W.R. Grace to review revised 40 North takeover bid

MOSCOW (MRC) -- W.R. Grace says it will review a newly-received USD65/share bid to acquire all outstanding shares in the company from private investment fund 40 North Management (New York, New York), reported Chemweek.

The offer values the company at about USD4.3 billion. It comes two months after Grace rejected a USD60/share, USD4-billion acquisition offer from 40 North in November.

Grace will consider strategic alternatives as part of its review of the latest bid from 40 North. The company’s board will “carefully review and evaluate the proposal,” Grace say. “As part of this review, the board will consider the proposal in the context of the company’s ongoing review of potential strategic alternatives to maximize shareholder value.”

40 North owns a 14.9% stake in Grace and has two seats on the board following an agreement reached in 2019.

40 North released a letter criticizing Grace’s rejection of its earlier offer, which the fund says was “summarily dismissed.” The letter adds that “since that time, (Grace has) neither engaged with us, nor made any public statement about opportunities Grace is pursuing to maximize value.”

The offer represents a 16% premium on Grace’s 11 January closing price, and a 48% premium on Grace’s 6 November closing price, prior to when 40 North’s initial offer was announced.

40 North reiterated its criticisms of Grace, saying that the company’s stock has under-performed since the spin-off of Grace Construction Products (GCP) in 2016, due largely to environmental declines and environmental liabilities. “Grace offers a strong and unique - but unrealized - value proposition that can make it a standout player in the world of specialty chemicals,” 40 North says. “Allowing the Company to continue along its current path, however, guarantees only that the value destruction at Grace will continue and worsen, consistent with its track record since the spin-off of GCP in 2016.”

Going private can enable Grace “to quickly and decisively undertake critical actions to arrest its steady decline and turn the tide towards enhanced profitability and growth,” the fund’s letter adds.

Goldman Sachs and Moelis & Company are acting as Grace’s financial advisors in reviewing the proposal, while Wachtell, Lipton, Rosen & Katz is its legal advisor. Citi and J.P. Morgan are acting as financial advisors to 40 North.

As MRC wrote before, in October 2020, W. R. Grace & Co. licensed 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.

We also remind that in April 2018, W. R. Grace & Co. completed the USD416 million acquisition of the Polyolefin Catalysts business of Albemarle Corporation.

According to MRC's ScanPlast report, Russia's estimated polyethylene (PE) consumption totalled 1,990,280 tonnes in the first eleven months of 2020, up by 1% year on year. Only high density polyethylene (HDPE) shipments increased. At the same time, polypropylene (PP) shipments to the Russian market reached 1 090,900 tonnes in the first eleven months of 2020 (calculated using the formula: production, minus exports, plus imports, excluding producers' inventories as of 1 January, 2020). Supply of exclusively PP random copolymer increased.

A leader in polyolefin catalysts and licensing, W.R. 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.

PPG to acquire German industrial coatings maker

MOSCOW (MRC) -- PPG Industries announced it will acquired Worwag (Stuttgart, Germany), a producer of liquid, powder and film coatings for industrial and automotive applications, said Chemweek.

Terms of the transaction, including purchase price, have not been disclosed. The deal is expected to close in the first half of this year.

Worwag, a family-owned business, has operations in several countries in Europe, the Americas and Africa, and generates about EUR220 million/year (USD269 million) in revenue. It has about 1,100 employees.

"The addition of Worwag will also enhance PPG’s waterborne, direct-to-metal, liquid and powder coatings offerings, and allow us to further expand current customer distribution in key geographies," says Rebecca Liebert, executive vice president at PPG.

The deal is the second substantial acquisition announced by PPG this year, and the fourth since mid-November, including the USD1.52-billion acquisition of Finnish decorative coatings producer Tikkurila.

As MRC informed earlier, PPG said 24 December that it has completed the acquisition of specialty transport coatings maker Ennis-Flint.

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.

Shell to acquire stake in Enerkem renewable chemicals and biofuels plant

MOSCOW (MRC) -- Shell will take a 40% interest in a waste-to-fuels plant using technology developed by Enerkem, a leading Canadian clean tech company, accoridng to Kemicalinfo.

Enerkem announced the project in December 2020, subject to finalization of commercial agreements.

The approximately CD875 million (USD686 million) commercial-scale facility will be constructed in Varennes, Quebec, and will produce low-carbon fuels and renewable chemicals products from non-recyclable waste using Enerkem’s proprietary technology.

Commissioning of the first phase of the facility is scheduled for 2023.

Critical investment in the plant comes from Shell, Enerkem, Suncor, Proman and Hydro-Quebec, as well as from the Quebec and Canadian governments.

“Building a commercial-scale low-carbon fuels plant is one of the ways Shell is advancing cleaner fuels and evolving to meet the changing expectations of our customers,” said Michael Crothers, Shell Canada President and Country Chair.

“Canada is well suited to capitalize on the energy transition thanks to the ingenuity of Canadians and our willingness to work together. We’re grateful for the collaboration between industry and government that has been instrumental in making this project a reality.”

Once completed, the plant will treat more than 200,000 tons of non-recyclable waste and wood waste per year with an annual production of nearly 125 million liters of low carbon fuels.

“The Varennes Carbon Recycling plant demonstrates our commitment and ability to use wastes as a feedstock to provide our customers with low carbon, high quality and affordable products,” added Crothers.

