Univar to acquire Chinese silicone distribution business

MOSCOW (MRC) -- Univar Solutions says it has agreed to acquire the coatings, adhesives, sealants and elastomers (CASE) business of Zhuhai Techi Chem Silicone Industry Corporation (Guangdong, China), a silicones provider, reported Chemweek.

Terms of the transaction, including purchase price, were not disclosed. The deal is a part of Univar’s push to extend its global reach and product offering in the CASE market.

“Our customers throughout China will benefit from Techi Chem's strong relationship with the leading global silicone supplier as well as Univar Solutions' global silicone expertise and network of technical Solutions Centers that will provide comprehensive solutions for the Chinese market,” says Nick Powell, president/specialty chemicals and ingredients at Univar.

Techi Chem was founded in 2001 and is known for an extensive product and service offering within silicones, and a strong logistics footprint in China, according to Univar.

As MRC wrote previously, in late October, 2020, Univar Solutions Inc. and PVS Chloralkali Inc., a wholly owned subsidiary of PVS Chemicals Inc. (PVS), announced a new agreement where PVS will transfer railcars located in Ohio, Illinois and Virginia and sourcing agreements for Hydrochloric Acid (HCL) to Univar Solutions.

According to MRC's ScanPlast report, Russia's October total production of unmixed PVC grew to 86,600 tonnes from 86,000 tonnes a month earlier, SayanskKhimPlast and Bashkir Soda Company increased their capacity utilisation. Overall output of polymer in Russia was 805,100 tonnes in the first ten months of 2020, which virtually corresponds to the last year's figure. Two producers increased their production, whereas two other manufacturers reduced their output.

Univar Solutions is a leading global chemical and ingredient distributor and provider of value added services to customers across a wide range of industries. With the industry's largest private transportation fleet and North American sales force, a vast supplier network, deep market and regulatory knowledge, world-class formulation and recipe development, unparalleled logistics know-how, and industry-leading digital tools, Univar Solutions is a committed ally to customers and suppliers, helping them anticipate, navigate, and leverage meaningful growth opportunities.
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MOSCOW (MRC) -- BASF says it has launched a circular-economy program, under which it aims to double its sales generated by solutions for the circular economy to EUR17.0 billion (USD20.6 billion) by 2030, and process 250,000 metric tons of recycled and waste-based raw materials annually as of 2025, replacing fossil-based raw materials, according to Chemweek.

The company says it is concentrating on three action areas to achieve its circular-economy targets: circular feedstocks, new material cycles, and new business models.

“The path to a circular economy will require enormous efforts on our part. But we have taken on this challenge with commitment and creativity and we can build on our innovative strength,” says Martin Brudermuller, chairman and chief technology officer at BASF. “Companies that can provide solutions for the transformation to a circular economy will have a crucial competitive advantage.”

In a circular economy, the aim is to avoid waste, reuse products, and recover resources, BASF says. As a result, the company's circular-economy program focuses on battery recycling, to develop processes that reduce carbon footprint; the development of additives to improve plastics recycling; chemical recycling that can turn plastic waste into feedstock for the chemical industry; and increasing the volume of renewable raw materials from sustainable sources in the company's production.

As MRC reported before, German chemicals maker BASF said in early November it had put a project to build a petrochemicals complex in India worth up to USD4 billion on hold due to the economic uncertainty caused by the COVID-19 pandemic. BASF signed a memorandum of understanding with Abu Dhabi National Oil Company (ADNOC), Adani Group and Borealis AG in October 2019 to evaluate a collaboration to build the chemical site in Mundra, in India’s Gujarat state.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,760,950 tonnes in the first ten months of 2020, up by 3% year on year. Only high density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments increased. At the same time, PP shipments to the Russian market reached 978,870 tonnes in January-October 2020 (calculated using the formula: production minus exports plus imports minus producers' inventories as of 1 January, 2020). Supply of exclusively of PP random copolymer increased.

BASF is the leading chemical company. It produces a wide range of chemicals, for example solvents, amines, resins, glues, electronic-grade chemicals, industrial gases, basic petrochemicals and inorganic chemicals. The most important customers for this segment are the pharmaceutical, construction, textile and automotive industries.
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MOSCOW (MRC) -- Showa Denko has announced a long-term strategy covering 2021-30 following the company’s acquisition of Hitachi Chemical, renamed Showa Denko Materials, earlier this year, reported Chemweek.

