Novozymes posts resilient performance despite COVID-19, reinstates 2020 outlook

MOSCOW (MRC) -- Novozymes says its net profits for the second quarter of 2020 dropped 28% year on year (YOY), to 646 million Danish krone (USD102 million) on 3% YOY lower sales, to DKr3.35 billion, according to Chemweek.

EBITDA and EBIT also declined 24% and 27%, to DKr1.17 billion and DKr867 million, respectively. The disproportional fall in profits this year is mainly attributed to a decrease in other operating income, which in 2019 included the recognition of DKr287 million in deferred income related to the termination of the BioAg alliance and DKr153 million in proceeds from the divestment of a pharma-related royalty, the company says.

“The pandemic is still very present, and we continue to take all necessary measures to keep our employees safe, protect the business, and maintain our ability to supply our customers. But as countries and economies carefully reopen, we now reinstate our 2020 outlook with an organic sales performance of -2% to +2%, an EBIT margin of around 26% including much weaker currency effects, and free cash flow before acquisitions of DKr2.4-2.8 billion,” says Ester Baiget, president and CEO at Novozymes.

Sales in the company’s household care business grew by 11% organically YOY, driven by COVID-19 related stockpiling effects that continued into April but eased toward the end of the quarter, and the increased demand for higher-performance quality detergents, Novozymes says. Sales in the food and beverages business went up 3% organically YOY mainly due to increased at-home consumption with growth in freshkeeping and flour-correction technologies as well as in solutions targeting consumer-health trends such as acrylamide reduction, the company says. The agriculture and feed business also saw organic growth of 27%, which included a positive settlement contribution related to the former BioAg setup.

However, sales of Novozymes’ bioenergy business declined by 37% organically, mainly due to the significant drop in ethanol production in North America, as the full impact of the stay-at-home restrictions, related to COVID-19, materialized, the company says. Technical and pharma also saw a 34% organic drop in sales, attributed to the continuation of last year’s decline in China's textile production, with volumes shifting away from China to countries with lower enzyme penetration. The decline was further amplified by COVID-19 lockdowns and their impact on the textile and apparel industry, Novozymes says.

Operating free cash flow was DKr1.45 billion, an increase of DKr401 million compared with the second quarter of 2019. The improvement was mainly due to higher sales, gross margin expansion, and lower operating costs, the company says.

As MRC reported earlier, in 2012, BASF, Cargill and Novozymes signed an agreement to develop technologies to produce acrylic acid from renewable raw materials. Presently, acrylic acid is produced by the oxidation of propylene derived from the refining of crude oil. BASF – The Chemical Company, Cargill and industrial biotechnology company Novozymes were tol develop bio-based technologies to produce acrylic acid from renewable feedstocks.

We remind that BASF-YPC, a 50-50 joint venture of BASF and Sinopec, undertook a planned shutdown at its naphtha cracker on 30 April 2020. The company initially planned to start turnaround at the cracker on April 5, 2020. The plant remained under maintenance unitl 18 June, 2020. Located in Jiangsu, China, the cracker has an ethylene capacity of 750,000 mt/year and propylene capacity of 400,000 mt/year.

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

According to MRC's DataScope report, PE imports to Russia dropped in January-June 2020 by 7% year on year to 328,000 tonnes. High density polyethylene (HDPE) accounted for the main decrease in imports. At the same time, PP imports into Russia rose in the first six months of 2020 by 21% year on year to 105,300 tonnes. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.
MRC

MOSCOW (MRC) -- Element Solutions says it has acquired DMP Corporation (Rock Hill, South Carolina), a provider of turnkey wastewater treatment and recycling products and services for the manufacturing sector, reported Chemweek.

Terms of the transaction, including purchase price, were not disclosed. DMP will, along with Element’s existing metals recycling business, form MacDermic Envio Solutions, a new business unit within the company’s industrial solutions segment.

“As environmental concerns and regulation continue to drive change within the specialty chemicals industry and our existing supply chain, we continue to invest in technology to help our customers meet and exceed these requirements,” says Element Solutions CEO Benjamin Gliklich.

MacDermid Envio Solutions will launch with USD20 million/year in sales, “however, we have greater ambitions for it in the near term,” Gliklich adds. “Several of the technologies in this portfolio are novel to international markets and with modest customer education, these technologies should generate strong traction.”

As MRC informed before, in October 2018, Siemens Water Solutions received an order for a complete wastewater treatment system for Tianjin Bohua Chemical Development’s (a subsidiary of Bohai Chemical Group) new propylene oxide-styrene monomer (POSM) plant. The plant, located at the Nangang Industrial Zone in northern China’s Tianjin, will have a production capacity of 200 000 tpy of propylene oxide (PO) and 450 000 tpy of styrene monomer (SM).

SM is the main feedstock for the production of polystyrene (PS).

According to MRC's ScanPlast report, Russia's estimated consumption of PS and styrene plastics was 225,870 tonnes in the first half of 2020, down by 8% year on year. PS consumption increased by 2% year on year in June 2020, totalling 39,590 tonnes.
MRC

MOSCOW (MRC) -- Braskem, the largest polyolefins producer in the Americas and leading producer of biopolymers in the world, today announced the launch of its new INSPIRE polypropylene (PP) grade designed to replace polyethylene terephthalate (PET) in consumer packaging applications such as ready-made meals at grocery stores and fast casual restaurants when higher temperature resistance is needed, said the company.

