Asahi Kasei earnings, sales decline YOY, sequential improvement seen

MOSCOW (MRC) -- Asahi Kasei reports a 39.9% year-on-year (YOY) decline in net profit for its fiscal first half, ended 30 September, to Yen 46.8 billion (USD453 million) on sales down 7.4%, to ?989.4 billion. The result reflects the impacts of COVID-19 during the six-month period, reported Chemweek with reference to Asahi's statement.

However, there was an improvement in the overall market environment during the first half due to a recovery in demand, with the company's fiscal second-quarter results exceeding those of the first quarter. Asahi’s operating income for the fiscal second quarter ended 30 September was Yen 46.7 billion, an increase from ?30.1 billion in the first quarter. Second-quarter sales were Yen 534.2 billion, up from Yen 455.2 billion in the preceding quarter.

The impact of COVID-19 has centered on Asahi Kasei’s materials business, which registered an overall decrease in net sales of 21.8% and operating income of 63.4% in the fiscal first half, to ?438.4 billion and ?20.8 billion, respectively. However, demand for various products in the materials segment recovered as the period progressed with an improved market environment especially in automotive. Firm sales of electronic materials continued. The business increased shipments of lithium-ion battery (LIB) separators and electronic materials. Lower market prices for petrochemical products and sluggish demand in automotive and apparel markets, resulting from COVID-19, helped drive the operating-income decrease, Asahi says.

In basic materials, part of the materials segment, there was an inventory-valuation loss by the gross average method due to decreased prices for feedstocks such as naphtha. In performance products, also part of the materials segment, there were decreased shipments of automobile-related products, and of fiber products for apparel applications. In specialty solutions, there were increased shipments of LIB separators, and higher shipments of electronic materials for communications infrastructure and tablet PCs, but lower shipments of automobile-related products.

In Asahi Kasei’s homes segment, expected delays in construction materialized in order-built homes due to infection-preventing measures, but deliveries proceeded more smoothly than expected. As a result, the segment's first-half operating income slipped 3.1% YOY, to ?31.7 billion but sales increased 1.6% to Yen 338.7 billion.

Operating income increased 36.6% YOY to Yen 35.4 billion in Asahi Kasei’s health care segment centered on the critical care business, which registered a firm performance, the company says. Sales grew 22.2% YOY to Yen 204.9 billion.

Asahi forecasts declines in group earnings and sales for the full fiscal year ending 31 March 2021. Net profit is expected to be Yen 87 billion, a decline of 16.3% from the previous fiscal year. The company anticipates full-year operating profit of Yen 140 billion, a decline of 21.0%. Sales are expected to be Yen 2.03 trillion, a 5.5% decrease from the previous fiscal year..

The impact of COVID-19 remains unpredictable, Asahi says. The sequential improvement trend is expected to continue in the fiscal second half, with a gradual strengthening of the market environment, particularly in automotive, it says.

In the materials segment, increased shipments and improved terms of trade for acrylonitrile (ACN) are predicted, although lower overall market prices for petrochemical feedstocks are forecast. Asahi expects a net sales and operating income increase from the fiscal first half to the second half for materials.

As MRC informed before, in March 2020, Asahi Kasei decided to discontinue its business for the styrenic resins SAN (Styrene-acrylonitrile resin), ABS (Acrylonitrile butadiene styrene), and ACS. According to the company, the operations of SAN plant at Kawasaki Works will be closed in March 2021. The business to be discontinued began with the 1962 start-up of the SAN plant in Kawasaki, now part of Asahi Kasei’s Kawasaki Works, followed by the 1964 start-up of the ABS plant at the same site (function transferred to Mizushima in 1978). The ACS business began in 1995. The ABS plant at Asahi Kasei’s Mizushima Works, which started up in 1967, was closed in 2015 due to deteriorating profitability as domestic Japanese demand decreased significantly.

According to MRC's ScanPlast report, Russia's consumption of material in the ABS segment decreased in January-September 2020 by 8% year on year, totalling 32,240 tonnes.
MRC

MOSCOW (MRC) -- Ascend Performance Materials (Houston) has announced a price rise for adiponitrile (ADN), acrylonitrile, adipic acid, and hexamethylenediamine (HMDA), effective immediately or as contracts allow. The company has hiked its prices for the same products in each of the last two months, said Chemweek.

The prices of adiponitrile and HMDA have each been hiked by $600/metric ton, while acrylonitrile and adipic acid have both been increased by USD200/metric ton.

As MRC informed earlier, Ascend Performance Materials has made their new mask technology available to the public for purchase. In July, NorthEscambia.com first reported that Ascend developed a new mask technology that protect against SARS-CoV-2, the cause of COVID-19, and the material to make it is manufactured at the company’s North Escambia facility on Old Chemstrand Road.

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.
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MOSCOW (MRC) -- Canadian energy producers Cenovus Energy and Husky Energy have agreed to combine in an all-stock transaction valued at USD23.6bn, inclusive of debt, said the company.

