Idemitsu reduces run rate by 20% at Malaysian HIPS plant on weak demand

MOSCOW (MRC) -- Japanese Idemitsu Kosan's wholly-owned subsidiary Petrochemicals (Malaysia) has lowered the operating rate at its 110,000 tpa high impact polystyrene (HIPS) plant at Pasir Gudang this month to 80%, said Plastemart.

Operating rates were at 100% in June. The reason for the lowered run rate is slowing demand due to rising HIPS prices -- caused by increasing styrene monomer prices -- and the Muslim fasting month of Ramadan. Run rates are likely to be gradually lowered to 70% if demand remains low.

Idemitsu also has a 240,000 tpa styrene monomer plant at Pasir Gudang, run by its subsidiary Idemitsu SM (Malaysia), which is expected to shut in mid-August for a one-month turnaround.

Meanwhile, Petrochemicals (Malaysia) plans to shut its HIPS plant in January next year for a one-month turnaround.
MRC

MOSCOW (MRC) -- South Korea's SK Global Chemical is running its 350,000 mt/year styrene monomer plant at Ulsan at full capacity in July, similar to June and May, but is considering run cuts as margins are being squeezed, as per Plastemart with reference to a company source in Platts.

The plant, originally owned by German chemical major BASF, was idled in late 2008. It was bought by SK Global in 2009 and restarted late this April. Due to the plant being relatively old and idle for several years, it was less cost-efficient than newer plants, the source said. The source said margins were not good at the moment, although SKGC is completely self-sufficient in terms of feedstocks benzene and ethylene.

Several other SM producers in Japan and Southeast Asia have recently cut or considered cutting operating rates due to negative margins caused by relatively high benzene and ethylene prices while SM prices have been relatively stagnant due to a high inventory level in key market China.

As MRC reported earlier, last July, SK Global Chemical and China Petroleum & Chemical Corp. signed an agreement that establishes a joint venture between the two companies to operate Sinopec's recently completed 800,000 tonnes per year naphtha cracker in Wuhan, China. The USD2.9-billion project includes facilities for the production of 300,000 tonnes per year of high-density polyethylene (HDPE), 300,000 tonnes per year of linear low-density polyethylene (LDPE) and 400,000 tonnes per year of polypropylene.
MRC

MOSCOW (MRC) -- Evonik Industries and AkzoNobel have entered into negotiations to build a membrane electrolysis facility at AkzoNobel's site in Ibbenburen (Germany), as per Evonik's press release.

The objective of the negotiations is to establish a joint venture for the new construction and shared operation of an electrolysis facility for potassium hydroxide solution and chlorine. The negotiations of the two companies are expected to be finalized by the end of 2014.

The law stipulates that the production of potassium hydroxide solutions with the current mercury electrolysis technology must be phased out by 2018. The new membrane electrolysis will replace this procedure with an environmentally-friendly and sustainable method.

"This investment would allow us to reliably supply our customers with our potassium hydroxide solutions in the long term", explained Gregor Hetzke, Head of Evonik's Advanced Intermediates Business Unit. "At the same time, it would make an important contribution to the environmentally-friendly and sustainable production of potassium hydroxide solutions."

The membrane electrolysis facility in Ibbenburen is to have a nominal annual capacity of approximately 130,000 metric tons of potassium hydroxide solution and a nominal annual capacity of approximately 82,000 metric tons of chlorine. After the startup of production, which is projected for the third quarter of 2017, AkzoNobel would take over the marketing of chlorine and hydrogen or process the substances directly at the Ibbenburen site. Meanwhile, Evonik would take over the marketing and further processing of potassium hydroxide solution at its Lulsdorf site, where Evonik processes potassium hydroxide solution into potassium carbonate.

As informed previoulsy, Essen-based Evonik Industriesis making an investment in the double-digit-million euro range in a new research center at the Rheinfelden site. Starting at the beginning of 2016, research into silanes will be carried out in modern laboratories in the four-story building. Silanes are used in the electronics industry, in the tire industry, for the production of adhesives and sealants as well as plastics, and in the construction industry.

