Indonesian government warns of fuel price hike

Indonesian government warns of fuel price hike

MOSCOW (MRC) -- Indonesians must prepare for a potential hike in fuel prices as the government looks to control its ballooning energy subsidies amid high global oil prices, said Hydrocarbonprocessing.

Southeast Asia's largest economy has tripled this year's energy subsidy budget to 502 trillion rupiah (USD34.22 billion) in order to keep some fuel prices and power tariffs unchanged and manage inflation. However, this may not be enough, as nearly all of the subsidized fuel quota has already been used, according to the finance ministry.

Indonesia's Investment Minister Bahlil Lahadalia said if the government has to increase the quota for subsidized gasoline to 29 million kiloliters from 23 million kiloliters, and assuming oil prices stay elevated and the rupiah weak, the subsidy bill could rise to up to 600 trillion rupiah.

"Please convey to the people that my feeling is we have to get ready in case a fuel price hike happens," Bahlil told a news conference, noting that it was fiscally unwise to spend 25% of government revenues on subsidies. "The burden on the state is high. Maybe this is momentum for us to work together to keep our fiscal (position) healthy," he added.

Indonesia's Finance Minister Sri Mulyani Indrawati on Thursday said she has asked state energy firm Pertamina to limit sales of subsidized fuels. Economists have criticized the government's decision to increase subsidies this year, saying this would take money away from projects with bigger economic impacts.

Critics have also said a widening price disparity between subsidized and unsubsidized fuels has incentivized a shift in domestic consumption patterns and smuggling to neighboring countries, leading to increased sales of subsidized fuels. A fuel price hike is sensitive in the world's fourth-most populous country and such a decision is usually taken by a head of government. Previous government moves to raise fuel prices have sparked street protests.

As per MRC, Linde plc (Woking, U.K.) announced it has signed a long-term agreement to supply high-purity industrial gases to PT Freeport Indonesia, a leading mining company in Indonesia. Linde will build, own and operate an air separation unit (ASU) to supply oxygen and nitrogen to PT Freeport Indonesia’s new copper smelter and refinery in Manyar, Indonesia. The new copper smelter, the largest copper processing site in the world, will process concentrates from PT Freeport Indonesia’s Grasberg mine. The new on-site facility is expected to start up in mid-2024 and will be one of the largest ASUs in Indonesia.

Sabic posts near 4% rise in Q2 net profit

Sabic posts near 4% rise in Q2 net profit

MOSCOW (MRC) -- Saudi Basic Industries Corp (Sabic) said that it expects margins to be under pressure in the second half of 2022, due to a slowdown in global growth, lockdowns in China, conflict in Europe and continued supply chain challenges, said Hydrocarbonprocessing.

The guidance from the world's fourth-biggest petrochemicals firm by sales and asset value came as it reported an almost 4% rise in second-quarter net profit. SABIC achieved a net profit of 7.93 billion riyals (USD2.11 billion) for the three months to June 30, up from 7.64 billion a year earlier, the company said in a bourse statement.

That beat the 6.16 billion riyals mean forecast of seven analysts, Refinitv data showed. It attributed the increase in profit to higher average selling prices despite an increase in feedstock costs and higher selling and distribution expenses. Sales rose 32% to 55.98 billion riyals, exceeding an analysts' forecast of 53.78 billion.

Average selling prices rose 22% and were up 3% from the first quarter, Sabic said in its earnings presentation. Sales volumes increased 10% year on year and 3% quarter on quarter. The company said profits were also buoyed by an increase in its share of results of associates and joint ventures.

Sabic said it expects earnings before interest, tax, depreciation and amortization (EBITDA) to be flat this year with higher sales volumes offsetting high feedstock prices. Oil giant Saudi Aramco owns 70% of Sabic.

As per MRC, Sabic is looking at building a plant in Port Arthur, Texas, with process units for polypropylene (PP), high density polyethylene (HDPE) and polyethylene (PE) using SK Global Chemical’s Nexlene technology. Sabic filed a Chapter 313 application with the state of Texas Comptroller of Public Accounts for tax breaks from the local school district. According to the application, Sabic will build a 400,000 tonne/year PP unit, a 400,000 tonne/year HDPE C4/C6 bimodal unit and a 400,000 tonne/year PE unit using the Nexlene technology.

Brenntag beats estimates on strong earnings

Brenntag beats estimates on strong earnings

MOSCOW (MRC) -- Brenntag, the global market leader in chemicals and ingredients distribution, continues its growth path and reports very strong results in the second quarter of 2022 in a macro-economic market environment that has been and remains highly challenging, said the company.

The severe geopolitical uncertainties add to the continued pressure on global supply chains. Brenntag’s two global divisions, Brenntag Specialties and Brenntag Essentials, continued their strong growth seen at the beginning of the year, resulting in a very positive first half of 2022.

Christian Kohlpaintner, Chief Executive Officer of Brenntag SE, said “Brenntag continues on its growth path, achieving very strong results in the second quarter of 2022 with excellent organic growth in both divisions. We are particularly pleased by the progress of our ambitious transformation program Project Brenntag, which will achieve our targets already by the end of 2022, one year ahead of plan. We expect from the remaining transformation initiatives an additional positive operating EBITDA impact for 2023, which will be quantified later this year. Our full year results are now expected at the upper range of our upgraded guidance provided in June."

