Hexion Q3 revenue declines

MOSCOW (MRC) -- Hexion saw revenues decline in Q3 year on year, but the recovery began to take shape with a solid sequential rebound in volumes, said the company.

"Third quarter 2020 results reflected steadily improving volume gains each month during the quarter as ongoing improvement in several key end markets drove Segment EBITDA that exceeded the prior year by 6 percent if excluding the prior year impact of fresh start accounting,” said Craig Rogerson, Chairman, President and Chief Executive Officer. “We were also pleased to post strong sequential Segment EBITDA from continuing operations gains of 60% in the third quarter of 2020 compared to second quarter Segment EBITDA from continuing operations of $56 million. Favorable residential construction trends drove strong sequential improvement in our third quarter volumes and EBITDA for our Adhesives segment. Our Coatings & Composites segment posted positive Segment EBITDA gains in the third quarter of 2020 versus the prior year due to our specialty epoxy resins business and continued positive demand in wind energy, as well as our Versatic Acids™ and Derivatives business due to strength in architectural coatings and recovering automotive demand."

Mr. Rogerson added: "We were pleased to recently announce a divestiture and continue to explore other portfolio optimization opportunities. Upon closing, we plan to use the proceeds to invest in our business and reduce our debt. While our volumes continued to improve sequentially in October, visibility remains limited regarding the fourth quarter of 2020 because of the pandemic as well as normal year-end volatility. Our balance sheet, liquidity, and ability to generate cash remain strong, and we are encouraged by the recent trends in housing, wind energy, automotive and several other markets, although we continue to keep a close eye on key economic indicators to monitor the impact of COVID-19. In addition, we expect to be free cash flow1 positive in 2020. We remain focused on the things we can control, such as completing the pending divestiture, maintaining our streamlined cost structure and continuing to accelerate new product development, which we believe positions us favorably as demand recovers. We also plan to expand our investments in productivity and growth-oriented capital expenditures to drive future growth in 2021 and future years."

On September 27, 2020, the Company entered into a Purchase Agreement for the sale of its Phenolic Specialty Resin (PSR), Hexamine and European-based Forest Products Resins businesses (together with PSR, the “Held for Sale Business” or the “Business”) for approximately $425 million to Black Diamond and Investindustrial. The consideration consists of $335 in cash and certain assumed liabilities with the remainder in future proceeds based on the performance of the Held for Sale Business. The final purchase price is subject to customary post-closing adjustments.

The business includes approximately 900 associates and 11 manufacturing facilities globally where phenolic specialty resins and engineered thermoset molding compounds are produced for a wide range of end markets including building and construction, industrial, automotive, electronics, agriculture and consumer. The Company expects to use the net sale proceeds to reduce indebtedness as well as for general corporate purposes including investments in its business. The transaction is intended to close in the first quarter of 2021, subject to regulatory approvals and other customary closing conditions, including Works Council consultation.

As MRC informed earlier, Hexion, a major American manufacturer of phenol and bisphenol A (BPA), has shut down its BPA plant in Pernis, the Netherlands for scheduled maintenance. Hexion is currently carrying out scheduled repairs at the enterprises for the production of epichlorohydrin with a capacity of 90,000 tonnes/year and bisphenol-A (BPA) with a capacity of 120,000 tonnes/year in Pernis in the Netherlands. The renovation began in early November and will last until the end of November, a company source added. The exact dates were not disclosed.

According to MRC's ScanPlast report, Russia's estimated consumption of PC granules (excluding imports and exports to/from Belarus) rose in the first three quarters of 2020 by 32% year on year to 75,600 tonnes (57,200 tonnes a year earlier).

Hexion Inc., formerly Momentive Specialty Chemicals Inc., is a chemical company based in Columbus, Ohio. It manufactures thermosetting resins and related technologies and specialty products. Hexion has two divisions: the epoxy, phenolic and coating resins division and the forest products division.
MRC

MOSCOW (MRC) -- Piedmont Plastics (Charlotte, North Carolina) say it has acquired rival plastics distributor Empire Plastics (Sioux Falls, South Dakota), marking the company’s expansion into the Upper Midwest region of the US, said Chemweek.

Terms of the transaction, including purchase price, were not disclosed. Empire also increases the number of Piedmont branch locations in North America to 50.

"This part of the country is a natural extension of our growing branch network and we feel that Empire Plastics is a great fit both culturally and strategically," says Tyler Booth, president of Piedmont Plastics.

All of Empire Plastics’s employees will join Piedmont, the companies say. Empire Plastics owner Doug Edwards will remain in a key role through the end of the year to assist with the transition. Piedmont Plastics is a wholesale distributor of plastic sheet, rod, and tube and film products.

As MRC informed earlier, Empire Precision Plastics Inc., specializing in high-volume injection molding and mold manufacturing, announced that it is installing two, precision 55-ton Arburg injection molding presses with Arburg automation for an OEM customer with requirements for medical disposables.

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) -- Specialty chemicals producer Elementis (London, UK) says it has entered an exclusive distribution agreement with DKSH (Zurich, Switzerland), a holding company specializing in market expansion services, for personal care applications in the French market, said Chemweek.

