Huntsman announces sale of its India-based DIY consumer adhesives business

MOSCOW (MRC) -- Huntsman Corporation announced that it has entered into a definitive agreement to sell its India based Do-It-Yourself (DIY) consumer adhesives business, part of the Advanced Materials division, to Pidilite Industries Ltd. in an all-cash transaction valued at up to USD285 million, excluding customary working capital and other adjustments, as per the company's press release.

The transaction value represents a 2019 adjusted EBITDA multiple of approximately 15 times. Under the terms of the agreement Huntsman will receive approximately USD257 million in cash at closing and up to approximately USD28 million of additional cash under an earn out within 18 months if the business achieves sales revenue in-line with 2019. The transaction is expected to close within the coming week.

Peter Huntsman, Chairman, President and CEO commented: "We have taken this business and built it from almost nothing to be a market leader in India. To take it to the next level of size and value, we simply do not have the footprint in India to do so. Pidilite is a respected leader in consumer adhesives within India and is in a better position to invest in and more aggressively grow this consumer DIY business over the coming years. We anticipate within the coming months that we will be able to deploy the proceeds from this asset and replace the lost EBITDA with other growth assets that fit even better within our core Advanced Materials specialty business."

As MRC reported earlier, Nanjing Jinling Huntsman, a joint venture between Huntsman and Sinopec Jinling, planned to shut its 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, PP shipments to the Russian market reached 880,130 tonnes in the nine months of 2020 (calculated using the formula: production minus exports plus imports, exluding producers' inventories as of 1 January, 2020). Supply increased exclusively of PP random copolymer.

Huntsman Corporation is a publicly traded global manufacturer and marketer of differentiated and specialty chemicals with 2019 revenues of approximately USD7 billion. The company's chemical products number in the thousands and are sold worldwide to manufacturers serving a broad and diverse range of consumer and industrial end markets. The company operates more than 70 manufacturing, R&D and operations facilities in approximately 30 countries and employ approximately 9,000 associates within our four distinct business divisions.
MRC

MOSCOW (MRC) -- DSM's net profit fell in the third quarter amid significant negative foreign exchange effects, the Dutch life sciences and chemicals producer said.

Adjusted EBITDA from continuing operations at its materials business fell by 31% year on year in the third quarter. "Trading conditions during Q3 were in line with expectations as communicated in August with the Q2 results," the company said. "Materials, whilst still impacted by COVID-19, showed an improving volume trend relative to the prior quarter, especially in September," it said. Trading conditions during Q3 were in line with expectations as communicated in August with the Q2 results. Nutrition performed well, despite a significant negative foreign exchange effect of minus 6%. Materials, whilst still impacted by COVID-19, showed an improving volume trend relative to the prior quarter, especially in September.

DSM has suspended its overall earnings outlook for 2020 because of the uncertainties surrounding the coronavirus pandemic. DSM suspended its overall earnings outlook for the full year 2020 earlier this year owing to COVID-19 related uncertainties in Materials. For Nutrition, DSM indicated it expected to deliver at least a mid-single digit increase in Adjusted EBITDA for 2020, which is unchanged.

As MRC informed earlier, Royal DSM (Netherlands) announced an agreement to sell its resin and functional materials business units and related businesses DSM Resins & Functional Materials (RFM) to Covestro AG (Germany) for EUR1.6 billion.

As MRC informed earlier, Russia"s output of products from polymers grew in September 2020 by 6.6% year on year.
However, this figure increased by 0.9% year on year in the first nine months of 2020. According to the Russian Federal State Statistics Service, September production of unreinforced and non-combined films dropped to 117,600 tonnes from 126,300 tonnes a month earlier. Output of films products grew in January-September 2020 by 8.2% year on year to 980,700 tonnes.
MRC

MOSCOW (MRC) -- Shell Catalysts & Technologies is launching the Shell Blue Hydrogen Process, which integrates proven technologies to increase significantly the affordability of greenfield projects for “blue” hydrogen production from natural gas along with carbon capture, utilization and storage (CCUS), said Hydrocarbonprocessing.

Affordable blue hydrogen enables the decarbonization of hard-to-abate heavy industries while creating value for refiners and resource holders. Shell’s new process can reduce the levelized cost of hydrogen by 22% compared with the best the market has to offer today.

Without low-carbon hydrogen, the net-zero goals announced by governments and companies will be difficult to achieve. Currently, hydrogen production is nearly all “grey” (from hydrocarbons without CCUS). If hydrogen is to contribute to carbon neutrality, it must be produced on a much larger scale and with far lower emission levels.

Blue hydrogen production can be relatively easily scaled up to meet demand. With carbon dioxide (CO2) costing USD25–35/t, blue hydrogen becomes competitive against grey, even with its higher capital costs. And green hydrogen, produced from the renewable-energy powered electrolysis of water, may still be more than double the price of blue hydrogen by 2030[i] and not achieve cost parity until about 2045.

This analysis is based on conventional steam methane reforming (SMR) and auto-thermal reforming (ATR) technologies. The availability of the Shell Blue Hydrogen Process, which integrates proprietary Shell gas partial oxidation (SGP) technology with ADIP ULTRA solvent technology, further improves blue hydrogen economics.