Shell has been a significant producer of ethanol as a low carbon fuel for the last ten years through Raizen, its joint venture in Brazil. Bioethanol is an effective way to reduce road transport emissions today, without the need to invest in new vehicles or infrastructure and already play a significant role in helping to decarbonise road transport in the Americas and in Europe.

As MRC reported earlier, Royal Dutch Shell plc. said in November that its petrochemical complex of several billion dollars in Western Pennsylvania is about 70% complete and in the process to enter service in the early 2020s. The plant's costs are estimated to be USD6-USD10 billion, where ethane will be transformed into plastic feedstock. The facility is equipped to produce 1.5 million metric tons per year (mmty) of ethylene and 1.6 mmty of polyethylene (PE), two important constituents of plastics.

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

According to MRC's DataScope report, PE imports to Russia decreased in January-November 2020 by 17% year on year and reached 569,900 tonnes. High density polyethylene (HDPE) accounted for the greatest reduction in imports. At the same time, PP imports into Russia increased by 21% year on year to about 202,000 tonnes in the first eleven months of 2020. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.

Royal Dutch Shell plc is an Anglo-Dutch multinational oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the biggest company in the world in terms of revenue and one of the six oil and gas "supermajors". Shell is vertically integrated and is active in every area of the oil and gas industry, including exploration and production, refining, distribution and marketing, petrochemicals, power generation and trading.

Polynt increases composite prices on rising costs

MOSCOW (MRC) -- Polynt Composites has announced a price increase for resins for the composite materials industry, effective from January 15 in Europe, the Middle East and Africa (EMEA), said Chemweek.

In detail, the increase will be equal to 100 euros per ton for the entire range of unsaturated polyester resins and gelcoats, while for the vinylester ones it will reach 180 euros / ton. "Extraordinary rise" in raw material, logistics costs sees company impose third price hike since November 2020.

The increases - the Italian manufacturer said - are linked to extraordinary costs of raw materials and logistics. Similar increases were announced in December and entered into force on January 1st.

As MRC informed earlier, in early March, 2020, Polynt announced that all its sites and activities in Italy were running smoothly and according to plan, despite the news about the Italian situation related to the spreading of the coronavirus in the country.

Polynt runs two maleic anhydride (MA) plants in northern Italy, including Bergamo’s 36,000 tonne unit in Lombardy and Ravenna’s 60,000 tonne plant on the east coast. The bigger production line at Ravenna had been operating at a reduced rate since March 2019 due to technical issues, the firm previously said. A new reactor ordered is expected to be operational in 2021. Polynt also produces phthalic anhydride at Bergamo and its San Giovanni Valdarno site, as well as plasticizers at San Giovanni Valdarno.

Maleic anhydride is a feedstock for the production of tetrahydrofuran, tetrahydrophthalic anhydride, films and synthetic fibers, pharmaceuticals, detergents, plasticizers, maleic, succinic, fumaric and malic acids and a number of chemicals for agriculture.

Plasticizers are substances introduced into a polymeric material to give it elasticity and plasticity during processing and operation. In particular, plasticizers are used to produce polyvinyl chloride (PVC). The share of plasticizers used for the production of PVC products is about 80%.

As per MRC, despite the coronavirus pandemic, the demand for unmixed polyvinyl chloride (PVC) in Russia did not decrease at the end of 2020, but actually remained at the level a year earlier. At the same time, prices hit record highs and continue to rise.

Methanol facility to remain idled indefinitely

MOSCOW (MRC) -- Methanex Corporation announced that it expects its Titan methanol facility (“Titan”) in Trinidad (875,000 annual operating capacity) will remain idled indefinitely, said Hydrocarbonprocessing.

As a result, the Company has made the decision to restructure its Trinidad operations to support a one-plant operation and reduce its Trinidad workforce by approximately 60 positions filled by employees and long-term contractors.

To date, the facility has not able to reach an agreement for an economic longer-term natural gas agreement and given that the economic recovery path remains uncertain the company believes it is prudent to reduce costs while continuing efforts to secure longer-term gas supply. The Atlas methanol facility (Methanex interest 63.1%) is not affected by the change and continues to operate as it is underpinned by a separate natural gas supply agreement that expires in 2024.

John Floren, President and CEO, Methanex Corporation, commented, “We remain committed to doing business in Trinidad and Tobago and we believe that we will be able to secure an economic longer-term natural gas agreement for Titan in the coming years. Our operations in Trinidad are well located to supply global methanol markets and are an important component of our global production network. We are taking the necessary steps to maintain Titan to ensure a safe and efficient restart of the plant when a longer-term gas agreement is reached."

As per MRC, Air Liquide said on Wednesday that it has agreed with Methanex Corp. to supply oxygen, nitrogen and utilities to its upcoming methanol plant expansion project at Geismar, Louisiana. Air Liquide will invest more than USD270 million in two new large air separation units (ASUs) and infrastructure assets connected to its Mississippi River pipeline, and significantly increase its production capacity in the US Gulf Coast region to serve Methanex and its other customers in the industrial basin that encompases Geismar and Baton Rouge.

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

According to MRC's ScanPlast report, Russia's estimated polyethylene (PE) consumption totalled 1,990,280 tonnes in the first eleven months of 2020, up by 1% year on year. Only high density polyethylene (HDPE) shipments increased. At the same time, polypropylene (PP) shipments to the Russian market reached 1 090,900 tonnes in the first eleven months of 2020 (calculated using the formula: production, minus exports, plus imports, excluding producers' inventories as of 1 January, 2020). Supply of exclusively PP random copolymer increased.