Axalta to move to business-unit structure

MOSCOW (MRC) -- Axalta said that it will realign its business structure to fold most organizational functions into its two global business units, transportation coatings and performance coatings, according to Chemweek.

The two global business units will have full profit-and-loss (P&L) responsibility, a shift from the previously existing matrix organization in which regional business leaders had “primary financial responsibility,” Axalta says.

The plan follows earlier restructuring moves announced over the summer, and will involve the closure of Axalta’s offices in Center City, Philadelphia. Employees at those offices will be transferred to Glen Mills, Pennsylvania, a Philadelphia suburb that will become the site of Axalta’s headquarters, or to an office at the Philadelphia Navy Yard.

“With today's announcement, primary decision-making authority will reside with business unit leadership, supported by regional leadership and our global functions,” says Axalta chairman and CEO Robert Bryant. “Axalta's strategic review completed in March provided us with valuable insights into areas where we had the opportunity to simplify and streamline our decision-making processes. Aligning our organization more directly with our businesses will enable us to focus on our customers and better support our growth objectives in each of our markets.”

Axalta’s regional headquarters at Basel, Switzerland and Shanghai, China will remain open and regional leaders will continue to play an important role in the organization, the company says.

The reorganization will become effective 1 January 2021, and the office closures and shifts in the Philadelphia area will occur in the middle of next year.

As MRC reported earlier, in July 2017, Axalta Coating Systems completed its previously announced acquisition of the Spencer Coatings Group (UK), a leading manufacturer of high performance industrial coatings for heavy-duty equipment, general industrial, oil and gas, and glass coatings segments.

We remind that 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.
MRC

SRF to establish BOPP film line in India

MOSCOW (MRC) -- The Board of Directors of SRF Ltd at its meeting held on November 04, 2020 has approved Setting up of a second BOPP Film Line & Metallizer at Indore either directly or through a wholly owned subsidiary, said Indianchemicalnews.

The existing capacity is 45,000 MTPA and the existing capacity utilization is 100% on product mix basis. 60,000 MTPA of additional capacity is proposed at an outlay of Rs. 424 crore through mix of debt and internal accruals.

The new capacity should go on stream within 20 months. The rationale for expansion is the growth of BOPP market both in India and overseas, need for ability to service the customer for the entire spectrum of BOPP products.

Recently its subsidiary SRF Europe Kft announced the successful commissioning of its new Bi-axially Oriented Polyethylene Terephthalate (BOPET) film manufacturing plant in Jaszfenyszaru, Hungary at a cost of Euro 80 million.

The company has also announced setting up of a new chloromethane facility to produce 1,00,000 tonnes per annum at Dahej, Gujarat at a projected cost of Rs. 315 crore.

As MRC reported earlier, Ufaorgsintez (UOS, BashneftпїЅs petrochemical asset) has resumed its polypropylene (PP) production after a shutdown for maintenance. The plant"s customers said Ufaorgsintez had resumed its PP output since 13 October after the shutdown for a scheduled turnaround. The outage was quite long and started on 12 September. Ufaorgsintez's overall PP production capacities are 120,000 tonnes/year.
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Shell closing Convent, Louisiana, refinery as pandemic takes toll

MOSCOW (MRC) -- Royal Dutch Shell announced it was closing its refinery in Convent, Louisiana, the largest such US facility and first on the US Gulf Coast to shut down since the coronavirus pandemic devastated worldwide demand, reported Reuters.

The shutdown will occur this month after Shell failed to find a buyer.

The refinery is the ninth in North America targeted for a shutdown or to be idled since the pandemic, which has dealt a heavy blow to fuel demand globally. The United States is the world's largest fuel consumer.

Shell said it failed to find a buyer for the 211,000-barrel-per-day refinery after announcing plans to sell it in July.

“After looking at all aspects of our business, including financial performance, we made the difficult decision to shut down the site,” Shell spokesman Curtis Smith said in an emailed statement.

Refining margins have been down substantially since the pandemic started. The gasoline refining margin is currently at USD8.79 per barrel, below the threshold where most refiners can profit.

Once the shutdown is complete, Shell will continue to try to divest the refinery, the company said. It expects to sell all but six refineries and chemical plants globally and is considering closing facilities it cannot sell, the company told investors on its quarterly earnings call this week.

"We recognize the market is not great at the moment in terms of divesting assets ... if it's not possible, we'll consider closing and shutting down. That's ultimately, the last option we'd like to pull," said chief financial officer Jessica Uhl.

