Bayer reports another record year

MOSCOW (MRC) -- The Bayer Group had a very successful year in 2015, both strategically and operationally, according to the company's press release.

"Operationally it was another record year for Bayer. Sales reached the highest level in the company’s history, exceeding EUR 46 billion. Clean EBITDA substantially rose by about 18 percent and also set a new record of more than EUR 10 billion," Management Board Chairman Dr. Marijn Dekkers said at the Financial News Conference in Leverkusen. "Strategically we have taken all the necessary steps to make Bayer a pure Life Science company," said Dekkers.

The Bayer CEO explained that the company had floated the former MaterialScience subgroup on the stock market under the name Covestro and implemented a reorganization to set the course for Bayer’s successful further development. Dekkers forecasted further growth in sales and earnings in 2016.

Group sales advanced by 12.1 percent to EUR 46,324 million (2014: EUR 41,339 million). After adjusting for currency and portfolio effects, the increase was 2.7 percent. EBITDA before special items increased by 18.2 percent to EUR 10,266 million (2014: EUR 8,685 million).

The good business development was accompanied by higher R&D expenses (a year-on-year increase of around EUR 740 million). Positive currency effects buoyed earnings by about EUR 680 million. EBIT increased by 15.8 percent to EUR 6,250 million (2014: EUR 5,395 million) after net special charges of EUR 819 million (2014: EUR 438 million). The special charges mainly comprised expenses for the consolidation of production sites, integration costs for acquired businesses and expenses connected with the carve-out and stock market flotation of Covestro. A special gain from a litigation in connection with a breach of contract and patent infringement had a positive effect.

Net income climbed by 20.0 percent to EUR 4,110 million (2014: EUR 3,426 million), and core earnings per share from continuing operations by 16.0 percent to EUR 6.83 (2014: EUR 5.89).

Gross cash flow from continuing operations rose by 4.4 percent to EUR 6,999 million (2014: EUR 6,707 million) and was thus substantially above the gross cash flow hurdle of approximately EUR 5.7 billion. "In 2015, Bayer far exceeded the minimum return and reproduction requirements and thus created value. All subgroups contributed to this performance," stressed Chief Financial Officer Johannes Dietsch. Net cash flow (total) rose by 18.6 percent to EUR 6,890 million (2014: EUR 5,810 million). Net financial debt declined by EUR 2.2 billion between the end of 2014 and December 31, 2015, to EUR 17.4 billion.

As MRC informed earlier, the plan for Bayer MaterialScience to become a separate company was announced in September 2014.

Bayer is a global enterprise with core competencies in the fields of health care, agriculture and high-tech polymer materials. As an innovation company, it sets trends in research-intensive areas. Bayer's products and services are designed to benefit people and improve their quality of life. At the same time, the Group aims to create value through innovation, growth and high earning power. Bayer is committed to the principles of sustainable development and to its social and ethical responsibilities as a corporate citizen. In fiscal 2014, the Group employed 118,900 people and had sales of EUR 42.2 billion.
MRC

MOSCOW (MRC) -- French industrial gas company Air Liquide yesterday opened a 25-million-euro (USD27.6 million) research and technology center in Shanghai to address issues including carbon dioxide emission reduction and waste water treatment in China and Asia-Pacific, said the producer on its site.

The center intends to tackle environmental and societal challenges, including transition to cleaner energy, carbon dioxide emission reduction, waste water treatment, urban air quality, food safety, and health care.

Located in Xinzhuang Industrial Park in Minhang District, the 12,000-square-meter center is Air Liquide’s first to focus on innovation and its fifth center globally.

In 2015, Air Liquide Asia Pacific’s gas and services revenue grew 6 percent year on year to 3.85 billion euros, which accounted for 26 percent of its worldwide gas and services revenue.

Air Liquide is confident China’s industrial gas market will grow 6 to 8 percent annually, above the government’s economic growth target of around 6.7 percent.

As it was informed earlier, Air Liquide also signed a contract with Chinese outfit Xinneng Energy last month, which will see it invest more then EUR60m (USD65m) in a new ASU to produce up to 2,700t of oxygen (O2) per day, sticking its proverbial flag further into Chinese soil.

L'Air Liquide S.A., or Air Liquide, is a French multinational company which supplies industrial gases and services to various industries including medical, chemical and electronic manufacturers.
MRC

MOCOW (MRC) -- South Korea’s 2015 petrochemical exports plunged 21.6% to USD37.78 billion on year due to softened demand from China and the sustained low oil prices, according to a report released by the Korea International Trade Association (KITA), said TPS.

The main driver behind the plunge in South Korea’s petrochemical exports in 2015 was the sustained low oil prices which translated into lower unit price of petrochemical products.

For instance, the Dubai crude oil, which accounts for nearly 70% of total oil imports in South Korea, was averaged at USD26.90/b in January 2016. This was a sharp fall of 41.30% compared to the same month in 2015.

