Esseco launches competitive bid for Spanish chlorine producer Ercros

Chlor-alkali firm Esseco Industrial (Trecate, Italy) has joined the bidding race for Spanish chlorine and polyvinyl chloride (PVC) producer Ercros (Barcelona) after submitting a competing offer of EUR351.115 million for Ercros, said the company.

This latest tendered offer announced by Esseco in a statement to Spain’s National Securities Market Commission on June 27 is 6.7% higher than Bondalti Iberica’s (Porto Salvo, Portugal) initial takeover bid of EUR329.170 million announced on March 5. Bondalti’s bid was approved by the Spanish government on June 13. Any takeover needs to be rubber stamped by Spain’s National Securities Market Commission.

Esseco submitted on June 27 to the Ercros board a request for authorization of the voluntary, competing tender offer of EUR3.60 per share for 100% of the Spanish company’s shares. This amounts to a higher offer of EUR3.84 per share compared to Bondalti’s offer of EUR3.60 per share.

Esseco is a family-owned industrial group that has manufactured chemical products for over a century. It produces chlor-alkali and derivates, sulfur-based chemical, sulfur byproducts, and organic acids and formiates for a variety of industrial applications in multiple sectors, including agribusiness, pharmaceuticals, detergents, water treatment and paper, among others. The group also provides products and services for the oenological sector.

Ercros produces a total of 127,000 metric tons per year of chlorine and caustic soda at its Vilaseca I plant. It also produces around 175,000 metric tons per year of vinyl chloride monomer (VCM) at this site, which goes into its PVC plant nearby. It exports more than 50% of its products and produces more than 1 million metric tons per year across 150 products in its portfolio in three business lines: chlorine derivatives, intermediate chemicals unit and pharmaceuticals.

“With this transaction, Esseco intends to actively contribute, through its experience and knowledge, to the development and growth of Ercros, and to promote its opportunities as a clear Southern European leader in caustic soda, potassium derivatives, paraformaldehyde and trichloroisocuaniric acids and as a broader European chemicals player in its specific areas of activity,” Esseco said in its statement to the commission.

“The intention is not only to maintain the headquarters in Barcelona and production in its operational centers in Spain, but also to promote Ercros’ current growth and investment plans,” Esseco said.

The acquisition of the Spanish chlorine producer would allow either the Portuguese or Italian chlorine manufacturers to compete in the chlor-alkali segment, where pharmaceuticals and water treatment applications markets are key. Chlor-alkali producers have faced challenges of volatile energy costs and weak demand, with chlorine, caustic soda and PVC prices persisting at historic lows through most of 2023.

European caustic soda demand remained challenged but was counterbalanced by a lack of import resupply. The latter was constricted by the recent rise in freight costs, which meant that US cargoes were priced out of the market.

Platts, part of S&P Global Commodity Insights, assessed the European chlorine contract price at EUR148 per metric ton on June 25, down EUR14 from May. Caustic soda spot prices were assessed at USD475 per dry metric ton CFR Med and at USD380 per dry metric ton FOB NWE on June 25, up USD10 and unchanged from May, respectively.

mrchub.com

Caixin’s China manufacturing purchasing managers’ index (PMI) rose to 51.8 in June from 51.7 in May as production growth accelerated on the back of rising new orders, the Chinese media firm said on Monday.

Caixin’s headline PMI print was in contrast to China’s June official manufacturing PMI which remained stable from May at 49.5, data from the National Bureau of Statistics (NBS) showed on 30 June.

A PMI reading below 50 indicates contraction in the manufacturing economy, while a higher number denotes expansion.

The June reading marks the Caixin index’s eighth straight month in expansionary territory and its highest level since May 2021, showing ongoing improvement in the sector, said Wang Zhe, a senior economist at Caixin Insight Group.

Manufacturing output growth reached a two-year high, driven by five consecutive months of expansion in both supply and demand, he said.

Demand remained strong, with the total new orders subindex in expansionary territory for 11 months straight, led by consumer and intermediate goods, according to Wang.

