LANXESS and Advent International establish JV for high-performance engineering polymers

Specialty chemicals company LANXESS and Advent International (Advent), one of the largest and most experienced global private equity investors with a well established track record in chemicals investings, are establishing a joint venture for high-performance engineering polymers, said the company.

The two companies today signed an agreement to acquire the DSM Engineering Materials business (DEM) from Dutch group Royal DSM, which will become part of the new joint venture. The purchase price is around EUR 3.7 billion and will be financed by the joint venture via equity from Advent and external debt. The business represents sales of around EUR 1.5 billion with an EBITDA margin of approximately 20 percent. DEM is one of the leading global suppliers in high-performance specialty materials that address key market needs in electronics, electrical and consumer goods.

In addition, LANXESS will contribute its High Performance Materials (HPM) business unit to the joint venture. HPM is one of the leading suppliers of high-performance polymers, which are used primarily in the automotive industry. The business represents annual sales of around EUR 1.5 billion with EBITDA pre exceptionals of around EUR 210 million. Advent will hold at least 60 percent in the joint venture. LANXESS will receive an initial payment of at least EUR 1.1 billion and a stake of up to 40 percent in the future joint venture. Following the transfer to the joint venture, the HPM business will no longer be fully consolidated at LANXESS, but will be included in the consolidated financial statements at equity.

This move further sharpens LANXESS’ business portfolio, which will consist of three specialty chemicals segments once the transaction is completed. LANXESS will use the proceeds of the transaction to reduce debt and to strengthen its balance sheet. In addition, the Group plans a share buy-back program with a volume of up to EUR 300 million.

LANXESS will have the possibility to divest its stake in the joint venture to Advent at the same valuation earliest after three years. EBITDA could then be significantly higher than today as Advent and LANXESS anticipate substantial synergies resulting from the combination of the two businesses. The transaction is still subject to approval by the authorities. Closing is expected in the first half of 2023.

As per MRC, LANXESS said it was suspending its business activities in Russia due to the war in Ukraine. Thus, the company had “suspended business activities with Russian customers as far as contractually possible until further notice” and had suspended all investments in Russia. Its sales in Russia and Ukraine made up less than 1% of its global sales, it said.

LANXESS is a leading specialty chemicals company with about 19,200 employees in 25 countries. The company is currently represented at 74 production sites worldwide. The core business of Lanxess is the development, manufacturing and marketing of chemical intermediates, additives, specialty chemicals and plastics. Through Arlanxeo, the joint venture with Saudi Aramco, Lanxess is also a leading supplier of synthetic rubber.
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McDermott’s storage business unit, CB&I, and Korea Gas Corporation (KOGAS) have signed a memorandum of understanding (MoU) to explore the development of large-scale liquid hydrogen storage to support Korea’s hydrogen economy roadmap, said Refiningandpetrochemicalsme.

Last year, South Korea announced plans to achieve carbon neutrality by 2050 by replacing coal-fired power generation with renewable sources and internal combustion engine vehicles with hydrogen-powered and battery-based electric vehicles, McDermott wrote in a statement.

KOGAS has grown into the largest LNG-importing company in the world and operates four LNG regasification terminals and 4,945 kilometres of natural gas pipelines in South Korea. the statement noted.

Commenting on the development, Seung Lee, executive vice president of KOGAS said: “Hydrogen has emerged as a key enabler to meet these decarbonization goals and KOGAS will play a leading role in building the infrastructure for hydrogen shipping, storage and distribution to make these ambitions a reality.”

As MRC reported earlier, McDermott plans to deliver engineering and procurement for the ethylene cracker of the Gas Chemical Complex (GCC) project. The largest polyethylene (PE) integration project in the world with China National Chemical Engineering and Construction Corporation Seven, Ltd (CC7). This agreement follows McDermott"s safe and successful delivery of the front end engineering design (FEED) and early works phases of the project. The ethane cracker project is owned by Baltic Chemical Complex LLC, (BCC) a subsidiary of RusGazDobycha, located onshore Russia in the Gulf of Finland.

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

According to MR''s ScanPlast report, Russia's estimated PE consumption totalled 2,265,290 tonnes in the first eleven months of 2021, up by 14% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 1,363,850 tonnes in January-November, 2021, up by 25% year on year. Supply of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased, whereas supply of injection moulding PP random copolymers decreased significantly.

McDermott is a fully-integrated provider of engineering and construction solutions to the energy industry. Our customers trust our technology-driven approach engineered to responsibly harness and transform global energy resources into the products the world needs. From concept to commissioning, McDermott's innovative expertise and capabilities advance the next generation of global energy infrastructure Ѕempowering a brighter, more sustainable future for us all. Operating in over 54 countries, McDermott's locally-focused and globally-integrated resources include more than 30,000 employees, a diversified fleet of specialty marine construction vessels and fabrication facilities around the world.
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Interface Polymers Ltd. and Flexipol Ltd. have jointly won funding through a competition run by UKRI’s Smart Sustainable Plastic Packaging challenge, said Sustainableplastics.

The ?850K grant is to finance a 24-month collaborative project entitled ‘Recycle Ready’ multi-layer barrier plastic packaging films, aimed at the development of fully recyclable LDPE multi-layer packaging suitable for upcycling into high-value applications.

