PPG net income down by 95% in Q1 2022

PPG net income down by 95% in Q1 2022

MOSCOW (MRC) -- PPG Industries has reported first-quarter net income down 95% year-on-year (YOY), to USD18 million, on net sales up 11%, to USD4.31 billion, as per the company's press release.

Adjusted earnings, excluding charges related to the wind-down of PPG’s business in Russia, totaled USD327 million, or USD1.37/share, down 27% YOY but well ahead of analysts’ consensus estimate of USD1.11/share, as reported by Refinitiv (New York, New York). Selling prices grew 10% YOY and volumes were down 3%, while raw material costs rose 25%, and energy and transport costs remained elevated during the quarter.

“Adjusted earnings exceeded our January guidance as we delivered excellent earnings leverage on higher-than-expected sales volumes,” says PPG chairman and CEO Michael McGarry. “The leverage benefits were aided by sequential quarterly improvements in manufacturing performance, including the benefit of more consistent raw material availability. We once again finished the quarter with a much larger than normal order backlog, totaling about $180 million, primarily in automotive refinish and aerospace coatings, and we expect further volume growth in these businesses in the coming quarters.”

Performance coatings segment sales grew 11% YOY, to USD2.57 billion, while segment income fell 17%, to USD319 million. Volumes fell 2% YOY, while selling prices rose 8%. “While demand remained strong in most end-use markets, raw material availability continued to constrain sales in many businesses, with the largest impacts in architectural coatings Americas and Asia Pacific, traffic solutions, and automotive refinish,” PPG says.

Industrial coatings segment sales rose 11% YOY, to USD1.74 billion, while segment income was down 43%, to USD140 million. Volumes declined 5% YOY, while selling prices increased 12%. “Industrial Coatings net sales increased primarily due to selling price increases across all businesses and acquisition-related sales, partially offset by lower sales volumes in comparison to strong, pandemic-related volume recovery in the prior year,” PPG says. “Most businesses were also impacted by lower economic activity in China due to the Winter Olympics and growing COVID-19 restrictions later in the quarter.”

As MRC reported before, earlier this month, PPG announced that it has completed its acquisition of the powder coatings manufacturing business of Arsonsisi, an industrial coatings company based in Milan, Italy. Financial terms were not disclosed. The transaction will provide PPG with a highly automated, small- and large-batch capable, powder manufacturing plant in Verbania, Italy. PPG will also now have metallic bonding capabilities in the Europe, Middle East and Africa (EMEA) region. In 2021, the Arsonsisi powder business had sales of approximately USD15 million.

We remind that in June 2021, PPG announced an expansion of its coatings manufacturing capacity in Europe for packaging applications. The investments at sites in The Netherlands and Poland will support growing customer demand in the region for the latest generation of coatings for aluminum and steel cans used in packaging for beverage, food and personal care items. The projects include a further expansion of the company’s location in Tiel, The Netherlands, which will increase the plant’s production capacity for PPG INNOVEL non-BPA internal coatings for beverage cans by 30%. Expected to be completed in the first quarter of 2022, the project follows a 50% expansion completed at the end of 2020.

PPG is a leading supplier of powder coatings to the automotive, transportation, appliance, furniture and other markets. The company expanded the business with its 2020 acquisition of Alpha Coating Technologies, which manufactures powder coatings for light industrial applications and heat-sensitive substrates, and its 2021 acquisition of Worwag, which makes liquid, powder and film coatings for industrial and automotive applications. PPG recently agreed to acquire the powder coatings business of Arsonsisi, including a manufacturing plant in Verbania, Italy.
MRC

Reliance calls off deal with Future Group

Reliance calls off deal with Future Group

MOSCOW (MRC) -- Indian petrochemical major Reliance Industries Ltd (RIL) "cannot implement" a rupee (Rs) 247bn (USD3.2bn) deal to acquire core parts of retail chain major Future Group after the letter's secured creditors rejected the offer, said Indianexpress.

The shareholders and unsecured creditors of Future Retail Ltd (FRL), a retail arm of the Future Group, have voted in favour of RIL’s offer, RIL said in a statement to the Bombay Stock Exchange (BSE) over the weekend. “But the secured creditors of FRL have voted against the scheme. In view thereof, the subject scheme of arrangement cannot be implemented,” it stated.

Future Group, which owns more than 1,500 retail outlets, may now face bankruptcy proceedings. The group’s debts stood at around Rs270bn. Its secured creditors had rejected the RIL deal in the absence of any official commitment on loan repayment, according to media reports.

Future Group has a significant presence in the Indian retail and fashion sectors, with popular supermarket chains. FRL is the flagship company of the Group with stores in 428 cities across the country. A nearly two-year long legal battle between the Future Group and global e-commerce giant Amazon also posed as an obstacle to the asset sale to RIL.