While exports continued to grow, the pace slowed for the first time in six months, suggesting a slight weakening of overseas demand, he said.

“Recent macroeconomic data show that the economy continues to recover, with stable production, demand, employment and prices, as well as strong exports,” Wang said.

“Despite this, insufficient market confidence and effective demand remain key challenges. Looking ahead, policy support requires further consolidation.”

The Caixin PMI surveys small and medium-sized enterprises (SMEs) and export-oriented enterprises located in eastern coastal regions while the official PMI is tilted toward larger state-owned enterprises.

According to data from China's National Bureau of Statistics, the official China NBS Manufacturing PMI rose to 50.8 in March 2024 from 49.1 a month earlier. Thus, the current growth exceeded market forecasts of 49.9.

mrchub.com

Carbios and Zhink Group have signed a letter of intent (LoI) to set up a new polyethylene terephthalate (PET) biorecy-cling facility in China, said Polymerupdate.

Under a long-term partnership, the two companies plan to build the biorecycling plant with a minimum processing capacity of 50,000 t/y of prepared PET waste, with potential for expansion. An anticipated schedule for the project was not given.

The facility would utilize Carbios enzymatic depol-ymerization technology that enables efficient and sol-vent-free recycling of PET plastic and textile waste into virgin-like materials, Carbios noted.

"For Carbios, this agreement marks a significant step in the deployment of its technology worldwide and roll-out of its licensing model to achieve its ambition to become a leading technology provider in the recycling of PET by 2035," it added.

The proposed partnership would allow Zhink to in-crease its recycled PET capacities and meet its sustain-able competitiveness objectives by offering r-PET (recy-cled PET) from enzymatic recycling.

There is great momentum in China to accelerate the circular economy and meet its target of carbon neutrali-ty by 2060.

"The technology developed by Carbios makes perfect sense in this context: capable of recycling all types of PET waste, it promotes a circular economy with high-quality products and significantly reduces the carbon footprint of industries.

mrchub.com

The EU has begun an antidumping investigation into imports of epoxy resins from China, South Korea, Taiwan and Thailand in response to a joint complaint by producers Olin Corp. (Clayton, Missouri), Westlake Corp. (Houston) and Spolchemie (Usti nad Labem, Czechia), said Chemweek.

The US began its own investigation in April at the request of Olin and Westlake. The complaint to the EU alleges dumping margins of 140%-170% for China, 10%-40% for South Korea, 20%-40% for Taiwan and 60%-90% for Thailand.

“Although this issue is not unique to epoxy, nor to the EU, the significant volume of what we believe are unfairly dumped imports of epoxy resin have a seriously negative impact on the EU,” said Florian Kohl, president/Olin Epoxy & international. “Related unfair trade practices for the same products are also under investigation in the United States by the U.S. Department of Commerce and the U.S. International Trade Commission.”

We remind, China has extended anti-dumping duties (ADD) on styrene imports from South Korea, Taiwan and the US for another five years, according to an announcement released by the Chinese mainland's Ministry of Commerce. The news comes two months after South Korea, until recently a net exporter of styrene, launched an anti-dumping investigation into styrene imports from mainland China.

mrchub.com

A fire erupted at a chemical company in Tianjin on 25 June, resulting in seven injuries and one missing, according to CCTV, said Chinadaily.

Among the injured, six individuals suffered minor injuries and one from severe injury. They have been sent to hospital.

The fire accident occurred at the hydrogen peroxide oxidation tower unit of a subsidiary of the Bohai Chemical Industry Group, according to the report.

In response to the incident, emergency response teams swiftly arrived at the site to initiate rescue efforts.

The cause of the accident and further details on casualties are under investigation, it added.

We remind, that in the Aktobe region, the Chinese Tianjin Bohua Petrochemical plans to launch the production of polyethylene and polypropylene worth USD4 billion. Construction of the plant is expected to be completed within two to three years. The main markets for finished products will be Kazakhstan and China.

mrchub.com