OCI Global signs MOU with Lotte Fine Chemical for the supply of low carbon and green ammonia

MOSCOW (MRC) -- OCI has signed a memorandum of understanding (MoU) with Korean company Lotte Fine Chemical for the supply of low-carbon and green ammonia, the companies said in a statement.

The first shipments will start this year from OCI's US facilities. The companies are also looking to co-operate to build a global supply chain of bunkering for ammonia-powered vessels in Ulsan, Korea, which are expected to be commercialised from 2025 onwards.

Under the agreement, OCI will supply Lotte Fine Chemical from OCI's existing low-carbon ammonia production capacity in Texas starting this year. Lotte Fine Chemical will introduce OCI's ISCC Plus bio-ammonia, derived from bio-methane, for supply to its domestic customers. When bio-certified, plastic products made of this material will be eligible for tax benefits when exported to Europe.

We remind, Linde has announced it signed a long-term agreement to supply clean hydrogen and other industrial gases to OCI’s new world-scale blue ammonia plant in Beaumont, Texas. Linde said it will build, own and operate an on-site complex which will include autothermal reforming with carbon capture, plus a large air separation plant, and will be integrated into their Gulf Coast industrial gas infrastructure.

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MOSCOW (MRC) -- Asahi Kasei Plastics North America (APNA), global compounder of of advanced engineered polymers and Asahi Kasei Asaclean Americas (AKAC), global supplier of purging compounds and concentrates, are merging effective April 1, 2023, said Canplastics.

The combined company will operate as APNA and be headquartered in Fowlerville, Michigan. The merged entity creates a plastics-focused powerhouse with customers spanning the automotive, industrial, and consumer industries. APNA’s broad portfolio now includes Xyron modified PPE, Thermylene chemically coupled PP, Leona nylon 66, 66+6i, Tenac homopolymer and copolymer POM, Thermylon nylons 6 and 66, and Asaclean purging compounds and concentrates.

Following the integration, the company will have over 350 employees with four locations in North America to support the diverse needs of customers in different segments. Said president and COO of APNA Todd Glogovsky, “The merger will provide significant internal and external benefits for our employees, customers, and communities. We expect to drive value creation and synergies between APNA and AKAC to leverage both companies’ strengths. We have a strong team with industry expertise to serve our partners’ needs while expanding our growth.”

The leadership at both APNA and AKAC see this merger as an opportunity to enhance their strategic growth plans while better-serving customers. Several opportunities have already been taken advantage of, such as the production of Asaclean products, new product commercialization, and warehousing of raw materials and finished goods. The goal is to improve the customer experience by providing both the production material and the materials that clean the resin in one place to reduce downtime and deliver efficiencies. By consolidating relevant resources, customers can streamline items such as invoicing and product support through one partnership.

Said Phani Nagaraj, v.p. of AKAC and after the merger, APNA’s v.p. of commercial operations, “This partnership benefits our mutual customers through areas such as connected customer service and technical support while maintaining the relationships that have been cultivated for years. From a product and customer experience standpoint, nothing changes. The Asaclean products will deliver the same quality and consistency that has been trusted for nearly 30 years.”

We remind, Asahi Kasei is set to start the sale of sustainable synthetic rubber materials after the company’s Synthetic Rubber Division earned the internationally recognised ISCC Plus certification in October. The company announced it would be marketing its ISCC Plus-certified Tufdene-branded solution-polymerised styrene-butadiene rubber (SSBR) and Asadene butadiene rubber starting in November. Both products are made using the mass-balance approach at Asahi Kasei Synthetic Rubber Singapore Pte. Ltd. and the Synthetic Rubber Plant of Asahi Kasei's Kawasaki Works.

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MOSCOW (MRC) -- Unipar’s earnings and net income fell sharply in 2022 despite an increase in sales on the back of higher costs for feedstocks, the Brazilian chemicals producer said this week.

The company’s earnings before interest, taxes, depreciation, and amortisation (EBITDA), the best metric to measure a company’s financial soundness, fell by nearly 16% to Brazilian reais (R) 3.16bn (USD605m).

In the fourth quarter of 2022 alone, EBITDA fell by more than 56%, year on year. The company's stock was down more than 7% on Tuesday afternoon trading, compared with the prior close, to R75.30/share.

Unipar produces polyvinyl chloride (PVC), caustic soda, vinyl chloride monomer (VCM), ethylene dichloride (EDC) and other chlorine derivatives, among others; its three main production facilities are in Cubatao and Santo Andre, Brazil, and Bahia Blanca in Argentina.

