SABIC Specialties business on track to establish stand-alone operations

SABIC Specialties business on track to establish stand-alone operations

MOSCOW (MRC) -- SABIC has confirmed that the establishment of its Specialties strategic business unit (SBU), as a separate, stand-alone business, which will remain owned by SABIC, is on track, as per the company's press release.

While SABIC continues to monitor the business impacts of COVID-19, at this time, it anticipates that the timing of the “go-live” for the stand-alone operations of the group of companies embedding its Specialties strategic business unit (SBU) will be November 1, 2020.

The establishment of the stand-alone model for the Specialties SBU will bring additional value to its customers who depend on the Specialties business for its innovation expertise and highly differentiated ULTEM and NORYL resins, LNP compounds and copolymers.

The process of establishing the corporate, financial, commercial and business structure of the stand-alone organization has progressed successfully. The Specialties business has been working closely with its customers, distributors and suppliers with the strong commitment to ensure business continuity for all parties during the transition.

Ernesto Occhiello, Executive Vice President Specialties, said: “We are pleased the establishment of the Specialties business unit, as a stand-alone corporate group of companies within SABIC, is progressing as planned. The task we have as a business is to continue to strengthen our market position and bring added value to our customers. We will continue to work closely with them to address their most – and often one-of-a-kind – challenges by offering a unique portfolio of high-end products, technologies and solutions.“

Moreover, in advance of the go-live, the Specialties business has undertaken a global reorganization to align required staffing with the strategic focus of the transformed business. This endeavour has been effective in bringing no impact to customers, while successfully retaining company’s talent within SABIC and limiting the instances of redundancies.

SABIC’s Specialties business has deployed new fulfilment strategies to ensure the best support of its broad customer base. The business is focusing its resources and efforts on specification and is working closely with its customers and distribution partners. The anticipated capacity expansions for the NORYL and ULTEM products are progressing while the company is adhering to strict safety precautions for its employees in light of the global pandemic. The expansions are expected to be operational in 2021 in the Netherlands and 2022 in Singapore, benefiting a growing customer demand with strategically positioned supply and shorter lead times.

The decision to establish the Specialties business as a stand-alone group of companies precedes the acquisition of a 70% stake in SABIC from the Public Investment Fund (PIF) by Saudi Aramco and it is unrelated to it. SABIC remains a listed company on the Saudi Stock Exchange, with its board of directors representing the interests of all shareholders and continuing to exercise its own robust governance practices.

As MRC reported earlier, SABIC Europe, an affiliate of Saudi Basic Industries Corp (SABIC), has shut its No. 6 cracker in Wilton (UK) for a scheduled maintenance. The flaring was registerend on 29 September. The turnaround at this cracker which has an annual ethylene capacity of 865,000 tonnes and propylene capacity of 415,000 tonnes will be conducted during approximately 75 days.

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

According to MRC's ScanPlast report, Russia's overall PE production totalled 1,712,400 tonnes in the first seven months of 2020, up by 58% year on year. Linear low density polyethylene (LLDPE) accounted for the greatest increase in the output. At the same time, 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.

Saudi Basic Industries Corporation (Sabic) ranks among the world's top petrochemical companies. The company is among the world's market leaders in the production of polyethylene, polypropylene and other advanced thermoplastics, glycols, methanol and fertilizers.

Poland intends to increase stake in oil refiner PKN

MOSCOW (MRC) -- Poland would like to increase its stake in oil refiner PKN Orlen as a result of the company's merger with rival Lotos, reported Reuters with reference to a deputy state assets minister's statement.

“Poland’s treasury holds only a 27% stake in PKN Orlen. As a result of the (Lotos) transaction we would like significantly increase the treasury’s share in the combined group,” said Deputy State Assets Minister Zbigniew Gryglas.

The state currently holds a 53.19% stake in Lotos.

As MRC wrote before, Poland’s PKN Orlen said in August 2020 it had signed a non-binding agreement with the state treasury and Grupa Lotos to shape a deal to take direct or indirect capital control of fellow state company Lotos.

Also, in line with the Polish government policy of creating large “national champion” industrial groups capable of competing in global markets, Orlen in July launched a process to acquire oil and gas exploration and production company PGNiG, another group contolled by the Polish state.

We remind that in H1 September 2019, Honeywell announced that PKN ORLEN had licensed the UOP MaxEne process, which can increase production of ethylene and aromatics and improve the flexibility of gasoline production. The project, for the PKN Orlen facility in Plock, Poland, currently is in the basic engineering stage.

Ethylene is the main feedstock for the production of polyethylene (PE).

According to MRC"s ScanPlast report, Russia's estimated PE consumption totalled 1,496,500 tonnes in the first eight months of 2020, up by 5% year on year. Shipments of all ethylene polymers increased, except for linear low desnity polyethylene (LLDPE).

PKN Orlen would be the first refining and petrochemicals company in Europe to use the Honeywell UOP MaxEne technology for molecule management of a naphtha stream to produce high-quality products including olefins, aromatics and gasoline.

Sekisui hikes PVOH prices worldwide

MOSCOW (MRC) -- Sekisui Specialty Chemicals announced today that it will increase the price of Selvol Polyvinyl Alcohol, Selvol Ultiloc, Selvol Ultalux and Selvol Premiol up to USD150/mT globally, said Chemweek.

