Solvay has received a binding offer from Composites One

MOSCOW (MRC) -- Solvay and Composites One have entered an exclusive negotiation period for the acquisition of Solvay’s Process Materials (PM) business by Composites One, said the company.

The PM business provides a broad array of vacuum bagging materials including bagging films, breather fabrics, release films and fabrics, peel plies, sealant tapes plus valves and hoses. Additionally, the business is a leader in the manufacture of tailored consumable kits and hard and soft tooling.

Carmelo Lo Faro, president of Solvay Composite Materials Global Business Unit, said: “Solvay has significantly strengthened the Process Materials business over the last several years. The proposed transaction will deliver value for our shareholders and enable Solvay to continue focusing on our core composites technology portfolio. The Process Materials employees and customers will greatly benefit from this business being part of Composites One’s established and recognized distribution infrastructure. Composites One’s intent is to grow and invest in the business, fostering innovation, reliability and customer service and building on the excellent work our teammates have done so far."

"As their distributor for over two years, we have worked closely with Solvay’s knowledgeable leadership and team members and have seen their focus on serving customers – we know this business is an excellent addition to Composites One. Through their outstanding team, the Process Materials business provides us with a global connection to wind and aerospace customers,” commented Steve Dehmlow, CEO of Composites One.

The completion of the transaction, expected early Q1, would remain subject to following social processes and approval by the relevant regulatory authorities.

As MRC informed earlier, Solvay SA said it will close two plants making composites for Airbus SE and Boeing Co. in a sign the deepening aerospace crisis is hitting suppliers of even the latest aircraft materials. The Belgian chemical maker is adding to savings achieved in the past year following the grounding of Boeing’s 737 Max. The latest measures from Solvay Chief Executive Officer Ilham Kadri will lead to about 570 job cuts, or 20% of the workforce in Solvay’s composites unit.

As MRC reported earlier, in August, 2020, through the acquisition of the Solvay polyamide (PA) business, BASF enhanced its R&D capabilities in Asia Pacific with new technologies, technical expertise, and upgraded material and part testing services. BASF is planning to integrate the R&D centers from Solvay into its R&D existing facilities in Shanghai, China, and Seoul, Korea. The enhanced capabilities will boost BASF’s position as a solution provider to develop advanced material solutions for key industries.

We remind that BASF-YPC, a 50-50 joint venture of BASF and Sinopec, undertook a planned shutdown at its naphtha cracker on 30 April 2020. The company initially planned to start turnaround at the cracker on April 5, 2020. The plant remained under maintenance unitl 18 June, 2020. Located in Jiangsu, China, the cracker has an ethylene capacity of 750,000 mt/year and propylene capacity of 400,000 mt/year.

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.

Solvay S.A. is a Belgian chemical company, one of the largest in Europe and the world with a market share of 27%, is the second largest PVC producer and the fourth largest caustic soda producer in Europe. The company's activities are concentrated in two main areas - the chemical sector (plastics production) and the pharmaceutical sector.

Evonik successfully completes acquisition of Porocel

MOSCOW (MRC) -- Evonik completed the acquisition of the Porocel Group, Houston (USA), for USD 210 million, as planned, said Myconvernto.

Contributions from the new business will therefore be included in Evonik’s sales and earnings as of this day. The company with its approximately 300 employees and the corresponding production facilities will be integrated into the Smart Materials division of Evonik. Porocel's global activities in the field of desulfurization catalyst rejuvenation, sulfur recovery catalysts and alumina based purification adsorbents represent an expansion of Evonik's catalyst portfolio.

The intensive planning work that has been done for the integration into the business line Catalysts over the past few months will be put into action straight away. Porocel's customers will continue to receive the same high-quality products and services they have come to expect via the established sales channels.

Claus Rettig, head of the Smart Materials division, sees additional growth potential in Evonik's global catalyst business through the transaction. “The Catalysts business line is an important driver of growth and sustainability within Evonik's Smart Materials division. With the targeted acquisition, we expand our competencies with new technologies and products. In this way, we enable our customers to make their processes and products more efficient and resource-saving,” said Rettig. "The global presence of Porocel along with its available production capacities will further strengthen the worldwide presence of Evonik's catalyst activities."

