EU deepens scrutiny of ChemChina-Syngenta deal

МОSCOW (MRC) -- Extended reviews stretch timelines for ag megadeals The European Commission announced that it has opened an in-depth antitrust probe into ChemChina's USD43-billion acquisition of Syngenta, the latest indication of potential regulatory resistance to consolidation underway in beleaguered agricultural markets, said Chemweek.

"This deal would lead to the combination of a leading crop protection company with one of its main generic competitors. Therefore we need to carefully assess whether the proposed merger would lead to higher prices or a reduced choice for farmers," Margrethe Vestager, head of EU's competition regulations, says in a press release. The transaction would also take place in an industry that is already relatively concentrated, the statement adds.

Syngenta is one of the main global seeds and crop protection companies. ChemChina controls Adama, the largest supplier of generic crop protection products in Europe.

The escalation to a Phase II review gives the Vestager's office 90 working days—as late as March 2017—to make a ruling. The two companies had originally aimed to close the deal by year-end, but Syngenta conceded on Tuesday that closure could be pushed back until the first quarter of 2017. "In a context of industry consolidation, regulators in the EU and elsewhere have recently requested a large amount of additional information, and we now expect the regulatory process to extend into the first quarter of 2017,” said Syngenta CEO Erik Fyrwald. "ChemChina and Syngenta remain fully committed to the transaction and are confident of its closure."

Syngenta and ChemChina confirmed the review, adding that they "intend to continue constructive discussions with the EU authorities in order to conclude the review as early as possible."

The Commission says its Phase I investigation turned up several preliminary concerns, among them partially overlapping portfolios of crop protection products, including herbicides, insecticides, fungicides and plant growth regulators. Both Syngenta and ChemChina have high combined market share and their products may directly compete. In addition, Adama may be an important generic competitor of Syngenta in many of these markets, the Commission says.

The Commission adds that it is cooperating closely with other competition authorities, "notably with the Federal Trade Commission in the US and the antitrust authorities of Brazil and Canada. The opening of an in-depth inquiry does not prejudge the final result of the investigation, the Commission adds.

The pending merger of Dow Chemical and DuPont, a deal driven in part by the downturn in agriculture markets, is also subject to a Phase II review by the Commission. That review began in August, with a provisional deadline of 6 February for a ruling. Bayer, meanwhile, says it has initiated the process of obtaining the necessary approvals for the USD66-billion acquisition of Monsanto from regulators in the United States and European Union. Bayer has reiterated its expectation that the deal will be completed by the end of 2017.

ChemChina produces special chemical materials, basic chemicals, oil refining, agricultural chemistry, rubber products, and chemical equipment.

Clariant to invest CHF 10 mln in expansion of color & additive masterbatches

MOSCOW (MRC) -- Clariant plans to invest approximately CHF 10 mln - a global initiative to expand its ability to produce color and additive masterbatches and compounds using engineering polymers and high-temperature plastics like PEEK (polyether ether ketone) is progressing on schedule, reported Plastemart.

Jeff Saeger, who heads the expansion program for Clariant, reports two extrusion lines at the Masterbatches plant in Ahrensburg, Germany, have been refurbished and can now run at temperatures up to 450 C. Another new line will be installed and running by the end of Q1 2017.

In Shanghai, two new co-rotating extruders are now up and running in Shanghai and a smaller high-temperature unit has been started up in Singapore. Saeger says equipment for processing fluoropolymers has been installed in Lewiston, Maine, U.S.A, and new lines for specialty high-temperature compounds are now running in Holden, Massachusetts. A new black masterbatch line, for engineering polymers is schedule start-up in Holden in Q3 2017.

In addition, the Shanghai plant is being expanded to include not only additional compounding space, but also a new testing and quality-control laboratory. The Asian region already is served by a state-of-the-art lab in Singapore, but Clariant plans to add new physical, chemical and weathering test equipment there as well in the first half of 2017.

The new investments are expected to be especially beneficial to manufacturers of electrical products and appliances, since many of these devices and the components in them contain engineering plastics that need to meet flammability-resistance standards promulgated by Underwriters Laboratories (UL). Clariant has obtained UL94 masterbatch listing for more than 200 commercial grades.

As MRC informed before, in February 2106, Clariant Masterbatches Saudi Arabia, a joint venture (JV) between Clariant and Rowad National Plastic Company, started construction of a new masterbatch production unit in Yanbu, Saudi Arabia. Being built on a 38,000 sq. m area, the new unit will be located in Yanbu Industrial Zone 2 and is scheduled to be commissioned by early next year. The new facility, which will be the second manufacturing site of the company in Saudi Arabia, the other being situated in Riyadh, will manufacture white masterbatches.

Clariant AG is a Swiss chemical company and a world leader in the production of specialty chemicals for the textile, printing, mining and metallurgical industries. It is engaged in processing crude oil products in pigments, plastics and paints.

KINFRA receives in-principle approval to set up petrochemical park at Kochi

MOSCOW (MRC) -- Kerala Industrial Infrastructure Development Corp. (KINFRA), a statutory body of the government of Kerala, has received in-principle approval from the state to set up a petrochemical park at Kochi in India's Kerala State, reported Apic-online with reference to the Times of India.