A key advantage of SGP technology over ATR is that the partial oxidation reaction does not require steam. Instead, high-pressure steam is generated, which satisfies the steam demands of the process and some other power consumers. There is also no need for feed gas pretreatment, which simples the process line-up. And SGP gives refiners greater feed flexibility, as it is more robust against feed contaminants and can thus accommodate a large range of natural gas qualities.

Compared with ATR, SGP technology gives a 22% lower levelized cost of hydrogen from: 17% lower capital expenditure (higher operating pressure giving smaller hydrogen compressor and CO2 capture and compressor units); and 34% lower operating expenditure (excluding the natural gas feedstock price) from reduced compression duties and more steam generation.

When compared with SMR, SGP technology leads to even greater hydrogen production cost savings from both the capital and operating expenditure perspectives.

As MRC informed before, Royal Dutch Shell plc. said earlier this month that its petrochemical complex of several billion dollars in Western Pennsylvania is about 70% complete and in the process to enter service in the early 2020s. The plant’s costs are estimated to be USD6-USD10 billion, where ethane will be transformed into plastic feedstock. The facility is equipped to produce 1.5 million metric tons per year (mmty) of ethylene and 1.6 mmty of polyethylene (PE), two important constituents of plastics.

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

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). At the same time, PP shipments to the Russian market reached 767,2900 tonnes in the eight months of 2020 (calculated using the formula - production minus exports plus imports - and not counting producers' inventories as of 1 January, 2020). Supply increased exclusively of PP random copolymer.

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

MOSCOW (MRC) -- Douglas M. Baker Jr., CEO of Ecolab Inc., has announced his retirement effective January 1, 2021, according to ISSA.

Baker will remain in his current position as Ecolab board chairman. Christophe Beck has been appointed Baker’s successor as CEO. Beck currently serves as the company’s president and chief operating officer.

Beck joined Ecolab in 2007 from Nestle S.A. where he served in a variety of executive positions over a 16-year tenure.

As MRC wrote before, Ecolab reported third-quarter net income down 44% year on year (YOY), to USD246.2 million, on net sales down 6%, to USD3.02 billion. Adjusted earnings totaled USD1.15/share, down 24% YOY but slightly ahead of analysts’ consensus estimate of USD1.13/share, as reported by Refinitiv (New York, New York). Volumes declined due to COVID-19 and a less-favorable business mix more than offset cost cuts and higher selling prices.

Global industrial segment sales fell 3% YOY, to USD1.47 billion, while segment operating income was up 18%, to USD293.4 million. Sales were flat in the food and beverage business, but this was offset by declines in other industrial end markets. Higher selling prices, cost cuts, and lower discretionary spending boosted operating income, however.

Global institutional and specialty segment sales were down 22% YOY, to USD896.1 million, while segment operating income fell 71%, to USD82.0 million. Closures and reduced business for restaurants, lodging, and entertainment facilities cut into demand for the segment, more than offsetting higher demand for sanitizing products.

We remind that Russia's output of chemical products rose in September 2020 by 6.7% year on year. At the same time, production of basic chemicals increased by 6.1% year on year in the first nine months of 2020, 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 January-September output. Last month's production of primary polymers decreased to 852,000 tonnes from 888,000 tonnes in August due to shutdowns in Tomsk, Ufa and Kazan. Overall output of polymers in primary form totalled 7,480,000 tonnes over the stated period, up by 16.4% year on year.

With annual sales of USD15 billion and more than 50,000 associates, Ecolab Inc. specializes in cleaning, sanitizing, food safety, and infection prevention products and services in more than 170 countries
MRC

MOSCOW (MRC) -- Lonza says that Pierre-Alain Ruffieux assumed responsibility as the company’s CEO on 2 November, following his appointment in June, according to Chemweek.

Albert Baehny, who has been Lonza’s CEO ad interim since November 2019, will work with Ruffieux to ensure a smooth handover before returning to his role as chairman.

“I have had the opportunity to work with Lonza as a customer many times in my career to date, so I know both the strength and value of its expertise, its technology, and its people,” says Ruffieux.

As MRC informed earlier, Lonza (Basel, Switzerland) says it has developed a new structure for its pharma, biotech, and nutrition (LBPN) segment to increase “divisional end-to-end performance accountability” and to strengthen governance and process excellence from global functions, as the company proceeds with the previously announced divestment of its specialty ingredients (LSI) segment.

We remind that in 2012, Lonza set up a task force to look at new supply routes and vendors to feed its cracker in Visp, Switzerland, following the shutdown of Petroplus’ refinery at Cressier in January, 2012. Lonza’s cracker has an ethylene capacity of 25,000 tonnes/year.

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

According to MRC"s ScanPlast report, Russia"s estimated PE consumption totalled 1,594,510 tonnes in the first nine months of 2020, up by 1% year on year. Only high denstiy polyethylene (HDPE) shipments increased. At the same time, PP shipments to the Russian market reached 880,130 tonnes in the nine months of 2020 (calculated using the formula: production minus exports plus imports, exluding producers" inventories as of 1 January, 2020). Supply increased exclusively of PP random copolymer.
MRC