"With the technology for the highly efficient rejuvenation of desulfurization catalysts, Evonik will be able to serve the growing market for low-sulfur fuels. Catalyst rejuvenation reduces CO2 emissions, contributes to sustainability and transition to circular economy thus enabling the reduction of the carbon footprint. Porocel represents a decisive milestone for the Catalysts business line and opens up a new horizon for growth,” says Sanjeev Taneja, head of Evonik's Catalysts business line at Evonik.

For the financial year 2019, Porocel generated sales of approximately US$ 100 million and EBITDA of about USD 23 million in 2019. The EBITDA margin at around 23 percent is above Evonik's target range of 18-20 percent.

As MRC reported before, Dow and Evonik have recently entered into an exclusive technology partnership. Together, they plan to bring a unique method for directly synthesizing propylene glycol (PG) from propylene and hydrogen peroxide to market maturity.

We remind, construction work on the largest investment to date by the specialty chemicals company Evonik in Germany, at more than EUR400 million, is progressing well. The first plant was completed on schedule in mid-October and is currently being commissioned. Further plants will follow by the first quarter of 2021, with full completion expected in the first half of 2021.

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

According to MRC's ScanPlast report, 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.

Evonik is one of the world leaders in specialty chemicals. The focus on more specialty businesses, customer-oriented innovative prowess and a trustful and performance-oriented corporate culture form the heart of Evonik’s corporate strategy. They are the lever for profitable growth and a sustained increase in the value of the company. Evonik benefits specifically from its customer proximity and leading market positions. Evonik is active in over 100 countries around the world with more than 36,000 employees.

Arkema Q3 net income falls

MOSCOW (MRC) -- Arkema's net income fell in the third quarter as earnings dropped amid lower volumes and prices at its intermediates unit, the French company said.

The company reported a strong improvement in the Group's volumes compared to the second quarter and excellent cash generation in an environment that remains uncertain.

Arkema noted sales of EUR1.9 billion (EUR2.2 billion in Q3'19): 9% decline at constant scope and currency (-18% in Q2'20), in line with the guidance of around -10% issued end July. There was a negative volume effect of 4.4%. The company reported EBITDA of EUR307 million (EUR385 million in Q3'19) and EBITDA margin of 16.1%.

Net debt was down €265 million on June 30, 2020, at EUR1,869 million including hybrid bonds (EUR2,470 million on Sept. 30, 2019). Arkema reported the successful issuance of the Group's first-ever green bond for a total amount of EUR300 million dedicated to financing the growth project in bio-based polyamides in Singapore.

"After a second quarter marked by the development of the COVID-19 health crisis, global demand recovered in the third quarter and was supported in particular by the strong improvement of market segments linked to construction. Group volumes reflect a clear rebound compared to the previous quarter," chairman and CEO Thierry Le Henaff said. "In a context that remains volatile and uncertain, Arkema continues to demonstrate its solidity thanks to the responsiveness and daily commitment of its teams.

"Specialty Materials, which now account for 83% of Group sales, showed a good level of resilience given the current environment. The Group continued to roll out its cost reduction initiatives and to strictly adapt its working capital. The high level of cash generation in the third quarter enabled us to further strengthen our balance sheet structure."

Demand in the third quarter was supported in particular by the rebound in the construction and decorative paints markets, which started in June, growth in batteries, and a sequential improvement in the automotive sector toward the end of the quarter.

The 4.5% negative price effect was due mainly to the impact of lower propylene prices in Coating Solutions and continued challenging market conditions in Intermediates.

As MRC reported earlier, Arkema said in June, 2020, that it had finalized the divestment of its functional polyolefins business to SK Global Chemical. The divestment was announced last year. Arkema says the sale forms part of its strategy to refocus the group’s activities on specialty materials.

As per MRC, Arkema wins the 2020 Pierre Potier Prize for its Elium® liquid thermoplastic resin for wind turbines Elium,liquid thermoplastic resin, a breakthrough innovation in the composites market that enables the manufacture of 100% recyclable wind turbine blades.

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.

Arkema is a global manufacturer in specialty chemicals and advanced materials, with 3 business segments - High Performance Materials, Industrial Specialties, and Coating Solutions - and globally recognized brands. The Group reports annual sales of EUR8.8 billion. Buoyed by the collective energy of its 20,000 employees, Arkema operates in close to 55 countries.