The company said in 2019 it would structure its operations to match the future market for downstream products with a focus on its chemicals business.

In February, Shell sold its 156,400 bpd Martinez, California, refinery and logistics assets to PBF Energy for $960 million plus the price for oil and refined products on hand.

Shell said it will open a selective voluntary severance program to potentially create other roles for workers.

Convent's closure adds to the almost 2 MMbpd of refinery capacity globally that has been permanently shuttered globally due to the coronavirus pandemic.

Another 1.4 MMbpd is temporarily out of commission or being converted in terminal and other facilities, US refiner Phillips 66 said on its third quarter earnings call earlier this week.

Late last month PBF Energy said it will shut most refining units at its Paulsboro, New Jersey, refinery.

Elsewhere, Canada’s Come-by-Chance plant in Newfoundland and Labrador has been idled since May. HollyFrontier shut down its Cheyenne, Wyoming, refinery, Marathon Petroleum began closing refineries in Martinez, California, and Gallup, New Mexico, while Calcasieu Refining idled its Lake Charles refinery in southwest Louisiana.

Phillips 66 announced plans to shut its plant in Arroyo Grande, California, in 2023 and plans to reconfigure its San Francisco Refinery to produce renewable fuels.

It is unusual for an oil company to sell a refinery that it has already idled, in part because the value of the asset is deemed to be lower if it is not operating.

North Atlantic Refinery Limited is actively trying to sell its Come-by-Chance refinery, after a deal with Irving Oil fell through last month for undisclosed reasons.

"Refineries aren't light switches, they're extremely expensive to shut and restart," said Zachary Rogers, senior oil analyst at Rapidan Energy Group.

"The fact it's shutting down (for however long) underscores the weakness of refining economics as COVID persists," he added.

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 1,594,510 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.

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

BP oil, gas output to fall 40% by 2030 amid transition to carbon energy company

MOSCOW (MRC) -- BP expects its oil and gas production to fall by at least 1 million b/d of oil equivalent or 40% over the next decade, as it transitions to a lower carbon energy company, reported S&P Global with reference to the company's statement.

Under a new strategy, BP said it will boost investment on low carbon projects such as renewables, bioenergy by 10-fold to around USD5 billion/year by 2030 as part of plans to become a "net zero" emitter.

The move will see BP's upstream oil and gas production fall from 2.6 million boe/d in 2019 to around 1.5 million boe/d while its refining throughput is expected to fall from 1.7 million b/d in 2019 to around 1.2 million b/d.

"BP has been an international oil company for over a century - defined by two core commodities produced by two core businesses. Now we are pivoting to become an integrated energy company - from IOC to IEC," CEO Bernard Looney said in a statement.

As a result, BP said it expects its emissions from its operations and those associated with the carbon in its upstream oil and gas production to be lower by 30-35% and 35-40%, respectively.

BP had already flagged plans for the "most wide-ranging reorganization in (BP's) history" on February 5, announcing ambitious targets for the oil major to become a net-zero carbon emitter by 2050 or sooner.

As MRC informed previously, global oil demand may have already peaked, according to BP's latest long-term energy outlook, as the COVID-19 pandemic kicks the world economy onto a weaker growth trajectory and accelerates the shift to cleaner fuels.

Earlier this year, BP said the deadly coronavirus outbreak could cut global oil demand growth by 40 per cent in 2020, putting pressure on Opec producers and Russia to curb supplies to keep prices in check.

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

ccording 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

COVID-19 - News digest as of 05.11.2020

1. Mitsubishi Chemical reports loss on weak demand in automotive sector, forecasts full-year net loss

MOSCOW (MRC) -- Mitsubishi Chemical Holdings reports a net loss of Yen 49.68 billion (USD474.7 million) for the company's fiscal first half ended 30 September, swinging from net income of Yen 81.3 billion a year earlier, according to Chemweek. Mitsubishi registered a third-quarter operating loss of Yen 28.1 billion, compared with an operating profit of ?130.5 billion a year earlier. Revenue decreased 17.6% year on year (YOY) to Yen 1.5 trillion. The company says that during the first half of the fiscal year, demand was slower YOY, particularly for automotive applications, owing to the impact of the COVID-19 pandemic. Notwithstanding a recent pickup in demand, business conditions remain challenging, says Mitsubishi.


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