Lotte Chemical completes takeover of Samsung Group chemical businesses

MOSCOW (MRC) -- Lotte Chemical Corp. has finalized the takeover of Samsung Group’s chemical units.The company said that it paid for money to acquire Samsung SDI Chemical on Apr. 29 and completed the acquisition of Samsung Group’s chemical businesses in about six months after the announcement of "Big Deal" in October 2015, reported BusinessKorea.

Samsung Fine Chemicals, which was completely taken over by Lotte in Feb., changed its name to Lotte Fine Chemical, while SDI Chemical, which completed the acquisition process on the 29th, changed its name to Lotte Advanced Materials through the general meeting of stockholders.

Lee Ja-hyeong, former head of the production division of at Lotte Chemical, which is formerly known as Honam Petrochemical Corp., is appointed as new CEO of Lotte Advanced Materials. Lotte Fine Chemical CEO Oh Sung-yup, who was named in Feb., joined Lotte Chemical in 1985, worked at the finance team and served as the head of the planning division and business management division at the company.

Lotte Chemical CEO and President Huh Soo-young said, "As the company successfully completed the takeover of Samsung chemical units, it has gained a foothold to jump into a global leading chemical company. Lotte Chemical has the world class technology in raw materials that is used to produce synthetic resins. So, the latest acquisition will help the company expand high value added product lineups through the vertical integration in the petrochemical sector."

Combining 11.7 trillion won (USD10.26 billion) of Lotte Chemical’s consolidated sales last year and 4 trillion won (USD3.51 billion) of acquired company, its sales in the petrochemical division will reach 16 trillion won (USD14.03 billion.)

As MRC wrote previously, in November 2014, South Korea's Samsung Group said it is selling stakes in four chemical and defence firms for 1.9 trillion won (USD1.72 billion) to Hanwha Group. In March 2015, South Korea's Fair Trade Commission (KFTC) gave conditional approval to Hanwha's proposed acquisition of Samsung General Chemicals.

Established in 1976, Lotte Chemical has been solidifyng its position by localizing cutting-edge petrochemical technologies. Among the high-quality products produced by Lotte Chemical through its efficient processes are ethylene, HDPE, LDPE, LLDPE, PP, functional resin, EG, SM, PIA, PET, etc. Lotte Chemical’s products are being distributed to 152 countries around the world. With the acquisition of Pakistan’s PTA in 2009, Artenius in the UK in 2010 and Titan Chemical Corp., Lotte Chemical is now able to efficiently supply excellent products to an increasing number of countries. The company is further accelerating its efforts to strengthen its global competitiveness by establishing overseas branches in Hong Kong, Russia, and USA, along with the sales corporation in China for active sales activities both in domestic and abroad.
MRC

Braskem-Idesa starts second HDPE line

MOSCOW (MRC) -- Mexico's Braskem-Idesa, a 75-25 joint venture between Braskem and Grupo Idesa, started operations at the end of last week on its second high density polyethylene (HDPE) line at the Etileno XXI petrochemical complex, as per Magships.

The HDPE will ramp up the second week of May, as per a company spokeswoman.

"The first HDPE plant ramped up April 8, the second one tonight and the third will start in the next 10 days," spokeswoman Yeraseth Bello said. The cracker feeding the PE plants is said to be operating at 50-60% but is expected to increase to 80-90% by mid-May.

A source with knowledge of business operations said this week that the second HDPE line had been delayed due to some problems related to the supply of ethane, which has since been corrected. Pemex won the bid in 2010 to provide ethane feedstock on a 20-year contract for the complex.

Braskem-Idesa is a joint venture between Brazil's Braskem (75%) and Mexico's Grupo Idesa (25%). Etileno XXI PE production was expected to begin with HDPE injection resin, followed by blowmolding and finally low-density PE. Etileno XXI will focus on meeting Mexico's growing PE demand, with remaining output available for export, including to the US and South America.

Etileno XXI will include 1 million mt/year of polyethylene capacity.

As MRC informed previously, Braskem Idesa started polyethylene (PE) production at its Coatzacoalcos, Mexico complex on 6 April. The JV started injecting ethane at its Etileno XXI steam cracker on 18 March.

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).
MRC

Trinseo Q1 2016 profit rises

MOSCOW (MRC) -- Trinseo, a global materials company and manufacturer of plastics, latex binders and synthetic rubber, has reported its first quarter 2016 financial results with revenue of USD894 million and net income of USD77 million, as per BusinessWire.

Additionally, results for the first quarter included adjusted EPS of USD1.62 per diluted share and adjusted EBITDA of USD143 million; these included an unfavorable inventory revaluation impact of USD0.16 and USD10 million, respectively.

Commenting on the Company’s performance, Chris Pappas, Trinseo President and Chief Executive Officer, said, "I am very pleased with the strong start to the year, as we exceeded our first quarter Adjusted EBITDA and Adjusted EPS guidance. We continue to see a higher, sustainable level of EBITDA and earnings due to structural improvements in the styrenics and polycarbonate markets. Free cash flow of $63 million was a record first quarter result, and we repurchased 1.6 million shares in March as part of Bain Capital’s secondary offering on March 24."

Pappas continued, "As expected, our Performance Materials division delivered USD77 million of Adjusted EBITDA excluding inventory revaluation, putting it on track to deliver at least 5% EBITDA growth in 2016. Our Basic Plastics & Feedstocks division had another strong quarter with USD101 million Adjusted EBITDA excluding inventory revaluation. This result exceeded our guidance due mainly to higher than expected styrene margins, and included no contribution from fly-up styrene margin."