The acquired company became a consolidated subsidiary of Showa Denko in April. A “long-term vision” is needed to “integrate the two companies as soon as possible and establish a foundation for future growth” in the face of intensifying worldwide competition and expected changes in market structure, Showa Denko says. The strategy includes sales and earnings targets as well as restructuring measures such as divestments and job cuts.

Showa Denko has split the two companies' portfolios into four business categories: core-growth businesses, next-generation businesses, stable-earnings businesses, and fundamental technologies/materials businesses. Each will have “a competitive advantage commensurate with their respective roles,” Showa Denko says.

The core-growth and next-generation businesses will drive the Showa Denko group’s future growth, the company says. Core-growth businesses consist of electronics and mobility, including advanced materials, which possess “overwhelming scale/top-share products in growing markets and which will sustain the group’s future growth,” Showa Denko says. The next-generation businesses are life sciences, which are “in an advantageous position that can lead to future growth in promising markets, and that will be developed into a next-generation pillar,” Showa Denko says.

The stable-earnings businesses include carbon, petrochemicals, device solutions, industrial gases, basic chemicals, coating materials, electronics materials, energy. These activities “earn a stable profit and generate investment capital with competitiveness and a high share in markets where the competitive landscape is stabilizing,” Showa Denko says.

The fundamental technologies and materials business include ceramics and functional chemicals, “with a wide range of inorganics, organics, and aluminum technologies that support the competitiveness of the other three business categories,” Showa Denko says.

Showa Denko expects the electronics market to “remain fiercely competitive,” but says the “direction of technological development is set and rapid structural changes and new entries in the industry are less likely to occur.” The company highlights its position as the world’s biggest manufacturer of semiconductor materials with annual sales of about ?200.0 billion ($1.9 billion). “The Showa Denko group is in the top position, far ahead of all other players in terms of business scale and offers a broad product portfolio that boasts global top-level competitiveness and share in both wafer and packaging processes,” the company says.

In mobility, Showa Denko envisages that competition for the top position among multiple manufacturers of advanced materials will continue. The group “will manage certainty and uncertainty with its portfolio of businesses, by leveraging global top-share products and its product line-up, enhanced through integration,” it says. These include meeting demand from the trend toward vehicle-weight reduction and the shift to vehicle electrification.

Showa Denko expects the life sciences business to grow “significantly.” The company plans to leverage its contracting business, based on a worldwide production structure that includes three sites across Europe, Asia, and North America.

Cumulative sales for the core-growth and next-generation businesses totaled approximately Yen 230 billion in 2020, and the group will seek to expand this to Yen 600 billion by 2030, achieving a compound annual growth rate of 10% mainly through innovation. Together they will generate an additional Yen 18 billion and ?48 billion in operating income in 2025 and 2030, respectively, Showa Denko says.

Showa Denko says the integrated company will aim to be in the worldwide chemical industry’s top quartile over the medium- and long term, in terms of sales and profit. It is targeting an increase in overall sales from Yen 1.2 trillion in 2020 to Yen 1.6 trillion in 2025 and ?1.8-1.9 trillion in 2030. The company is aiming for an increase in EBITDA from Yen 900 million in 2020 to Yen 3.2 billion in 2025 and an increase in its EBITDA margin from 8% this year to 20% in 2025.

Showa Denko plans to restructure its portfolio steadily through 2023. The company says it is “considering and negotiating” the sell-off of multiple business. It envisages divestment proceeds totaling ?200 billion on an enterprise value basis.

The company is also planning profit-improvement and asset-streamlining measures. This includes synergies arising from the integration of Showa Denko and Showa Denko Materials. The company is considering six initiatives including reducing procurement and logistics costs, improving productivity, and cutting about 1,500 jobs. The aim is to boost annual profit by ?28 billion by the end of 2023.

Showa Denko, meanwhile, will consolidate its operating sites and says that these measures are not included in the profit-improvement initiatives. The company forecasts that asset streamlining will yield Yen 50 billion in additional profit through 2021.

Other measures include reducing working capital, which the company expects to yield about Yen 25 billion in additional profit and selling marketable securities, which is expected to generate about Yen 20 billion.

The group is due to complete construction of a worldwide R&D hub at Kanagawa in Yokohama, Japan, in spring 2022. It envisages an ESG-oriented R&D focus at the new facility based on the expertise of Showa Denko and Showa Denko Materials.

Showa Denko expects to complete the integration of the two companies into a single entity in January 2023, following “substantive integration” through July 2021 and the integration of head offices in October 2021.