Capacity utilisation during 2022 rose, year on year, to 84%, said the company. In 2021, capacity utilisation stood at 78%. Unipar said 50% of its sales came from PVC, down from 62% in 2021. Sales of caustic soda amounted to 37% of the total, up from 26% in 2021, and sales of chlorine and tis derivatives stood at 13% of the revenue, practically unchanged from 2021.

By country, Unipar sales in Brazil in 2022 stood at R5.18bn (71.2% of the total) and at R2.09bn in Argentina, or 28.7% of the total. Speaking to reporters from the company’s headquarters in Sao Paulo on Tuesday, Unipar’s CFO said 2023 may also be a challenging year for earnings due to the woeful global economic environment.

“Costs for natural gas and ethylene went up sharply in 2022. For 2023, we expect a more challenging year, with more restricted prices and margins, expectations of high inflation globally, and continued economic and political instability in Argentina,” said Antonio Marcos Campos Rabello.

We remind, Unipar has recently appointed Marco Rabello as its new CFO and director of investor relations, the company announced. The new hire comes to strengthen the company's business model directly related to expansion on greenfield projects and acquisitions focusing on domestic and international markets. Unipar's new CFO began his career at Odebrecht Group companies including Novonor, where he held the same position for four years, and Ocyan, the new brand of the former Odebrecht Oil and Gas Company. Marco has also worked for other major corporations such as Braskem and will succeed Christian Schnitzlein, who has been in charge for the past seven years.

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MOSCOW (MRC) -- Global energy traders Trafigura and Vitol still help to export limited supplies of Russian refined products within the rules of international sanctions, but they are considering whether to resume more trade in Russia's oil, as per Reuters.

The two Swiss companies were among the largest lifters of Russian crude oil and refined products before the country's invasion of Ukraine last February. By last summer, both firms had already sharply reduced their presence in Russian oil and later sold their interests in Vostok, a major upstream development in Siberia.

"We lift limited refined products within sanctions... our position is under review," Trafigura CEO Jeremy Weir told the FT Global Commodities Summit in Lausanne, Switzerland. The United States has been openly keen to make sure Russian oil flows continued after the EU embargo took effect on Dec. 5 to prevent price spikes and has indicated that it views the trade under the G7 price cap mechanism as legal.

The current oil price dip following the collapse of three banks has combined with inflation risks to further lower new investment in oil output, with a tight market looming in the second half of the year as China rebounds from COVID-19 curbs. The U.S. Treasury recently held some talks with Trafigura to emphasize their stance, sources familiar with the matter said.

"Less than 100,000 barrels per day (bpd) of our traded volume now is Russian business. Will that move up with some slightly stronger guidance? Yes, maybe," Vitol CEO Russell Hardy told the summit.

Vitol traded 7.4 million bpd last year, down from the previous year owing to the company stepping away from more than 90% of the Russian oil business it previously did. Gunvor's co-head of trading Stephane Degenne was more circumspect.

We remind, Russia's piped supply of Urals crude to the European Union via the southern spur of the Druzhba pipeline is set to rise 6% on a daily basis in the first quarter from the three months before, data from industry sources and Reuters calculations showed. The EU pledged to stop buying Russian oil via maritime routes from Dec. 5. Supply via the Druzhba pipeline remains exempt from sanctions, though flows via its northern spur, which supplies Poland and Germany, dried up last month.

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MOSCOW (MRC) -- The EQUATE Group, a global producer of petrochemicals and the world’s leading supplier of Ethylene Glycol, announced its full-year earnings for 2022, said the company.

The EQUATE Group reported total revenue of USD3,947 million in 2022, compared to USD4,159 million in 2021. The Group also reported a net income after tax of USD611 million and EBITDA of USD1,217 million, compared to USD1,109 million and USD1,735 million, respectively, for 2021.

In the face of changing market conditions, EQUATE remained resilient. Through cost positioning and feedstock, EQUATE was able to respond to demand trends and optimize margins, resulting in a low-cost operating model and strong cash conversion.

Commenting on the results, Naser Aldousari, President & CEO of EQUATE Group, said: “As economic conditions deteriorate across the world, we have put in place a comprehensive set of immediate and long-term measures to drive resilient performance. We keep our financial position strong by focusing on disciplined and balanced capital allocation. We will continue to manage our operations and adjust our business to the changing market in order to generate long-term value for our stakeholders, as we leverage our competitive advantages and operational agility."

EQUATE Group’s results reflect their focus on operational reliability, a low cost-to-serve model, and a proactive approach in navigating challenges and market dynamics to deliver a long-term sustainable strategy.

We remind, EQUATE has nominated its April 2023 MEG India Contract Price (ICP) at $515/tonne CFR India Main Ports. The April nomination was USD23/tonne lower than the March number.

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