Amazon had legally blocked the deal between RIL and the Future Group, citing violation of contracts. In 2019, Amazon India invested around USD200m in Future Coupons, the promoter entity of Future Group which holds a 9.82% stake in FRL.

This deal involved a non-compete clause that forbade Future Coupons from selling its retail assets to certain firms, including RIL’s retail subsidiary Reliance Retail Ventures Ltd (RRVL). As per the agreement, in case of a dispute, the matter was to be settled by the Singapore International Arbitration Centre (SIAC).

As per MRC, Reliance Industries, operator of the world's biggest refining complex, may avoid buying Russian fuels for its plants following western sanctions on Moscow over its invasion of Ukraine.

As MRC informed before, in November 2021, Reliance Industries and Saudi Aramco decided to re-evaluate their agreement for the Middle Eastern producer to buy a stake in the refining and petrochemical business of India's biggest private refiner, and both companies would look at broader areas of cooperation due to the changing energy scenario.

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 2,487,450 tonnes in 2021, up by 13% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market totalled 1,494.280 tonnes, up by 21% year on year. Deliveries of homopolymer PP and PP block copolymers increased, whreas.shipments of PP random copolymers decreased significantly.
Reliance Industries is one of the world's largest producers of polymers. The company produces polypropylene, polyethylene and polyvinyl chloride and other petrochemical products.
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Covestro to complete new films production capacities in Germany by late 2023

Covestro to complete new films production capacities in Germany by late 2023

MOSCOW (MRC) -- Covestro is expanding its production capacities for thermoplastic polyurethane (TPU) Films in the Platilon range, as well as the associated infrastructure and logistics and schedules to complete the new facilities as early as the end of 2023, as per the company's press release.

To this end, the company is investing a low double-digit million euro amount in its German center of excellence for the aforementioned films in Bomlitz, Lower Saxony. This site of Epurex Films, a wholly owned subsidiary of Covestro, houses application development and production for the semi-finished products, among other things.

The new capacity is intended to meet the growing global demand for multilayer TPU Films. They are used in automotive interiors and construction, among other applications. Breathable, water-impermeable specialty films have also proven their worth in wound care and outdoor clothing.

"With this capacity expansion, we are strengthening our Bomlitz site and our position as a leading supplier of technical specialty films," said Dr. Klaus Schafer, Chief Technology Officer of Covestro, at the groundbreaking ceremony. "At the same time, we are investing in promising technologies and applications and creating new jobs."

Covestro is fully geared toward the circular economy and aims to become climate-neutral by 2035. To this end, the Bomlitz site plans to switch its energy supply completely to green electricity starting this year.

Epurex Films is one of three Covestro competence centers for specialty films in Germany. The other two centers in Leverkusen and Dormagen are focused on research, production and application of polycarbonate films.

As MRC informed before, in April 2021, DSM completed the sale of the resins & functional materials businesses to Covestro for EUR1.6 billion (USD1.9 billion), including EUR1.4 billion in cash.

We remind that Covestro closed the sale of its European polycarbonates (PC) sheets business to the Munich-based Serafin Group effective January 2, 2020. This includes key management and sales functions throughout Europe as well as production sites in Belgium and Italy.

According to MRC's ScanPlast report, Russia's overall consumption of PC granules (excluding exports from Belarus) totalled 7,800 tonnes in January 2022, down by 4% year on year (8,100 tonnes a year earlier).

Covestro (formerly Bayer MaterialScience) is an independent subgroup within Bayer. It was created as part of the restructuring of Bayer AG from the former business group Bayer Polymers, with certain of its activities being spun off to Lanxess AG. Covestro manufactures and develops materials such as coatings, adhesives and sealants, polycarbonates (CDs, DVDs), polyurethanes (automotive seating, insulation for refrigerating appliances) etc. With 2021 sales of EUR 15.9 billion, Covestro has 50 production sites worldwide and employs approximately 17,900 people (calculated as full-time equivalents).
MRC

Technip Energies, Alterra Energy partner on recycled feedstock production

Technip Energies, Alterra Energy partner on recycled feedstock production

MOSCOW (MRC) -- Technip Energies and Alterra Energy have now entered into a global joint development and collaboration agreement to integrate Technip Energies’ pyrolysis oil purification technology with Alterra’s commercially available liquefaction process technology, said Sustainableplastics.

By integrating both their proprietary processes, the two companies aim to accelerate the adoption of recycled feedstock, thus improving circular economy solutions for the global petrochemical industry. The combination of advanced recycling and purification technologies will enable more efficient processing and reuse of hard-to-recycle plastic.

Ohio-based Alterra provides an innovative, patented, thermochemical liquefaction technology, converting hard-to-recycle plastic into a pyrolysis based oil called PyOil and diverting tonnes of plastic from landfills.

