LANXESS increases competitiveness

MOSCOW (MRC) -- LANXESS, German specialty chemicals company, is countering the challenging business environment with a comprehensive efficiency program, according to the company's press release.

Currently, it is foremost the synthetic rubber activities that are experiencing a temporary weakness in demand, increased competition in the market and volatile raw materials prices. As part of the "Advance" program, the company therefore plans to reduce costs and headcount, as well as optimize its portfolio.

"Due to the current situation we must now take action," said LANXESS’ Chairman of the Board of Management, Axel C. Heitmann, at today’s Media Day. "We have a strong track record of managing our business in challenging economic environments. We will undertake all necessary steps in order to return to sustainable and profitable growth as soon as possible. We are seeing first signs of stability in the market but it is too early to say when and how quick a recovery will take hold."

Heitmann confirmed the company’s full-year guidance for 2013 of EUR 700-800 million EBITDA pre exceptionals, excluding potential inventory devaluations.

As part of the "Advance" program, LANXESS is aiming to achieve about EUR 100 million in annual savings from 2015 onward through efficiency improvements and targeted restructuring. This will lead to a headcount reduction of about 1,000 employees worldwide by the end of 2015.

Restructuring has already been implemented within the Rubber Chemicals business unit, which is closing a site in South Africa and downsizing its operations in Belgium. In addition, LANXESS will adjust its business operations globally to reflect the current market situation. The company will also continue with its proven flexible asset management strategy.

In total, some EUR150 million in one-off charges will be booked in 2013 and 2014 to cover the "Advance" program.

LANXESS will maintain its current structure of 14 business units under its three established segments. At the same time, the company is pursuing strategic options for specific non-core businesses.

As part of its portfolio management activities over the mid- to long term, LANXESS is predominantly targeting acquisitions that will strengthen its Advanced Intermediates and Performance Chemicals segments and thus further diversify the Group’s structure.

LANXESS is currently pushing ahead with three important investment projects serving the megatrend mobility. They are a neodymium polybutadiene rubber (Nd-PBR) plant in Singapore, an ethylene propylene diene monomer (EPDM) rubber plant in China and a polyamide plant in Belgium. Construction is progressing according to plan.

As MRC wrote before, LANXESS celebrated the opening of its first production facility in Russia. In the new plant at the Lipetsk site, LANXESS subsidiary Rhein Chemie manufactures polymer-bound rubber additives for the markets in Russia and the Commonwealth of Independent States (CIS), primarily for the automotive and tire industries. A production facility for the bladders used in tire production is to be added in 2016. The overall investment volume in euros amounts to a seven-digit figure and 40 new jobs will be created at the new plant in the medium term.

LANXESS is a leading specialty chemicals company with sales of EUR 9.1 billion in 2012 and roughly 17,400 employees in 31 countries. The company is currently represented at 50 production sites worldwide. The core business of LANXESS is the development, manufacturing and marketing of plastics, rubber, intermediates and specialty chemicals.
MRC

MOSCOW (MRC) - GS Engineering & Construction Corp said on Monday it won a 1.52 trillion Korean won (USD1.4 billion) order for the second phase of constructing petrochemical facilities in Kazakhstan from Kazakhstan LG Poly Ethylene (KLPE) LLP, said Reuters.

KLPE is a joint strategic company formed by SAT & Company AO SATC.KZ and LG Chem Ltd (051910.KS), according to its website.

The South Korean builder said in a regulatory filing the contract period is expected to last 37 months. (USD1 = 1084.0250 Korean won).

As MRC wrote before, South Korean petrochemical company LG Chem is planning to build an ethylene production plant in Atyrau, Kazakhstan. The project is going to be constacted in collaboration with two other Kazakh firms. The production is expected to begin in late 2016.

GS Engineering & Construction (GS E&C) is aiming to take a larger piece of the global construction pie. Founded in 1969, the company provides engineering and construction services to a variety of industries around the world. GS E&C's civil division builds roads, bridges, railroads, underground subways, and harbors. Its plant division undertakes work on oil and gas and petrochemical facilities. Projects include sewage system maintenance and wastewater treatment and commissioning of nuclear power plants. GS E&C also builds housing across Korea and in Vietnam. In addition to offices in South Korea, the firm has offices in China, India, Indonesia, Iran, Saudi Arabia, Italy, United Arab Emirates, and Vietnam.
MRC

МOSCOW (MRC) -- Siemens has been awarded a turnkey contract by the Kuwait National Petroleum Co., known as KNPC, to supply high-voltage substations at refineries south of the city of Kuwait, said Arabianoilandgas.

The project, valued at USD240 million, will provide reliable power supply to two of KNPC’s biggest refineries. The project is scheduled for completion in December 2015.

Under the contract, one of the largest for the Siemens Energy Transmission busi-ness in Kuwait, Siemens will supply and install a 132kV substation AHRF "C" at the Mina Al Ahmadi Refinery (MAA) and a 300/132kV substation MARF "W" at the Mina Abdulla Refinery (MAB), including high-voltage cable connections.

The works will fit in with KNPC’s Clean Fuels Project, which will see a major upgrade and expansion of the MAA and MAB refineries to integrate the company’s Refining System into one Refining Complex. The Clean Fuels Project seeks to make fuel production in Kuwait more environmentally-friendly.

"Siemens is proud to be supplying the latest high-voltage technology to KNPC," said Adrian Wood, CEO of Siemens EES, the Kuwaiti unit of Siemens AG.

As MRC wrote before, Kuwait National Petroleum Co.awarded engineering firms Amec and Foster Wheeler consultancy contracts for its new refinery and clean fuel projects. The contracts allow the two companies to prepare the bids and technical specifications for the projects.

The Kuwait National Petroleum Company is the national oil refining company of Kuwait. Established in October 1960, KNPC handles the responsibility of oil refining, gas liquefaction, and distribution of petroleum goods within the local market.

MRC