The two companies have a 40-year relationship and, under the terms of the new agreement, DKSH will provide sales and marketing, distribution, logistics, and customer management for Elementis’s entire range of specialty ingredients for personal care products, including antiperspirant actives, in France, Elementis says.

As MRC informed earlier, Elementis (London, UK) says it has committed to reducing waste by 10%, water usage in operations by 10%, increasing energy efficiency by 20%, and reducing greenhouse gas emissions by 25% by 2030, as part of its environmental sustainability goals.

As MRC reported earlier, Elementis PLC (ELM.L) said in February, 2013, it agreed, through its wholly owned subsidiary Elementis Specialties to purchase the assets of Hi-Mar Specialty Chemicals, LLC or "Hi-Mar" a US coatings additives company, for a cash consideration of USD33 million. Hi-Mar is a supplier of defoamers to the coatings, construction and oilfield drilling industries, with manufacturing and technical facilities based in Milwaukee, Wisconsin. The acquisition of Hi-Mar would further expand Elementis' product and technical service offering in these high value segments.

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.

Elementis plc is one of the UK's largest speciality chemicals business. The Company comprises three businesses: Specialty Products, Surfactants and Chromium. Both Specialty Products and Chromium hold leading market positions in their chosen sectors. Elementis employs over 1,200 people at more than 30 locations worldwide.
MRC

MOSCOW (MRC) -- Idemitsu Renewables, formerly Solar Frontier Americas, has put on stream a 100-MW solar park in California’s Kings County, said Renewablesnow.

The commissioning was announced on Thursday by Peninsula Clean Energy, a community choice aggregator and electricity provider for California’s San Mateo County. The company said the power plant will "exclusively" generate electricity to supply its customers.

Located in Leemore, the Mustang Two Whirlaway photovoltaic (PV) park is expected to have an output that will be enough to cover the electricity consumption of almost 58,000 homes per year.

Peninsula Clean Energy noted it has so far signed power purchase agreements (PPAs) for the output of 500 MW of renewable energy facilities. Among those is the 200-MW Wright solar farm that was brought online in San Mateo County in January. The company has set a goal of delivering 100% carbon-free electricity by 2021 and achieve 100% renewable power supplies by 2025.

Idemitsu Renewables is the renewable energy business of Japan’s Idemitsu Kosan Co Ltd.

As MRC informed earlier, Idemitsu Kosan plans to close the cracking unit in Chiba (Chiba, Japan) in April 2021 for scheduled maintenance. This cracking unit with a capacity of 413,000 tonnes/year of ethylene and 180,000 tonnes/year of propylene per year will be closed for scheduled work for two months.

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.

Idemitsu Kosan is a Japanese oil company that owns oil platforms and refineries. The company manufactures and markets oil and petrochemical products. She operates two petrochemical plants in Chiba and Tokuyama. The capacity of the two cracking units is 997 thousand tons of ethylene per year.
MRC

MOSCOW (MRC) -- Honeywell has announced Oriental Energy Company Ltd. will use Honeywell UOP’s C3 Oleflex technology for propane dehydrogenation (PDH) to meet growing demand for the production of polymer-grade propylene, according to Hydrocarbonprocessing.

The Oleflex unit is scheduled to start up in Maoming, Guangdong in 2022.

UOP will provide services, equipment, catalysts and adsorbents for the Maoming plant. The project marks Oriental Energy’s fourth C3 Oleflex unit, and the 44th award for C3 Oleflex technology in China, where demand continues to rise for propylene, the primary component in many plastic resins, films and fibers.

Since 2011, 68 of the last 92 dehydrogenation projects globally have been based on UOP technology, including many in China. Global production capacity of propylene from Oleflex technology currently stands at approximately 7.9 million metric tons per year.

“Longtime customers such as Oriental Energy continue to invest in UOP’s Oleflex technology because of its strong record for operational reliability and cost efficiency compared to other dehydrogenation technologies,” said Bryan Glover, vice president and general manager of UOP’s Process Technologies business. “We continue to see significant growth in China with the immense demand for propylene.”

UOP’s C3 Oleflex technology uses catalytic dehydrogenation to convert propane to propylene and is designed to have a lower cash cost of production and higher return on investment compared to competing dehydrogenation technologies. The Oleflex technology’s low-energy consumption, low-emissions and fully recyclable, platinum-alumina-based catalyst system also helps minimize impact on the environment. The independent reactor and regeneration design helps maximize operating flexibility and onstream reliability.

Nanjing-based Oriental Energy Company, Ltd. is one of the first companies in China to adopt on-purpose propylene technology. It previously has licensed three C3 Oleflex units, each at 660,000 metric tons a year, two of which are in operation with a third going into production this year. In addition to these three, two more units are planned.

As MRC reported earlier, China's Oriental Energy was to start up its new PDH plant in Ningbo in October 2020, after it was delayed from late June. The new PDH plant has the capacity to produce 660,000 mt/year of propylene.

Propylene is the main feedstock for the production of polypropylene (PP).

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.
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