SIBUR sustainability committee outlines further steps in coronavirus response

MOSCOW (MRC) -- SIBUR’s Sustainability Committee held a regular meeting online to review measures implemented by the Company in dealing with the COVID-19 outbreak and approve further steps in key focus areas, said the company.

The safety of our employees and clients is at the centre of the Company’s pandemic response. SIBUR works consistently and proactively to tackle COVID-19 and its consequences. The Company is placing major emphasis on protecting its employees and partners as it seeks to maintain the highest level of customer service and meet the increased demand for materials used in medical products and safe packaging.

We have cancelled all employee business trips, urging staff to refrain from personal travel outside the region of their residence. The Company has asked office employees to work remotely while retaining their salary levels. For employees engaged in the continuous production of supplies for strategically important industries, including the healthcare sector, SIBUR has introduced a shift-camp work model. With their full agreement, employees are transitioned to live and work at on-site shift camps, with shifts rotating every two weeks. Before joining a shift, all staff members are tested for coronavirus. All of them, including heads of production units who have tested negative are isolated from the outside world with their consent to live and work in a special safety environment created on site. The facilities available to them include dormitories, canteens offering three-time meals at the Company’s expense, convenience stores, recreational areas and first aid posts. Those joining shift camps will see their monthly remuneration increase by 20%.

The Sustainability Committee highlighted the importance of continued partnership with external counterparties. As of now, SIBUR delivers on all of its contractual obligations and takes active steps to mitigate the risk of non-performance due to imposed restrictions, including by altering its supply routes to overcome logistic limitations in certain regions.

The Company increases its production of polymers, including polypropylene, to ensure supply of high-quality disposable PPE to healthcare facilities. The prices for medical grade polymers are kept at their minimum levels. We also expand cooperation with producers of medical supplies to support high utilisation of their capacities and help drive their production growth. In addition, SIBUR invests in developing a feedstock base for import substitution of medical products in order to meet the nation-wide demand for disposable PPE.

As part of social and economic support in its regions of operation, the Company will provide over 40,000 epidemiological kits required by healthcare facilities. On top of anti-crisis aid, the committee decided to continue the Formula for Good Deeds charitable programme, keeping its scope intact. The Company works together with its partners and grantees to transform the 2020 projects and ensure their successful implementation while abiding by the strict safety requirements for organisers and attendees.

Alexey Kozlov, Managing Director and Member of SIBUR’s Management Board, commented: “SIBUR remains focused on ensuring the safety of our employees and clients. We take comprehensive measures to mitigate the negative impact of the coronavirus outbreak, regularly monitor their effectiveness and maintain a flexible approach to planning further steps. We will continue to work closely with our partners, clients and government authorities to respond to this challenge and its developments promptly and effectively."

As MRC informed earlier, SIBUR will develop a feasibility study for the construction of a gas processing plant near Kazan by July 2020. Based on the feasibility study, the company"s shareholders will decide on the construction of the enterprise.

According to MRC's ScanPlast report, PP shipments to the Russian market were 192,760 tonnes in January-February 2020, down by 6% year on year. Homopolymer PP accounted for the main decrease in imports.

SIBUR Holding PJSC is the largest petrochemical company in Russia and Eastern Europe with full coverage of the industry cycle from gas processing, production of monomers, plastics and synthetic rubbers to plastics processing. The main shareholder of SIBUR Leonid Mikhelson controls 48.48% of the company, Gennady Timchenko - 17%, Kirill Shamalov - 3.88%, the current and former management of the company (including SIBUR chairman of the board Dmitry Konov and head of Gazprom Neft Alexander Dyukov) - 10.6%, Chinese Sinopec and the Silk Road Fund - 10% each.

PP imports to Russia grew by 37% in the first quarter

MOSCOW (MRC) -- Polypropylene (PP) imports into Russia grew by 37% year on year to 53,500 tonnes in the first three months of 2020 .
All grades of propylene polymers accounted for the greatest increase in imports, according to MRC's DataScope report.

Russian companies increased their PP imports in March significantly: imports were 21,500 tonnes versus 15,100 tonnes a month earlier, shipments of propylene homopolymers (homopolymer PP) from Azerbaijan increased. Thus, overall PP imports to Russia totalled 53,500 tonnes of propylene polymers in January-March 2020, compared to 39,200 tonnes a year earlier. The volume of purchasing of all grades of propylene polymers in foreign markets increased, with imports of homopolymer PP raffia accounting for the most noticeable increase.

The overall structure of PP imports by grades looked the following way over the stated period.

March imports of homopolymer PP increased to 9,800 tonnes against 4,800 tonnes a month earlier, shipments of homopolymer PP from Azerbaijan increased several times. Thus, overall imports of homopolymer PP to Russia totalled about 22,400 tonnes in the first three months of 2020, compared to 12,600 tonnes a year earlier.

Last month's imports of propylene block-copolymers (PP block copolymers) were 5,100 tonnes versus 5,300 tonnes in February, demand for pipe grade PP decreased from Russian companies. Imports of PP block copolymers into Russia reached 14,700 tonnes in January-March 2020, compared to 10,500 tonnes a year earlier.

March imports of PP random copolymers remained in the level of February at about 2,300 tonnes. Total imports of PP random copolymers in Russia were 8,100 tonnes in January - March 2020, compared with 7,800 tonnes year on year.

Imports of other propylene polymers totalled 8,300 tonnes over the stated period versus 8,200 tonnes a year earlier.


