Arkema ratings grew to Baa2

MOSCOW (MRC) --Moody's Investors Service has today upgraded Arkema S.A.'s senior unsecured rating to Baa2 from Baa3, said Moody's in its statement.

The outlook on the rating was changed to stable from positive.

The upgrade of Arkema's rating by one notch to Baa2 follows the company's step-by-step repositioning of its operations via restructuring and the disposal of its more volatile activities, as well as its complementary acquisitions of several higher-value-added businesses in 2011 and 2012. These underlying improvements and strong integration efforts were reflected by Arkema's strong performance throughout 2012, with the company's financial and operating metrics in line with the performance of global Baa2-rated chemical peers.

Looking ahead, the Baa2 rating also takes into account Arkema's balanced growth agenda, as well as Moody's expectation that the company will achieve two-thirds of its targeted sales growth by 2016 through making ongoing investments, which are projected to begin contributing to earnings from 2014. To deliver its growth targets, Moody's expects that Arkema will continue to generate strong operating cash flows and reinvest most of it in the business. In contrast to some of its European peers, Arkema has completed most of its restructuring projects and therefore Moody's does not expect restructuring measures to weigh on the company's operating cash flow generation in the near term.

Moody's notes that challenging operating conditions at Kem One, a PVC business disposed of by Arkema in 2012, and the recently announced legal challenge to Arkema by the Klesch Group, the new owner of the assets, may result in contingent claims or credit losses on Arkema's contracts with Kem One. While the developing dispute is a credit negative, the Baa2 rating reflects Moody's expectation that Arkema will manage the developing situation with a view to protecting its financial profile (see MRC news).
MRC

MOSCOW (MRC) --To cope with the ever-increasing demand for methanol, the Assam Petrochemicals Ltd (APL) plans to implement its long-cherished 500 TPD new Methanol expansion -200 TPD Acetic Acid project in the existing location of the factory investing a total capital outlay of Rs. 1028 crore, said Plastemart.

Most of the preparatory works of the project has been completed- engagement of Tata Consulting Engineers Ltd for PMC Services, selection of Engineers Ltd. New Delhi (with technology supply from Haldor Topsoe) for LEPCM contract for 500TPD Methanol plant etc. The Oil India Ltd has already agreed to supply the required 0.5 MMSCMD natural gas to APL’s new projects. The final confirmation of equity participation has already been given by the Government of Assam and the Assam Gas Company. The confirmation of equity participation from the Oil India Ltd is expected soon.

The project has received due approval for implementation from the Government of Assam. State Bank of India which has already been selected as the lead banker by the company, has obtained more than the required amount of term loan for final sanction from various banks. The Public Hearing for environmental clearance has been successfully done and final environmental clearance of the project is about to come. Statutory approval for drawing water from the Dilli river for the project has also been obtained. It is hoped that the foundation of APL’s New Integrated Methanol-Acetic Acid plant will be laid soon.

As MRC wrote earlier, Brahmaputra Cracker & Polymer Ltd. (BCPL) has completed nearly 80% of the work on its delayed Assam gas cracker in Dibrugarh, India, and now expects the project to begin operations by December 2013, according to local reports quoting BCPL Managing Director P. N. Prasad. The project will have the capacity to produce 220,000 t/y of ethylene, 60,000 t/y of propylene and 60,000 t/y of polypropylene.
MRC

MOSCOW (MRC) --The petrochemical production capacity of Iran is likely to reach 100 million tons by 2015, Mr. Abdolhossein Bayat, an Iranian Deputy Oil Minister, said Fibre2fashion.

Mr. Bayat, who is also the managing director of National Petrochemical Company (NPC), said Iran’s petrochemical production capacity would increase to 60 million tons by August this year, as several new petrochemical projects are likely to become on-stream by then.

New petrochemical hubs are being set up in Lavan Island in the Persian Gulf, in the southeastern port city of Chabahar, and in Sarakhsh in northeastern Iran, which are together expected to make Iran the largest petrochemical producer in the Middle East.

During the last few years, Iran has significantly increased the volume and range of its petrochemical products, and the NPC has grown to become the second-biggest producer and exporter of petrochemicals in the Middle East, next only to Saudi Arabia.

Iran exported USD 14 billion worth of petrochemicals to 60 countries worldwide during Iranian calendar year that ended on March 19, 2012.

As per MRC news, Islamic Republic of Iran has proposed setting up a petrochemical exporting forum and is involved in talking with several countries including a number of neighboring countries on the issue.
MRC

MOSCOW (MRC) -- Dow Europe GmbH has announced a price increase for polyethylene (PE) resins across the European, Middle Eastern and African regions, reported the company on its site.

Effective March 1, 2013, or as contract terms allow, Dow Europe GmbH will increase prices for all grades of its low-density polyethylene (LDPE), linear low-density polyethylene (LLDPE) and high-density polyethylene (HDPE) resins by EUR100/tonne.

As MRC informed earlier, another major producer of polyethylene (PE) and polypropylene (PP) in Europe Borealis raised its price for PE by EUR100/tonne and PP prices - by EUR75/tonne in January, 2012.

The Dow Chemical Company is an American multinational chemical corporation headquartered in Midland, Michigan, United States. Dow is a large producer of plastics, including polystyrene (PS), polyurethane, polyethylene (PE), polypropylene (PP), and synthetic rubber.
MRC

MOSCOW (MRC) - In February, PVC imports to Russia increased by 24% from January to around 32,000 tonnes. The imports of acetylene resin from China increased significantly, while the imports from United States declined, according to MRC DataScope.

Despite the low seasonal demand in the first months of the year, Russian companies have traditionally increasing the imports of suspension PVC (SPVC). In February, the external supply of resin increased by 24% compared with the January figure and amounted to about 32,000 tonnes. In February 2012 imports of SPVC made 26,700 tonnes. The main increase in imports fell on China PVC, while imports from the U.S. decreased.

Last month supply of PVC from China rose to 12,300 tonnes, while in January, it was about 4,400 tonnes. In February 2012, imports of Chinese PVC to Russia amounted to 5,500 tonnes. This significant increase in the supply of PVC from China was caused due to the serious debts by last year's contracts and the temporary improvement in the transition of Dostyk-Alashankou (border of Kazakhstan and China).

Due to the heavy loading in the transition of Dostyk-Alashankou Chinese makers are unable to ship PVC in the CIS countries on time. As a consequence, some Russian companies reported about disruptions in PVC shipments from China often exceed two months. The February growth of shipments is a temporary improvement in the border, and in March, imports are likely to decline.

PVC imports from the United States in February fell to 16,300 tonnes, while in January it was 18,500 tonnes. Reduction of North American PVC supplies is a consequence of high export prices and limited export quotas because of planned turnarouns of some US plants in January and February. Imports of US resin is expected to decrease in March further under pressure of these factors.


MRC