Evonik presents next phase of strategic transformation

MOSCOW (MRC) -- Evonik, one the world's petrochemical majors, is embarking on the next phase of its strategic transformation, as per the company's press release.

Sustainability is being integrated fully and systematically into all elements of the strategy: portfolio management, innovation, corporate culture. “Driven by our purpose, Leading Beyond Chemistry, in recent years we have made good progress both strategically and financially,” Christian Kullmann, chairman of Evonik's executive board, told investors and analysts at the company's Capital Markets Day. “In the next phase of our transformation, we are executing targeted and massive investments in green growth and making sustainability our central innovation driver.”

Evonik is aligning its portfolio completely to its three growth divisions: Specialty Additives, Nutrition & Care, and Smart Materials. “The businesses we are withdrawing from on strategic grounds are being optimally set up to give them a responsible route to a good future,” said Kullmann. Preparations are already under way for the exit of all three businesses of Performance Materials - Superabsorbents, Functional Solutions and Performance Intermediates. Evonik aims to find new owners or partners for each of these three businesses in the course of 2023.

The proceeds from the divestment of the Performance Materials businesses and the operating cash flow in the coming years will be channeled to the green transformation. By 2030, Evonik aims to invest more than EUR3 billion in Next Generation Solutions - products with superior sustainability benefits. That is around 80% of annual growth investments. In the same period, a further EUR700 million will be invested in Next Generation Technologies, i.e., the optimization of production processes and infrastructure to avoid CO2 emissions.

Evonik aims to reduce its footprint by significantly cutting both direct and indirect greenhouse gas emissions from production and processing. With the support of Next Generation Technologies, Evonik will reduce its scope 1 and 2 emissions by 25%, from 6.5 million metric tons at present to 4.9 million metric tons by 2030. This goal is fully consistent with the requirements of the Science Based Targets (SBTi) initiative, which Evonik is committed to. At the same time, the investments in sustainability are profitable: By investing EUR700 million in Next Generation Technologies, Evonik will cut its operating costs by more than EUR100 million a year up to 2030.

The repositioned Research, Development & Innovation unit is also fully integrating sustainability into the management of Evonik’s innovation activities. “Our RD&I targets are right on track to generate additional sales of more than EUR1 billion with our innovation growth fields by 2030,” said Harald Schwager, the executive board member responsible for innovation. “Our innovative capability is a key factor in leveraging green and profitable growth.”

Evonik’s aspirations are supported by its venture capital activities. A new Sustainability Tech Fund with a total investment volume of EUR150 million will strengthen the sustainability targets by investing into innovative technologies and business models. The focus is on new technologies that will reduce emissions as well as on innovations that have a high technological fit with the Next Generation Solutions.

As part of its strategic transformation, Evonik has also reviewed its mid-term financial targets. “Despite the current challenging environment, we are confirming our core targets: an adjusted EBITDA margin of between 18 and 20%, a cash conversion rate of over 40 percent, and ROCE of around 11%,” said Evonik’s chief financial officer, Ute Wolf. In line with the full alignment to high-growth, less cyclical specialty chemicals, Evonik now aims to achieve an organic sales CAGR of over 4 percent. Up to now, the target was volume growth of over 3%. The annual capex budget increases successively from the current level of around EUR900 million to a level between EUR900 million and EUR1 billion over the next years - as a result of investments in Next Generation Technologies to save CO2 emissions.

As MRC reported earlier, in March, 2022, Evonik launched a new biosurfactant produced from renewable feedstocks.
The rhamnolipids are produced at Evonik’s plant in Slovenska Lupca, Slovakia following a triple-digit million-euro investment in the site, which is scheduled to be completed by the end of 2023. The biosurfactant range is made using feedstocks which are locally sourced and fully biodegradable, meeting demand for low-emission, low-impact cleaning products in the market.

