Equate unit starts work on new facility in US

MOSCOW (MRC) -- Kuwait-based Equate Petrochemical Company has continued its global growth through its wholly owned subsidiary MEGlobal with the launch of work on a new world-scale ethylene glycol (EG) manufacturing facility in Freeport, Texas, US, as per TradeArabia.

The ground-breaking ceremony was attended by senior officials from Kuwait Petroleum Corporation (KPC), Petrochemical Industries Company (PIC), Equate, MEGlobal and the State of Texas, said a statement.

With this plant, Equate is the first Kuwaiti petrochemical company to invest in the US, said a statement from the company.

Equate is the world’s second largest EG producer with 12% of the global market share, it said.

The new facility, to be completed during 2019, will increase Equate’s monoethylene glycol (MEG) capacity by 750,000 metric tonnes annually and will enhance the company’s global presence to meet customer needs, it added.

Through its existing plants in Kuwait and Canada, Equate’s current EG production capacity exceeds 2 million metric tonnes annually. The plant will utilise Dow’s Meteor technology as part of its production process, it stated.

On the side-lines of the ground-breaking ceremony, attendees toured Dow’s US Gulf Coast cracker construction at the adjacent Oyster Creek site, it said.

Equate president and CEO Mohammad Husain, said: "Building on our acquisition of MEGlobal during 2015, this step is part of our strategic expansion plans as an international petrochemical enterprise."

"The new facility will benefit from overall integration in terms of low cost advantaged shale-gas, strategic location, feedstock availability and operational excellence," he said.

“The new plant will enable us to meet rising demand for EG throughout the world, especially in the US and Asia. We are pleased to be the first Kuwaiti petrochemical company to have an industrial investment in the US through this EG facility," he added.

As MRC wrote before, in December 2015, The Dow Chemical Company finalized the transaction to sell its ownership interest in MEGlobal to Equate Petrochemical Company K.S.C. and received USD1.5 billion in pre-tax proceeds.

MEGlobal is a world leader in the manufacture and marketing of monoethylene glycol and diethylene glycol (EG), and is headquartered in Dubai, UAE. Established in July 2004, MEGlobal currently markets over 2.5 million metric tons of EG per year globally. EG is used as a raw material in the manufacture of polyester fibers (clothing and other textiles), polyethylene terephthalate (PET) resins, antifreeze formulations and other industrial products.

Wanhua BorsodChem and Huawei to cooperate in Hungary

MOSCOW (MRC) -- The chemical company Wanhua BorsodChem and the information and communications technology provider Huawei Technologies announced the signing of a strategic cooperation agreement in Budapest, Hungary, on 28 July 2016. Under the agreement, the two companies will cooperate in setting up a big-data centre, cloud-based technology and network for machine-to-machine communication, as per GV.

The agreement was signed by Ding Jiansheng (front left) and Zheng Weifeng. The ceremony was also attended by Chen Xiaojun (back left), Political Counselor of the Chinese Embassy in Hungary, and Peter Szijjarto, Minister of Foreign Affairs and Trade of Hungary.

The agreement was signed by Ding Jiansheng (front left) and Zheng Weifeng. The ceremony was also attended by Chen Xiaojun (back left), Political Counselor of the Chinese Embassy in Hungary, and Peter Szijjarto, Minister of Foreign Affairs and Trade of Hungary.

Ding Jiansheng, President of Wanhua Industrial Group Co., Ltd. and Chairman & CEO of Wanhua BorsodChem, said: "Through cooperation, we will set up our European Informatization Center in Hungary, deepen and upgrade the level of our intelligent production and finally realize industry 4.0 (or the fourth industrial revolution) in our company. We have every reason to believe that with full support from Huawei Technologies, we will be successful in building up an intelligent manufacturing base with relative competitive advantages in Europe."

Zheng Weifeng, CEO of Huawei Technologies Hungary, said: "We are very pleased to sign the strategic cooperation agreement with Wanhua BorsodChem, one of the largest chemical companies operating in Hungary and we believe this will be an important milestone for both companies in our development in Hungary." Based on BorsodChem’s demands, Huawei will provide advanced products and solutions to accelerate the company's speed on the path towards intelligent manufacturing.