Evonik, the creative industrial group from Germany, is one of the world leaders in specialty chemicals. Its activities focus on the key megatrends health, nutrition, resource efficiency and globalization. Evonik benefits specifically from its innovative prowess and integrated technology platforms. Evonik is active in over 100 countries around the world. In fiscal 2013 more than 33,500 employees generated sales of around EUR12.9 billion and an operating profit (adjusted EBITDA) of about EUR2.0 billion.
MRC

MOSCOW (MRC) -- PolyOne Corporation, a premier global provider of specialized polymer materials, services and solutions, has reported its second quarter results. As expected and to drive earnings growth, the company continued to exit certain unprofitable products associated with the Spartech acquisition completed in March of last year. Accordingly, revenues were USD1.01 billion for the second quarter of 2014, compared to USD1.04 billion in the second quarter of 2013, reported the company on its site.

These actions, coupled with other ongoing initiatives to expand margins, resulted in a 38% increase in adjusted earnings per share to USD0.51 for the second quarter of 2014, up from USD0.37 in the second quarter of 2013. Recently announced asset realignment actions taken in Brazil led to higher restructuring costs this quarter. As a result, GAAP earnings per share totaled USD0.33 for the second quarter of 2014 versus USD0.39 in the second quarter of 2013.

President and chief executive officer Robert M. Pattersonr said, "Mix improvement continues to be at the heart of our transformation as our specialty businesses reached record levels of operating income and profitability for the quarter. Driven by an expanding portfolio of specialty solutions, our underlying mix of earnings has never been stronger with specialty now contributing two-thirds of our segment income."

"Our strong track record of converting earnings to cash continued this quarter as we generated USD100 million of free cash flow," said executive vice president and chief financial officer Bradley C. Richardson.

Mr. Richardson continued, "We ended the quarter with USD261.5 million in cash. This, coupled with our availability under our asset-based revolver, gives us significant capacity to invest in innovation, aggressively pursue acquisition opportunities and deliver cash to shareholders. During the quarter, we repurchased approximately 1.8 million shares at an average price of USD38.15, bringing the total share buyback since early 2013 to 8.2 million shares."

Commenting on the company's outlook, Mr. Patterson said, "We are very pleased with our first half performance in 2014 and the underlying momentum and strength of our earnings growth. While our second quarter is seasonally our strongest, we expect to deliver strong year-over-year double-digit EPS expansion for the balance of 2014. With a growing pipeline of new and differentiated solutions, we are very confident in our ability to continue to create value for our customers and deliver market-beating performance for our shareholders."

As MRC informed previously, PolyOne Corporation has recently presented its specialty portfolio for automotive interiors to designers and engineers. These advanced technologies, including soft-touch materials as well as colorants and special effects, enable customers to design new features that boost consumer appeal and reduce manufacturing complexity.

PolyOne Corporation, with 2013 revenues of USD3.8 billion, is a global provider of specialized polymer materials, services, and solutions. PolyOne is a provider of specialized polymer materials, services and solutions with operations in specialty polymer formulations, color and additive systems, polymer distribution and specialty vinyl resins.
MRC

MOSCOW (MRC) -- CB&I and Clariant, a world leader in specialty chemicals, have announced that their new Ziegler-Natta (ZN) polypropylene catalyst plant in Louisville, Kentucky, is on schedule to begin production in 2015, reported Hydrocarbonprocessing.

The plant is part of a long-term strategic partnership between Clariant’s catalysts business and CB&I’s Lummus Novolen Technology business. Based at Clariant’s largest US production hub, the new facility will combine innovative catalysts jointly developed by both companies with high-capacity output.

The partnership strengthens both companies’ position in polypropylene catalyst and technology by leveraging Clariant’s catalyst research and development and production know-how together with CB&I’s vast knowledge in catalyst, process design and licensing of polypropylene plants.

"The successful joint development of new generation polypropylene catalyst and progressing of Louisville plant are key milestones for our catalyst business," said Stefan Heuser, senior vice president of Clariant. "It strengthens greatly our competitive position in this attractive and fast-growing market."

As a result of joint efforts from research and development teams of Clariant and CB&I, a series of new ZN polypropylene catalysts to be produced in the Louisville plant has been developed recently.

As MRC informed previously, Clariant is making its products available in UL’s Materials Search Engine, Prospector, so that it’s easier for designers and engineers to find color masterbatches they need to make plastics products that comply with UL standards and those of other organizations.

Clariant AG is a Swiss chemical company and a world leader in the production of specialty chemicals for the textile, printing, mining and metallurgical industries. It is engaged in processing crude oil products in pigments, plastics and paints.
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