Georgia Gulf and PPG industries to finilize a merger in late January 2013

(Daily Finance) -- Georgia Gulf Corporation has recently announced that a favorable private letter ruling has been received by PPG Industries from the U.S.

Internal Revenue Service with respect to the previously announced separation of PPG's commodity chemicals business and subsequent merger of a newly formed company with a subsidiary of Georgia Gulf Corporation. The receipt of the ruling is a closing condition and an important milestone in moving towards completion of the transaction.

As previously disclosed, the Georgia Gulf Board of Directors has called a special meeting to be held on January 10, 2013, for shareholders to approve the issuance of Georgia Gulf shares in the proposed merger with PPG's commodity chemicals business. If approved by Georgia Gulf's shareholders at the special meeting, the merger is expected to close in late January 2013.

The Georgia Gulf Corporation has historically been a major manufacturer and marketer of chlorovinyls (caustic soda, chlorine, VCM, EDC, PVC resins, PVC rigid and flexible compounds) and aromatics (acetone, cumene, phenol). With the acquisition of Royal Group Technologies the company is now also a major producer of building materials ranging from piping and siding to window profiles, decking, and fencing.

PPG Industries Inc. is an Americain international company that produces paints, chemicals, optical components, specialty materials, glass and fiber glass. The company consists of more than 150 production units and offices in more than 60 countries. PPG industries is in the list of the top 500 U.S. corporations in terms of sales of. As MRC reported previously, PPG Industries plans to open its first factory in Russia near Tver. As of today, PPG Industries has no production facilities in Russia.
MRC

Qatar launches Muntajat in USD25bn petchems push

(Qatar News Agency) -- The Chairman of Qatar Chemical and Petrochemical Marketing and Distribution Company (MUNTAJAT) said that the State of Qatar has a future plan to increase its chemical and petrochemical production from about 10 million tonnes currently, to about 23 million tonnes by 2020.

HE Dr. Al-Sada said that the company has a vision to position the State of Qatar as the world s pre-eminent chemical and petrochemical hub, pointing that Qatar has strengthened its presences as a producer and a major source of chemicals, polymers and fertilisers and still aims for more concrete large-scale expansions.

With growing global demand for chemicals, polymers and fertilisers, Qatar s increasing production is supplying and supporting the growth of a wide number of industries around the world. The country is investing around USD 25 billion in its petrochemical sector up until 2020 as part of its economic diversification strategy and its mission to increase its global market share in the chemicals and petrochemicals industries, he said.

He stressed that the launch of the new company comes in preparation for Qatar's targeted huge production levels, where it occupies the second place in petrochemical production in the Gulf, and plans to double its current production in 2020, stressing that Launching the company is to address a problem, it is rather planning for a future which Qatar is keen to benefit from its opportunities.

Asked whether there was a relationship between the launch of the new company and Climate Conference, which was held recently in Doha targeting emission reduction, HE Dr. Al-Sada stressed that Qatar is making considerable efforts in this area, including the areas of research and solar energy projects.

The Qatar Petrochemical Company produces ethylene, low density polyethylene, and sulfur. Its facilities consist of an ethylene plant producing 525,000 tonnes per annum (tpa), two low density polyethylene (LDPE) plants with 360,000 tpa and a sulphur plant with 70,000 tpa.

MRC

Pars Oil & Gas Company announces petrochemicals output Hit 27 million tons

(yourindustrynews) -- 27.4 million tons of petrochemical products were produced in Iran during the first 8 months of current Iranian calendar year, began 20 March 2012.

Production manager at National Petrochemical Company (NPC), Ali Bossaqzadeh made the remarks adding that currently 18 petrochemical plants are active in Mahshahr region, south of Iran, 10 plants in Assaluyeh (onshore installation of South Pars gas field) and 13 others in other parts of the country.

Bandar Imam, Pars, Nori, Maroun and Pardis petrochemical plants were the main producers of petrochemicals during the aforementioned period while Zagros, Jam, Shiraz, Razi and Bo Ali plants followed them.

‘During the mentioned period, Shiraz, Shazand, Kermanshah, Khorasan, Mehr and Oromiyeh petrochemical plants produced 1.3 million tons, one million tons, 720 thousand tons, 534 thousand tons , 199 thousand tons and 15 thousand tons of petrochemicals respectively implying they have succeeded to produce equal to 90 percent of their nameplate capacities’, NPC official said.

Earlier Bossaqzadeh had said that petrochemical products output would hit a new record in current year by providing on time feedstock to petrochemical plants.

