Covestro Q1 profit beats market view on strong construction business

MOSCOW (MRC) -- Covestro, the plastics maker that parent Bayer plans to divest, reported a larger-than-forecast profit gain for the first quarter, on stronger volumes and prices of foam chemicals used in the construction industry, said Reuters.

Quarterly earnings before interest, taxes, depreciation and amortisation (EBITDA), rose by two thirds to 846 million euros (USD919 million), above the 761 million euros expected on average in a Reuters poll of analysts.

Covestro said it now sees the return on capital employed (ROCE) in 2017 clearly above 2016 levels, where it had previously seen a slight increase.

As MRC informed earlier, Covestro has announced that it will continue manufacturing MDI in Tarragona, Spain. The plant closure that had originally been planned for the end of 2017.

Covestro (formerly Bayer MaterialScience) is an independent subgroup within Bayer. It was created as part of the restructuring of Bayer AG from the former business group Bayer Polymers, with certain of its activities being spun off to Lanxess AG. Covestro manufactures and develops materials such as coatings, adhesives and sealants, polycarbonates (CDs, DVDs), polyurethanes (automotive seating, insulation for refrigerating appliances) etc.
MRC

MOSCOW (Market Report) -- After eight months of a break, shipments of Iranian polycarbonate (PC) were resumed to the Russian market, an Iranian trader told MRC.

He said he intends to focus on PC sales to Turkey and Russia in the coming months.

Import prices of the first lot of material will be at USD2,400-2,420/tonne CPT Astrakhan, excluding VAT. PGPC-0407 and PGPC-0710 grades at a total volume of 225 tonnes are scheduled for delivery.

April domestic prices for Kazanorgsintez's PC remained at the same level - Rb185,000-186,000/tonne CPT Moscow, including VAT.
MRC

MOSCOW (MRC) -- Lanxess has announced plans to further strengthen its integrated production complex for polyamide and precursors for plastics in Antwerp. With an investment of roughly EUR 25 million in 2017, the specialty chemicals company will primarily implement measures to further enhance efficiency, said the producer on its site.

"Our integrated production complex in Lillo is the backbone of our global business for high-tech plastics. Given the trend toward lightweight construction in the automotive industry, for example, this is a major future market. Therefore we are continuously strengthening the competitiveness of this site. In total, our company has invested more than EUR300 million in Lillo since 2004 - a sum that shows our firm commitment to this site," said Matthias Zachert, Chairman of the Board of Management at Lanxess.

The announcement was made on the occasion of the 50th anniversary of caprolactam production at the site. Caprolactam is a key precursor for the production of Lanxess' high-tech plastics. Besides the automotive industry, these plastics are also used in electrical and electronics applications.

In recent years Lanxess has focused on building a balanced value chain for its high-tech plastics production operations, which absorbs the lion’s share of the intermediates produced for captive use. A milestone on that strategic path was the construction of a world-class polymerization plant with an annual capacity of 90,000 metric tons connected directly to the caprolactam production facility. Since its start in summer 2014, the polyamide is shipped from Antwerp to Lanxess’s global network of compounding facilities, where it is further processed into the high-tech plastics.

Production at the site began half a century ago on April 24, 1967. The plant was a pioneer in the harbor area, which has developed into the largest integrated chemical cluster in Europe.

The complex had a capacity of 160,000 metric tons of caprolactam per year in 2004 when LANXESS was founded; current capacity is 220,000 metric tons per year. Since the plant came on stream 50 years ago, 6,252,000 metric tons of caprolactam have been produced.

Lanxess not only expanded capacity considerably, it also modernized the complex. One recent major step was the implementation of a virtually energy self-sufficient infrastructure.

Lanxess has three production sites in the Antwerp docklands. Caprolactam and polyamide are produced in Lillo-Antwerp, glass fibers and rubber chemicals are manufactured in Kallo. Arlanxeo, a joint venture of Lanxess and Saudi Aramco, produces synthetic rubber at the site in Zwijndrecht. Lanxess has a total staff of roughly 1.250 in Belgium, including Zwijndrecht.

