Lanxess exits leather business with sale of organic leather chemicals unit to German firm

MOSCOW (MRC) -- Lanxess announced that it plans to withdraw from the leather business with the sale of its organic leather chemicals operation to TFL Ledertechnik (Rheinfelden, Germany), a worldwide supplier of leather chemicals and a portfolio company of asset-management firm Black Diamond Capital Management, said Chemweek.

According to the agreement, which is subject to approval from the relevant authorities, the purchase price comprises a fixed component of EUR80.0 million (USD94.4 million) and a performance-related component of up to EUR115.0 million. In addition, TFL will assume certain liabilities associated with the business, the company says. The transaction is expected to close in about mid-2021, it says.

The organic leather chemicals business has production at Leverkusen, Germany; Filago, Italy; and Changzhou, China. It generated 2019 sales in the "low three-digit million euros" range, Lanxess says. With this sale, “we are making Lanxess somewhat more independent from the automotive industry, a key target industry for leather products,” says Lanxess chairman Matthias Zachert.

Lanxess began its withdrawal from the leather business by divesting its chrome chemicals unit in January 2020. The company is scheduled to complete the sale of a stake in a chrome ore mine in South Africa by the end of 2020.

As MRC informed earlier, Lanxess has announced that it expects its core income to decline in 2020 as the global coronavirus epidemic is expected to damage its supply chains. The company forecasts that profit before exceptional items will slash EUR 50-100 million (USD56.4-112.8 million) as a result of coronavirus, with EUR20 million (USD22.6 million) impact projected for the first quarter. However, the company anticipates its operating business will remain stable for the year.

Russia's output of chemical products rose in June 2020 by 2.6% year on year. However, production of basic chemicals increased year on year by 4.9% in the first six months of 2020. According to the Federal State Statistics Service of the Russian Federation, polymers in primary form accounted for the greatest increase in the output in January-June. Production of benzene was 106,000 tonnes in June 2020, compared to 110,000 tonnes a month earlier. Overall output of this product reached 721,000 tonnes over the stated period, up by 3.9% year on year.
MRC

MOSCOW (MRC) -- Lotte Chemical Titan Holding Bhd returned to the black in the second quarter ended June 30,2020 with net profit of RM88.72mil amid the adverse global business environment caused by the fallout from the Covid-19 pandemic, said Thestar.

It announced this was a turnaround from the net loss of RM170mil in the first quarter ended March 30,2020. Its net profit was, however, down by 15.3% from RM104.84mil a year ago. “This marks a record profit swing amounting to RM266mil on quarterly basis. Similarly, operating profit for the quarter soared to RM119mil from operating loss of RM191mil in the previous quarter.

“This represents a remarkable operating profitability improvement of RM310mil for the company on quarterly basis, ” it said. Lotte Chemical Titan said the record profitability improvement in 2Q was mainly due to product margin spread improvement amid much lower naphtha feedstock costs following the fall in Brent crude oil price in April and enhanced plant efficiency upon completion of major statutory turnaround.

“Furthermore, it also recorded a reversal of provision for write-down of inventories to net realisable value made in previous quarter with its average product selling prices (ASP) stabilising. These achievements were made despite the on-going global economic downturn caused by the outbreak of the Covid-19 pandemic, which began to intensify worldwide since March this year, ” it said.

However, 2Q revenue declined by 25.9% to RM1.57bil from RM2.12bil a year ago. But on a quarter-on-quarter basis, revenue increased from RM1.46bil in 1Q. The 2Q revenue was supported by both higher production and sales performance which have markedly improved following the successful completion of the statutory turnaround undertaken by the company in 1Q. Earnings per share were 3.90 sen compared with 4.61 sen.

Revenue for the quarter is supported by both higher production and sales performance which have markedly improved following the successful completion of the statutory turnaround undertaken by the company in 1Q. “The company has noted that the overall plant operating rate for the group has recorded a jump of 20%, to 86% during the quarter with the completion of plant turnaround activities and subsequent ramping up of production with much higher operating efficiencies, ” it said.

Due to the improvement to net profit, earnings before interest, tax, depreciation and amortisation (Ebitda) also saw an increase to RM262mill in the quarter, which improved more than five-fold from Ebitda loss of RM 56mil in 1Q.

“The company also generated positive operating cash flows (OCF) amounting to RM242mil for the quarter, which brings the total OCF generated to RM51mil to-date this year.

We remind that, as MRC informed before, Lotte Chemical Titan Holding (Kuala Lumpur, Malaysia), an affiliate of Lotte Chemical (Seoul, South Korea), announced that the group's ethane cracker and ethylene glycol (EG) plant at Lake Charles, Louisiana, commenced commercial operations in August, 2019. Lotte Chemical USA, a 40/60 joint venture (JV) between Lotte Chemical Titan and Lotte Chemical, holds the Lotte group's stakes in the plants. The USD3.1-billion ethane cracker is an 88/12 JV between Lotte Chemical USA and Axiall, a subsidiary of Westlake Chemical. Lotte has invested about USD1.9 billion in the JV. Lotte Chemical USA owns 100% of the EG plant.

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) -- Specialty chemicals producer Elementis (London, UK) says it has committed to reducing waste by 10%, water usage in operations by 10%, increasing energy efficiency by 20%, and reducing greenhouse gas emissions by 25% by 2030, as part of its environmental sustainability goals, according to Chemweek.

“We will achieve our sustainability goals through three key areas of focus: innovation in sustainable solutions and products, efficiency in our operations, and the drive and passion of our people,” says Paul Waterman, CEO at Elementis.
The company has already taken action to achieve its sustainability goals at various locations around the world, it says.

