Chandra Asri commences operation of MTBE, butene-1 plants at Cilegon, Indonesia

MOSCOW (MRC) -- Indonesian manufacturer, PT Chandra Asri Petrochemical Tbk has started the operating of the Methyl Tert-butyl Ether (MTBE) and B1 plants, which are the first in the country, said the company.

The construction of both factories was carried out by Toyo Engineering Corporation and PT Inti Karya Persada Tehnik since 2018. According to the minister of industry, Agus Gumiwang Kartasasmita in an official statement said, the petrochemical industry in Indonesia has an important role in substituting imports. Based on the ministry data, in 2018, Indonesia is still importing methanol chemical products, including derivatives, namely MTBE and B1, worth of Rp174 trillion.

"Apart from import substitution, petrochemical companies like Chandra Asri are also able to attract new investors which will certainly have a positive impact on the Indonesian economy," he added.

President Director of the producer, Erwin Ciputra, stated, with the operation of this new factory, he hope that the government’ goal of reducing imports by 35 percent in 2022 can be achieved. On August 26, the largest integrated petrochemical company has completed the issuance of a Rp1 trillion bond.

The issuance will be used the proceeds to fund Chandra Asri’ working capital as part of its Integration Master Plan, with its MTBE and Butene-1 plant projects. The chemical producer has allocated capital expenditure (capex) USD294 million in 2020.

Director of the issuer, Suryandi explained, the company will use the internal cash to meet the capex. He said, the company still had cash of around $649 million as first half (1H) of 2019. The new factories he said were built with an investment of USD130.5 million with a capacity of 127,000 tons per year.

While the Butene-1 plant will have a capacity of 43,000 tons per year. These new factories will absorb Raffinate-1 to be used as raw material. In October of 2019, Chandra Asri will also complete the construction of a polyethylene and polypropylene factory.

With the operation of these two new factories, the company’ production capacity could increase to 4.2 million tons from the current 3.9 million tons. After operate four new factories in this year, Suryandi revealed, the company will also complete the construction of the CAP 2 factory in June 2024.

The manufacturer will allocate around USD5 billion to build the factory. The company is looking strategic investors to build the plants. The director stated, “After CAP 2 is operational, our production capacity can increase to 8 million tons."

The subsidiary of PT Barito Pacific Tbk as the majority shareholders, is the largest integrated petrochemical company producing olefins and polyolefins. The company factories located in Cilegon and Serang, Banten Province. The company is the only producer who operates a naphtha cracker and is the sole domestic producer of ethylene, styrene monomer and butadiene.

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.

In addition, CAPC is also the largest polypropylene producer in Indonesia, including produces plastic raw materials and chemicals used for packaging products, pipes, automotive, electronics, others.

Emergency shutdown reported at South Korean S-Oil FCC unit

MOSCOW (MRC) -- S-Oil Corporation has shut its No. 2 fluid catalytic cracking unit (FCC) due to unexpected issue since 7 September 2020, according to CommoPlast with reference to market sources.

Based in Ulsan, South Korea, the FCC unit is able to produce 705,000 tons/year of propylene. It is expected to remain off-stream for 4 weeks. Market players informed that their polypropylene (PP) plant is still operating regularly.

As MRC reported earlier, S-Oil, South Korean petrochemical major, took off-stream its residue fluid catalytic cracker (RFCC) unit for a turnaround in June, 2020. The company undertook a planned shutdown at the unit by early-July, 2020. The unit remained off-line for about two weeks. Located at Onsan, South Korea, the RFCC unit has a propylene capacity of 705,000 mt/year.

Propylene is the main feedstock for the production of PP.

According to MRC's ScanPlast report, overall PP production in Russia increased in January-July 2020 by 24% year on year to 1,063,700 tonne. ZapSibNeftekhim accounted for the main increase in the output.s-oil

VCI forecasts decline in Germany's chemicals output, sales in 2020

MOSCOW (MRC) -- Germany’s chemical industry association VCI (Frankfurt) says it expects the country’s production of chemicals and pharmaceuticals to fall by 3% in 2020 compared to the prior year, with annual sales to decline by 6% year on year (YOY). A return to pre-COVID-19 levels is not expected before the end of 2021 at the earliest, it says, said Chemweek.

Initial signs of a recovery are, however, now being seen, says Christian Kullmann, VCI president and chairman of Evonik Industries. “If another shutdown can be avoided, demand for chemicals and pharmaceuticals is expected to stabilize in the second half of the year," he says.

Production by Germany’s chemical and pharmaceutical industry fell by 2.5% YOY in the first six months of this year, while sales shrank by 6.1% YOY to EUR96 billion (USD113 billion). Excluding pharmaceuticals, chemicals output fell by 3.6% in the first half of the year, compared to the equivalent period last year.