As MRC informed before, following the approval of all relevant antitrust authorities, the new synthetic rubber joint venture of Lanxess and Saudi Aramco started life on April 1, 2016, under the name Arlanxeo.

Lanxess is a leading specialty chemicals company with sales of EUR 8.0 billion in 2014 and about 16,600 employees in 29 countries. The company is currently represented at 52 production sites worldwide. The core business of Lanxess is the development, manufacturing and marketing of plastics, rubber, intermediates and specialty chemicals.
MRC

MOSCOW (MRC) -- AkzoNobel strongly respects and greatly values its shareholders and regularly engages in an open and direct dialog with them to better understand and consider their perspectives, said the company on its site.

Within the last week alone, the management of AkzoNobel has held face-to-face meetings with shareholders at an Investor Day followed by an extensive international shareholder roadshow and today’s Annual General Meeting (AGM). This dialog will continue to be intensive and the valued insights of AkzoNobel shareholders will be carefully considered by the Board of Management and the Supervisory Board.

AkzoNobel fully supports the rights that shareholders have under Dutch law. One of these rights is for shareholders representing at least 10% of issued share capital to request a general meeting as qualified by Dutch law. According to Dutch law, this includes meeting standards of reasonableness and fairness and a ‘legitimate interest’ test.

In its statement of April 12, 2017, AkzoNobel confirmed receipt of a request from certain shareholders, led by Elliott Advisors, to hold an EGM with the sole agenda item of dismissing Mr. Antony Burgmans as Chairman of the Supervisory Board. The Supervisory Board subsequently conducted a thorough review in response to this request and has taken detailed legal advice (see also footnotes below).

The Supervisory Board has concluded that the request from Elliott Advisers to dismiss the Chairman does not meet the standards required under Dutch law. The request is irresponsible, disproportionate, damaging and not in the best interests of the Company. Given the sole agenda item, there is no legal basis for calling an EGM.

As per MRC, US paintmaker PPG has fired what it called its "last" friendly invitation to buy Akzo Nobel, by tabling a third bid to take over its Dutch rival for EUR24.6bn.
MRC

MOSCOW (MRC) -- Russia reclaimed its position as China's biggest crude oil supplier in March, customs data showed on Tuesday, displacing Saudi Arabia after two months in second place as Moscow fights to hang on to its slice of the Chinese market, reported Reuters.

Russian shipments grew nearly 1% to 1.104 MMbpd from the same month a year earlier, as China's private refineries maintained high processing rates and restocked inventories after receiving fresh 2017 import quotas. China's crude imports rose to a record in March, overtaking the United States and shattering expectations.

Saudi shipments were 1.072 MMbbl in March, up nearly 15% from a year ago, the General Administration of Customs said. For the first three months, Saudi arrivals stood at 1.165 MMbpd, making it the top supplier on a quarterly basis.

March's record arrivals came as Saudi Arabia cut April prices of light crude as Europe and the United States ramped out supply to Asia.

The Organization of Petroleum Exporting Countries (OPEC) agreed to curb its output by about 1.2 MMbpd from January to support prices. Non-OPEC producers, including Russia, agreed to cut another 600,000 barrels, but both OPEC and non-OPEC countries continued efforts to keep Asian markets vital for growth well supplied.

March also saw the United States ramp up shipments to 45,057 bpd. A year ago, China did not import US crude.

Imports from Iran meanwhile rose 5.97% to 626,200 bpd.

We remind that, as MRC informed earlier, in September 2016, Russia's Rosneft signed a contract to supply 96 MMt of crude oil to PV Oil, an affiliate of state oil and gas PetroVietnam, starting 2017. The contract, signed on the sidelines of an international economic forum in Russia's St Petersburg, will last between 2017 and 2040.
MRC