A Schulman to buy Ferro specialty plastics assets

MOSCOW (MRC) -- A. Schulman has agreed to purchase a majority of the assets of the specialty plastics business of Ferro Corp. for USD91 million in cash, said Hydrocarbonprocessing.

The purchase agreement includes four facilities located in the US as well as operations in Spain. Subject to the satisfaction of customary closing conditions and regulatory approvals, the transaction is anticipated to close during the fourth quarter of A. Schulman's current fiscal year ending August 31, 2014.

Excluded from the transaction are Ferro's plastics business and operations in Edison, New Jersey, and Carabobo, Venezuela.

The acquisition is expected to be accretive to adjusted earnings per share, and Schulman anticipates achieving approximately USD5.5 million in synergies within 12 to 18 months following the close of the transaction, driven primarily by sourcing activities and plant efficiency actions.

The assets included in the pending transaction achieved sales of USD154 million in 2013, with approximately two-thirds of these revenues generated in the US. As a result, this acquisition is expected to deliver important geographic diversification benefits to A. Schulman.

The specialty plastics segment is a global supplier of custom engineered plastic compounds, colorants, and liquid coatings, primarily focused on thermoset plastic technology. The business offers a broad portfolio of proprietary products and recognized brand names serving a wide range of end markets including packaging, transportation, construction, appliances and agriculture.

"We continue to strengthen our US operations and expand our global capabilities in engineered plastics, masterbatch solutions and custom performance colors, which represent outstanding profitable growth opportunities and are integral to our value creation strategy," said Bernard Rzepka, chief operating officer of A Schulman.

We remind that, as MRC wrote previously, in mid-2012 A. Schulman Inc. inked a definitive agreement to acquire ECM Plastics, a privately owned plastics compounder located in Worcester, Mass., for USD36.5 million. Besides, Jeddah-based National Petrochemical Industrial Company (Natpet), a subsidiary of Alujain Corporation, entered into a joint venture agreement with A. Schulman to produce polypropylene compounds.

A. Schulman is a global plastics supplier, headquartered in Akron, Ohio, and a leading international supplier of high-performance plastic compounds and resins, which are used as raw materials in a variety of markets. A. Schulman has 33 manufacturing facilities globally. A. Schulman's fiscal third-quarter earnings fell 69% amid continued sluggishness in European markets and higher-than-expected costs in Latin America, where the company has been consolidating its Brazilian operations.
MRC

MOSCOW (MRC) - Mexico's national oil company Pemex will sell a 7.9% stake in Spanish oil firm Repsol, worth about 2.2 billion euros (USD3.0 billion), said Reuters.

The sale ends a long relationship between Pemex and Repsol that had run into trouble in recent years over disagreements on policies ranging from top management to the handling of Repsol's investments in Argentina.

Through this sale, Pemex will divest nearly all of its holding in Repsol, where its 9% stake has made it one of the top three shareholders.

As a result of the divestment, Pemex will lose its seat on Repsol's board. The companies had hoped to team up to explore for offshore oil in the Gulf of Mexico, so the sale represents a lost opportunity for both.

Both Repsol and Pemex declined to comment.

Still, Repsol shares could benefit in the short term, analysts said, as the sale erases uncertainty that had been holding back gains over past months, even as the company made a successful USD6.3 billion exit from Argentina.

Repsol itself is on the hunt for acquisitions to expand its exploration and production business, with a preference for oil assets that offer cash flow, banking sources said.

As MRC informed previously, Pemex and Mexichem in 2013 entered into a joint venture, which will enable greater competitiveness of the domestic petrochemical industry in the global market through the integration of a new company, which will create value to the chlorine-vinyl chain. The joint venture includes a cash investment and assets contribution up to the amount of USD518 million, of which Pemex will participate with USD228 million in assets while Mexichem will contribute with both, USD90 million in assets and USD200 million in cash in order to modernize the Pajaritos complex.

Pemex, Mexican Petroleum, is a Mexican state-owned petroleum company. Pemex has a total asset worth of USD415.75 billion, and is the world's second largest non-publicly listed company by total market value, and Latin America's second largest enterprise by annual revenue as of 2009. Company produces such polymers, as polyethylene, polypropylene, polystyrene.

