Clariant ro sell its Masterbatches business to PolyOne

MOSCOW (MRC) -- Clariant (Muttenz, Switzerland) agreed to sell its entire Masterbatches business to PolyOne Corp. (Avon Lake, Ohio), said the company.

The transaction values the Masterbatches business at USD1,560 million, representing about 12.2 times the last twelve months reported EBITDA (ending September 2019) on a cash and debt free basis. This amount is payable at closing, which is expected by Q3 2020.

"This announcement is a significant milestone on our path to focusing on businesses with above-market growth, higher profitability and stronger cash generation. After the successful divestment of Healthcare Packaging in October 2019 the agreement to sell Masterbatches is an important step in delivering on our strategy defined in 2015 to concentrate on our three core Business Areas Care Chemicals, Catalysis and Natural Resources”, says Hariolf Kottmann, executive chairman of Clariant. “As announced, we are confident that we will execute the remaining divestment of our Pigments business in 2020 in order to build the new, more focused and stronger Clariant by 2021," he adds.

As previously communicated, the proceeds from the intended divestments of Clariant’s non-core businesses will be used to invest in innovations and technological applications within the core Business Areas, to strengthen Clariant’s balance sheet and to return capital to shareholders.

As a consequence of the divestment of the Masterbatches business, as well as the anticipated divestment of the Pigments business by the end of 2020, Clariant’s Board of Directors is proposing an extraordinary cash distribution of CHF 3.00 per share to the Clariant Annual General Meeting to be held on March 30, 2020. Subject to a positive vote of Clariant’s shareholders, the extraordinary distribution of approx. CHF 1 billion will be paid out post the closing of the divestment of the Masterbatches business.

The deal with PolyOne comprises two separate transactions. The global Masterbatches business is sold in a deal valued at USD1,500 million, representing c. 12.1 times the last twelve months reported EBITDA (ending September 2019).

As MRC informed earlier, Clariant announced that it has been awarded a contract by Dongguan Grand Resource Science & Technology Co. Ltd. to develop a new propane dehydrogenation unit in cooperation with CB&I. The Dongguan plant will be one of the largest single-train dehydrogenation units in the world. Clariant's technology partner CB&I will base the plant's design on its Catofin® catalytic dehydrogenation technology, which uses Clariant's tailor-made Catofin catalyst and Heat Generating Material (HGM).

Propylene is the main feedstock for producing polyprolypele (PP).

According to MRC's ScanPlast report, the estimated consumption of PP in the Russian market totalled 694,210 tonnes in January-June 2019, up by 14% year on year. The supply of propylene block copolymers (PP-block) and propylene homopolymers (PP-homo) increased.

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. Clariant India has local masterbatch production activities at Rania, Kalol and Nandesari (Gujarat) and Vashere (Maharashtra) sites in India.
MRC

MOSCOW (MRC) -- KBR (Houston) has been awarded a contract to utilize its proprietary Plinke Magnac technology to produce high-concentration nitric acid at Grupa Azoty’s Tarnow site in Poland, said Chemengonline.

KBR will provide basic and detailed engineering design, equipment, and related advisory services for the plant, which will be built adjacent to an existing plant that was also supplied by KBR and has been in operation since 1998.

Magnac technology is used to produce 98.5 wt% high-concentration nitric acid from fresh, weak nitric acid.

“This contract reinforces KBR’s existing relationship with Grupa Azoty,” said Doug Kelly, KBR President, Technology Solutions. “We are proud to deliver well-proven solutions that will enable Grupa Azoty to achieve its business expansion goals safely, reliably and efficiently."

The Grupa Azoty Group is a leader in the fertilizer and chemical market in Poland and one of its key players in Europe. It is the second largest EU-based manufacturer of nitrogen and compound fertilizers, and its other products, including melamine, caprolactam, polyamide, oxo alcohols, plasticisers and titanium white, enjoy an equally strong standing in the chemical sector, with a wide range of applications in various industries.

As MRC informed earlier, Lotos is going ahead with a zloty (Zl) 500m (EUR117.3m or $130.7m) share capital investment in fellow Polish company Grupa Azoty’s EUR1.5bn propane dehydrogenation (PDH) and polypropylene (PP) project.

According to MRC's ScanPlast report, the estimated PP consumption in the Russian market in January-October 2019 totalled 1,066,520 tonnes, up by 7% year on year. Supply of block copolymers of propylene (PP block copolymer) and homopolymer of propylene (homopolymer PP) increased, demand for statistical copolymers (PP random copolymer) decreased.

MRC

MOSCOW (MRC) -- Enterprise Products Partners and Enbridge have agreed to jointly develop a deepwater crude oil export terminal offshore Houston, the latest sign of consolidation in the crowded field of US Gulf Coast export projects, reported S&P Global.