The companies have entered into a definitive arrangement agreement under which Cenovus and Husky will combine in an all-stock transaction valued at USD23.6 billion, inclusive of debt. The combined company will operate as Cenovus Energy Inc. and remain headquartered in Calgary, Alberta. The transaction has been unanimously approved by the Boards of Directors of Cenovus and Husky and is expected to close in the first quarter of 2021.

With a combined output of approximately 750,000 bbl/day, the company is expected to become Canada's third largest oil and gas producer. “It will be the second largest Canadian-based refiner and upgrader, with total North American upgrading and refining capacity of approximately 660,000 bbl/day, which includes approximately 350,000 bbl/day of heavy oil conversion capacity,” they said.

It will also have 16m bbl of crude oil storage capacity as well as strategic crude-by-rail assets that provide takeaway optionality, the two firms said.

As MRC informed earlier, Husky Energy continues to make steady progress towards a return to full operations at the Superior Refinery. The Company has received the required permit approvals to begin reconstruction activities at the site and work is expected to begin immediately. Demolition of damaged equipment resulting from a fire in April of 2018 is now largely complete and the rebuild will take place over the next two years with an expected return to full operations in 2021.

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.
MRC

MOSCOW (MRC) -- Sekisui Specialty Chemicals is announcing that consolidated financial results forecast for the first
half of fiscal 2020 and full-year of fiscal 2020 (ending March 31, 2021), announced on July 30, 2020
have been revised as follows, said the company.

Consolidated earnings forecast for the first half of the current fiscal year is expected to exceed the forecast
announced on July 30, 2020, as we have promoted a reduction in fixed costs in each segment that was
greater than planned, and as demand for High Performance Plastics Company in the mobility field and
building and infrastructure materials field has been recovering more than expected.

The consolidated earnings forecast for the full year is as stated above, as the demand trend remains
uncertain due to the impact of COVID-19.

As MRC informed earlier, 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. 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.

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.

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.
MRC

MOSCOW (MRC) -- The downstream oil and gas industry is under intense pressure to improve efficiency, reduce greenhouse gas (GHG) emissions, comply with strict environmental regulations, and demonstrate that it can be part of a sustainable future. At the same time, plant operators face the ever-present challenge of lowering costs and maintaining profitable operations. To help the industry meet these demands, Siemens Energy and Linde Engineering have entered into a strategic partnership, according to Hydrocarbonprocessing.

As part of the collaboration agreement, the two companies will leverage their complementary portfolios and competencies to investigate, develop, and optimize technology and equipment packages to enhance the sustainability and performance of petrochemical facilities (brownfields and greenfields).

The companies will jointly conduct studies that explore how Siemens Energy’s and Linde Engineering’s technologies can be combined to facilitate the decarbonization of petrochemical plants through emissions reductions and increases in energy efficiency - for example, by optimizing the consumption of power and steam.

Particular areas that will be evaluated include, but are not limited to, the use of Siemens Energy’s products, including gas turbines, steam turbines, compressors, and generators with Linde Engineering’s steam cracker technology and related processes for olefin production, purification, and separation. The companies will also explore how renewable technologies and energy storage can be leveraged to support customers’ decarbonization initiatives. Other key performance areas that will be targeted for improvement include plant availability and uptime, maintenance, OPEX and CAPEX, and regulatory compliance.

“The core competencies and technology portfolios of Siemens Energy and Linde Engineering are highly complementary,” said Thorbjoern Fors, executive vice president for Siemens Energy Industrial Applications. “Our experience in designing and building low-emissions energy systems, coupled with Linde Engineering’s expertise in steam cracker technology and other downstream processes, will enable us to unlock tremendous value for petrochemical customers, who are under intense pressure to reduce costs and decarbonize.”

“The partnership builds on the longstanding and trustful business relationship that Siemens and Linde Engineering have maintained for decades,” said John van der Velden, senior vice president Global Sales & Technology at Linde Engineering. “It represents a key step in helping the industry drive toward a more sustainable, profitable future and in offering our customers a more efficient solution for ethylene production.”

As MRC informed earlier, in late October, 2020, Siemens Smart Infrastructure and WUN H2 GmbH signed a contract to build one of the largest hydrogen production plants in Germany. It will be built in Wunsiedel in the north of Bavaria. With a power intake of six megawatts in the initial development phase, the plant will run solely on renewable energy and will be CO2-free. The electrolysis plant from Siemens Energy will have the capacity to produce over 900 tons of hydrogen per year in this first phase. When fully expanded, it will be able to supply up to 2,000 tons. Groundbreaking is scheduled for the end of this year and commissioning at the end of 2021.

We remind that in mid-October, 2020, Linde GmbH and Shell announced an exclusive collaboration agreement on ethane-oxidative dehydrogenation (E-ODH) technology for ethylene production. The catalytic process is an alternative route to ethane steam cracking, offering the potential of economic advantages, acetic acid co-production and significantly lower overall carbon footprint through electrification of power input.

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

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.
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