Taiwan to allow ethylene production to be relocated to Mainland China

MOSCOW (MRC) -- Relocating production of 31 items from Taiwan to Mainland China is prohibited. Ethylene was one of them. It has now been excluded from Taiwan’s list of those products, the production of which may be relocated to China in order to save costs. According to Plastemart, Taiwan's Executive Yuan or Cabinet decided on Sept. 16 to lift bans against ethylene plants and allow related production to be relocated to Mainland China. The possible reason could be that Taiwanese companies have experienced difficulties setting up gas and petrochemical plants at home, as they continue to be faced with opposition from local residents and environmentalists.


The Cabinet has decided that Taiwanese shareholders must retain over 50% stake in the mainland production facilities. The headquarters must be based in Taiwan and the company must not relocate its cash to China; furthermore the company must not lay off its Taiwan-based employees and Taiwan must be the priority market for the company's products.

MRC

PT Chandra Asri Petrochemical to increase its naphtha cracker production capacity up to 43%

MOSCOW (MRC) -- PT Chandra Asri Petrochemical Tbk has signed cooperation contract of Engineering, Procurement, and Construction (EPC) for the construction of production facility of the Company's Naphtha Cracker with Toyo Engineering Corporation. According to Plastemart, the expansion will increase its Naphtha Cracker production capacity up to 43%. Among them is an increase in the production capacity of Ethylene up to 860,000 tpa from 600,000 tpa, propylene from 150,000 tpa to 470,000 tpa, Py-Gas by 120,000 tons to 400,000 tpa, and Mixed C4 by 95,000 tons to 315,000 tpa.


The production capacity expansion ill be conducted by adding furnaces, changing, and modifying major equipment in Company's plant located in Cilegon, Banten. The construction process ofNaphtha Cracker production facility is targeted to commence in Q3-2013 and will be completed and operating in Q4-2015. lnvestment cost for the expansion is estimated at US$380 million, with sources of funding from the combination of loan and equity.

MRC

GIZEH is establishing a production unit overseas

MOSCOW (MRC) -- The internationally operating plastic packaging specialist GIZEH is establishing a production unit overseas. According to the company's press release, from its new Canadian works in Brantford, Ontario, the company will supply its customers in North America and continue to expand its business there. The unit is due to start production later this year.

“A branch of our own in North America is a logical step for GIZEH,” says GIZEH CEO Ralf Jung. GIZEH has been steadily growing for years and, since 2011, has supplied an increasing number of customers in Canada and the USA. “With a local presence, we want to be closer to our customers and, in the medium term, become a major player in the North American market.”

The new company is called “GIZEH Packaging NA Inc.” and will initially offer the technologies deep drawing, injection molding and labeling. The first contracts with customers have already been signed. Later this year, the first plastic packaging will roll off the belt and be labeled. “North America is an extremely interesting market, particularly for our technologically advanced packaging and decoration solutions for milk and dairy products,” says Jung. Installation of the first sleeve system is planned for the beginning of 2014.


The decisive factor for the new branch was its strategically favorable location. Brantford is located south of Toronto in the heart of the Canadian foodstuffs industry.

MRC

Acquisition of Boise Inc. by Packaging Corporation of America under investigation

MOSCOW (MRC) -- Robbins Arroyo LLP is investigating the acquisition of Boise Inc. by Packaging Corporation of America. On September 16, 2013, the two companies announced the signing of a definitive merger agreement under which an affiliate of Packaging Corporation will acquire Boise for $12.55 in an all-cash tender offer. The transaction is expected to close in the fourth quarter of 2013. According to RobbinsArroyo, investigation focuses on whether the board of directors at Boise is undertaking a fair process to obtain maximum value and adequately compensate its shareholders in the merger.


As an initial matter, the $12.55 consideration represents a premium of only 26% based on the Boise’s closing price on September 13, 2013. That premium is substantially below the average one-day premium of 37.36% for comparable transactions in the last three years.


Robbins Arroyo is examining Boise’s board of directors’ decision to sell the company to Packaging Corporation now rather than allow shareholders to continue to participate in the company’s continued success and future growth prospects, and whether they are seeking to benefit themselves.

MRC

Petro Rabigh restarts Saudi refinery operations as power supply restored

MOSCOW (MRC) -- Petro Rabigh said the supply of power and steam supplies has been restored, after a sudden cut late last week halted operations at its refinery, reported Hydrocarbonprocessing.

The interruption of power supply from the provider RAWEC damaged some of the ovens in an ethane cracker unit, but did not harm the complex's unit for refining crude oil, Petro Rabigh said in a statement posted on the Saudi bourse website.

Repairs and lost production will cost about USD66.7 million, which will appear in the third quarter of this year, the company noted.

Production in the undamaged units are starting up again this week, Rabigh said, adding repairs and maintenance on the damaged equipment is expected to last 16 days.

Rabigh utilizes 400,000 bpd of crude oil and 1.2 million tpy of ethane as primary feedstock to produce several refined petroleum products and petrochemical products. The refinery has mainly been producing 8 million tons of heavy oil, 5.3 million tons of light oil, 3 million tons of naphtha and 2.6 million tons of kerosene each year.

Saudi Aramco and Japan's Sumitomo Chemical each hold a 37.5% stake in Petro Rabigh, with the remaining 25% owned by the public.
MRC