Enbridge plans to buy interest in Enterprise's already proposed Sea Port Oil Terminal, subject to the project receiving a federal deepwater port license. Both companies would focus on fully subscribing the SPOT export capacity before Enbridge possibly pursues its own Texas COLT project later, Enbridge said in a statement.

Enbridge and Enterprise are 50/50 partners in the 850,000 b/d Seaway Pipeline system that moves US and Canadian crude to the Gulf Coast.

"It makes a lot of sense to leverage this strong business relationship in moving forward with an offshore deepwater export facility," Enbridge spokesman Michael Barnes said Monday. "We can help each other. More importantly, this agreement combines the talents and expertise of both companies in order to help customers in the US Gulf Coast."

Seaway last month announced an open season to gauge interest in expanding capacity by 200,000 b/d.

Separately Monday, Enbridge announced plans to build a new 15 million-barrel storage terminal at Jones Creek, where Seaway ends. Barnes said it would provide access to Houston-area refineries and existing and future export facilities.

"These two significant steps will benefit customers in the US Gulf Coast region, giving them more options to get their product to market," Barnes said.

The SPOT single-point mooring buoy system off Brazoria County would be able to fully load two VLCCs at a time at an overall rate of 2 million b/d, according to Enterprise's application to the US Department of Transportation's Maritime Administration. Enterprise made a final investment decision on the project in July after securing long-term agreements with Chevron, including unspecified transport and storage at Enterprise's 8.3 million-barrel ECHO terminal in Houston.

Enterprise has said the port will have access to over 6 million b/d of crude supply and more than 300 million barrels of storage, of which nearly 50 million is owned by Enterprise.

If additional US crude export demand exists, Enbridge would then pursue its Texas COLT project offshore Freeport.

Only one Gulf of Mexico port, the Louisiana Offshore Oil Port, can currently fully load VLCCs without lightering from smaller vessels. Eight VLCC-capable projects are competing to move the next wave of US crude exports with deepwater ports off Houston, Corpus Christi and southeast Louisiana, although not all of the proposed capacity will be needed.

Enterprise has said it expects to receive a federal permit for SPOT in the second quarter of 2020. Construction will take up to two years, with some work getting starting before the final approval, executives said.

As MRC wrote before, Enterprise Products Partners' Mont Belvieu propane dehydrogenation unit in Texas restarted from planned maintenance in the first week of December. The PDH unit went offline for maintenance on November 13. That day, the company said in a filing with the Texas Commission on Environmental Quality that the RAC "B" turbine shut down, which resulted in flaring. The flaring was estimated to last 72 hours. The unit has a capacity of 750,000 mt/year, according to Platts data.

Propylene is the main feedstock for producing polypropylene (PP).

According to MRC's ScanPlast report, the estimated PP consumption in the Russian market in January-October 2019 totalled 1,066,520 tonnes, up by 7% year on year. Supply of block copolymers of propylene (PP block copolymer) and homopolymer of propylene (homopolymer PP) increased, demand for statistical copolymers (PP random copolymer) decreased.

Enterprise Products Partners L.P. is an American midstream natural gas and crude oil pipeline company with headquarters in Houston, Texas. It acquired GulfTerra in September 2004. The company ranked No. 105 in the 2018 Fortune 500 list of the largest United States corporations by total revenue
MRC

MOSCOW (MRC) -- Ineos Styrolution's general purpose polystyrene (GPPS) imports into Russia increased in the first eleven months of 2019 by 64% year on year to 12,000 tonnes, according to MRC's DataScope report.

This figure was 7,300 tonnes in January-November 2018.

Ineos Styrolution is the largest GPPS supplier to Russia.

European material accounted for 47% of the total GPPS shipments over the stated period versus 36% in the first eleven months of 2018.

At the same time, November Styrolution's GPPS shipments to the Russian market grew by more than 2 times to this year's maximum of 1,500 tonnes from 700 tonnes a month earlier, the company's imports into the country were 2,400 tonnes in November 2018.
MRC

MOSCOW (MRC) -- Overall imports of general purpose polystyrene (GPPS) and high impact polystyrene (HIPS) to Kazakhstan dropped in the first ten months of 2019 by 11% year on year, totalling 7,600 tonnes, according to MRC's DataScope report.

However, October imports of material into the country grew by 6% year on year and reached the highest level this year - 1,200 tonnes, compared to 1,100 tonnes in September 2019, whereas HIPS and GPPS imports to Kazakhstan were 1,100 tonnes in October 2018.

HIPS and GPPS are shipped to Kazakhstan mainly from Russia.

The share of the Russian Federation decreased by 14% of the total imports in the first ten months of 2019 to 73% (5,500 tonnes).

October imports of Russian material into the country decreased by 9% from September to 1,000 tonnes versus 1,100 tonnes. HIPS and GPPS imports to Kazakhstan also were 1,000 tonnes in October 2018.

MRC