Wacker to cut 1,200 job by end of 2022

MOSCOW (MRC) -- Wacker Chemie AG is moving forward with “Shape the Future,” its efficiency program initiated last November. The Munich-based chemical company has recenly announced that company management and employee representatives have agreed on a framework for the planned job cutbacks, as per the company's press release.

In this regard, some 1,000 jobs in total will go in Germany by the end of 2022. The job cuts will affect mainly Wacker’s administrative departments and the indirect and non-operational functions of its business divisions. In addition, 200 jobs will be cut back at international sites.

The layoffs in Germany are to be implemented exclusively with socially responsible and voluntary measures. These include retirement, phased retirement or severance agreements. The recently reached agreement excludes forced layoffs.

Moreover, it was decided that qualified trainees will continue to be taken over. The company is thereby making an important contribution toward offering young people an attractive career perspective after they have completed their training. This policy also secures Wacker’s access to well-qualified young professionals in future.

The company confirmed that by reducing non-personnel costs and the scope of internal services, and slimming down the organization, it will achieve its annual savings goal of EUR250 million by the end of 2022. Half the total amount is accounted for by non-personnel costs and the other half by personnel costs. WACKER is expecting non-personnel-cost savings of over EUR50 million this year. In 2021, the amount saved is likely to exceed EUR100 million. Significant savings in personnel costs are not expected before next year.

“The main purpose of “Shape the Future” is to support the company’s profitable growth by keeping WACKER’s organization aligned with customers’ needs and requirements,” said CEO Rudolf Staudigl, explaining the focus of the program. “In both our polysilicon business and our chemical divisions, we are preparing ourselves for a harsher competitive environment. We not only want to achieve significant cost-savings, but also to decisively strengthen WACKER for tomorrow’s challenges and secure a long-term competitive-edge,” added Staudigl.

“With the agreements we have just concluded, we have created the framework that will enable us to go ahead quickly with the implementation phase of the planned organizational changes. Together with the employee council, we will now work out the personnel measures in detail,” said Executive Board member Christian Hartel. “We are very satisfied that we have succeeded in achieving our goals with good and fair solutions with this agreement,” emphasized Hartel.

As MRC reported earlier, Wacker Chemie operates a 90 ktpa EVA compounding plant at the Ulsan site, consisting of two lines. The second line with a capacity of 40 thousand tons of products per year was launched in 2013.

According to MRC's DataScope, September EVA imports to Russia fell by 30,32% year on year to 2,38 tonnes from 3,420 tonnes a year earlier, and overall imports of this grade of ethylene copolymer into the Russian Federation dropped in January-September 2020 by 9,85% year on year to 26,340 tonnes (29,220 tonnes a year earlier).

Wacker Chemie manufactures and markets EVA dispersions under the VINNAPAS brand name. VINNAPAS polymer dispersions are used in a wide range of industries: for the production of complex thermal insulation systems, building and tile adhesives, plaster, building mixtures and mortars, cement sealing slurries and nonwovens.

Trump administration asks court for extension

MOSCOW (MRC) -- The Trump administration has asked the U.S. Supreme Court for an extension to respond to a petition from oil refiners requesting that the court review a decision that cast doubt on a program exempting refiners from biofuel blending obligations, said Reuters.

The government’s request would push their response deadline to Dec. 14 from Nov. 12, according to a letter to the court. The request comes as the Trump administration has delayed a slew of decisions related to U.S. biofuel laws, choosing to wait until after the U.S. presidential election to decide on politically sensitive matters.

Under the U.S. Renewable Fuel Standard, refiners must blend billions of gallons of biofuels into their fuel, or buy credits from those that do. If refiners can prove the obligations would cause them financial harm, they can get waivers from their requirements.

The Trump administration has about quadrupled the number of exemptions it grants to refiners, angering farmers and ethanol producers, who say the waivers hurt demand for their products. The oil industry says the exemptions help against the too-pricey obligations.

In January, an appeals court handling a case initiated by the biofuel industry, ruled that waivers granted to small refineries after 2010 should only be approved as extensions. Because most recipients of waivers in recent years have not continuously received them year after year, the decision threatened to upend the waiver program.

Then in September, oil refiners petitioned the Supreme Court to review the decision. The administration’s request for an extension could postpone already delayed decisions around the RFS. The Trump administration has not decided how to handle exemptions for the 2019 compliance year. It also has yet to set volumes for next year’s biofuel blending mandates under the RFS ahead of a looming Nov. 30 deadline.

And in September 2019, six world's major petrochemical companies in Flanders, Belgium, North Rhine-Westphalia, Germany, and the Netherlands (Trilateral Region) announced the creation of a consortium to jointly investigate how naphtha or gas steam crackers could be operated using renewable electricity instead of fossil fuels. The Cracker of the Future consortium, which includes BASF, Borealis, BP, LyondellBasell, SABIC and Total, aims to produce base chemicals while also significantly reducing carbon emissions. The companies agreed to invest in R&D and knowledge sharing as they assess the possibility of transitioning their base chemical production to renewable electricity.