As MRC reported earlier, Elementis PLC (ELM.L) said in February, 2013, it agreed, through its wholly owned subsidiary Elementis Specialties to purchase the assets of Hi-Mar Specialty Chemicals, LLC or "Hi-Mar" a US coatings additives company, for a cash consideration of USD33 million. Hi-Mar is a supplier of defoamers to the coatings, construction and oilfield drilling industries, with manufacturing and technical facilities based in Milwaukee, Wisconsin. The acquisition of Hi-Mar would further expand Elementis' product and technical service offering in these high value segments.

We remind that Russia's output of chemical products rose in June 2020 by 2.6% year on year. However, production of basic chemicals increased in the first six months of 2020 by 4.9% year on year, according to Rosstat's data. According to the Federal State Statistics Service of the Russian Federation, polymers in primary form accounted for the greatest increase in the output in January-June, 2020. At the same time, June production of polymers in primary form fell to 791,000 tonnes from 820,000 tonnes in May partially because of a scheduled shutdown for maintenance at ZapSibNeftekhim. Output of polymers in primary form totalled 4,900,000 tonnes in the first six months of 2020, up by 14.8% year on year.

Elementis plc is one of the UK's largest speciality chemicals business. The Company comprises three businesses: Specialty Products, Surfactants and Chromium. Both Specialty Products and Chromium hold leading market positions in their chosen sectors. Elementis employs over 1,200 people at more than 30 locations worldwide.
MRC

MOSCOW (MRC) -- Indorama Ventures PCL's second-quarter net profit plunged 93% from a year earlier as some of its businesses were hit by Covid-19 restrictions, according to MarketScreener.

Net profit was 153.51 million baht ($4.9 million), sharply lower from THB2.27 billion a year ago, the Thai petrochemical-products company said Thursday.

Revenue fell 21% to THB75.01 billion, as its integrated oxides and derivatives business took a hit due to a drop in crude oil prices and falling demand for its products.

Indorama's fibers business also suffered, mainly because of softening demand from lifestyle companies and from the automobile sector.

As MRC informed before, Indorama Ventures is still assessing the damage after lightning struck its Lake Charles cracker in Louisiana in early August, 2020 said spokeswoman Krystal Medlock in an email Aug. 3. "No restart date is available at this time," Krystal Medlock said. At around 8:30 am CT (1330 GMT) Aug. 1, "lightning struck our Lake Charles ethylene cracker resulting in a plant trip of the facility and subsequent flaring. The plant is currently offline and being assessed by plant personnel," Indorama said in a statement. The unit has a capacity of 440,000 mt/year, according to S&P Global Platts data.

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.

Indorama Ventures Public Company Limited, listed in Thailand, is one of the world's leading petrochemicals producers, a global manufacturing footprint with 59 sites in 20 countries across Africa, Asia, Europe and North America. The company's portfolio is comprises necessities and high value-added (HVA) categories of polymers, fibers, and packaging. Indorama Ventures has approx. 24,000 employees worldwide and consolidated revenue of USD 11.4 billion in 2019.
MRC

MOSCOW (MRC) -- Oil major Royal Dutch Shell plans to buy a 50% stake in Indian-based Nayara Energy’s up to USD9 billion planned petrochemical project, reported Reuters with reference to a source familiar with the matter.

Global oil majors are looking at expanding foothold in the vast Indian market, where local refiners are investing billions of dollars to boost their petrochemical capacities.

They are looking to meet an expected surge in demand for goods ranging from plastics to paints as the country seeks to promote durable, cheaper materials in industries such as farming and food packaging.

Shell and Nayara - which is part-owned by Russian oil major Rosneft - signed a memorandum of understanding in early June, the source said, adding an equal joint venture will be created for building the project.

“The petrochemical joint venture between Nayara and Shell was discussed at board of directors meetings of Nayara in November and December last year,” another source said.

The 1.8 million tonnes a year full steam ethylene cracker and linked downstream units to be build at Vadinar in western Gujarat state would cost USD8 billion-USD9 billion and would be completed in five years, the first source said.

The project will also have an aromatic complex and capacity to produce 10.75 million tonnes of a variety of petrochemicals, according to Nayara’s proposal to the environment ministry.

Shell declined to comment on the project while Nayara did not respond to a Reuters request for comment.

Along with the petrochemical complex, Nayara also aims to expand its current 400,000 barrels per day Vadinar refinery to 920,000 bpd. The refinery expansion and petrochemical project are estimated to cost nearly 1.3 trillion Indian rupees (USD17.39 billion).

India’s environment ministry would hold a meeting on the expansion project on Aug 29-30, the first source said.

In India, Shell operates a liquefied natural gas import terminal, a port, fuel stations and a plant to turn waste into petrol or diesel. Last year it signed an equity investment deal with an Indian company specialising in biomass aggregation and processing for energy production. (Editing by Emelia Sithole-Matarise)

As MRC wrote earlier, Rosneft is spearheading a move to develop polymer production in India through its recently acquired local subsidiary, Mumbai-based Nayara Energy Ltd. In October 2019, preliminary plans were unveiled to construct a 450,000tpa polypropylene (PP) production plant at Nayara Energy's Vadinar oil refinery in Gujarat state, India, which is scheduled to go on stream in 2022.

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.

Royal Dutch Shell plc is an Anglo-Dutch multinational oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the biggest company in the world in terms of revenue and one of the six oil and gas "supermajors". Shell is vertically integrated and is active in every area of the oil and gas industry, including exploration and production, refining, distribution and marketing, petrochemicals, power generation and trading.
MRC