As MRC wrote before, Chinese-owned chemical company BorsodChem is planning to establish a new hydrochloric acid condensation plant in Kazincbarcika, via an EUR84 mln investment, supported with a EUR3.2 mln Hungarian government grant.

Wanhua Industrial Group acquired BorsodChem in February 2011 by exercising a call option on shares held by funds of UK-based private equity group Permira and Austrian private equity investor Vienna Capital Partners (VCP), making Wanhua the third largest isocyanates producer in the world.

Shell net profit collapses in Q2 2016 on low oil prices

MOSCOW (MRC) -- Shell's net profit collapsed in the second quarter 2016 on low oil prices, weak refining margins and production outages, the British energy giant has said, as per the company's report.

Net profits sank 71% to USD1.175 billion in the three months to June, compared with USD3.986 billion in the same part of 2015, Shell announced in a results statement.

Profit on a current cost-of-supplies (CCS) basis - which strips out changes to the value of its oil and gas inventories - slid 72% to USD1.045 billion in the reporting period.

That was almost half of market expectations for CCS profit of USD2.16 billion, according to Bloomberg News.

A 25% rebound in Brent oil prices last quarter provided some relief, but the market hit three-month lows today as rising US inventories sparked resurgent supply glut fears.

"Downstream and integrated gas businesses contributed strongly to the results, alongside Shell's self-help programme," said Chief Executive Ben van Beurden.

"However, lower oil prices continue to be a significant challenge across the business, particularly in the upstream."

The downstream business includes refining, marketing and distribution, while upstream comprises exploration and production.

Second-quarter production stood at 3.51 million barrels of oil equivalent a day, which missed forecasts of 3.63 million as output was hit by shutdowns in Canada and Nigeria.

The recent slump in oil prices has pushed energy groups worldwide to slash spending and jobs, and sell off assets.

"We are managing the company through the down-cycle by reducing costs, by delivering on lower and more predictable investment levels, executing our asset sales plans and starting up profitable new projects," added Mr van Beurden.

"At the same time, integration of Shell and BG is making strong progress, and our operating performance continues to further improve."

The company completed in February a USD47 billion takeover of BG Group, in a deal aimed at strengthening Shell's position in the liquefied natural gas (LNG) market.

"Our investment plans and portfolio actions are focused firmly on reshaping Shell into a world-class investment case through stronger, sustained and growing free cash flow per share," said Mr van Beurden.

As MRC wrote previously, on 15 February 2016, Shell said that the scheme with BG Group had become effective and the UK-based company is now owned by Shell. This follows the Court’s sanction of the scheme at a hearing held on February 11 and the delivery of the order to the registrar of companies on Monday, February 15. The USD50 billion merger created the world’s largest liquefied natural gas company. BG and Shell’ shareholders approved the historic merger in January. This is Shell’s biggest ever acquisition and the largest oil and gas deal since Exxon bought Mobil in 1999.

Royal Dutch Shell, commonly known as Shell, is an Anglo–Dutch multinational oil and gas company headquartered in the Netherlands and incorporated in the United Kingdom.Created by the merger of Royal Dutch Petroleum and UK-based Shell Transport & Trading, it is the fourth largest company in the world as of 2014, in terms of revenue, and one of the six oil and gas "supermajors".

Celanese announces increase in August VAM prices in China

MOSCOW (MRC) -- Celanese Corporation, a global technology and specialty materials company, has raised list and off-list selling prices for vinyl acetate monomer (VAM) in China in view of recent market conditions, said the producer on its site.

The price increase will be effective immediately, or as contracts allow, and will be RMB150 per mt.

Celanese last increased its list and off-list selling VAM prices for Europe and Americas as of 1 July 2016, as follows:

- by EUR50/mt - for Europe;
- by USD50/mt for Central and South America and Mexico;
- by USD0.02/lb for USA and Canada.