France-headquartered Technip Energies has extensive knowledge of ethylene furnace and steam cracker design, preparation and purification of heavy feedstocks for refining and petrochemical facilities, on the basis of which the company has developed its Pure.rOil purification technology, which enables the safe, reliable and optimised integration with individual crackers.

Combining the two technologies yields a drop-in ready PyOil feedstock derived from recycled waste plastics, helping to create, as Bhaskar Patel, SVP Sustainable Fuels, Chemicals and Circularity at Technip Energies said ‘new pathways toward solving the plastic waste problem’.

“Our partnership with Technip Energies allows us to offer a more holistic value proposition to our customers by ensuring that our recycled product can be utilised as a direct feed in the majority of existing chemical and petrochemical assets for the production of new plastics, thus closing the plastic recycling loop,” said Frederic Schmuck, CEO of Alterra Energy. “To meet the growing demand for recycled content, Alterra will continue to forge partnerships and collaborations with innovative companies like Technip Energies to create a recycling ecosystem that’s as efficient and effective as possible."

As per MRC, TechnipFMC has been awarded a large Engineering, Procurement, Construction and Installation (EPCI) contract by Petrobras. The contract covers flexible and rigid pipe, umbilicals, pipeline end terminals, rigid jumpers, umbilical termination assemblies and a mooring system.

As per MRC, TechnipFMC announced the launch of the placement of 16 million Technip Energies shares, representing ca. 9% of Technip Energies’ issued and outstanding share capital, through a private placement by way of an accelerated bookbuild offering. Upon completion of the Placement, TechnipFMC would retain a direct stake of ca. 22% of Technip Energies’ issued and outstanding share capital.

We remind, SIBUR, the largest petrochemical complex in Russia and Eastern Europe, and Technip Energies, an international engineering company, have entered into an agreement on cooperation in the field of technology for the production of Hexen-1 comonomer used in the production of linear polyethylene (LDPE) and low-pressure polyethylene (HDPE). The HEXSIB technology is a proprietary development of NIOST specialists, one of the main research centers of SIBUR.
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Borealis selects Axens process for its plastics pyrolysis oil upgrading unit

Borealis selects Axens process for its plastics pyrolysis oil upgrading unit

MOSCOW (MRC) -- Borealis and Axens have recently signed a license agreement for the Rewind Mix process in order to purify and upgrade 50 KTA of pyrolysis oils produced from plastics wastes at the petrochemical plant of Borealis in Stenungsund, Sweden, said Hydrocarbonprocessing.

The unit is planned to be in commercial operation in 2025, subject to FID, and will produce a virgin-like recycled feedstock to be further processed in the existing steam cracker unit for the production of recycled polymers, which could be used for food-grade packaging and other high-value applications.

Axens will supply the process design package of the Rewind Mix unit and the corresponding proprietary equipment, catalysts and adsorbents. Developed by IFP Energies nouvelles, Repsol and Axens, and based upon a strong industrial background, Rewind Mix provides a complete solution to turn plastic pyrolysis oils into perfect feedstock for steam cracking to make recycled plastics suitable for any application. Axens will also support Borealis with technical on-site and digital assistance, securing a long-term optimal performance of the unit.

This unit is a key element of the planned plastic advanced recycling project of Borealis in Stenungsund. The project will as well include a pyrolysis unit feeding the Rewind Mix process, and storage and logistic solutions. The plastic waste will be provided from selected partners. The project has got support from the Swedish Energy Agency for the study phases.

"We are proud to have been selected by Borealis for this ground-breaking project. Axens is strongly committed to supporting the plastic recycling industry in reaching its ambitious targets at the 2025-2030 horizon, developing and offering robust, flexible, low-carbon footprint technologies which complement mechanical recycling and create a truly circular plastic economy,” said Stephane Fedou, Axens Plastics Circular Economy Director.

”Borealis has set ambitious targets to create a circular economy for plastic, as a part of our sustainability journey,” said Anders Froberg, Borealis Director of Manufacturing Excellence and Transformation. “Together with Axens, we will be able to provide our customers with sustainable products in order to meet market demands and improve recycle rates of plastic."

We remind, Borealis (Vienna), a leading producer of polyolefins, has delayed the start-up of a new, world-scale propane dehydrogenation (PDH) plant at its existing production site at Kallo, Belgium, which is the company's biggest investment in Europe, until Q3 2023, citing Covid-19. The plant in Kallo in the port of Antwerp was previously targeted to begin operations by the end of next year.

Borealis is owned by OMV AG and Mubadala Investment Co., the Abu Dhabi state investment company. Borealis is a leading provider of innovative solutions in the fields of polyolefins, base chemicals and fertilizers. With headquarters in Vienna, Austria, Borealis currently employs around 6,500 and operates in over 120 countries.
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