In the second quarter 2022, Brenntag generated sales of 5,061.2 million EUR. Operating gross profit rose by 28.0% to 1,144.8 million EUR compared to 838.7 million EUR in previous year’s quarter. Operating EBITDA reached 533.8 million EUR, a strong year-on-year increase of 41.0%. Earnings per share totaled 1.86 EUR which represents more than a doubling of last year’s EPS.

“In the highly challenging environment of the first half of 2022, product availability as well as prompt and reliable delivery were once again key for Brenntag’s success. We were able to translate the positive gross profit growth into an over-proportional operating EBITDA growth, which is reflected in a very strong conversion ratio for the group of 46.6%”, comments Kristin Neumann, Chief Financial Officer of Brenntag SE.

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.

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.

Sika delays MBCC acquisition closure

Sika delays MBCC acquisition closure

MOSCOW (MRC) -- Sika AG’s 5.5 billion-franc (USD5.8 billion) purchase of MBCC Group faces an in-depth investigation by the UK’s merger watchdog over concerns the deal may weaken national competition in the supply of chemical admixtures, said Reuters.

Swiss building materials company Sika and its German rival MBCC had offered concessions that failed to sway the regulator, the Competition and Markets Authority said in a statement on Wednesday. The offer wasn’t a clear-cut solution to the concerns identified last months, it said.

The CMA already flagged concerns last month, saying that the combined business would account for over half of admixtures supplied in the UK after the merger and face limited competition, giving customers less choice and potentially leaving them facing higher costs and reduced innovation. Sika said in a statement the delays stemming from the CMA probe “will not impact the strategic attractiveness of the transaction.” It said the closing of the deal is “now targeted for the first half of 2023 instead of at the end of 2022 as previously announced.”

Sika, which makes sealants, mortars and other building adhesives, has been stepping up its pace of dealmaking as Chief Executive Officer Thomas Hasler seeks to tap demand for new materials supporting sustainability and the shift to electric vehicles. The MBCC transaction ranks as its largest-ever deal, and it’s announced at least seven other acquisitions this year, according to data compiled by Bloomberg.

As per MRC, Sika is still waiting for regulators to approve its planned acquisition of Germany-based MBCC Group. Sika agreed to acquire MBCC in November 2021. Sika keeps co-operating closely with authorities and currently hopes to complete the deal by the end of 2022, it said.

Henkel invests in technology start-up Direct-C

Henkel invests in technology start-up Direct-C

MOSCOW (MRC) -- Henkel Adhesive Technologies strengthens its capabilities for predictive maintenance solutions by investing in Direct-C LTD (Direct-C), Edmonton, Canada, said the company.

The company has developed a sophisticated sensor technology for the early detection of hydrocarbon leakages. With the investment Henkel aims to further expand its maintenance, repair and overhaul (MRO) business and to drive the implementation of innovative digital applications.

Henkel Adhesive Technologies is one of the leading providers of MRO solutions in more than 800 different industry segments. Adhesives and sealants under the well-known Loctite brand improve the maintenance of production machinery and equipment for example in oil and gas plants, steel mills, car factories, mining equipment or power turbines around the globe. With the recent launch of Loctite Pulse Henkel offers a novel portfolio of Industrial Internet of Things (IIOT) solutions designed to minimize downtime, save maintenance costs and underpin safety as well as sustainability. These data-enabled solutions empower customers in various industries to increase maintenance efficiency and effectiveness by monitoring the status of critical assets. With the implementation of these IIOT solutions across its MRO portfolio Henkel further expands its offering beyond materials to create additional value for its customers.

"The combination of the Direct-C sensor technology and our broad MRO portfolio and expertise offers great potentials for innovative end-to-end solutions”, explained Paolo Bavaj, Head of Corporate Venturing at Henkel Adhesive Technologies. “The contributions of start-up technologies are crucial for us to develop predictive maintenance solutions for our customers. Together we aim to develop digital business models that help innovating our traditional MRO business towards the increasing demands for novel and efficient industrial IoT applications. Thus, the investment perfectly fits to our business strategy to implement and enable predictive maintenance solutions across industries under our constantly growing Loctite Pulse portfolio."

Founded in 2014, Direct-C has developed a polymer nanocomposite sensor material that is adaptable to various polymer matrices and sensing parameters. The technology is specifically designed to react to liquid hydrocarbons and provides a sophisticated leak detection solution for the integrity monitoring of the oil and gas infrastructure. The technology enables significantly enhanced response times to unexpected incidents and helps limiting cost-intensive unplanned production downtimes.

As per MRC, BASF and Henkel jointly commit to replacing fossil carbon feedstock with renewable feedstock for most products in Henkel’s European Laundry & Home Care and Beauty Care businesses over the next four years following a successful pilot with Henkel’s cleaning and detergent brand Love Nature in 2021. Through the cooperation, the fossil feedstock for around 110,000 tons of ingredients per year will be substituted with renewable feedstock using BASF’s certified biomass balance approach. As a result, Henkel’s core brands like Persil, Pril, Fa and Schauma will come with a reduced carbon footprint, avoiding around 200,000 tons of CO2 emissions in total.