The project, estimated to cost Rs 1864 crore, is expected to be built on land procured from the FACT complex at Ambalamugal.

Now that the project has received approval from the state, "the next step will be to procure 600-acre land from FACT for the project," said the report quoting KINFRA Managing Director Dr. M. Beena. "That decision is pending for the Union Cabinet approval," Dr. Beena added.

Petrochemicals currently account for approximately 30% of India's USD120-billion chemical industry, which is likely to grow 11% in the coming years and reach USD250-billion by 2020.

PCN last year reported that Bharat Petroleum Corp. Ltd. (BPCL) received Environment Ministry approval to expand BPCL's refinery in Kochi to produce niche petrochemicals that were predominately being imported.

The project involves the production of acrylic acid acrylates and oxo alcohols, with production scheduled to begin during fiscal 2018-2019. The facility is expected to receive polymer-grade propylene feedstock from BPCL's nearby refinery, which is currently being expanded to 15.5-million t/y from 9.5-million t/y.

The petrochemical park assumes significance in view of the proposed expansion of BPCL, proximity to the port and the availability of natural gas infrastructure, the report noted.

We remind that, in January 2016, BPCL selected Air Liquide Global E&C Solutions, the engineering and construction unit of French firm Air Liquide group, for supplying Lurgi/Nippon Kayaku ester grade acrylic acid technology for BPCL’s propylene derivatives petrochemical project (PDPP) located in Kochi.

Bharat Petroleum Corporation Limited (BPCL) is an Indian state-controlled oil and gas company headquartered in Mumbai, India. Bharat Petroleum owns refineries at Mumbai, Maharashtra and Kochi, Kerala (Kochi Refineries) with a capacity of 12 and 9.5 million metric tonnes per year.

Braskem opens first technology center in Europe

MOSCOW (MRC) -- Global petrochemicals firm Braskem has invested around EUR5 million to build a new European Technology Center within its plant in Wesseling, Germany, said the producer on its site.

With the new facility, the company will be able to develop new products designed specifically for the European market.

Braskem already operates two Polymer Technology Centers worldwide, one in Triunfo, Brazil and one in Pittsburgh in Pennsylvania, US. Investing in a center of technical know-how in Germany reflects the company's commitment to the European market and its clients.

"We are pleased that we now have the capability to develop new products directly for the European market and to provide enhanced technical support to our clients" says Srivatsan Iyer, CEO of Braskem Europe. "Our capabilities in research and development here in Europe, along with the expertise and facilities in our other global Technology Centers, will continue to enable Braskem to expand its technical leadership in polyolefins. We are now able to give our clients even closer support on products and serve them even more efficiently with market-specific requirements", he adds.

The new equipment at the Technology Center provides instrumentation for testing, application development and new product research, which will help improve products and broaden Braskem's portfolio to serve high growth markets.

As MRC reported before, Braskem has commissioned a new UTEC ultra-high-molecular-weight-polyethylene (UHMWPE) production plant at its La Porte, Texas site. The new UTEC plant is scheduled for startup by the end of 2016 and reflects another milestone investment in Braskem's North American growth strategy.

Braskem S.A. produces petrochemicals and generates electricity. The Company produces ethylene, propylene, benzene, toluene, xylenes, butadiene, butene, isoprene, dicyclopentediene, MTBE, caprolactam, ammonium sulfate, cyclohexene, polyethylene theraphtalat, polyethylene, and polyvinyl chloride (PVC).

Exxon Mobil profit drops 38% but beats estimates

MOSCOW (MRC) -- Exxon Mobil Corp, the world's largest publicly traded oil company, reported a 38 percent drop in quarterly profit that still beat Wall Street's expectations as cost cuts partly offset declining crude prices, said Reuters.

Shares of Exxon were down 1.4 percent at 85.73 in premarket trading. The company reported third-quarter net income of USD2.65 billion, or 63 cents per share, compared with USD4.24 billion, or USD1.01 per share, a year earlier.

Analysts on average expected a profit of 58 cents per share, according to Thomson Reuters I/B/E/S.

Earnings fell in all of the company's divisions, including the refining arm, which has generally bolstered profits when oil prices are low.

Production fell about 3 percent to 3.8 million barrels of oil equivalent per day. Exxon's refineries processed about 2 percent less crude oil during the quarter than it did a year earlier.

We remind that, as MRC informed previously, in mid-February 2016, US petrochemical producer ExxonMobil Chemical completed the start up process of its 820,000 m tpa ethylene complex in Beaumont, Texas. The Beaumont complex has two equal-sized steam cracking units with total combined ethylene capacity of 820,000 mtpa. "Operations are normal and we anticipate no impact to production," spokesman Todd Spitler said in confirming market reports of a successful restart. The unit shut January 21 after an area wide power outage. The startup process started within a week of the outage. The Beaumont cracker has an ethylene capacity of 900,000 tonnes/year.

ExxonMobil is the largest non-government owned company in the energy industry and produces about 3% of the world's oil and about 2% of the world's energy.