After a positive start to 2020, production in the second quarter fell by 5.8% compared to the prior-year quarter, with average plant capacity utilization falling to 77.5%, according to the VCI. All product areas in the chemicals and pharmaceuticals sector were affected by weak demand both domestically and internationally, with production of specialty chemicals falling by 3.9% in the first six months of the year compared to 2019, it says. Polymers production declined by 8% YOY due to the slump in demand from the automotive industry and plastics processors, it says. Production of pharmaceuticals recorded only a slight fall of 0.3% over the same period, while the decline in soaps and detergents output was 0.7%.

"For one in four companies, the lack of orders continues to have a major impact on business activities,” the VCI says. The chemical and pharmaceutical sector “bottomed out” in the second quarter, with a survey of the VCI’s members showing that disruptions to operations are decreasing, it says. Overcoming the COVID-19 crisis “will take some time,” it adds, with 49% of its member companies expecting the industry to return to pre-pandemic levels by the end of next year. About 20% of those surveyed expect it to take a further year, with 13% expecting only to be able to compensate for the decline at a later date or not at all, it notes.

Acknowledging the “rapid and consistent action” of Germany’s federal government during the crisis, Kullman says it is now important to look ahead. “The emergency aid was right and indispensable, but they will not secure the future of Germany,” he says. A stimulus package must be followed by a political program that provides sustainable growth opportunities and which makes Germany attractive once again for large-scale industrial projects “so that investment and innovation can be mobilized,” he says. He urged the government to take measures including reducing corporation tax to 25%, cutting green energy costs, streamlining planning and approval procedures, and establishing an investment program for climate protection and the circular economy.

As MRC informed earlier, Russia's output of chemical products rose by 4.4% year on year in May 2020 . Thus, production of basic chemicals increased year on year by 5.4% in the first five 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-May. Production of benzene was 110,000 tonnes in May 2020, which equalled the figure a month earlier. Overall output of this product reached 615,000 tonnes over the stated period, up by 1.7% year on year.

Sasa to license Invista PTA technology for new plant in Turkey

MOSCOW (MRC) -- INVISTA’s technology and licensing group, INVISTA Performance Technologies (IPT), and SASA Polyester Sanayi A.S. (SASA) reached an agreement on Aug. 25 for the license of IPT’s P8 process technology for SASA’s PTA project in Adana, Turkey, said the company.

With an annual PTA production capacity of 1.5 million tonnes, this would be the largest single-stream design capacity licensed by INVISTA. Built on the demonstrated performance of IPT’s P8 technology platform, the variable cost, capital productivity and environmental performance of this PTA plant is expected to set new benchmarks within the industry.

Ibrahim Erdemoglu, SASA’s chairman, said, “SASA will continue to invest in polyester to position itself as the leading polyester producer after China and India. This agreement will enable self-sufficiency in PTA, terminating all PTA imports into Turkey. This is also the first step of SASA’s investment in petrochemicals with more investment in polyester, PTA and MEG to follow in Adana's Yumurtalik district."

Mike Pickens, IPT president, said, “Our companies have a long history of cooperation dating back to 1974, when SASA licensed IPT’s polyester technology. We are honoured that our industry leading P8 PTA technology has been selected by SASA. The signing of this license agreement has great significance in terms of long-term collaboration between SASA and IPT."

IPT’s industry-leading PTA technology, including its latest version of P8 technology, is available as a license package from IPT.

As MRC informed earlier, INVISTA Textiles (U.K.) Limited’s technology and licensing business, INVISTA Performance Technologies (IPT), and Jiangsu Jiatong Energy Co., Ltd, a subsidiary of Tongkun Group (Tongkun), have reached agreement to license INVISTA’s latest P8 PTA technology for two PTA lines. These two lines will be installed in Rudong, Nantong City, Jiangsu province, China. Both lines deploy INVISTA’s largest twin stream design respectively, utilising INVISTA’s latest P8++ PTA technology.

PTA is used to produce polyethylene terephthalate (PET), which is used in the manufacturing of plastic bottles, films, packaging containers, in the textile and food industries.

According to MRC's ScanPlast report, Russia's estimated PET consumption totalled 367,720 tonnes in the first six months of 2020, up by 19% year on year. Russian companies processed 62,910 tonnes in June.

COVID-19 - News digest as of 08.09.2020

1. LG Chem targets zero major environmental, safety accidents from 2021

MOSCOW (MRC) -- LG Chem says it will establish a "global standard" for environmental safety and expand it to the company's business sites worldwide. LG Chem has also announced that it will reestablish its environmental safety standards for all its business sites globally and considerably strengthen its management system, said Chemweek. LG Chem says that it is currently activating its M-Project, a large-scale safety initiative involving in-company environmental safety and process technology experts, as well as external agencies specialized in related fields, with the goal of achieving zero major environmental and safety accidents from 2021. The decision to execute the project followed the company's announcement in May that it would carry out safety inspections at all its sites worldwide following recent accidents in India and South Korea.