As MRC wrote before, effective 22 July or as contracts allow, Celanese Corporation raised list and off-list selling prices in the Asia region for Ateva ethylene-vinyl-acetate (EVA) and low density polyethylene (LDPE) polymers in Asia. The price increase was USD100/tonne for Ateva EVA and USD100/tonne for LDPE.

Celanese Corporation is a global technology leader in the production of differentiated chemistry solutions and specialty materials used in most major industries and consumer applications. Based in Dallas, Celanese employs approximately 7,000 employees worldwide and had 2015 net sales of USD5.7 billion.

PolyOne announces second quarter 2016 results

MOSCOW (MRC) -- PolyOne Corporation has reported its second quarter results for 2016, as per the company's press release.

GAAP earnings per share of USD0.59 in the second quarter of 2016 decreased from USD0.74 in the second quarter of 2015. Adjusted earnings per share increased 11% to USD0.63, from USD0.57 in the second quarter of 2015. Special items for the second quarter of 2016, which primarily included realignment and acquisition-related costs, resulted in a net after-tax charge of USD3.2 million, or USD0.04 per share (see Attachment 1). In the prior year quarter, special items, which primarily included a tax benefit and realignment charges, resulted in a net after-tax gain of USD15.9 million, or USD0.17 per share.

"I'm pleased to report adjusted EPS growth of 11% to USD0.63," said Robert M. Patterson, chairman, president, and chief executive officer, PolyOne Corporation. "Our focus on specialty applications and executing our four-pillar strategy have been the driving force behind PolyOne extending our streak to 27 consecutive quarters of adjusted EPS expansion."

Mr. Patterson added, "Performance Products & Solutions (PP&S) achieved another exceptional quarter, driven by continued mix improvement resulting in a new segment operating margin record of 12.3%. In addition, our recent investments in commercial resources resulted in a 9% volume increase in Distribution and profitability expansion in Engineered Materials."

Revenue for the second quarter of 2016 was USD862 million, compared to USD887 million in the second quarter of 2015. Underlying organic sales growth plus the addition of Magenta's fiber colorant business and Kraton's TPE business was more than offset by lower year-over-year selling prices in Distribution, PP&S, and Designed Structures and Solutions (DSS), due to lower hydro-carbon based raw material costs.

Bradley C. Richardson, executive vice president and chief financial officer, PolyOne Corporation, said, "Our balance sheet and cash flow remain very strong, and we ended June with over USD540 million of available liquidity. Also in the quarter, we successfully repriced our Senior Secured USD550 million Term Loan B, reducing the interest rate by 25 basis points to LIBOR + 2.75%. Our ability to reprice is reflective of the financial health and creditor confidence in our company."

In end-July, the company announced the acquisitions of Gordon Composites and Polystrand, two specialty businesses that will join PolyOne's existing composite technologies under a new platform to be called PolyOne Advanced Composites, which will operate within the Specialty Engineered Materials segment.

"I'm thrilled to have these companies join the PolyOne family," said Mr. Patterson. "Gordon Composites complements our Glasforms business with leading thermoset solutions. Polystrand establishes us with an immediate leadership position in new, next generation thermoplastic composites that combine high strength characteristics of a thermoset with the design freedom of thermoplastics."

"We're excited to leverage these new capabilities to better serve existing and future customers," Mr. Patterson added. "We continue to seek out specialty acquisitions to supplement our organic investments in innovation and additional commercial resources needed to drive new business gains. Overall, economic conditions remain sluggish, and I see these investments as more important now than ever to deliver long-term growth for our shareholders."

As MRC wrote before, in July 2016, PolyOne expanded its offerings for the European transportation industry. This includes the launch of OnFlex LO thermoplastic elastomers with reduced VOC levels for vehicle interiors.

PolyOne Corporation, with 2015 revenues of USD3.4 billion, is a premier provider of specialized polymer materials, services and solutions with operations in specialty polymer formulations, color and additive systems, polymer distribution and specialty vinyl resins.