Lotte Chemical plans to acquire JSR elastomers business

MOSCOW (MRC) -- Lotte Chemical has recently completed its due diligence on potential acquisition of JSR’s elastomers business, according to Chemweek with reference to a local press report from Business Korea.

Lotte Chemical has selected Nomura Securities as its lead manager for the acquisition, says the report.

JSR’s elastomers unit produces emulsion styrene-butadiene rubber (E-SBR), solution styrene-butadiene rubber (S-SBR), polybutadiene rubber, and isoprene rubber. IHS Markit data says that JSR is the largest producer of SBR in Japan, accounting for a combined capacity of 210,000 metric tons.

Lotte Chemical established a joint venture (JV) with Versalis (Milan), the chemicals arm of Eni (Rome), and has been operating 100,000-metric tons/year S-SBR facilities for high-performance tires since 2017.

The press report says that the JV has been making losses in this business. It is not easy for new companies to enter the S-SBR sector due to difficult quality certification procedures set by existing customers such as automakers, adds the report. The report says that the acquisition will help Lotte Chemical to meet product standards required by global tire manufacturers.

Lotte’s flagship products include butadiene and styrene monomer, used as raw materials for synthetic rubber. Lotte will be able to enjoy huge synergies by absorbing the elastomers division from JSR, says the report.

It says that JSR plans to sell its elastomers business for a price of up to 1 trillion South Korean won (USD908 million). Press reports quoting industry experts say that JSR’s elastomers business suffered a loss in the aftermath of COVID-19 in 2020, a factor that will be reflected in price calculation.

As MRC reported before, South Korea’s Lotte Chemical has restarted its fire-hit naphtha-fed steam cracker in Daesan. Thus, the facility begins trial runs of naphtha on 7 December, 2020, and the company achieved commercial production on 8 December. The cracker was shut on March 4, 2020m following an explosion, which injured more than 30 people.

Lotte Chemical runs two naphtha crackers in South Korea. One cracker is located in Daesan county in Seosan which can produce 1.1 million tonnes per year of ethylene with the other 1.2 million tonnes per year cracker in the southwestern city of Yeosu.

Styrene is the main feedstock for the production of polystyrene (PS).

According to MRC's ScanPlast report, Russia's estimated consumption of PS and styrene plastics totalled 454,990 tonnes in the first eleven months of 2020, which corresponds to the last year's figure. November estimated consumption of PS and styrene plastics grew by 4% year on year to 45,830 tonnes.

Ineos Styrolution to build demo plant for ABS production using recycled feedstock

MOSCOW (MRC) -- Ineos Styrolution, the styrenics subsidiary of Ineos, says it will build a demonstration plant at its manufacturing site in Antwerp, Belgium, to test production of acrylonitrile-butadiene-styrene (ABS) plastic from recycled feedstock, said Chemweek.

The demo plant will complement another demo unit planned by Styrolution’s ‘ABSolutely Circular’ project partner Indaver (Mechelen, Belgium), a waste management company. Both plants are part of the ABS circular recycling project, which is supported by the EU’s LIFE program.

The company “is still open for new partners to start working with us on the demonstration plant,” says Styrolution’s Bart van der Zee, technical R&D project lead. “I invite technology providers to join us on our mission,” he says.

Styrolution and Indaver announced in December 2020 they would collaborate as technology partners for the four-year project to produce ABS from recycled feedstock, and that they would be funded by the LIFE program, the EU’s funding instrument for environment and resource efficiency.

The two companies also linked up mid-2019 for the chemical recycling of post-consumer polystyrene (PS) waste. Indaver has large-scale treatment facilities in Antwerp, with plans for a 15,000-metric tons/year demonstration chemical-recycling installation to be operational in 2021.

As MRC informed earlier, Ineos Styrolution plans to raise prices for acrylonitrile butadiene styrene (ABS) by 7 cents per pound (USD154 per tonne) from February 1. The company also sought a similar increase in ABS prices from December 15 by two of its brands. The intention to raise prices stems from rising raw materials and logistics costs associated with the production and supply of ABS, the letter said.

According to the ICIS-MRC Price Report, ABS imports to Russia grew by 4% in the first ten months of this year compared to the same period last year and amounted to 29,100 tonnes against 28,000 tonnes. The share of South Korean supplies amounted to 62% (18,200 tonnes) against 57% (16,100 tonnes) in January-October 2019.

Asian Paints reports 49% net profit growth for Q3 QoQ FY20-21

MOSCOW (MRC) -- Asian Paints Limited., an Indian paints and coatings manufacturer, announced its results for the third quarter ended December 31, 2020, according to Kemicalinfo.

The company’s net profit increased 49.1% to Rs 1238.34 crores for the period ended December 31, 2020 as against net profit of Rs 830.37 crores for the previous quarter.

Net sales grew 27% to Rs 6886.39 crores during the period ended December 31, 2020 as compared to Rs 5432.86 crores during the previous quarter.

The company’s net profit grew 62% to Rs 1238.34 crores for the period ended December 31, 2020 as against net profit of Rs 764.43 crores for the prior-year quarter.

Net sales increased 25.4% to Rs 6886.39 crores during the period ended December 30, 2020 as compared to Rs 5490.11 crores during the prior-year quarter.

