Ineos considers move to Switzerland to save tax

March 5 (prw) -- Polymers and petrochemicals group Ineos is considering a relocation of its headquarters and tax residence from the UK to Switzerland. It said potential cash tax savings would be ┬450m between now and 2014 if it went ahead with the move, which would need the consent of its lenders.

Ineos said its day-to-day operations in the UK and locations around the world would remain unaffected by the plan. But the transfer of its headquarters would be a symbolically charged move for a company set up as a UK business by its chairman Jim Ratcliffe.

Ineos was formed in 1998 and has grown quickly through acquisition to be the world's third largest chemical company, with leading positions in polyolefins, vinyls and styrenics. Milestones over the past 12 years have included its acquisition of BP's polyolefins business in 2005 and Hydro Polymer in 2008.

The group employs 15,500 people across 64 plants in 14 countries, with 70% of its revenue coming from outside the UK. But its links to the UK are still strong, with 3,700 permanent staff employed at eight UK sites.

In a statement, it said: ⌠[The ┬450m tax] saving would further support investment in skills, plant and technology, considered by the company to be critical to driving future growth and competitive advantage. Irrespective of this change Ineos remains committed to its UK operations.

Tom Crotty, chief executive of Ineos, said: ⌠We have to make a decision that is right for Ineos, our businesses and our sites, to ensure we remain competitive long-term in a global marketplace. Many leading chemical companies have European or global operations resident in Switzerland and we need to compete effectively with them.

⌠We remain committed to the UK and our facilities will continue to play an essential part in the long-term growth of Ineos. Investment in people skills, plant and technology is an important element of our ongoing competitiveness and the change of tax residence would allow us to increase investment to the benefit of all stakeholders in our business.

Last year, the group reached agreement after lengthy negotiations with its lenders for a restructuring.

Ineos said it ⌠has weathered the current recession well. It has stabilised its business, is trading in line with its business plan and its financial performance is expected to improve further over the longer term.

MRC

MRC Reference

Ineos is a petrochemical group.
In Russia Ineos's interests are represented by Ineos Polyolefins and IneosChlorVinyls.

The share in the Russian market in 2008:
PVC - 4.5%;

polyethylene - 1.9%
(HDPE - 2.8%, LDPE - 1.2%);
polypropylene - 1.4%
(PP-random - 22.1%, PP-impact - 2.0%);
polystyrene - 0.9%.

Imports by polymers processing technologies:
profile extrusion;
pipe extrusion;
film extrusion;
injection molding.

The Russian LDPE market bore the heaviest losses in 2009, having lost nearly 30% of demand and moved at 418 kt. The HDPE market shrank only by 5% (to 732.5 kt); whereas EVA consumption fell down by 9% (at about 18 kt). The LLDPE market was getting strength; that was the only market that demonstrated growth of domestic shipments up to 118 kt (+16.8%).

Overall PE imports were 21% down; the drop referred to the three PE types: HDPE was in the ⌠lead with minus 31% (about 165 kt), and followed by LDPE - 26% (about 55 kt), and EVA with minus 17% (about 10 kt). There were positive trends in imports of LLDPE (+7%) and copolymers (+20%).

The crisis in the Russian construction industry determined shrunk production volumes (tiling by 51%, pipes on average by 18%, concrete by 18.4%), which could be obviously tracked in PE imports. Imports of leading grades in the pipe extrusion sector dropped by more than two times (Yuhwa Hiden P600BL/Korea Petrochemical - by 53%, Hostalen CRP 100/LyondellBasell - by 66%).

One of the positive aspects of 2009 was the growth of output by nearly all domestic producers (overall output increased 11%, and exceeded 1 415 kt). In January 2009, Nizhnekamskneftekhim launched a PE plant that was run on average at more than 50% during the year, and the overall output exceeded 130 kt at year-end.

Domestic producers increased their exports; particularly about 278 kt of material were shipped to China. Overall exports went up by 125%, to more than 447 kt; at the same time, exports increased by all PE types apart from EVA (-4%). Exports of Tomskneftekhim's 15803-020 grade hiked by 4 times, to 170 kt.

MRC

For more detailed analysis of market moves and market development forecast, see MRC Annual Report.

March 4 (yourpetrochemicalnews) -- INEOS ChlorVinyls has today announced a price increase of ┬50 per tonne and GBP45 per tonne for methylene chloride for March supply.

This increase is in response to margin erosion over recent months that needs to be remedied.

The new price levels will be effective from March 2010, or as contracts permit.

MRCMRC Reference

Ineos is a petrochemical group.
In Russia Ineos's interests are represented by Ineos Polyolefins and IneosChlorVinyls.

The share in the Russian market in 2008:
PVC - 4.5%;

polyethylene - 1.9%
(HDPE - 2.8%, LDPE - 1.2%);
polypropylene - 1.4%
(PP-random - 22.1%, PP-impact - 2.0%);
polystyrene - 0.9%.

Imports by polymers processing technologies:
profile extrusion;
pipe extrusion;
film extrusion;
injection molding.

March 4 (plastemart) -- The shares of Reliance Industries Ltd. (RIL) have spiked past the 1000 mark as reports pour in that the bankrupt petrochemicals firm LyondellBasell rejected an acquisition bid by RIL. RIL had bid for LB in November at about US$12 bln that it raised to US$14.5 bln a week ago.

Investors were concerned that RIL was paying too much for the acquisition because of which the share prices had weakened. However, markets have been believed that the deal did not come through.

MRC

MRC Reference

LyondellBasell. The share in the Russian market in 2008:
PE - 1.4% (including HDPE - 2.5%, LDPE - 0.3%);
PP - 4.1% (including block-copolymers - 9.5%).

Annual sales growth in Russia, during the recent 5 years:
PE - 27%;
PP - 88%.

The leader in the following polymers processing technologies:

pipe extrusion;

film extrusion;

injection molding.

March 4 (plasteurope) -- In a move to step up its ⌠recycling revolution, Israel's ministry of the environment on 14 February 2010 distributed a memorandum on a draft packaging law to several ministries. Mirroring the European Directive on Packaging and Packaging Waste, the proposed law is steeped in the principle of manufacturer responsibility. Its provisions include encouraging the use of multi-use packaging, clearly marking the packaging with recycling or reuse information as well as the imposition of fines for non-compliance.

The ministry's proposed law also would oblige packaging manufacturers and importers to meet a recycling target of 60% of the total weight of single-use packaging by 2014. In addition, producers will have to comply with annual recycling targets - 22.5% in the case of plastic. Packaging producers and importers will also be required to finance new models for treating and separating waste at the source.

MRC