As MRC informed earlier, Japanese firm Hitachi Chemical Company changed name to Showa Denko Materials on 1 October 2020.

MRC also wrote before that Showa Denko (SDK) expanded production lines to produce vinyl ester resin (VE) and synthetic resin emulsion (EM) in the premises of Shanghai Showa Highpolymer Co., Ltd. (SSHP), a Chinese subsidiary of SDK, and has increased production of VE and EM there, aiming to expand the Showa Denko Group’s functional resin business in China.

According to MRC's ScanPlast report, October total production of unmixed PVC grew to 86,600 tonnes from 86,000 tonnes a month earlier, SayanskKhimPlast and Bashkir Soda Company increased their capacity utilisation. Overall output of polymer was 805,100 tonnes in the first ten months of 2020, which virtually corresponds to the last year's figure. Two producers increased their production, whereas two other manufacturers reduced their output.

Showa Denko K.K. Mainly engaged in the petrochemical business. The company's petrochemical division produces and markets industrial gases, olefins, organic chemicals, and others.

Hitachi Chemical is a consolidated subsidiary of Showa Denko and is involved in the manufacturing, processing and sales of functional materials and advanced components and systems.
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MOSCOW (MRC) -- Chile’s SQM said on Tuesday it had inked a long-term agreement with LG Energy Solution to supply the South Korean battery maker with ultralight metal lithium, a main ingredient in powering electric vehicles, said Reuters.

SQM, the world’s No.2 producer of lithium, said the contract would run between 2021 and 2029 and involves the supply of approximately 55,000 metric tons of lithium carbonate equivalent, SQM said in a statement.

Pablo Altimiras, who oversees SQM’s lithium business, said the deal demonstrated confidence in the quality of the company’s product.

"These are long-term contracts that point to SQM’s stability," Altimiras said, adding that the company would continue seeking out such deals in the future.

South Korea’s LG Chem, an electric car battery supplier for Tesla Inc and GM, said in September that it would separate its battery making business into a new company - LG Energy Solution - to meet growing demand from European car makers and increasing sales of cylindrical batteries used in Tesla cars.

Car and battery makers in the United States, Europe and China are scrambling to lock down supplies of lithium ahead of an anticipated boom in demand for electric vehicles.

Many miners had moved to boost output ahead of the rush, but the COVID-19 pandemic largely temporarily slammed the brakes on the electric vehicle revolution, driving down prices, denting profits and forcing many companies to shelve expansion plans.

In November, SQM nonetheless said its plans to boost its production of lithium carbonate and lithium hydroxide by the second half of 2021 were still on track.

SQM also plans to increase its production capacity to 180,000 and 30,000 metric tons of lithium carbonate and lithium hydroxide, respectively, by 2023.

As MRC informed earlier, LG Chem developed a new biodegradable material potentially with mechanical properties and transparency equivalent to synthetic resins such as PP.
MRC

MOSCOW (MRC) -- Aceto says it has acquired IsleChem (Grand Island, New York), a contract manufacturer and R&D organization. Terms of the transaction, including purchase price, were not disclosed, reported Chemweek.

The deal adds to Aceto’s capabilities in chemicals sourcing, quality and supply chain.

“The COVID-19 pandemic has reinforced that access to a diverse, secure supply chain and dependable manufacturing is essential to business continuity,” says Aceto CEO Gilles Cottier. “This acquisition adds manufacturing and R&D capabilities to enhance Aceto’s already robust supply network. IsleChem is poised for facility expansion to service growing market demand, allowing the combined company to support more of our customers’ needs from development through to commercialization and full-scale production.”

Aceto says it will invest in IsleChem’s operations, including expanding the business’ workforce.

As MRC informed before, chemical production in the US increased 0.4% on a sequential three-month-moving-average (3MMA) basis in November, according to the American Chemistry Council’s (ACC). This follows a 1.1% gain in October, and 0.6% gain in September. Improvement was evident in most chemical end sub-sectors, including fertilizers, synthetic dyes and pigments, chlor-alkali, and inorganic chemicals, although gains eased in coatings, adhesives, crop protection chemicals, and some other sectors. Chemical production also increased in all regions of the country.

We remind that Russia's output of chemical products rose in October 2020 by 7.2% year on year. At the same time, production of basic chemicals grew in the first ten months of 2020 by 6.3% year on year, 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-October output. October production of polymers in primary form grew to 857,000 tonnes from 852,000 tonnes in September. Overall output of polymers in primary form totalled 8,340,000 tonnes over the stated period, up by 17% year on year.
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