Ethylene and propylene are feedstocks for producing polyethylene (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.

Husky introduces mid-volume PET preform system

MOSCOW (MRC) -- A new NexPET system from Husky Injection Molding Systems is described by the company as a game-changing mid-volume PET preform molding solution that can help producers introduce multiple new applications into the market quickly and cost effectively, said Canplastics.

The preform system benefits both established companies producing niche brands or smaller-run SKUs as well as emerging producers seeking a fast, low-risk entry into markets, officials with Bolton, Ont.-based Husky said in a statement. It also allows manufacturers to respond nimbly to shifting market trends, such as greater consumer demand for personalized products. COVID-19 has amplified this trend globally, said Robert Domodossola, president of Husky’s rigid packaging division. The pandemic has forced many producers to “rapidly adapt operations to scale up new applications like hand sanitizer, disinfectant, and other health, personal care, or cleaning related products,” said Domodossola.

The NexPET system can run up to a 48-cavity mold and is equipped with a number of productivity-enhancing features. According to Husky, advantages include: faster mold changeovers; different screw diameters to maximize production output flexibility; a Reflex PET clamp to distribute the right amount of force and maximize mold life;
rotating end-of-arm tooling with up to three cooling positions to ensure preforms are ejected at ideal temperatures;
intuitive, easy-to-use controls; adaptive system that automatically adjusts oil pressure to suit applications while conserving energy; capability to run recycled PET pellets and varying quantities of flakes.

As per MRC' ScanPlast, calculated consumption of polyethylene terephthalate (PET) reached 52,71o tonnes in September 2020, down 27% compared to the same time a year before. Total consumption of PET in Russia in the nine months of 2020 reached 530,750 tonnes, down 22% than the same indicator last year.


HollyFrontier posts smaller-than-expected loss as fuel demand recovers

MOSCOW (MRC) -- U.S. refiner HollyFrontier Corp has posted a smaller-than-expected quarterly loss on the back of cost cuts and a recovery in fuel prices, said Hedocarbonprocessing.

Oil refiners have been forced to cut production and slash spending as they struggle with months of sluggish demand as coronavirus-led lockdowns wrecked the need for travel. While demand for fuel has gradually picked up with the reopening of economies, a resurgence in coronavirus infections has threatened the recovery.

The refiner said the amount of crude it processed rose 11.5% to 421,100 bpd in the third-quarter from the second, but was still 17% lower than a year earlier. It expects to run 360,000 bpd to 380,000 bpd of crude at its refineries in the current quarter.

The slump in demand for gasoline, coupled with investor push for clean energy, has pushed refiners to accelerate plans for retrofitting facilities to produce so-called renewable diesel made from cooking oil and fats. HollyFrontier said it would look heavily towards investing in its renewables business. It ran the last barrel of crude oil at Cheyenne refinery in Wyoming in August and had begun converting the facility to produce renewable diesel.

Last month, rival Valero raised its bet on the future of renewable diesel by allocating a larger portion of planned expenses to such projects, though it also cut its overall investment budget for the year. HollyFrontier now expects full-year capital expenditure to range between USD475 million and USD550 million, compared with its prior expectations of between USD525 million and USD625 million.

Its shares rose as much as 4.2% to USD19.51 after the company posted a loss of 41 cents per share, smaller than 53 cents loss expected by analysts, according to Refinitiv IBES.

We remind, HollyFrontier planned for its five refineries to run up to 81% of their combined throughput of 457,000 bpd in the third quarter of 2020. The refineries’ combined crude oil throughput will range between 340,000 and 370,000 bpd in the third quarter, Go said on a conference call with Wall Street analysts to discuss the company’s second-quarter results.

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.

LG Chem slashes PVC production rate following a fire at the cracker

MOSCOW (MRC) -- LG Chem has reduced the operating rates at its polyvinyl chloride (PVC) unit in Yeosu prefecture by 30-40% following the shutdown at the upstream naphtha cracker that curbs the supply of ethylene feedstock, reported CommoPlast.

The PVC unit has an annual capacity of 610,000 tons/year and currently running at 60-70% rates.

The producer has not disclosed the timeline to when the unit could resume normal operating rates.

As MRC informed earlier, LG Chem took off-stream its 1.16 million tons/year naphtha cracker on 5 November, 2020, following a fire incident at the main control room. It is estimated that the cracker would remain shut for 20 days.

According to MRC"s ScanPlast report, Russia's overall PVC production totalled 718,500 tonnes in January-September 2020, down by 0.3% year on year. At the same time, only two producers managed to increase their PVC output.

LG Chem Ltd., often referred to as LG Chemical, is the largest Korean chemical company and is headquartered in Seoul, South Korea. It has eight domestic factories and global network of 29 business locations in 15 countries. LG Chem is a manufacturer, supplier, and exporter of petrochemical goods, IT&E Materials and Energy Solutions.