Repsol S.A is an integrated Spanish oil and gas company with operations in 28 countries. The bulk of its assets are located in Spain.
MRC

MOSCOW (MRC) -- Lotte Chemical has restarted a polypropylene (PP) plant, reported Apic-online.

A Polymerupdate source in Malaysia informed that the plant restarted on May 29, 2014. It was shut on May 17, 2014 for maintenance turnaround.

Located at Pasir Gudang, Malaysia, the plant has a production capacity of 240,000 mt/year.

As MRC wrote previously, Lotte Chemical Titan shut down its PP plant in Malaysia on February 5, 2014 for a brief outage. The plant, located at Pasir Gudang, Malaysia, with a production capacity of 200,000 mt/year resumed operations on February 6, 2014.

We remind that in early 2014, Hyundai Oilbank and Lotte Chemical Corp. established Hyundai Chemical as a new venture in the "oil refining and synthetic fiber materials business". The venture, owned 60 % by Hyundai and 40% by Lotte, will invest up to 1.2-trillion won, with production targeted to begin in the second half of 2016 at Hyundai’s Daesan plant in South Chungcheong province.

In early 2013, a major South Korean pertochemical and polymer producer, Honam Petrochemical, and one of the largest South Korean PET and PTA producer, KP Chemical, decided to merge into a new company with a new name Lotte Chemical Corporation. The newly formed company believes that this move will strengthen its position both in domestic and international markets and is in a line with Lotte Chemical's strategy to become a leading global company.

The Lotte Group currently has a presence in Indonesia via its subsidiary, Honam Petrochemicals, which acquired Malaysia’s polyolefin major Titan Chemicals in July 2010. Included in the acquisition was Titan’s Indonesian subsidiary - PT Titan Petrokimia Nusantara (TPN), which has a polyethylene (PE) production capacity of 450,000 tonnes/year.
MRC

MOSCOW (MRC) -- Kem One, Europe’s third-largest producer of polyvinyl chloride (PVC) has announced an increase of EUR25/tonne in June prices of suspension PVC (SPVC) grades and mass PVC (MPVC) grades, reported the company in its press release.

Kem One will maintain a strict price policy in order to recover the margins,deteriorated by the weakness of the market for caustic soda.

As MRC wrote earlier, the company raised its prices of SPVC and MPVC grades by EUR25/tonne in May in order to recover the margins, deteriorated by the weakness of the market for caustic soda.

Kem One, a fully integrated vinyl production company, was established mid-2012 following the acquisition of Arkema's vinyl products division by the Klesch Group. The company employs 2,600 people at 22 manufacturing sites, primarily in Europe but also in Asia and North America. Europe’s third-largest producer of PVC with revenues in excess of one billion euros, Kem One continues to grow and build on its numerous strengths with a view to becoming market leader for integrated vinyl solutions.
MRC

MOSCOW (MRC) -- Solvay has completed the divestment of its polyvinyl chloride (PVC) compound business Benvic Europe to US investment company OpenGate Capital, enhancing the resilience of the group's portfolio, reported the company on its site.

Completion comes after competition authorities cleared the divestment agreement, which Solvay and OpenGate Capital had announced in April.

Benvic Europe mixes PVC and additives, pigments and stabilizers to make innovative plastic compounds used in markets including construction, cars and packaging. Revenues last year reached about EUR160 million. Its three PVC compounding production sites are in France, Italy and Spain.

As an international chemical group, Solvay assists industries in finding and implementing ever more responsible and value-creating solutions. Solvay generates 90% of its net sales in activities where it is among the world's top three players. It serves many markets, varying from energy and the environment to automotive and aeronautics or electricity and electronics, with one goal: to raise the performance of its clients and improve society's quality of life.
The group is headquartered in Brussels, employs about 29,400 people in 56 countries and generated EUR9.9 billion in net sales in 2013.

OpenGate Capital is a global private buyout firm specializing in the acquisition and operation of businesses seeking revitalization through growth and operational improvements. Established in 2005, OpenGate Capital is headquartered in Los Angeles, California and maintains offices in Paris, France and Sao Paulo, Brazil. The firm’s portfolio includes businesses operating in a variety of industries and generates revenues of nearly USD3 billion.
MRC