BASF inaugurates its largest surface treatment site in Pinghu, China

The Surface Treatment global business unit of BASF’s Coatings division, operating under the Chemetall brand, celebrated the inauguration of its state-of-the-art surface treatment production site in Pinghu City, Zhejiang Province, China, said the company.

Spanning across 60,000 square meters, the Pinghu site is BASF’s first production site located in the Dushan Port Economic Development Zone and its largest surface treatment site globally.

“In July this year, we expanded our production capacity of automotive refinish coatings at our Jiangmen site in Guangdong Province. Today, we celebrate the opening of our new surface treatment site in Pinghu. We are strategically located closely to our customers to meet the local demands for our advanced and time-tested solutions. Our goal is to be a growth-oriented surface technology leader, providing sustainable solutions, services, expertise and innovations that support our customers in various industries and in our key growth market – China,” said Uta Holzenkamp, President, Coatings Division, BASF.

“BASF is committed to growing in China, the world’s largest chemical market. It is our strategy to produce where our customers are. The Pinghu site is another good example to demonstrate our customer focus by enhancing our local technological and market positions,” said Jeffrey Lou, President and Chairman, BASF Greater China.

“Asia Pacific is the world’s fastest growing surface treatment market and China accounts for approximately 50% of the market in Asia. We believe the China market will show attractive growth rates in the medium to long term. By localizing our cutting-edge processes and solutions, like our thin-film technology Oxsilan®, we are strengthening our leading position in China and we will significantly reduce the delivery time to our local customers” said Christophe Cazabeau, Senior Vice President, Surface Treatment, Coatings Division, BASF.

Designed as a smart factory, the Pinghu site allows a high level of process automation and end-to-end digitalization of the site operations for high efficiency in manufacturing and site logistics. The new site offers a comprehensive portfolio of applied surface treatment products and solutions to various market segments including but not limited to automotive OEM and components, coil, general industry, cold forming, aerospace, aluminum finishing and glass.

As per MRC, BASF posted a EUR130m loss in its German domestic market during the third quarter (Q3), as economic conditions deteriorated quickly, on the back of high production costs for chemicals companies. Martin Brudermuller added, however, that the overall increase in sales revenue in Q3 came thanks to the company’s ability to pass higher input costs onto customers through higher selling prices, as well as a weaker euro, benefiting the company in its non-euro sales.
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German chemical industry output fell 4.2% in the third quarter of this year, the German Chemical Industry Association (VCI) said in its third quarter industry report, as per Echemi.

The German Chemical Industry Association (VCI) said in its third-quarter industry report on the 14th that compared with the previous quarter, the output of the German chemical industry in the third quarter of this year fell by 4.2%, and the capacity utilization rate was 79.3%, which was significantly lower than the normal level.

The report showed that the total turnover of the German chemical and pharmaceutical industry in the third quarter fell by 1.6% month-on-month to 63.1 billion euros due to lower sales due to sharp production cuts, price cuts and weak demand.

The report notes that the German chemical and pharmaceutical industry continues to be affected by the energy crisis, especially in the summer, and the situation has further worsened. Production in the sector has been slashed, affecting almost all sub-sectors, with production stagnating at some plants and below-normal capacity utilization in the industry.

At the same time, it is increasingly difficult for German chemical companies to pass on the sharply rising energy costs in the value chain to downstream users. The industry's turnover declined for the first time in two years, with domestic sales particularly evident. A weak global economy and weak industrial activity in Germany led to a decline in demand for chemical products.

The data shows that despite the sharp rise in energy costs, producer prices rose by only 2.6% in the third quarter. This means that chemical prices are 23.7% more expensive than in the previous year.

Markus Steilemann, president of the German Chemical Industry Association, said the chemical industry was facing a bleaker outlook. Due to the significant increase in energy costs, production in Germany is already in an extremely serious situation for many companies. In particular, SMEs have considerable problems in concluding follow-up contracts or new contracts after the expiration of electricity or gas supply contracts. The situation will worsen with the onset of winter and the decline in natural gas storage.

Given the continuing difficult situation in the sector, VCI maintains its forecast for a 5.5% decline in production for the full year 2022, with chemical production (excluding pharmaceuticals) expected to decline by 8.5%.

As per MRC, BASF posted a EUR130m loss in its German domestic market during the third quarter (Q3), as economic conditions deteriorated quickly, on the back of high production costs for chemicals companies. Martin Brudermuller added, however, that the overall increase in sales revenue in Q3 came thanks to the company’s ability to pass higher input costs onto customers through higher selling prices, as well as a weaker euro, benefiting the company in its non-euro sales.
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DSM and Firmenich have officially launched the exchange offer as part of their merger process, said the companies.

The acceptance period will begin 23 November and run until 31 January 2023, unless it is extended.

