Momentive: USD 13 million investment in PU additives plant in Italy

MOSCOW (MRC) -- On 10 November 2020, Momentive Performance Materials Inc. announced it will invest USD13 million for the expansion of its existing Termoli, Italy, plant to create a state-of-the-art manufacturing hub for its Niax polyurethane additives, reported GV.

The site, which currently produces high performance additives for rigid foam applications among other silicone-based products, will undergo a comprehensive technology upgrade to expand services to the EU slabstock foam industry.

The modernised facility will supply customers in Europe, Russia and Turkey with full production ramp-up expected by the middle of 2022. Momentive said this investment is part of its broader plans to optimise its global manufacturing footprint, whereby a silicone plant in Antwerp, Belgium, ceased operations earlier this year with long-term manufacturing shifting to the Italy plant.

“This investment expands our commitment to in-region manufacturing and supply, which will help us to serve our customers even better – providing a high level of flexibility and consistent, high quality products,” said Dr. Alberto Melle?, Global Business Segment Leader for Polyurethane Slabstock Additives.

To further underscore its commitment to serving European customers within the region, Momentive recently established a new customer service support centre in Milan (Italy). The transition from a third-party supplier to the new centre began in October 2020 and will be completed by year’s end.

“We continually seek new ways to improve and enhance our production and manufacturing capabilities and capacity to meet the growing needs of our customers. These investments position us for long-term sustainable growth and enable us to remain a valued supplier to those European-based customers who are seeking a trusted source of additives,” added VP Nalian, President and General Manager for Momentive’s Performance Additives business unit.

In addition to the Termoli (Italy) site, Momentive serves the polyurethane foam industry through its Sistersville, WV, USA, Itatiba, Brazil, Nantong, China, and Chennai, India, operations.

As MRC wrote earlier, in August 2020, Momentive Performance Materials Inc. (Waterford, N.Y.) outlined a series of steps to accelerate its global transition from commodity basics chemicals to specialty silicones – actions that will focus the company’s strengths and expertise on advanced technologies. The steps include a USD15-million investment in specialized Electronic Materials Production and the sale of its Consumer Sealants Business. The company also envisions a two-year transition away from basics chemicals production at its Waterford facility, which began operations in 1947.

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 year on year by 6.1% 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. September 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.

Idemitsu chemical business swings to loss on lower margin

MOSCOW (MRC) -- Japanese oil refiner Idemitsu Kosan expects higher gasoline and diesel exports in the October-March half of its financial year as its run rates are likely to recover to 85%-89% from 70% in the first half, said Chemweek.

But Idemitsu also expects a weak market for petroleum products in Asia to continue over the six-month period, Munehiro Sekine, general manager of investor relations for Idemitsu, told a news conference. Idemitsu forecast its annual domestic fuel sales in the year to March 31 to fall 13.1% from a year earlier to 35.26 million kilolitres, hit by collapsed demand from the COVID-19 crisis.

But it predicted that its fuel export will rise 10.5% on year to 4.21 million kilolitres. "As we expect to boost the run rate to meet higher kerosene demand during the winter, there will be some surplus in other products which we plan to export," Sekine said, pointing to gasoline and diesel.

For the April-September half, gasoline sales slid 14.6% from a year earlier, while jet fuel sales plunged 67.8%. The company revised down its annual earnings forecast, now predicting a net loss of 20 billion yen, instead of its May estimate of a profit of 5 billion yen, blaming a hefty appraisal loss on its oil inventories due to lower-than-expected oil prices.

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.

UK industry resilient during crisis

MOSCOW (MRC) -- Chemical companies across the UK are “battling through the pandemic and the threat of a Brexit no deal,” says the Chemical Industries Association (CIA; London), reported Chemweek.

According to the CIA’s latest quarterly survey of its members, chemical businesses saw a modest expansion in the third quarter with the survey’s sales diffusion index reaching 55.4 and export growth to non-EU countries registering 56.5. Any figure above 50 represents growth. The overall performance index was 51.5, beating forecasts, CIA says.

Despite new COVID-19 restrictions in the UK, the increases in sales and exports are predicted to continue into the fourth quarter, CIA says. For 2021, 57% of UK chemical businesses expect to see sales climb further, with more global export growth anticipated.

CIA says the industry’s resilience is demonstrated by the fact that 98% of its member companies have no plans to utilize any of the UK government’s Winter Economic Plan financial support measures, although “any prolonged impact from the latest COVID restrictions may see some reduction in this number.” The industry believes that from a business angle, there has been access to adequate levels of government support, including non-financial, throughout the crisis, it says.

Steve Elliott, CIA chief executive, says, “this performance shows the strength of chemical businesses in adapting to pressures from all angles. Since March, the industry has continued to deliver essential solutions for society such as hand sanitizer, PPE and, most recently, an exciting contribution to the vaccine breakthrough to help fight coronavirus.”

The UK chemical industry is “still far from out of the woods,” Elliott says. “Further and necessary COVID restrictions may impact negatively and the looming threat of a ‘no’ or inadequate UK/EU trade deal remains. Avoiding tariffs, minimizing customs and border delays, and securing a cost-effective agreement on our future EU and UK REACH requirements are all critical outcomes from the current negotiations.”