Braskem offers the new PP thermoforming grade, as part of its INSPIRE series, which can be an excellent replacement for PET. Braskem's INSPIRE series of value added polypropylene products offers enhanced performance attributes delivering a distinctive balance of performance and sustainability, providing Braskem clients differentiated products versus commodity grade polymers. The new grade has optical properties that approach PET, with improved thermal properties over PET and traditional random copolymer polypropylene. The new grade is suitable for thermoformed applications which demand a great balance of clarity and heat resistance, such as store and restaurant pre-prepared and ready-to-heat meals. The improved heat resistance allows these containers to be used in the dishwasher for continued re-use.

Alexandre Elias, Braskem America Vice President, Polyolefins commented, "Our INSPIRE series offers an attractive balance of performance and sustainability with a simplified pellet management solution. The INSPIRE series allows thermoformers to utilize a single pellet for a wide-range of applications that require varying levels of stiffness, clarity or impact creating a simplified inventory approach. This latest polypropylene grade is designed as an ideal solution to replace PET because of its recyclability and unique properties."

In June, Braskem announced the construction completion of its world-class polypropylene production line in La Porte, Texas. Braskem's new facility has a designed production capacity of over 450 kilotons (kt) or 1 billion pounds per year and has the capability to produce the entire polypropylene portfolio including a broad range of polypropylene products including homopolymer, impact copolymer and random copolymers. Initial production test runs began in July with the first full scale commercial production activity currently expected in the third quarter of 2020.

Earlier it was reported that the structure of Braskem Idesa polyethylene (PE) sales by destination over the past twelve months has changed due to sales in Asia. Total sales in the first quarter of 2020 were up 2% compared to the same quarter last year, but sales to Asia accounted for only 13% of sales made in the same period in 2019.

According to MRC DataScope, imports of PE to Russia decreased by 7% in January-June this year and reached 328,000 tonnes. The largest decrease in external supplies fell on high-density polyethylene (HDPE).

Braskem is a Brazilian petrochemical company headquartered in Sao Paulo. The company is the largest petrochemical company in South America and the fifth largest in the world in terms of production.
MRC

MOSCOW (MRC) -- Sinopec Maoming Petrochemical, part of Sinopec Corporation, has brought on-stream its No.3 polypropylene (PP) unit in Guangdong, according to Apic-online.

A Polymerupdate source in China informed that the company resumed operations at its PP unit on August 11, 2020. The unit was shut for unplanned maintenance on July 27, 2020.

Located in Guangdong, China, the No. 3 PP unit has a capacity of 200,000 mt/year.

As MRC informed before, Sinopec Maoming Petrochemical has brought on-stream its No.1 PP unit in Guangdong. The company resumed operations at the unit following turnaround on July 27, 2020. The PP unit was shut on July 15, 2020. Located in Guangdong, China, the No. 1 PP unit has a capacity of 170,000 mt/year.

According to MRC's DataScope report, PP imports into Russia rose in the first six months of 2020 by 21% year on year to 105,300 tonnes. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.

Sinopec corp. is one of the world's largest integrated energy and chemical companies. Business Sinopec Corp. includes oil and gas exploration, production and transportation of oil and gas, oil refining, petrochemical production, production of mineral fertilizers and other chemical products. In terms of refining capacity, Sinopec Corp. ranks second in the world, in terms of ethylene capacity - fourth.
MRC

MOSCOW (MRC) -- Sinopec Zhongke Refinery and Petrochemical has successfully completed the trial run at its newly constructed polypropylene (PP) plants and would proceed to commercial production within the month of August, reported CommoPlast.

Thus, No. 1 PP unit with an annual capacity of 350,000 tons/year would start producing commercial cargoes on 18 August 2020. The initial output might be homo-PP yarn before the company switches to PP fiber grades.

No. 2 PP line with nameplate capacity of 200,000 tons/year is scheduled to produce commercial cargoes on 24 August 2020, making homo-PP injection and high MI PP copolymer.

Meanwhile, a source close to the producer informed that the company is also planning to perform trial production at the polyethylene (PE) plants by the end of August, however, there are no exact dates set at the time of this report.

The PE plants consist of a 100,000 tons/year low density polyethylene (LDPE) line and a 350,000 tons/year high density polyethylene (HDPE)/linear low density polyethylene (LLDPE) swing unit.

As MRC wrote previously, Sinopec Zhongke successfully conducted trial runs at its new 350,000 tons/year No. 1 PP unit on 9 June, 2020.

We remind that top Chinese state refiner Sinopec Corp started up a USD6 billion new refinery and petrochemical plant in south China, making it the country’s third integrated complex to start operations in the past 18 months or so. The Sinopec venture, situated in coastal city of Zhanjiang, comprises a 200,000 barrel per day (bpd) crude oil refinery and an 800,000 tonne-per-year ethylene facility, built at a cost of 44 billion yuan (USD6.2 billion), Sinopec said in a statement. Two other complexes with combined refining capacity of 800,000 bpd have started up since early 2019, one built by privately-controlled Hengli Petrochemical Corp and the other by Zhejiang Petrochemical Corp.

According to MRC's DataScope report, PP imports into Russia rose in the first six months of 2020 by 21% year on year to 105,300 tonnes. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.

China Petrochemical Corporation (Sinopec Group) is a super-large petroleum and petrochemical enterprise group established in July 1998 on the basis of the former China Petrochemical Corporation. Sinopec Group"s key business activities include the exploration and production of oil and natural gas, petrochemicals and other chemical products, oil refining.
MRC