COVID-19 - News digest as of 22.04.2020

1. Vietnamese Dung Quat refinery says to delay maintenance

MOSCOW (MRC) -- Vietnam’s Binh Son Refining and Petrochemical Co will delay maintenance at its Dung Quat refinery until July 27-September 16 due to the coronavirus pandemic, according to Hydrocarbonprocessing with reference to the company's statement. It was scheduled to conduct maintenance at the 130,000-barrel-per-day refinery from June 12 to August 1.


DuPont lifts first-quarter outlook, shores up balance sheet as COVID-19 clouds view

MOSCOW (MRC) -- DuPont lifted its first-quarter earnings outlook as the coronavirus disease 2019 (COVID-19) pandemic bolsters demand for products such as Tyvek protective fabric, but withdrew its full-year guidance and announced steps to improve its balance sheet because the virus’s longer-term impacts on markets such as automotive and oil and gas remains unclear, reported Chemweek.

DuPont expects first-quarter 2020 adjusted earnings of USD0.82-0.84/share, well above the analysts’ consensus estimate of USD0.68/share, as reported by Refinitiv (New York), and the company’s initial first-quarter guidance of USD0.70-0.74/share, issued on 11 March.

First-quarter net earnings are expected to be USD0.70-USD1.00/share, on net sales of approximately USD5.2 billion. The company expects a first-quarter loss from continuing operations in the range of USD510-725 million operating EBITDA of approximately USD1.3 billion.

The company acknowledged significant uncertainty for the rest of the year and weakness in automotive, oil and gas, and industrial markets due to COVID-19, and withdrew its full-year guidance. "As this pandemic expands globally, the uncertainty around demand in select end-markets continues,” said Ed Breen, Executive Chairman and CEO. “In response, we continue to advance initiatives to improve our working capital and have taken steps to delay certain capital investments and idle production at several manufacturing sites."

The company entered into a 364-day, USD1.0-billion revolving credit facility, replacing the USD750 million revolving credit facility that was set to expire in June 2020, and secured a USD2.0-billion, 364-day delayed-draw facility ensuring its ability to meet the November 2020 maturities. "Securing these two new facilities further strengthens our near-term liquidity position," Breen says. "Additionally, we now have committed financing in place to bridge our debt maturing in November 2020 to the receipt of the special cash payment in connection with the Nutrition & Biosciences and IFF transaction. Combined with our existing cash balances and available borrowings through our commercial paper program, these facilities provide the liquidity needed to navigate these uncertain times."

DuPont has also idled production at several manufacturing sites, predominantly production plants within the transportation and industrial segment, due to significant downturn in automotive production.

The company will report first-quarter results on 5 May.

As MRC informed earlier, DuPont, which operates one of the Richmond region’s largest manufacturing plants, confirmed last Monday that five local employees have tested positive for the coronavirus, but the company’s local manufacturing operations are still functioning.

We also remind that an employee at the Port Arthur Total refinery has tested positive for the coronavirus. The company confirmed Tuesday that the employee who tested positive is in self-quarantine and hasn't been at the site since March 26. Total says it has 'implemented its pandemic response in the case of a positive COVID-19 test, which includes disinfecting and sanitation of the potentially-affected areas.'

In November 2019, Total disclosed that it is evaluating construction of a new gas cracker at its Deasan, South Korea, joint venture (JV) with Hanwha Chemical.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 383,760 tonnes in the first two month of 2020, up by 14% year on year. High density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments increased due to the increased capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market were 192,760 tonnes in January-February 2020, down by 6% year on year. Homopolymer PP accounted for the main decrease in imports.

Portugal Galp to halt Sines refinery for a month due to lack of storage

MOSCOW (MRC) -- Portugal’s Galp Energia will suspend output as its largest oil refinery at Sines for a month from May 4 as the drastic drop in demand due to the coronavirus outbreak has left the company out of storage space, a Galp spokesman said, as per Hydrocarbonprocessing.

The move follows the suspension on April 10 of the group’s smaller refinery in Matosinhos, bringing all its domestic oil and gas operations - making up 20% of refining capacity on the Iberian peninsula - to a halt.

As MRC informed earlier, Galp Energia said on Tuesday it will kick off its green business by installing renewable energy capacity of 10 gigawatts in the decade ahead. Galp, which last month bought solar power projects from Spain's ACS for 2.2 billion euros (USD2.38 billion), hopes to install 3.3 gigawatts of solar energy in Portugal and Spain alone by 2023, generating more than 10% in equity returns. Fossil fuel companies are racing to adapt to investor-demands for more sustainable business models as public awareness of climate change grows.

As MRC reported before, in September 2019, six world's major petrochemical companies in Flanders, Belgium, North Rhine-Westphalia, Germany, and the Netherlands (Trilateral Region) announced the creation of a consortium to jointly investigate how naphtha or gas steam crackers could be operated using renewable electricity instead of fossil fuels. The Cracker of the Future consortium, which includes BASF, Borealis, BP, LyondellBasell, SABIC and Total, aims to produce base chemicals while also significantly reducing carbon emissions. The companies agreed to invest in R&D and knowledge sharing as they assess the possibility of transitioning their base chemical production to renewable electricity.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, estimated PE consumption totalled 383,760 tonnes in the first two month of 2020, up by 14% year on year. High density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments increased due to the increased capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market were 192,760 tonnes in January-February 2020, down by 6% year on year. Homopolymer PP accounted for the main decrease in imports.