Sekisui Specialty Chemicals remains committed to meeting customers' needs with high quality products. The increase will take effect November 1, 2020, or as contracts and agreements allow. Customers should contact their local Sekisui sales representative for more details.

As MRC informed earlier, Sekisui Chemical has commenced the production of thermal interface materials for environment-friendly vehicles at Roermond, the Netherlands. Sekisui Chemical has established a new company, Sekisui Polymatech, based in the Netherlands.

As per MRC, Russia's output of chemical products rose in August 2020 by 5% year on year. At the same time, production of basic chemicals increased year on year by 5.3% in the first eight 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 January-July output. August production of benzene fell to 102,000 tonnes from 95,300 tonnes a month earlier due to scheduled shutdowns for maintenance at several producers. Overall output of this product reached 918,300 tonnes over the stated period, down by 0.9% year on year.

Sekisui Specialty Chemicals' primary product is Selvol, a line of high performance polyvinyl alcohol polymers and copolymers used in paper, adhesive, packaging, construction, personal care, and many other specialty formulations. The company also represents Durastream CPVC compounds and resins, Advancell expandable microspheres, and S-LEC BK polyvinyl acetal resins. Sekisui Specialty Chemicals is a subsidiary of the Sekisui Chemical Group, a multibillion dollar, global company that delivers a wide range of products and services to enrich people's lives. The company is comprised of core businesses and technologies in housing, social infrastructure, and chemical solutions.

IEA says refining throughput set for quarterly rise

MOSCOW (MRC) -- Global refining throughput will increase in the last quarter of the year by more than 2 MM barrels per day (bpd), the International Energy Agency (IEA) said, though the rise will not be sufficient to balance oil products markets, reported Reuters.

The sharp fall in demand for transport fuels owing to coronavirus lockdowns has placed significant pressure on refiners worldwide, weighing on margins and dragging down utilization rates to their lowest in 35 years.

The IEA’s monthly report said that global refinery crude throughput was at 73.7 MM bpd in the third quarter, almost 9 MM bpd down from the same period last year.

It predicted the crude intake would rise by 2.1 MM bpd to 75.8 MM bpd in the final quarter of the year.

“Nevertheless, runs will be almost 3 MM bpd below the levels required to balance the product markets, leading to stock draws,” the agency said.

Average global throughput in 2021 will rebound by 4.9 MM bpd to 79.4 MM bpd, the agency forecasts.

Refineries have also faced the challenge of a structural shift in oil use, moving away from transport fuels such as gasoline, diesel and jet fuel towards petrochemicals feedstock.

The petrochemicals sector remained strong during lockdowns, buoyed by the need for single-use plastics and packaging materials as a result of a boom in online shopping.

However, the IEA said the fall in crude prices in September, the first since April, offered some short-lived support to product margins.

European gasoline barge profit margins hit a seven-month high last week, boosted by firm export demand from West Africa and the United States and regional refinery shutdowns.

European diesel markets also recovered this month from historic lows as regional refineries shut for maintenance and Russian exports dropped, helping to offset persistently weak demand.

As MRC wrote previously, Croatia's Rijeka refinery will be optimizing its operations from November "for a few months" and during that period will "perform regular technological activities at process units such as catalyst regeneration and preparation of these plants for the new processing cycle in 2021 through regular maintenance work."

We also remind that Croatia’s oil and gas firm INA said in July 2020 it aims to invest 250 million euros (USD282.4 million) to build a biorefinery in the central town of Sisak to help reduce its carbon footprint. The company, whose biggest shareholders are Hungary’s energy group MOL and the Croatian government, has applied for strategic project approval at Croatia’s ministry of economy and entrepreneurship. It is also seeking European Union funding, as the bloc of which Croatia and Hungary are members, aspires to cut emissions to zero by 2050.

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

According to MRC's ScanPlast report, Russia's overall PE production totalled 1,712,400 tonnes in the first seven months of 2020, up by 58% year on year. Linear low density polyethylene (LLDPE) accounted for the greatest increase in the output. At the same time, 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.

Huntsman expects partial MDI outage to last five weeks

MOSCOW (MRC) -- Huntsman is experiencing a partial outage at its methylene diphenyl diisocyanate (MDI) plant in Geismar, Louisiana, according to a press release from the company, said Chemweek.

The partial outage is due to a mechanical failure at a third party raw material supplier and is expected to last for around five weeks. Huntsman operates a 500,000 tonnes/year MDI plant in Geismar as part of its Rubicon joint venture with Lanxess.

MDI is consumed mainly in polyurethane foams, which account for about 80% of global consumption. Rigid foams, the largest outlet for MDI, are used mostly in construction, refrigeration, packaging and insulation. MDI is also used to make binders, elastomers, adhesives, sealants, coatings and fibres.

As MRC informed earlier, Nanjing Jinling Huntsman, a joint venture between Huntsman and Sinopec Jinling, plans to close the propylene oxide plant in Nanjing (Nanjing, Jiangsu Province, China) on November 1 for scheduled maintenance. This plant with a capacity of 240,000 tonnes/year of propylene oxide will be closed until approximately 25 November.

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.