Lotte Chemical Titan shut No. 3 LLDPE unit in Indonesia for maintenance

MOSCOW (MRC) -- PT Lotte Chemical Titan Nusantara has reportedly shut its No. 3 linear low density polyethylene (LLDPE) line in Indonesia last week for a 20-30 day maintenance, while the high density polyethylene (HDPE) unit is unaffected by the overhaul, reported CommoPlast with reference to market sources.

According to market sources, the line was facing issues in producing higher Melt Index (MI) cargoes such as LLDPE roto-molding grade.

This line has an annual capacity of 200,000/year.

As MRC informed earlier, Lotte Chemical Titan last shut down its No. 3 LLDPE unit in Indonesia from December, 2019, 2020 to 20-22 January, 2020, owing to economic fundamentals. Located at Cilegon, Indonesia, the No. 3 unit has a production capacity of 200,000 mt/year.

We remind that PT Lotte Titan Nusantara, Indonesia shut its LLDPE units at Cilegon from 4 to 12 August, 2019, owing to power failure. Located in Cilegon, Indonesia, the No. 1, 2 and 3 units have a production capacity of 125,000 mt/year, 125,000 mt/year and 200,000 mt/year, respectively.

Besides, PT Lotte Titan Nusantara Indonesia restarted its No. 1 LLDPE unit at Cilegon in early December, 2019. The unit was shut owing to shortage of feedstock in early-November, 2019.

According to MRC's ScanPlast report, September LLDPE shipments to Russia increased to 19,110 tonnes from 17,330 tonnes a month earlier. Russia's overall LLDPE shipments totalled 276,330 tonnes in the first nine months of 2020, down by 9% year on year.

Lotte Chemical Titan produces Malaysia's most comprehensive portfolio of olefins and polyolefins which contribute to the enhancement of everyday life. Lotte Chemical Titan's production site in Malaysia consists of eleven process facilities, two co-generation plants and three tank farms. They are located on 2 sites in Pasir Gudang and Tanjung Langsat in the state of Johor. In 2006, Lotte Chemical Titan acquired PT Lotte Chemical Titan Nusantara, Indonesia’s first and largest polyethylene plant in the country. This acquisition boosted the polyolefins capacity by approximately 50%, thus making the company one of the largest producers in South East Asia. Lotte Chemical Titan was acquired by Lotte Chemical Corp., forming part of the Lotte conglomerate of Korea, in 2010. The company thus became one of Lotte Chemical Corp.’s largest overseas subsidiaries.

PP imports to Ukraine up by 1% in Jan-Oct 2020

MOSCOW (MRC) -- Overall polypropylene (PP) imports into the Ukrainian market totalled slightly over 113,000 tonnes in the first ten months of 2020, up by only 1% year on year. At the same time, only demand for homopolymer of propylene (homopolymer PP) increased, as per MRC's DataScope report.

October PP imports to Ukraine dropped to 11,800 tonnes from 12,500 tonnes a month earlier, demand for propylene copolymers subsided. Overall imports of propylene polymers reached 113,000 tonnes in January-October 2020, compared to 112,300 tonnes a year earlier. Demand for all grades of propylene polymers decreased, whereas demand for homopolymer PP increased.

The supply structure by PP grades looked the following way over the stated period.

October imports of homopolymer PP to the Ukrainian market were 9,500 tonnes versus 9,000 tonnes a month earlier, local companies increased their purchasing of PP in Saudi Arabia. Overall imports of homopolymer PP imports reached 86,800 tonnes in January-October 2020, compared to 85,600 tonnes a year earlier.

Last month's imports of block copolymers of propylene (PP block copolymers) were about 1,000 tonnes, compared to 1,700 tonnes in September, demand for injection moulding PP block copolymer subside. About 11,400 tonnes of PP block copolymers were imported in the first ten months of 2020, compared to 12,100 tonnes a year earlier.

October imports of stat-copolymers of propylene (PP random copolymer) fell to 1,100 tonnes from 1,600 tonnes a month earlier, local companies reduced their purchasing of pipe grade PP random copolymers. Overall imports of PP random copolymer reached 12,900 tonnes in January-October 2020, compared to 13,100 tonnes a year earlier.

Overall imports of other propylene copolymers totalled about 1,900 tonnes over the stated period.