As MRC informed before, SABIC Europe declared a force majeure on its low density polyethylene (LDPE) supplies from Wilton, the UK on November 3, 2020. The company had shut its LDPE plant for a maintenance work in the first half of October. The Wilton unit is able to produce 400,000 tons/year of LDPE.

According to MRC's ScanPlast report, September estimated LDPE consumption in Russia fell to 23,930 tonnes from 47,610 tonnes a month earlier. Russian producers reduced their domestic LDPE shipments due to shutdowns for maintenance at production capacities in Ufa, Tomsk and Kazan. Russia's estimated LDPE consumption totalled about 406,500 tonnes in January-September 2020, which virtually corresponded to the last year's figure.

US WR Grace gets takeover offer from investment firm

US WR Grace gets takeover offer from investment firm

MOSCOW (MRC) -- W. R. Grace & Co. confirmed that it has received a proposal from 40 North Management LLC, one of its shareholders, to acquire all outstanding common shares of the Company for USD60 per share in cash, subject to certain conditions, said the company.

Grace has a portfolio of high-value, specialty businesses and while end markets have been significantly impacted by the pandemic, the fundamentals of its businesses remain strong and demand trends continue to improve. As the Company has communicated, most recently on its third quarter 2020 earnings call, Grace has often pursued opportunities to maximize shareholder value.

Consistent with its commitment to all shareholders, Grace’s Board, working with management and its financial advisers, is carefully evaluating and thoroughly discussing its value creation opportunities. At the same time, Grace is focused on executing its long-term strategy and advancing its key investments to accelerate profitable growth, improve its competitive advantages and strengthen its portfolio.

Given the Company’s strong prospects and its ongoing review of the alternative opportunities available, Grace’s Board of Directors unanimously believes that 40 North’s USD60 per share proposal significantly undervalues the Company and is not a basis for further discussion. The Grace Board remains open to all opportunities to maximize value for shareholders.

Goldman Sachs & Co. LLC and Moelis & Company LLC are serving as financial advisors and Wachtell, Lipton, Rosen & Katz is serving as legal counsel to Grace.

As MRC informed earlier, W. R. Grace & Co. licenses UNIPOL PP process technology to Dongguan Grand Resource for two additional lines. This is part of the continued investment in UNIPOL PP Process Technology lines by DGR. The first license was signed in 2016. Building additional capacity at the same site will help DGR further optimize costs, shorten construction time, and broaden their product portfolio.

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.

A leader in polyolefin catalysts and licensing, Grace has the world’s broadest portfolio of polypropylene and polyethylene catalyst technologies used to produce thermoplastic resins for a variety of applications. A leading innovator and strategic partner to its customers, Grace supplies catalyst solutions for all polyolefin processes, as well as polypropylene process technology and process controls. Grace employs approximately 3,700 people in over 30 countries.

Japan's Cosmo cuts annual profit forecast by 41% on inventory loss

MOSCOW (MRC) -- Japanese oil firm Cosmo Energy Holdings on Thursday cut its net profit estimate for the year to March 31 by 41%, blaming a hefty appraisal loss on its crude inventories and slumping prices of petrochemicals, reported Reuters.

It now forecasts an annual net profit of 8.5 billion yen (USD80 million), down from its May prediction of 14.5 billion yen.

"Our sales of key fuels, mainly gasoline, have steadily recovered from the COVID-19 crisis, but petrochemicals markets have deteriorated more than we had anticipated," Takayuki Uematsu, Cosmo's senior executive officer, told a news conference.

Cosmo also expects to book an appraisal loss of 15 billion yen on its inventories, the result of a lower-than-expected purchase cost of oil due to a reduction in Saudi Aramco's selling prices and cheaper freight.

Still, it plans to boost the run rate of its refineries to 94% in the October to March period from 76.4% in the April to September period to reflect higher demand.

Cosmo also said it aims to boost its wind power generation capacity to over 1 gigawatt (GW) by March 2031 from 263 megawatts (MW) now as it beefs up renewable energy in the light of the global transition to greener power.

"We want to become a leading company in the offshore wind power market," Uematsu said, citing a plan to develop 600 MW offshore wind farms by March 2031.

Japan's offshore power market is set to take off after the government last year brought in a law to encourage wind farm development. The Japan Wind Power Association predicts the country's offshore wind power installed capacity will grow to 10 GW in 2030.

Cosmo, which is currently developing one offshore and four onshore wind farms, plans to bid for at least three offshore wind projects for which the government will select an operator through an auction, Uematsu said.

As MRC wrote previously, in February 2019, Cepsa and Cosmo have signed a memorandum of understanding (MOU) to study new business opportunities in the lubricants market, both in Spain and Japan and internationally. The agreement covers potential synergies in the production of lubricants and coolants, the exchange of technology and formulations, and the search for possible partnerships in the marketing of these products, to increase their efficiency.

We remind that Cepsa Quimica (Shanghai), a joint venture between Spanish petrochemical company CEPSA and Japanese Sumitomo Corp, shut its phenol and acetone plant in Shanghai for 5 days from December 10, 2019, due to the repair work on the gas pipeline in the Shanghai Caojing Chemical Industry Park, where the plant is located.
Phenol is the main feedstock for the production of bisphenol A (BPA), which, in its turn, is used to produce polycarbonate (PC).

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).

Cosmo Energy Holdings Co., Ltd. operates as a holding company. The Company, through its subsidiaries, imports, refines, and sells crude oil as well engages in the independent development of oil resources.