Wacker lifts sales in 2015 above EUR5 billion for the first time

MOSCOW (MRC) -- Following a generally robust fourth quarter, Wacker Chemie AG achieved its sales target for full-year 2015 and slightly exceeded its earnings expectations, as per the company's press release.

According to preliminary calculations, the Munich-based chemical group posted total sales of EUR5.3 billion in 2015 (2014: EUR4.83 billion), some 10% above the 2014 figure. This increase was chiefly the result of higher volumes and favorable exchange-rate effects. Every division generated year-over-year sales growth in 2015.

The group’s preliminary earnings before interest, taxes, depreciation and amortization (EBITDA) amounted to EUR1.04 billion (2014: EUR1.04 billion). EBITDA was at the prior-year level despite substantially lower special income from advance payments retained and damages received from solar-sector customers. In full-year 2015, these special-income items amounted to some EUR137 million (2014: EUR206 million). Adjusted for this effect, EBITDA increased by 9% in the reporting year. The group’s earnings before interest and taxes (EBIT) grew by 6% year over year to EUR470 million in 2015 (2014: EUR443 million). Wacker’s preliminary net income for 2015 reached EUR240 million (2014: EUR195 million).

"Our chemical business in particular performed well in the fourth quarter," said Group CEO Rudolf Staudigl on Tuesday in Munich. "Chemical sales were substantially higher than in the comparable final-year quarter. This more than compensated for the fact that polysilicon prices were lower and semiconductor-wafer volumes were down slightly year over year. On the whole, we generated the strongest final-quarter sales to date".

Net cash flow for the group was slightly positive, as forecast, although declining significantly year over year. It amounted to EUR20 million (2014: EUR216 million). The main reasons for this decrease were substantially higher investment spending and lower cash inflows from damages received from solar customers. Group net financial debt was at the prior-year level, as expected. It amounted to about EUR1.07 billion as of December 31, 2015 (Dec. 31, 2014: EUR1.08 billion).

As MRC wrote previously, in 2013, Wacker Chemie AG officially launched its new production plant for ethylene-vinyl-acetate copolymer (EVA) dispersions at its Ulsan site in South Korea. The additional 40,000 tonnes from the second reactor line increased the site's EVA-dispersion capacity to a total of 90,000 tonnes per year. The production capacity of the site has, thus, almost doubled, making the plant complex one of the biggest of its kind in South Korea.

Wacker Chemie AG is a worldwide operating company in the chemical business, founded 1914. The company is controlled by the Wacker-family holding more than 50 percent of the shares. The corporation is operating more than 25 production sites in Europe, Asia, and the Americas. The product range includes silicone rubbers, polymer products like ethylene vinyl acetate redispersible polymer powder, chemical materials, polysilicon and wafers for semiconductor industry.

Nippon steel plans maintenance at No. 3 SM plants

MOSCOW (MRC) -- Nippon Steel Chemical Company (NSCC) is in plans to shut its No.3 styrene monomer (SM) plant, as per Apic-online.

A Polymerupdate source in Japan informed that the company has scheduled maintenance at its No. 3 plant in end-March 2016. The plant is slated to remain offline for around one month.

Located in Oita, Japan, the No. 3 SM plant has a production capacity of 230,000 mt/year.

As MRC wrote before, in September 2015, NSCC announced its plans to shut its SM for maintenance. The plant was planned to remain off-stream for around one month. Located in Oita, Japan, the plant has a production capacity of 190,000 mt/year.

Idemtisu Kosan Co, Asahi Kasei Chemical and Taiyo Petrochemical are the other SM producers in Japan.

Asahi Glass begins shipping chlor-alkalis from expanded Indonesian complex

MOSCOW (MRC) -- Asahi Glass has begun shipping polyvinyl chloride (PVC) from the Anyer plant at Cilegon, Indonesia, following completion of an expansion program at PT Asahimas Chemical, said the producer on its site.

The ceremony also included a ground breaking for a new power plant at the site. Commercial production at the expanded chlor-alkali facility will start in the first quarter this year. PT Asahimas Chemical is owned 52.5% by Asahi Glass, 11.5% by Mitsubishi Corp. and 18% each by the local Rodamas and Ableman Finance.