We remind that in February, 2020, Dow and Evonik entered into an exclusive technology partnership. Together, they plan to bring a unique method for directly synthesizing propylene glycol (PG) from propylene and hydrogen peroxide to market maturity.

Evonik is one of the world leaders in specialty chemicals. The company is active in more than 100 countries around the world and generated sales of EUR12.2 billion and an operating profit (adjusted EBITDA) of EUR1.91 billion in 2020. Evonik goes far beyond chemistry to create innovative, profitable and sustainable solutions for customers. About 33,000 employees work together for a common purpose: to improve life today and tomorrow.
MRC

MOSCOW (MRC) -- Brenntag’s first-quarter sales and earnings rose strongly despite increased supply chain woes emanating from the war in Ukraine, said the company.

The company said the healthy financial metrics for Q1 were achieved despite the “exceptionally challenging market environment” during the quarter, following Russia’s invasion of Ukraine in February which disrupted even further supply chains in Europe. "In Q1, we saw strong price increases driving the outflow for working capital and thus impacting our free cash flow negatively,” said Brenntag’s CFO, Kristin Neumann.

"However, we continued to benefit from good margin management and were able to utilise business opportunities which translated into a high operating EBITDA over operating gross profit conversion ratio." While the company confirmed its previous financial guidance for this year, it added that the war in Ukraine and its “geopolitical and economic consequences” were very difficult to predict.

"While Brenntag expects a strong first half of 2022, the current environment contains great uncertainties and a forecast for the development in the second half is hardly possible at present,” it said. "Brenntag expects the overall geopolitical, macroeconomic, and operational conditions to remain highly challenging."

As MRC reported earlier, last summer, Brenntag acquired all operating assets and business of Matrix Chemical, LLC. The company is a solvents distributor and the largest distributor of acetone in North America with sales of around USD 200 million year to date in 2021.

Along with phenol, acetone is largely used to produce bisphenol A (BPA), which, in its turn, is used in the production of plastics such as polycarbonate (PC) and epoxy resins.

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).

BCD Chemie, a Brenntag Group company, is headquartered in Hamburg, Germany. It focuses on the pan-European marketing of industrial and performance chemicals. As a link between manufacturers of high-quality chemical raw materials and users from many industries, BCD Chemie provides B2B sales solutions for a wide range of industries and applications. Profound market knowledge, competent product and application consulting as well as comprehensive expertise in chemical-technical and market-analytical contexts form the basis of its philosophy of modern chemical distribution.
mrchub.com

MOSCOW (MRC) -- Brazilian state-run oil company Petrobras said on Wednesday it has signed a deal with TSE and Toyo Engineering Corp to build a new diesel hydrotreating unit at its Paulinia refinery, reported Reuters.

The move will require USD458 million in investments and is in line with Petrobras’ 2022-2026 business plan, the company said in a securities filing.

Petroleo Brasileiro SA, as the company is formally known, said the hydrotreating unit is expected to enter production in 2025.

As MRC informed before, in early February, 2022, Brazil’s state-owned oil company Petrobras and Novonor (formerly Odebrecht) cancelled in “mutual agreement” its plans to sell its stake in Braskem. The announcement came after both companies declared that potential buyers did not meet expectations, without providing any further details on the matter.

We remind that Braskem is no longer pursuing a petrochemical project, which would have included an ethane cracker, in West Virginia. And the company is seeking to sell the land that would have housed the cracker. The project, announced in 2013, had been on Braskem's back burner for several years.

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, whereas shipments of PP random copolymers decreased significantly.

Headquartered in Rio de Janeiro, Petrobras is an integrated energy firm. Petrobras' activities include exploration, exploitation and production of oil from reservoir wells, shale and other rocks as well as refining, processing, trade and transport of oil and oil products, natural gas and other fluid hydrocarbons, in addition to other energy-related activities.
MRC

MOSCOW (MRC) -- A 300,000 barrel-per-day refinery-petrochemical complex in Malaysia run as a joint venture between Petronas and Saudi Aramco has restarted after a more than two-year closure, a source with knowledge of the matter said, as per Hydrocarbonprocessing.

