Trinseo to sell synthetic rubber business to Synthos

MOSCOW (MRC) -- Trinseo, a global materials company and manufacturer of plastics, latex binders and synthetic rubber, has announced today it has entered into a definitive agreement to sell its synthetic rubber business based in Schkopau, Germany to Synthos S.A. and its affiliates for an enterprise value of approximately USD491 million, comprised of USD449.4 million of cash and the assumption of approximately USD41.6 million of pension liabilities, as per the company's press release.

The expected net cash proceeds are approximately USD400 million after transaction-related costs and taxes.

The transaction, which is subject to customary closing conditions and regulatory approvals, is expected to close in 2022.

The Business includes approximately 440 employees, mostly located in Schkopau, Germany, who are expected to join Synthos once the transaction closes. The transaction also includes the transfer of the associated Schkopau-based manufacturing and research and development facilities, as well as related intellectual property.

“In pursuing our transformation strategy toward becoming a higher margin and less cyclical specialty materials and sustainable solutions provider, we believe our best path is to focus on growth in Engineered Materials and CASE applications,” said Frank Bozich, Trinseo President and Chief Executive Officer. “Following the acquisition of Arkema’s PMMA business, the divestiture of Synthetic Rubber provides Trinseo with a stronger balance sheet and greater flexibility to pursue organic and acquisition growth opportunities.”

As MRC wrote before, recycled polystyrnee (PS) is just one of Trinseo’s sustainable materials aimed at circularity. The company also is involved with depolymerization with technology provided by partner, Recycling Technologies, and plans to build a dedicated plant at its Tessenderlo, Belgium location. This will be one of two PS recycling plants in Europe estimated to add a total of 30,000 tons of PS feedstock into the European marketplace. The plant is expected to start operating in 2023.

According to ICIS-MRC Price report, in Russia, Nizhnekamskneftekhim's PS prices remained unchanged in May. Prices of Nizhnekamskneftekhim's GPPS were in the range of Rb192,000-203,000/tonne, CPT Moscow, including VAT, whereas high impact polystyrene (HIPS) prices were at Rb196,000-207,000/tonne CPT Moscow, including VAT. At the same time, May prices of Penoplex's material fell by Rb15,000/tonne to Rb204,000-206,000/tonne CPT Moscow, including VAT.

Trinseo is a global materials company and manufacturer of plastics, latex and rubber. Trinseo's technology is used by customers in industries such as home appliances, automotive, building & construction, carpet, consumer electronics, consumer goods, electrical & lighting, medical, packaging, paper & paperboard, rubber goods and tires. Formerly known as Styron, Trinseo completed its renaming process in 1Q 2015. Trinseo had approximately USD3.0 billion in net sales in 2020, with 17 manufacturing sites around the world, and approximately 2,600 employees.

COVID-19 - News digest as of 25.05.2021

1. U.S. refiners trying to maximize gasoline production amid rising prices

MOSCOW (MRC) -- U.S. gasoline prices are rising strongly, encouraging refineries to maximise gasoline production, even as they struggle with lacklustre demand for jet fuel due to international quarantine restrictions, said Hydrocarbonprocessing. Based on futures prices, gross margins for making gasoline from U.S. crude oil have surged to more than USD24 per barrel, up from just USD10 at the start of the year, and the highest level since 2015. Driving the rise in prices is a much faster recovery in demand for gasoline than for other oil products as economies reopen. Margins are now in the 84th percentile for all weeks since the start of 2006, giving refiners a strong incentive to maximise production, even as they hold back output of other fuels. Rising margins have pushed the average retail cost of gasoline above $3 per gallon, its highest level since 2014, according to nationwide pump prices compiled by the U.S. Energy Information Administration (EIA).


Reliance profit doubles due to petrochemicals rebound

MOSCOW (MRC) -- India's Reliance Industries (RIL) said its quarterly profit doubled, led by a rebound in its petrochemicals and retail businesses, but fell short of analysts' estimates as costs jumped 10%, reported Reuters.

The oil-to-telecoms conglomerate, led by billionaire Mukesh Ambani, said consolidated profit climbed 108% to 132.27 billion rupees (USD1.79 billion) in the three months to March 31. Analysts on average had expected 134.91 billion rupees, according to Refinitiv data.

Revenue at Reliance's oil-to-chemicals unit - home to both its refining and petrochemicals operations - rose 4.5% in the March quarter. The Mumbai-headquartered company benefited from pent-up demand globally for petrochemical products like polyvinyl chloride (PVC) plastics, as business activity began to pick up after a coronavirus-hit 2020.

Reliance has built leading businesses in telecom and retail in recent years to diversify away from its mainstay energy arm, which has been recovering slowly from a coronavirus-driven slump in demand. Its retail business of more than 12,000 stores and supermarkets posted a 20% jump in revenue as shoppers bought more groceries and apparel, resulting in all-time high revenues in those two categories, Reliance said. Still, India's ongoing massive second wave of the virus, which has spurred lockdowns in many cities, had hit footfalls at stores as well as consumer sentiment, it said.