Revenue in the first quarter decreased 12% versus prior year driven by the pass through of lower raw material costs, lower sales volume to the Europe polystyrene and Asia Performance Plastics markets, as well as currency, as the euro weakened in comparison to the U.S. dollar.

First quarter adjusted EBITDA of USD143 million included a USD10 million unfavorable impact from inventory revaluation. Adjusted EBITDA excluding inventory revaluation of USD153 million was USD2 million higher than prior year.

As MRC informed before, Trinseo and its affiliate companies in Europe have announced price increases for all polystyrene (PS), ABS and SAN grades in May 2016. Thus, the May contract and spot prices for the products listed below will increase as follows:

- STYRON general purpose polystyrene grades (GPPS), STYRON and STYRON A-TECH high impact polystyrene grades (HIPS) - by EUR25 per metric ton;
- MAGNUM ABS resins - by EUR35 per metric ton;
- TYRIL SAN resins - by EUR20 per metric ton.

Trinseo is a global materials company and manufacturer of plastics, latex and rubber. TrinseoпїЅs technology is used by customers in industries such as home appliances, automotive, building & construction, carpet, consumer electronics, consumer goods, electrical & lighting, medical, packaging, paper & paperboard, rubber goods and tires. Formerly known as Styron, Trinseo completed its renaming process in 1Q 2015. Trinseo had approximately USD4.0 billion in revenue in 2015, with 18 manufacturing sites around the world, and more than 2,200 employees.
MRC

Shell Q1 2016 net income plummets 89%

MOSCOW (MRC) -- Royal Dutch Shell reported an 89% drop in net income on Wednesday as low oil prices sunk Upstream earnings to a USD1.4 billion loss, as per Petro Global News.

The company posted a first quarter net income attributable to shareholders of USD484 million, down from USD4.43 billion in the same quarter of last year.

Current cost of supplies (CCS) earnings attributable to shareholders fell 83% year-over-year to USD814 million in the first quarter.

First quarter CCS earnings attributable to shareholders excluding identified items were USD1.55 billion compared with USD3.73 billion for the first quarter 2015, or a 58% year-over-year decrease.

Identified items came in at a loss of USD739 million compared to USD1.02 billion in the year ago quarter.

First quarter basic CCS earnings per share excluding identified items decreased to USD0.22, a 63% decline from the first quarter 2015.

"Compared with the first quarter 2015, CCS earnings attributable to shareholders excluding identified items were impacted by the decline in oil, gas and LNG prices and weaker refining industry conditions. Earnings benefited from lower operating expenses, as steps taken by Shell to reduce costs more than offset the increase in operating expenses associated with BG," Shell said.

As MRC reported earlier, in April 2015, Royal Dutch Shell completed a revamp and upgrade of its Singapore ethane cracker. The project increased production for the 800,000-tpy ethylene plant on Bukom Island by 20%. The ethylene and olefins unit is also integrated with Shell’s 500,000-bpd refinery.

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

Paraxylene market expected to register CAGR of 7% from 2015 To 2022

MOSCOW (MRC) -- Global paraxylene (PX) demand is estimated to exceed 62.98 mln tons at a CAGR of 7% from 2015 to 2022, as per Plastemart with reference to Grand View Research, Inc.

Growing utilization of purified terephthalic acid (PTA) for polyester production, particularly in Asia Pacific is expected to fuel growth in paraxylene market over the forecast period. The global paraxylene (PX) market is anticipated to reach US$66.93 bln by 2022 owing to increasing demand for fiber and polyester resin in numerous end-use applications across various industries. Growing utilization of purified terephthalic acid (PTA) for polyester production, particularly in Asia Pacific is expected to fuel growth in paraxylene market over the forecast period.

Demand for PTA has been increasing exponentially over the past years owing to its efficient conversion rate coupled with lower costs associated with polyester production. The global utilization rate of PET has been adversely affected due to the fast growth of PTA production capacity. PTA manufacturers are now required to lower capacity utilization on account of the oversupply of PET. PTA producers in Asia Pacific have been adversely affected by sudden fall in PTA import in China due to increased domestic production, and this is expected to hamper market growth.

Rising demand for bio-based alternatives and increasing consumer awareness subject to non-biodegradable nature of petrochemical products is expected to be the major obstacles for market participants. Also, campaigns involving sensitizing consumers about the harmful effects of PX production is supposed to impede the future market demand.
PTA occupied over 95% of the overall PX demand on account of increasing utilization of polyester across various end-use industries. It is anticipated to remain the largest application segment for PX in the global market.

Asia Pacific was the dominant regional market in 2014 with 79.2% of the share. Increasing consumption of PET and polyester fiber in developing countries including India and China is expected to augment the market. Asia Pacific is anticipated to observe the fastest growth of nearly 7.3% in the next seven years. Rapid Industrialization together with increasing polyester demand in textile and packaging is expected to propel growth over the forecast period. South Asian countries such as Vietnam, Thailand, and Indonesia are likely to witness expansion in the next seven years owing to high demand for polyester. Growing PET demand in industrial applications, sheets and films are anticipated to drive the regional market.

As MRC wrote previously, in March 2016, China's Hanbang Petrochemical successfully started up its second purified terephthalic acid (PTA) unit and production operations are ongoing. However, the plant has yet to achieve on-spec production. According to the source, the plant is currently running one of its two production lines, each with an annual capacity of 1.1 million mt/year.
MRC