Meanwhile Petrochemical Commercial Company (PCC) released figures that showed during the first nine months of current Iranian calendar year the company had exported 3.476 million tons of petrochemical products worth 3.245 billion dollars, mainly gas liquids (propane and butane).

As MRC wrote earlier, Iran has launched the world's longest ethylene pipeline, which carries the chemical compound from the southern Persian Gulf port of Assaluyeh to petrochemical complexes in the western provinces of Iran.

MRC

Playing field leveled in Turkey on customs duty change

(apic-online) -- Turkey is set to face an upward revision in customs duties on HDPE and homo PP imports out of developing countries from 4.8% to 6.5% as of January 1, 2013. This is the second phase of the customs duty revision as they were first raised to 4.8% from 3% on September 6. Customs duties on LDPE imports from developing countries were immediately increased from 3% to 6.5% on the same date.

Players in Turkey have already started to calculate the costs of their import cargoes for homo PP and HDPE mainly from the Middle East and Iran taking the revised 6.5% duty into account. This is because anything offered on import basis will be subject to the new regulation if delivered after January 1.

This situation hampers the advantage of the main homo PP and HDPE suppliers to Turkey which had lower import duties, namely the Middle East and Iran, although these two regions still maintain their advantage for low feedstock costs and short distance to Turkey.

Accordingly, Far East Asia, from where imports are already subject to 6.5% duty, is the first region that may gain a chance to compete against the regular sources in Turkey. South Korea is likely to be the prominent origin to find its way from Far East Asia to Turkey considering the country’s large PP and PE capacities. South Korea hosts a total PP capacity of more than 2,800,000 tons/year and a total HDPE capacity of more than 1,800,000 tons/year with several major producers.

Under the agreement, customs duties on LLDPE, HDPE, EVA, PP copolymer, EPS, PET and PS imports will be eliminated between the two countries as of the date on which the agreement takes effect. Customs duties on other polymers including LDPE, homo PP and PVC will be cut by a ratio of one to six from the current 6.5% duty and will continue to be lowered by the same amount on January 1 of the following six years. Accordingly, LDPE, homo PP and PVC imports from South Korea to Turkey are expected to have an initial customs duty of around 5.5% when the free trade agreement is put into practice in the first year. These are expected to be completely lifted on the sixth year after the implementation of the agreement.

MRC

Only severe winter can save PVC Russian market from feedstock deficit

MOSCOW (Market Report) -- Weather conditions will be a core driver for Russian PVC market in January-February 2013, said MRC analysts.

Currently, the local converters of polyvinyl chloride (PVC) began to stop their capacities on the turnaround on the back of extreme cold weather in the most parts of Russia. First of all, it concerns major producers of window profiles, the main consumers of PVC. If such weather and low demand for finished products made of PVC remain in January and February next year, there will be no deficit of feedstock in the market.

Otherwise there is a serious possibility of the deficit of PVC, since domestic makers have only a short-term stock inventories, and the external supply is limited for many reasons.

The stoppage Karpatneftekhim (Lukoil Group) is one of these factors. As a consequence, the market will lack about 8,000-9,000 of PVC per month over the first three months of next year.

Besides, sharp increase in export prices of PVC in the U.S. was not expected by market players. The demand in the domestic PVC market in the United States showed a steady increase (the consumption over last ten months grew by 10%), resulting in exports cuts from 44% to 35%. However, the demand for North American PVC from external markets remains high and, as a result, last month export prices rose on average by USD100/tonne.

The strikes of dockers in the ports on the eastern coast of the U.S., and planned shutdowns of several factories in the first quarter of 2013 (in particular, FPC USA, Oxywinyls, Shin-tech) also put pressure on the market. Many traders have already warned their clients about possible problems with the January shipments of PVC from the U.S.

Chinese makers of acetylene PVC can also spring surprises. Currently, the severe colds in the north of China (-20 degrees Celsius) result in the difficulties in PVC deliveries to Kazakhstan.

"The beginning of the year was not typical for the Russian PVC market. Large volumes of resin at the Russian producers’ and traders’ stocks (about 50,000 tonnes), and bad weather caused the low demand and excess supply of PVC in the Russian market. But in January and February of next year the market situation can dramatically change" – said MRC analyst, Sergey Karaichentsev.

According to him, in 2012, Russian producers reached the end of their resource to increase the production of PVC, and their stock inventories can be described as "maximum permissible."

"So, they can not save the situation. Moreover, the Russian producers of polyvinyl chloride will have to accumulate feedstock in beginning of next year for the period of planned maintenance, when the buying activity usually goes up, so, that there can be a knock-on effect in the market. If there is a deficit in the market, it will have a chance to last more than two months" - said the analyst.


MRC