Indorama struggles in securing sufficient Philippine R-PET feedstock

Indorama Ventures, which recently launched its first recycled polyethylene terephthalate (R-PET) plant in the Philippines in a joint venture (JV) with Coca-Cola Beverages Philippines (CCBPI), expects persistent challenges in availing themselves of sufficient feedstock, said the company.

Indorama commenced plant operations at the end of 2022 after encountering a number of delays in completing construction, due to the surge of COVID-19 cases in the country over the past few years.

The pandemic not only made it difficult to carry out construction at the site but also further constrained the availability of post-consumer bales (PCB), as material pickers were restricted from collection activities.

Towards the end of 2022, when COVID-19 cases were generally under control across the region, Indorama and CCBPI sought the assistance of the local authorities to connect with bale feedstock suppliers across the Philippine archipelago.

Bales were agreed to be shipped from all parts of Luzon, Visayas and Mindanao – the country’s three major island groups – to Indorama’s plant in Cavite, which is a few hours south of Manila.

Extremely low levels of recycling in the country and inefficient waste collection activities have capped the supply of bales across the country, especially for premium quality materials which are required to produce bottle-grade R-PET pellets.

In light of this situation, Indorama combined purchases of bales and R-PET flakes to be able to maintain operations at the new plant, which has a nameplate capacity of 30,000 tonnes/year.

R-PET flakes suppliers to Indorama have had to import bales into the country, highlighting the huge gap between supply and demand for bales.

We remind, in mid-October this year, Indorama opened its R-PET facility in Cavite, Philippines which is a joint venture with Coca-Cola Beverages Philippines (CCBPI). Construction at its Indonesian R-PET plant is also ongoing, with commencement date expected towards the close of 2023.

Indorama Ventures Public Company Limited, listed in Thailand (Bloomberg ticker IVL.TB), is one of the world’s leading petrochemicals producers, with a global manufacturing footprint across Europe, Africa, Americas, and Asia Pacific. The company’s portfolio comprises Combined PET, Integrated Oxides and Derivatives, and Fibers. Indorama Ventures products serve major FMCG and automotive sectors, i.e., beverages, hygiene, personal care, tire, and safety segments.
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TotalEnergies and Eni have completed the transfer to QatarEnergy of a 30% interest in exploration Blocks 4 and 9 off the coast of Lebanon, said the company.

The agreements were endorsed in Beirut on January 29, during a ceremony attended by His Excellency Dr. Walid Fayad, Minister of Energy and Water of Lebanon; His Excellency Mr. Saad Sherida Al-Kaabi, Qatar's Minister of State for Energy Affairs and President and CEO of QatarEnergy; Mr. Patrick Pouyanne, Chairman and CEO of TotalEnergies; and Mr. Claudio Descalzi, CEO of Eni.

Pursuant to the terms of the agreements, TotalEnergies (operator) and Eni will each retain a 35% interest in the blocks with QatarEnergy holding the remaining 30%.

“We are very pleased to welcome QatarEnergy in our exploration acreage in Lebanon. The recent delineation of Lebanon’s maritime border with Israel has created a new momentum for the exploration of its hydrocarbon potential. Along with our partners, we are committed to drilling as soon as possible in 2023 an exploration well in Block 9, and our teams are mobilized to conduct these operations”, said Patrick Pouyanne, Chairman and CEO of TotalEnergies.

This new partnership further expands the cooperation between TotalEnergies and QatarEnergy in exploration activities, and brings to nine the number of countries where the two companies have partnerships.

We remind, QatarEnergy and Chevron Phillips Chemical Company LLC announced they will proceed on construction of a USD6 B integrated polymers complex in Ras Laffan Industrial City, Qatar. An agreement marking the positive final investment decision for the project was signed by His Excellency Mr. Saad Sherida Al-Kaabi, the Minister of State for Energy Affairs, the President and CEO of QatarEnergy, and by Bruce Chinn, President and CEO of Chevron Phillips Chemical, at a ceremony in Doha. The companies created a joint venture, Ras Laffan Petrochemicals, in which QatarEnergy owns a 70% equity share and Chevron Phillips Chemical owns 30%.