Structural factors that weakened South Korea’s petrochemical exports include the slowdown of the Chinese economy and increased self-sufficiency rates for petrochemical products in China.

Given that exports to China account nearly 50% of total petrochemical exports, this was regarded as a huge blow to South Kora’s export-oriented petrochemical industry.

Just as importantly, the sharp yuan depreciation by the People’s Bank of China (PBOC) has also weakened the competitiveness of South Korea’s petrochemical products.

Looking ahead, it is expected that petrochemical prices will continue to decline further due to low oil prices and exports to remain sluggish throughout Q1 2016.

As MRC informed previously, the South Korean government is pushing forward with consolidation of the petrochemical industries, which are mired in a supply glut and the protracted global economic recession. The restructuring on the petrochemical industry is currently led by the Ministry of Trade, Industry, and Energy. Although working-level officials of major petrochemical firms such as LG Chem, Lotte Chemical, and SK Global Chemical held a meeting last month in order to discuss issues like capacity adjustment, they no longer do it out of concern that it might be construed as an act of collusion by the Fair Trade Commission.
MRC

MOSCOW (MRC) -- Tigers Polymer will launch new plants in the U.S. and Thailand by this autumn to expand the lineup and boost the output of its automobile components, said Asia.nikkei.

The Japanese manufacturer of molded resin and rubber parts for autos, home appliances and construction expects to complete the plants by the end of February. The investment is expected to reach just over 2 billion yen (USD17.9 million).

The new U.S. plant with floor space of about 6,500 sq. meters is being built at the site of the company's existing plant in the state of Ohio at a cost of roughly 1.3 billion yen. This new plant, which will have production lines that can handle both injection and blow molding methods, is to sharply increase the company's capacity for car engine air-cleaner modules.

Tigers Polymer's existing U.S. plants have been operating at full capacity. The company's components are being adopted by an expanding range of vehicles manufactured by Japanese automakers in North America.

"In the U.S., new-car sales have been solid as gasoline prices have been falling," said Harunobu Genda, director of the Japanese parent. "Furthermore, we expect demand for cars there to increase steadily."

In Thailand, a plant with 10,000 sq. meters of floor space is going up in a vacant section of the site occupied by a manufacturing unit in Ayutthaya Province. The new plant, Tigers Polymer's fourth production base in the Southeast Asian country, will make air conditioning ducts. The facility also will absorb the manufacturing operations from the company's first Thai plant, whose productivity has suffered from a series of incremental expansions.

Domestic demand for cars has been weak, but vehicle exports from Thailand remain high. The company sees room for further growth in Thailand as a production base. Tigers Polymer is already the No. 1 supplier of blow-mold products to Japanese companies in Thailand, but it hopes to win more orders by expanding its product line, raising productivity and bolstering cost competitiveness, all with the establishment of the new plant.

The company, whose shares trade on the Tokyo Stock Exchange's first section, counts molded resin autoparts and hoses for home appliances and construction as its main products. It has added foreign production bases over the years to keep up with the business expansion of Honda Motor, its main customer.

As it was informed earlier, Honda Motor Company is planning to increase production of its partially or fully electric vehicles (EVs) to account for two-third of the global sales by 2030.

Tigers Polymer now generates more than 50% of sales outside Japan. Group sales for the current year ending in March are projected to reach 41 billion yen.

MRC

MOSCOW (MRC) -- Unconventional resources director and US chair, Marvin Odum, will leave Shell at the end of March 2016, said Hydrocarbonprocessing.

Concurrent with Odum’s departure, and in a move that will simplify Shell’s structure, the Athabasca oil sands project and the Scotford upgrader in Canada will join the global downstream organization under downstream director, John Abbott.

Meanwhile, Shell's shale resources business will join the global upstream organization under upstream director Andy Brown. As a result of these changes, the unconventional resources business will cease to exist.

Since joining Shell as an engineer in 1982, Odum had held a number of commercial and technical leadership roles of increasing responsibility. He has held the position of US chair and president of Shell Oil Co. since 2008, and joined Royal Dutch Shell’s executive committee as upstream Americas director in July 2009.

"Marvin has had a long and distinguished Shell career and I’m grateful to him for the central role he’s played in the company’s success," said Ben van Beurden, CEO of Shell. "He leaves our important businesses in the Americas well positioned for the next phase of their development."

Odum will be replaced as US chair and president of Shell Oil Co. by Bruce Culpepper, currently executive vice president of HR, unconventional resources and regional coordination.

In his new role, which is effective April 1, 2016, Culpepper, who is a US citizen and has worked for Shell for 34 years, will continue the company’s advocacy in the US on a wide range of energy policy issues.

As MRC informed earlier, Royal Dutch Shell plc agreed to sell its shareholding in the Shell Refining Company (SRC) in Malaysia to Malaysian Hengyuan International Ltd (MHIL).

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