As MRC informed before, amid a surging second wave of COVID-19 in the country, RIL has increased output of medical oxygen to 1,000 mt/day, making it India's largest producer of medical-grade liquid oxygen from a single location. Reliance ramped up production from near-zero to 1,000 tonnes per day and now produces over 11% of the country's oxygen demand. It has rallied its resources to meet the daily need of over 1 lakh people every day.

We remind that RIL shut its PVC plant in India for maintenance in April 2021. The unit in Dahej with an annual capacity of 315,000 tons/year was taken offline by 5 April 2021 and resumed operations on 20 April.

According to MRC's ScanPlast report, Russia's overall PVC production reached 259,400 tonnes in the first three months of 2021, down 3% year on year. All producers decreased their output over the stated period.

Reliance Industries is one of the world's largest producers of polymers. The company produces polypropylene, polyethylene and polyvinyl chloride and other petrochemical products.

LyondellBasell declares force majeure on supplies of some PP grades from its Wesseling plant

MOSCOW (MRC) -- LyondellBasell (LBI), the world's largest polyolefins producer, declared a force majeure (FM) on shipments of some polypropylene (PP) grades from its Wesseling plant in Germany as of May 20, according to NCT with reference to market sources.

Thus, the FM was declared for all PP Moplen grades produced at this plant with the capacity of 238,000 mt/year.

However, the reactor issies, which resulted in force majeure, were found at one line of this plant with the capacity of 135,000 mt/year.

As MRC reported earlier, LBI also declared FM on supplies of some PP grades from its Ferrara plant in Italy as of May 3. This plant is able to produce 285.000 tons/year of PP. At the time of press, no details were shared regarding the reason or duration of the FM.

According to MRC's ScanPlast report, PP shipments to the Russian market totalled 410,890 tonnes in January-March 2021, up by 56% year on year. Supply of homopolymer PP and PP block copolymers increased.

LyondellBasell is one of the largest plastics, chemicals and refining companies in the world. Driven by its 13,000 employees around the globe, LyondellBasell produces materials and products that are key to advancing solutions to modern challenges like enhancing food safety through lightweight and flexible packaging, protecting the purity of water supplies through stronger and more versatile pipes, and improving the safety, comfort and fuel efficiency of many of the cars and trucks on the road. LyondellBasell sells products into approximately 100 countries and is the world's largest licensor of polyolefin technologies.

Neste may be the first to develop renewable gasoline for commercialization internationally

MOSCOW (MRC) -- Until now, there have been no commercial drop-in solutions for replacing fossil gasoline to reduce high amounts of greenhouse gas emissions from conventional petrol cars, without investing into new vehicles or modifying the old ones. Neste, the world's leading producer of renewable diesel and sustainable aviation fuel (SAF), may be the first to have developed a renewable gasoline for such commercial use in the existing fleet, according to Hydrocarbonprocessing.

The final phase of testing is now beginning with the target to complete commercial tests of the fuel, and thereby enabling significant reductions of greenhouse gas emissions from gasoline and hybrid cars.

The EU recently increased its target for the reduction of the greenhouse gas emissions by at least 55% by 2030. There are also ambitious national targets in Sweden and Finland, for example, including separate emissions reduction mandates for the gasoline pool. However, the currently existing alternatives for gasoline-powered cars do not enable a significant reduction in fossil gasoline use in a short enough time frame.

Steps are now being taken to solve this challenge: with Neste's renewable gasoline, greenhouse gas emissions can be reduced by up to 65% over the fuel’s life cycle when compared to fossil fuels. The aim for Neste is to improve this figure, to eventually achieve up to 90% emission reduction with the fuel use. This would mean that greenhouse gas emission over the life cycle of the fuel would be equivalent to those from an electric vehicle.

The product fulfills EN228 standard and can be used in both existing and new gasoline and hybrid cars. Renewable gasoline can, therefore, provide yet another tool for the EU to achieve the ambitious goal of reducing greenhouse gas emissions by 55% by 2030 from the levels in 1990.

As MRC reported earlier, Neste, Mitsui Chemicals, Inc. and Toyota Tsusho Corp. have announced they are joining forces to enable Japan’s first industrial-scale production of renewable plastics and chemicals from 100% bio-based hydrocarbons. In this collaboration, Mitsui Chemicals will use Neste RE, 100% bio-based hydrocarbons produced by Neste, to replace a part of the fossil feedstock in the production of a variety of plastics and chemicals at its crackers within Osaka Works during 2021.

Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 576,270 tonnes in the first three month of 2021, up by 4% year on year. Low density polyethylene (LDPE) and high density polyethylene (HDPE) shipments increased. At the same time, PP shipments to the Russian market totalled 410,890 tonnes in January-March 2021, up by 56% year on year. Supply of homopolymer PP and PP block copolymers increased.