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Thai Shinkong Industry Corporation (TSIC), which is a joint venture between Taiwan’s Shinkong and Japan’s Mitsubishi, will hike the nameplate capacity of its recycled polyethylene terephthalate (R-PET) facility in Thailand, said the company.

As more customers and business partners have expressed buying interest for the materials, TSIC increased output to 140,000 tonnes/year from the initially planned 70,000 tonnes/year.

The plant will use the Uhde Inventa-Fischer (UIF) flakes-to-resin (FTR) technology to use R-PET flakes, combined with purified terephthalic acid (PTA) and mono-ethylene glycol (MEG) to produce chemically recycled R-PET pellets.

Previously encountering delays due to the surge of COVID-19 cases in Thailand in the past years, the facility is expected to commence production by end-February to April.

Although the facility will not directly compete for post-consumer bales from the local market, it will secure R-PET flakes which would indirectly hike demand for bales.

We remind, Mitsubishi Chemical Group Corporation announced the start of labormanagement consultation on cessation of the production of methacrylates (MMA) at Mitsubishi Chemical UK's Cassel, said the company. Site, and announced today that its Corporate Executive Officers Committee resolved in the day to cease the production of methacrylates at its Cassel Site subject to completion of the labor-management consultation.

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Chevron Corp. posted a record USD36.5 bn profit for 2022 that was more than double year-earlier earnings but fell shy of Wall Street estimates, undercut by an asset writedowns and a retreat in oil and gas prices, said Reuters.

The second largest U.S. oil producer's adjusted net profit for 2022 beat by about USD10 billion its previous record set in 2011. But USD1.1 B in writedowns in its international oil and gas operations in the fourth quarter left earnings short of forecasts for adjusted net profit of USD37.2 B.

Chevron's numbers kick off what promises to be nosebleed level earnings for global energy suppliers. High prices from strong demand and shortages since Russia's invasion of Ukraine position Western energy firms to show a combined $200 B profit for the year, according to analysts.

Industry earnings already have put energy stocks at the top of market returns as companies lift their payouts to shareholders. The latest figures could stir fresh calls for windfall taxes.

The White House on Wednesday protested against Chevron's decision to triple the budget to buy back its own stock from future earnings - now at USD75 B over an undisclosed period. Biden's administration say companies should invest more in ways to lower prices for consumers.

Investors reacted by boosting Chevron shares by almost 5% on Thursday, to USD187.79, up 44% in the last 52-weeks.

We remind, Chevron Corp plans to export this month its first cargo of Venezuelan crude to its Pascagoula, Mississippi refinery following a U.S. license granted last year. The 500,000-barrel cargo of Hamaca heavy crude, to be loaded at state-run PDVSA's Jose port, comes from the Petropiar oil joint venture operated by both companies.

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MRC) -- US-based specialty chemicals producer Eastman reported a sharp decline in Q4 net income because it reported fewer one-time benefits and a decline in sales, said the company.

Income fell in part because of a decline in reported benefits for the company's employee pension account. It reported a Q4 benefit of USD6m, down from USD303m from the same time last year. Factoring out the benefit, Eastman would have still reported a decline in Q4 net income because sales fell faster than costs.

During the quarter, demand slowed, destocking accelerated across all end-markets and the rapid spread of COVID-19 in China weakened demand in that country at the end of the year. In addition, Eastman's customers had destocked beyond what is typical for the fourth quarter.

Eastman attributed its decline in sales to a 12% decline in sales volume/mix, a 7% hit from divested businesses and a 3% hit from unfavourable exchange rates. These were partially offset by a 10% rise in selling prices.

The increase in sales prices more than offset the rise in costs for raw materials, energy and distribution. Demand was especially weak for products used in consumer durables as well as building and construction.

As per MRC, US-based Eastman aims to light a fire under the ecosystem for collecting hard-to-recycle polyester waste with USD2bn in new investments for plastics recycling projects in the US and France.
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