“Demand conditions continued to exhibit a strong recovery across business segments, spread over most regions in the third quarter of this financial year,” said Amit Syngle, Managing Director & CEO, Asian Paints Limited.

Mr Syngle said that “the domestic Decorative business delivered a powerful performance with more than 30% volume growth led by a strong performance in premium and luxury portfolios. The Home Decor foray of Asian Paints got a big fillip from a strong performance of the Home Improvement business. “

“The Industrial coatings business delivered a robust performance, particularly in Protective coatings and Auto OE businesses which rebounded in a big way, benefited by resurgence in the industrial activity,” Syngle said.

“The International business recorded a double-digit volume growth, strongly led by good growth in Asia and Middle East. Profitability across businesses has been well supported by a good Sales mix and some excellent work in cost optimization & sourcing measures pursued strongly through innovation programs,” he added.

As MRC reported previously, in early May, 2020, Reliance Industries Ltd. (RIL) announced that it was considering selling its stake in India’s largest paint maker valued at about USD989 million as the conglomerate steps up efforts to trim its debt. RIL was in discussions with banks for a potential sale of its 4.9% stake in Asian Paints Ltd. through a series of block trades. Reliance holds the stake through Teesta Retail. The size and timing of any potential sale haven’t been finalized, and Reliance could decide not to pro-ceed with a deal, the people said then. The sale of stake in Asian Paints is part of RIL’s string of fundraising plans unveiled in order to bolster investor confidence, even as the crash in oil prices pulled down profit at the company’s oil-to-chemicals business.

We remind that in November 2019, Reliance Industries confirmed plans to invest 700 billion Indian rupees (USD9.75 billion) to establish a crude-oil-to-chemicals (COTC) complex at the company's Jamnagar, India.

The MCC/HSFCC complex will have combined capacity for 8.5 million metric tons/year (MMt/y) of ethylene and propylene, and total extraction capacity for 3.5 MMt/y of benzene, toluene, and xylenes. It will also have combined capacity for 4.0 MMt/y of paraxylene and orthoxylene. The steam cracker will have combined capacity for 4.1 MMt/y of ethylene and propylene, and feed crude C4s to a 700,000-metric tons/year butadiene extraction plant. Reliance will also add 1.3 MMt/y of p-xylene capacity at existing plants at Jamnagar.

Ethylene and propylene are feedstocks for producing polyethylene (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.

Aramco omits some carbon data in disclosures to investors

MOSCOW (MRC) -- Saudi oil giant Aramco has excluded emissions generated from many of its refineries and petrochemical plants in its overall carbon disclosures to investors, said Hydrocarbonprocessing.

The world's biggest oil company's self-reported carbon footprint might nearly double, adding as much as 55 million metric tons of carbon dioxide equivalent to its annual tally, if those facilities are included, according to the report.

Much of the omissions are because Aramco chooses to report data from facilities it wholly owns and ones located inside the kingdom, Bloomberg News said, while many of its refineries are joint ventures or located overseas.

Aramco said in a statement that it uses globally accepted guidelines to report the data and has "a clear and deliberate path to increase the scope and details of this disclosure."

The company said it would disclose this year direct and indirect greenhouse gas emissions for 2020 from wholly-owned operations in the kingdom and worldwide, subject to verification by a third party.

Aramco's 2019 emissions would have been between 75 million tons and 113 million tons if missing emissions are included, according to Bloomberg News' calculations based on data from a Nature Climate Change study published last year.

Oil major Exxon Mobil Corp, under increasing pressure from investors and climate change campaigners, said in December it planned to reduce its greenhouse gas emissions over the next five years.

As per MRC, top oil exporter Saudi Arabia has cut supplies of February-loading crude for some Asian buyer by up to a quarter while meeting requirements of at least four others. This comes after Saudi Arabia pledged additional voluntary output cuts of 1 million barrels per day (bpd) in February and March under a deal between the Organization of the Petroleum Exporting Countries and its allies including Russia, a group known as OPEC+.

As MRC wrote previously, Formosa Petrochemical Corporation (FPCC) was running its crackers in Taiwan at 100% capacity utilisation in end-December, 2020. The company"s crackers have combined ethylene production capacity of 2.935 million metric tons/year. Meanwhile, FPCC is planning overhaul of the smallest cracker in mid-2021.

Ethylene and propylene are feedstocks for producing polyethylene (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.

Saudi Aramco, officially the Saudi Arabian Oil Company, is a Saudi Arabian national oil and natural gas company based in Dhahran, Saudi Arabia. Saudi Aramco"s value has been estimated at up to USD10 trillion in the Financial Times, making it the world"s most valuable company. Saudi Aramco has both the largest proven crude oil reserves, at more than 260 billion barrels, and largest daily oil production.

COVID-19 - News digest as of 22.01.2021

1. Indian oil imports at near three-year high in December

MOSCOW (MRC) -- India’s crude oil imports in December soared to the highest levels in nearly three years to more than 5 million barrels per day (bpd) as its refiners cranked up output to meet a rebound in fuel demand, reported Reuters with reference to data from trade sources. A boy walks past an oil tanker train stationed at a railway station in Ghaziabad, on the outskirts of New Delhi, India, February 1, 2019. India’s year-end rush for crude supplies coincided with stronger demand from north Asian buyers during winter, boosting prices and an accelerating de-stocking of floating storage globally.