Oil & Gas segment. This amount, which does not affect cash flow, is reported as a special item and reduces EBIT in the Oil & Gas segment in the fourth quarter of 2015.

On February 26, 2016, BASF will publish its Consolidated Financial Statements for 2015 and will comment on the figures at its Annual Press Conference.

As MRC reported earlier, last year, BASF sold its 25% share in the joint venture SolVin to Solvay. The transaction took place on July 1, 2015. Financial details were not disclosed. In addition, BASF said it had reached agreements with Solvay and Inovyn to continue to supply BASF’s site in Antwerp with basic chemicals.

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.