Firmenich shareholders have already approved the transactions and the DSM board has recommended that its shareholders likewise accept.

Completion is currently expected in Q1 2023. “We are entering the exciting next phase as we look to bring together DSM and Firmenich's complementary capabilities, likeminded and passionate people, and unite the heritages of two great and historic companies,” said Geraldine Matchett and Dimitri de Vreeze, Co-CEOs of DSM in a statement.

“DSM-Firmenich is set to become the leading creation and innovation partner in nutrition, beauty and wellbeing, capable of delivering enhanced growth and shareholder value creation through strong growth synergies, as well as an enhanced customer offering and an even greater positive impact across the world.”

Gilbert Ghostine, CEO of Firmenich, added: “This merger is a transformational moment for the history of both businesses. “DSM-Firmenich will be a global-scale partner, uniquely positioned to anticipate and better address the evolving needs of consumers by unlocking opportunities for our customers, and our people.

“Our two companies have an unrelenting commitment to their role in society with ESG at the core of everything we do, and I firmly believe that DSM-Firmenich will have a positive and measurable impact on people, climate and nature.”

Plans to create the new DSM-Firmenich entity were announced in May.

DSM-Firmenich will comprise four businesses: Perfumery & Beauty; Health, Nutrition & Care, which covers the dietary supplements industry; Food & Beverage/Taste & Beyond; and Animal Nutrition & Health.

It will be co-headquartered in Kaiseraugst, Switzerland and Maastricht in the Netherlands.

In June, it was announced that Ghostine would retire from his position as Firmenich CEO upon completion, with Matchett and de Vreeze, the current Co-CEOs of DSM, poised to head up the new company as joint-CEOs of DSM-Firmenich.

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Linde, the world’s largest industrial gases company, said on Tuesday it has started producing green hydrogen at its facilities in Greece, said Reuters.

Green hydrogen is made from water by electrolysis using renewable wind and solar power.

The U.S.-German company, which supplies gases such as oxygen, nitrogen and hydrogen to factories and hospitals, said it was the first green hydrogen production in Greece.

Hydrogen is key in Europe’s energy transition to a sustainable environment and net zero emissions by 2050.

Linde starts green hydrogen production in Greece, November 22, 2022.

We remind, Linde and SLB announced that they have entered into a strategic collaboration on carbon capture, utilization and sequestration (CCUS) projects to accelerate decarbonization solutions across industrial and energy sectors. The collaboration will combine decades of experience in carbon dioxide (CO2) capture and sequestration; innovative technology portfolios; project development and execution expertise; and engineering, procurement and construction (EPC) capabilities.

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LUKOIL Neftochim Burgas , Bulgaria's only oil refinery, may have to shut down if the government does not follow through on plans to allow the Russian-owned business to continue exporting, said Reuters, citing Chief Executive Ilshat Sharafutdinov.

The European Union has agreed to a ban on Russian crude oil imports as part of its sanctions against Russia for its invasion of Ukraine in February. The ban takes effect next month, but Bulgaria has been given an exemption and is allowed to import Russian crude until the end of 2024.

The Bulgarian caretaker government plans to allow the LUKOIL Neftochim refinery to continue importing Russian crude once the ban takes effect and give it permission to export its output. The previous government wanted to limit sales of the refinery's fuels to just the Bulgarian market.

LUKOIL Neftochim, which has switched to only Russian crude since the spring, expects to process a record high 7.1 MMt of crude oil this year, Sharafutdinov said. He said the refinery exports about 50% of its fuels and other end-products.

"The refinery cannot work if the exports are curtailed," Sharafutdinov told a joint news conference with Bulgarian deputy Prime Minister in charge of economic policy, Hristo Alexiev.

After talks with the Bulgarian government, the refinery, situated in the Black Sea city of Burgas, has agreed to change its business model and keep the profits from its operations in Bulgaria, which will seriously increase the taxes it pays, Alexiev said.

The government has already proposed to the parliament a temporary windfall tax of 33% on profits of oil, gas and coal companies for this and next year.

Alexiev said Bulgaria expects to collect around 100 MM levs in taxes from LUKOIL's operations for 2022, which should jump to 700 MM levs in 2023.

Sharafutdinov said LUKOIL Neftochim could pay such taxes next year if the market conditions remain the same and it could work on full capacity, processing Urals crude and exporting its output.

We remind, Lukoil finished construction of a Petroleum Residue Recycling Facility with production capacity of 2.1 million tonnes per year at its LUKOIL-Nizhegorodnefteorgsintez LLC refinery. The facility is comprised of a delayed coking unit, diesel fuel and gasoline hydrotreatment unit, fractioning column, hydrogen and sulphur production unit, as well as infrastructure facilities.
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