With the aim of taking in the increasing demand in the caustic soda and polyvinyl chloride (PVC) markets in Southeast Asia, the production facility enhancement at the Anyer Plant was launched in 2013 to significantly boost the output of caustic soda and vinyl chloride in Indonesia.

The caustic soda and polyvinyl chloride (PVC) markets in Southeast Asia are projected to grow at over 5% per year. Of the demand in the market, Indonesia, Thailand and Vietnam, where AGC has production bases for the chlor-alkali business, account for 70%.

As MRC informed earlier, Asahi Glass Co Ltd (AGC) in March 2015 announced that it would increase the production capacity of the polyvinyl chloride (PVC) facility at Phu My Plastics & Chemicals Co Ltd (PMPC), AGC’s subsidiary engaged in PVC business in Vietnam. PMPC’s PVC production capacity will be increased by 50% to 150,000 tonnes from the current 100,000 tonnes per year, which will make the Asahi Glass Group’s total PVC production in Southeast Asia 700,000 tonnes per year. The operation is scheduled to commence at the beginning of 2016.

Asahi Glass Co., Ltd., more commonly known as AGC, is a global glass manufacturing company, headquartered in Tokyo. It is one of the core Mitsubishi companies.

Saudi Kayan awards USD95 mln contract to Taiwanese CTCI

MOSCOW (MRC) -- Saudi Kayan Petrochemical Co. has awarded Taiwan's CTCI Corp. a contract worth USD94.5 million (SAR 354.4 million) to build a new cracker at its complex in Jubail Industrial City, said Argaam.

Under the deal, CTCI will manage the engineering, procurement and construction management (EPCM) for the project, which is located in the Eastern Province of Saudi Arabia.

The company added that it will secure the related finance from local institutions, expecting to complete the new cracker in H2-2017.

The date of trial operation and the expected financial impact will be announced later.

The new cracker comes as part of Kayan’s agreement, which was signed on February 5, 2015, with the Ministry of Petroleum and Mineral Resources and Saudi Basic Industries Corp. (SABIC) to enhance the company’s business and financial performance in return for extra ethane gas allocations.

As it was informed earlier, Saudi Kayan reported a net loss of 624.1 million riyals (USD166.3 million) 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.

Kayan is 35 percent-owned by SABIC. Kayan is the fifth-largest petrochemical manufacturer by market value in Saudi Arabia.

PE and PP prices resumed to rise in Ukraine

Moscow (MRC) - Prices for polyethylene (PE) and polypropylene (PP) sharply decreased in Ukraine in the beginning of the year, but since the end of last week prices started to rise. Devaluation of the national currency is the main reason for rise in price of polymers, according to ICIS-MRC Price Report.

In the early January PE and PP prices in the Ukrainian market began to decline rapidly. The price cuts resulted from the cancellation of a 5% temporary import duty and lower prices in foreign markets. PE and PP prices continued to go down in foreign markets in February, but the weakening of the national currency against the US dollar offset this factor, and prices on the contrary increased at the end of last week.

In the early January 2016 the exchange rate of hryvnya against the dollar fell below UAH24=USD1, but in the second half of January the devaluation of the Ukrainian currency has accelerated. By mid-February, the official hryvnya exchange rate to the dollar exceeded the level of UAH26=USD1. Thus, almost a month devaluation was more than 9%.

Such a serious devaluation in a short period has offset the reduction of PE and PP prices in the external markets.
In January - February polyolefins prices in Europe fell by EUR100-160/tonne. Prices for Middle Eastern PE reduced on average by USD150/tonne.

Late January's price offers for film high density polyethylene (HDPE) and low density polyethylene (LDPE) in the Ukrainian market reached the level of UAH39,000-40,500/tonne FCA, including VAT and UAH36,500-38,000/tonne FCA, including VAT, respectively.

Price offers for homopolymer PP raffia grade were heard in the range of USD33,500-34,500/tonne FCA, including VAT. But at the end of last week (11, February) traders under the pressure of the weakening of the national currency started to raise prices.

Price offers for film HDPE from some traders started from UAH41,000/tonne FCA, including VAT, price offers for LDPE were absent.

It is highly probable that price adjustment will continue this week in the Ukrainian market on the ongoing devaluation of the national currency.