The complex in Pengerang, Johor, is resuming operations at a time when refining margins in Asia are at record levels, buoyed by a fuel demand recovery as more economies across Asia, except for China, ease COVID-19 restrictions. Low inventories of oil products globally and a drop in fuel exports from Russia following the Ukraine crisis are also underpinning prices.

The joint venture, Pengerang Refining and Petrochemical (PRefChem), did not respond to a request for comment. PRefChem was shut in March 2020 following a deadly fire. Its resumption has been delayed from last year for the entire plant to undergo detailed checks, at a time when fuel demand and refining margins were still being hit by COVID-19 lockdowns.

The refinery, which restarted last week, is processing existing crude from storage tanks, which will then be followed by supplies from Saudi Aramco, two more sources said. It is expected to take some time before operations can return to full rates, the sources said.

We remind, Pengerang Refining and Petrochemical Complex (PRefChem), 50%-50% joint venture (JV) between Petronas and Saudi Aramco, aims to restart its cracker in Malaysia this May after more than two years of staying offline following an explosion on 16 March 2020. PrefChem's complex houses a naphtha cracker that produces 1.2 million tons/year of ethylene and 600,000 tons/year of propylene. Downstream units include a 450,000 ton/year homo-PP line, a 450,000 tons/year PP copolymer, and a 400,000 tons/year HDPE unit. The company also owns a C6-based metallocene PE plant with a capacity of 350,000 tons/year.

Ethylene and propylene are the main feedstocks for the producition 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, whereas shipments of PP random copolymers decreased significantly.
mrchub.com

MOSCOW (MRC) -- Chemplast Sanmar Ltd., a chemicals manufacturer based in India has reported financial results for the period ended March 31, 2022, according to Kemicalinfo.

The company’s net profit declined by 36.4% to Rs 2.31 billion for the period ended March 31, 2022 as against Rs 3.64 billion for the period ended March 31, 2021.

Net sales increased by 34.4% to Rs 18.15 billion during the period ended March 31, 2022 as compared to Rs 13.50 billion during the period ended March 31, 2021.

The company’s net profit increased by 58.2% to Rs 6.48 billion for the full-year period ended March 31, 2022 as against Rs 4.10 billion for the full-year period ended March 31, 2021.

The company has reported net sales of Rs 59.49 billion during the full-year period ended March 31, 2022, an increase of 55.9% as compared to Rs 38.15 billion during the full-year period ended March 31, 2021.

As MRC reported earlier, Chemplast Sanmar undertook a planned shutdown at its Cuddalore PVC unit in September, 2020. Thus, the maintenance works at this unit began on September 27, 2020. The unit remained off-line for about 4-5 days. Located in Tamil Nadu, India, the Cuddalore PVC unit has a production capacity of 300,000 mt/year.

According to MRC's ScanPlast report, Russia's overall PVC production reached 87,100 tonnes in 2021, down by 3% year on year. Three producers slightly decreased their output.

Chemplast Sanmar Limited is a chemical company based in Chennai, Tamil Nadu. It is part of Sanmar Group which has businesses in Chemicals, Shipping, Engineering and Metals. It has a turnover of over Rs.65 billion and a presence in some 25 businesses, with manufacturing units spread over numerous locations in India.Chemplast Sanmar's manufacturing facilities are located at Mettur, Panruti, Cuddalore and Ponneri in Tamil Nadu, Shinoli in Maharashtra, and Karaikal in the Union Territory of Puducherry. It is a major manufacturer of PVC resins, chlorochemicals and piping systems. The Cuddalore PVC project commissioned in September 2009 is the largest such project to come up in Tamil Nadu. It's aggregate capacity of 235,000 tons makes it one of the largest PVC players in India.
MRC