The project brings together Interface Polymers’ internationally patented surface functionality Polarfin additive technology that overcomes inherent molecular level non-compatibility between polyolefins to enable them to be recycled, and Flexipol’s film technology expertise and flexible packaging manufacturing capabilities.

Using Interface Polymers’ compatibility enabling di-block copolymer additive, the project is looking to build in recyclability as an integral part of originally manufactured multi-layer domestic and commercial packaging product formulations that can be viably scaled up. The aim is to provide a new range of Recycle Ready multi-layer packaging with a recyclability classification that will allow the waste to be collected and 100% reclaimed via existing pure stream reprocessing centres instead of being incinerated or sent to a landfill. The project team is also looking to provide multi-layer barrier packaging options with a minimum of 30% recycled material that will not incur the ?200 per tonne plastic packaging tax introduced in the UK in April 2022.

The vast majority of existing multi-layer barrier plastic packaging cannot be recycled as it is classified according to ASTM D7611 RIC (resin identification code) as RIC “7” - indicating that the resin does not belong to the other types of resin defined from categories 1 to 6 (PET, HDPE, PVC, LDPE, PP, PS). It therefore mostly ends up being incinerated or disposed of in landfills, creating a waste problem that is subject to increasing socioeconomic and legislative pressures.

We remind, Abu Dhabi-based petrochemicals company Borouge has attracted demand of USD80 billion for its initial public offering, two sources told Reuters, as retail investors snapped up shares despite volatile global markets.
The company, which is jointly owned by Abu Dhabi National Oil Company and Austria’s Borealis, has attracted orders of USD63 billion from institutional investors, said the sources, declining to be named as the matter is not public. Borouge is due to list on the Abu Dhabi stock exchange on Friday.
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A new route to the production of monoethylene glycol, a key monomer in the production of polyethylene terephthalate (PET), has been discovered, Illinois-based biotech company LanzaTech has announced, as per Sustainableplastics.

The method builds on the carbon capture technology previously developed by the company. That technology is based on a microbial gas fermentation process that initially could convert carbon monoxide into ethanol, but today provides a sustainable pathway to produce a range of platform chemicals. Gas streams from multiple sources are used, including industrial off-gases from steel and alloy mills; petroleum refineries, petrochemical complexes and gas processing facilities; syngas generated from municipal solid waste, organic industrial waste, agricultural waste; and reformed biogas.

To produce MEG, LanzaTech uses carbon emissions from steel mills or gasified waste biomass and a proprietary engineered bacterium to convert carbon emissions directly into MEG through fermentation. This bypasses the need for an ethanol intermediate, and simplifies the MEG supply chain as it eliminates the multiple processing steps required to convert ethanol into ethylene, then ethylene oxide and then to MEG.

The direct production of MEG was proven at laboratory scale and the presence of MEG was confirmed by two external laboratories. The discovery is a breakthrough in the production of sustainable PET that has vast potential to reduce the overall environmental impact of the process, said Dr. Jennifer Holmgren, CEO of LanzaTech.

As per MRC, Bridgestone Americas (Bridgestone), a global leader in tires and sustainable mobility solutions, today announced an exclusive partnership with Carbon Capture and Transformation (CCT) company, LanzaTech NZ, Inc. (LanzaTech) to address end-of-life tire waste. The two companies will co-develop the first dedicated end-of-life tire recycling process leveraging LanzaTech's proprietary CCT technology, creating a pathway toward tire material circularity and the decarbonization of new tire production.
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JGC Corporation and JGC Arabia have been jointly awarded a pair of contracts by Saudi Aramco for the Zuluf oil and gas field development megaproject, said Hydrocarbonprocessing.

Indrajit Sen, Oil & Gas Editor at GlobalData’s MEED, offers his view: “The Zuluf production increment project is of critical importance to Saudi Aramco in its quest of attaining a maximum oil production capacity of 13 MMbpd by 2027. Aramco has allocated a capital expenditure (capex) budget of USD40 billion to USD50 billion for 2022, and spending on the Zuluf EPC contracts accounts for a major chunk of this capex plan.

“By winning the two main onshore EPC packages, JGC has emerged as the single largest contractor on the Zuluf megaproject, with the combined value of its contracts estimated to be more than USD3 billion.

“With Aramco looking to increase its investments towards oil, gas, refining and petrochemicals production capacities, the Japanese contractor, which has a considerable track record of EPC project execution in Saudi Arabia, has positioned itself as a partner of choice for more key project contracts."

As per MRC, JGC Holdings Corporation announced the launch of a joint research and development (R&D) program with Bridgestone Corporation, the National Institute of Advanced Industrial Science and Technology (AIST), Tohoku University, and ENEOS Corporation. This program is aimed at developing chemical recycling technologies that utilize used tires to achieve high-yield production of isoprene, a raw material for synthetic rubber. By combining the expertise and technologies of industry leading companies and academic institutions, JGC Holdings and its partners are working to develop recycling technologies that will contribute to the realization of a more sustainable society and to conduct demonstrations for the social implementation of these technologies by 2030.
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