Eastman Chemical Q1 profit up 56% helped by Solutia Acquisition

MOSCOW (MRC) -- Eastman Chemical Co.'s first-quarter earnings rose 56% as the chemical and materials manufacturer was helped by a recent acquisition, according to The Wall Street Journal.

The company, which makes a variety of chemicals, plastics and synthetic fibers, has posted lower profit recently, hurt by costs related to acquisitions and restructuring. Last July, it finalized the roughly USD3.38 billion takeover of peer specialty-chemicals firm Solutia Inc., a deal aimed at expanding Eastman's global presence and stabilizing margins.

For the latest quarter, Eastman posted a profit of USD247 million, or USD1.60 a share, up from USD158 million, or USD1.12 a share a year earlier. Excluding Solutia-related costs and other impacts, earnings from continuing operations increased to USD1.62 a share, from USD1.22.

Revenue increased 27% to USD2.31 billion, helped by the Solutia acquisition.

Analysts surveyed by Thomson Reuters were expecting per-share earnings of USD1.57 a share on revenue of USD2.38 billion.

Gross margin widened to 26.7% from 23.7%.

Eastman's biggest revenue generator, the specialty fluids and intermediates segment, saw sales grow 6.7%.

Sales in the advanced materials unit doubled, benefitting from the acquired Solutia interlawyers and performance films product lines and strong demand in Asia.

We remind that, as MRC informed previously, in early October 2012, Eastman Chemical Company announced the addition of new PET polymer Aspir to its portfolio of resins.
MRC

MOSCOW (MRC) -- ExxonMobil and a union representing workers at the company's refinery in Baytown, Texas, reached a tentative agreement over contract language on safety, a dispute that the union said earlier this week could lead to a strike if not resolved, reported Hydrocarbonprocessing.

A spokesman for the United Steelworkers local at Baytown said Exxon agreed to implement a fatigue management system regulating how many days in a row someone can work and to accept a process safety representative position in the new three year contract.

"We had been at a standstill on those two items before the bargaining session," USW spokesman Lynne Hancock said in an email.

Exxon spokeswoman Patty Errico confirmed that the two sides had reached a tentative agreement, but declined to provide additional details.

"We look forward to moving ahead together and maintaining the good working relationships our employees share with us and one another," Ms. Errico said.

The 584,000 bpd refinery is the second largest in the US. The facility's 850 union employees will vote on the deal May 14 and 15, USW spokesman Richard Landry said.

If the majority of the members accept the agreement, it will avert a strike the union had said could go into effect June 15 unless Exxon agreed to new contract language on safety at the plant.

The union cited recent safety issues including a rupture in an Exxon pipeline in Arkansas and a fire at Exxon's Beaumont, Texas, refinery last month in pushing for additional safety standards. It had said similar provisions were already in place at other Exxon refineries in Torrance, California; Billings, Montana; Chalmette, Louisiana; and Beaumont.

ExxonMobil is the largest non-government owned company in the energy industry and produces about 3 percent of the world's oil and about 2 percent of the world's energy.
MRC

MOSCOW (MRC) -- ICA Fluor will be responsible for the construction, construction management and material management services for the TiO2 production facility, said Hydrocarbonprocessing.

ICA Fluor, the industrial construction joint venture of Empresas ICA and Fluor, announced a contract award for the construction of a new titanium dioxide (TiO2) train at DuPont’s complex in Altamira, Tamaulipas, on the Gulf of Mexico.

Fluor booked its proportional share of the contract value into backlog in the first quarter of 2013.

ICA Fluor will be responsible for the construction, construction management and material management services for the production facility that is scheduled for completion in 2015.

As per MRC, Dow Chemical awarded Fluor a contract for execution of a significant portion of its US Gulf Coast investments. Fluor’s scope includes the engineering, procurement and construction (EPC) of a propane dehydrogenation unit, an ethane cracker, and associated power, utilities and infrastructure facility upgrades to support each unit.
MRC

MOSCOW (MRC) -- Fourteen workers were injured May 2 in a fire at an ethylene purification unit operated by Formosa Plastics Corp. USA in Point Comfort, said Plasticsnews.

Formosa spokesman Steve Rice said May 3 that eight of the other 12 injured were treated and released from local hospitals. Most of the injured were treated for injuries ranging from serious burns to smoke inhalation, according to a report in the Victoria (Texas) Advocate.

The fire began around 1:30 p.m. and was extinguished by Formosa's in-house fire department within 10 minutes, Rice said, with an all-clear signal being given shortly after 3 p.m. The fire took place in an ethylene purification unit that is near a unit that makes high density polyethylene resin.

Rice said production has stopped at both the ethylene purification unit and the HDPE unit. No restart dates for those units has been announced. The cause of the fire is under investigation, he added.

"We're still assessing the situation and assessing damage," Rice said. "Our priority right now is tending to the injured."

Ken Mounger, vice president and general manager of the company's polyolefins division, said in a May 3 letter to customers: "It appears that there is no major damage to the production unit. The cause of this incident is under investigation and the restart date for the unit has not been determined.

"At this time there is sufficient product inventory to fill immediate normal and customary orders. The extent of our ability to supply product long term will depend on the results of the investigation and a full assessment of the equipment. Please rest assured that Formosa is working diligently to resume normal safe operations as soon as possible."

Point Comfort is Formosa's largest North American production site, making PE, polypropylene and PVC, as well as ethylene feedstock. It also was the site of an explosion and fire that injured 11 in 2005.

In February 2012, Formosa officials announced a USD1.7 billion expansion project for Point Comfort. The expansion will include an olefins cracker with almost 1.8 billion pounds of annual capacity as well as a low density PE plant with almost 700 million pounds of annual capacity and a propane dehydrogenation (PDO) unit with more than 1.3 billion pounds of annual capacity.
MRC

MOSCOW (MRC) -- Royal DSM NV, the Dutch materials and life sciences group, today reported first quarter sales of EUR2.4 billion (USD3.16 billion), up 4% compared with the same quarter in 2012, said Plasticsnews.

The rise was boosted by growth in Asia and what DSM called a "modest recovery" in the United States.
Quarterly earnings before interest, tax, depreciation and amortization (Ebitda) rose 1.6% to EUR311 million (USD409 million).

DSM's performance materials operation saw a 4% decline in sales to EUR673 million(USD886 million), dampened by a dip in construction and building activity across Europe.

Sales in its polymer intermediates arm were 2% higher at EUR437 million (USD576 million), driven by higher volumes, while the operation's Ebitda fell 58%, fuelled by lower caprolactum prices and higher benzene prices.

Chairman and CEO Feike Sijbesma said he was pleased with the group's numbers in what had been a "challenging environment".

"Where the last two years were characterized by acquisitions, in 2013 we will fully focus on the operational performance and the integration of acquisitions," he said.

Sijbesma added that the company still expects strong Ebitda growth for the year, moving towards EUR1.4 billion (USD1.84 billion), compared with the EUR1.1 billion in 2012.

As MRC reported earlier, DSM is going to invest about EUR100 million in three new R&D facilities in Delft and Sittard-Geleen (both in the Netherlands) over the next two years.

DSM delivers innovative solutions that nourish, protect and improve performance in global markets such as food and dietary supplements, personal care, feed, pharmaceuticals, medical devices, automotive, paints, electrical and electronics, life protection, alternative energy and bio-based materials.
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