Chandra Asri offers assets of two subsidiaries as collateral for USD533 mln debts

MOSCOW (MRC) -- Jakarta-listed PT Chandra Asri Petrochemical (TPIA), the country’s largest petrochemical producer, has made the assets of its two subsidiaries, PT Styrindo Mono Indonesia and PT Petrokimia Butadine Indonesia, collateral for loans worth USD533 million, reported Plastemart with reference to The Jakarta Post.

Chandra Asri, along with its two subsidiaries, signed a security sharing agreement with nine lenders, including DBS Bank Ltd., Bank Central Asia (BCA) and Bank Danamon Indonesia. Since last year, Chandra Asri has been looking for financing to partly expand its naphtha cracker facility from 600,000 kilotons of ethylene to 860,000 kilotons.

The naphtha cracker expansion, which requires USD380 mln in investment, is necessary to support Chandra Asri’s other expansions on other products, like ethylene, propylene, pyrolysis gasoline and mixed C4. Apart from higher ethylene production, the project will also see a boost in its annual production capacity of propylene by 150,000 tons to 470,000, pyrolysis gasoline by 120,000 tons to 400,000, and mixed C4 by 95,000 tons to 315,000.

As MRC wrote before, last June, German petrochemical company Ferrostaal Industrial Projects GmbH and Chandra Asri Petrochemical agreed to work on studies for the development of a petrochemical plant. Under an agreement, Ferrostaal and Chandra Asri has been developing a methanol-based olefin production complex in Teluk Bintuni in West Papua, with a total investment amounting to USD1.89 billion. The complex is expected to produce up to 400,000 tonnes of polypropylene and 175,000 tonnes of ethylene annually.
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MOSCOW (MRC) -- Munich-based chemical company Wacker is expanding its product range with a new liquid silicone rubber for the production of automotive gaskets, reported the company on its site.

Molded parts made from the new silicone are resistant to heat and coolant and exhibit low compression set even under permanent stress. Car radiators and cooling-system components can thus be reliably sealed. ELASTOSIL RT 728, as the new silicone grade is called, can be injection molded or mechanically dispensed straight onto the part to be sealed.

ELASTOSIL RT 728 has been chiefly developed for the production of fluid- and heat-resistant gaskets for the automotive industry. The liquid silicone is characterized by high coolant resistance. Gaskets made from ELASTOSIL RT 728 exhibit no more than 30% compression set after 1000 hours in coolant at a temperature of 105 C. After 1000 hours at 125 C, the permanent deformation is still less than 65% as soon as the stress is removed. The elastomer’s high resilience delivers constant contact pressure and optimum leaktightness in the seal groove. Moreover, even long-term stress has very little effect on the overall property profile of ELASTOSIL RT 728. Vulcanizates of the new liquid silicone meet delivery specifications of leading car manufacturers concerning gaskets for use in engine cooling systems.

ELASTOSIL RT 728 supports cost-efficient series production of parts by injection molding. However, the liquid silicone can also be applied by dispensing equipment straight onto the part to be sealed - automotive subcontractors use this method to produce two-component parts. ELASTOSIL RT 728 meets all the key requirements of this application. By virtue of its shear-thinning properties, it can be applied by dispensing equipment and is self-adhesive. Automotive suppliers, such as Stuttgart-based MAHLE, uses the product to make radiator components.

As MRC reported earlier, Wacker Polymers, a division of Wacker Chemie AG, is to raise its prices for vinyl acetate-ethylene (EVA) and ethylene-vinyl chloride-based (EVCL) copolymer dispersions of the VINNAPAS and VINNOL brand in the regions Americas and Greater China. As customer contracts allow, effective August 1, 2014, prices will be raised by USD0.03 per pound in the Americas. In Greater China, prices will increase by CNY300 per ton.

In Europe, the temporary surcharge of EUR140 per ton for vinyl acetate-based homopolymer dispersions as well as for vinyl acetate-ethylene and ethylene-vinyl chloride-based copolymer dispersions implemented on May 1, 2014, will persist, as customer contracts allow, until further notice.

Wacker Chemie AG is a worldwide operating company in the chemical business, founded 1914. The company is controlled by the Wacker-family holding more than 50 percent of the shares. The corporation is operating more than 25 production sites in Europe, Asia, and the Americas. The product range includes silicone rubbers, polymer products like ethylene vinyl acetate redispersible polymer powder, chemical materials, polysilicon and wafers for semiconductor industry.
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MOSCOW (MRC) -- Rosneft, Russia's biggest oil producer, has announced it has been seeking ways to cope with the negative impact of international sanctions, as it reported higher net income helped by a stronger ruble, as per Themoscowtimes.

Kremlin-controlled Rosneft, which accounts for 40% of Russian oil production, was hit by U.S. sanctions over Moscow's actions in Ukraine, limiting the company's access to Western money. Cooperation with international peers is important to Rosneft, 19.75% of whose shares are owned by BP. ExxonMobil also has a number of joint projects with Rosneft.

Chief Executive Officer Igor Sechin, a longstanding ally of President Vladimir Putin, said the company has been working on a plan to offset the negative effect of the punitive measures. Svyatoslav Slavinsky, in charge of Rosneft's finances, told a conference call that the company does not expect any changes to its joint projects with international majors.

The head of Norway's Statoil, with which Rosneft has plans to jointly develop Russia's Arctic offshore riches and hard-to-recover oil, said it has been studying the sanctions that have been implemented, but there has been no change in their cooperation.

However, Russian companies, including Rosneft, are facing tougher sanctions from the European Union as the deepest East-West spat since the end of the Cold War two decades ago flares.

Rosneft said its net income in the second quarter — before the sanctions were introduced — surged by almost five times year-on-year to 172 billion rubles (USD4.9 billion), beating analyst forecasts, due to a stronger ruble. Rosneft reports in rubles and the stronger currency has a positive impact on its huge foreign currency-denominated debt. The company said its earnings before interest, taxation, depreciation and amortization, or EBITDA, rose to 304 billion rubles (USD8.6 billion), almost in line with expectations. Sales for the period rose to 1.44 trillion rubles (USD41 billion), slightly above the 1.42 trillion rubles (USD40.4 billion) expected by analysts. Rosneft reported it received USD1.9 billion of advanced payments from BP in July under a five-year oil supply deal. Free cash flow surged to 112 billion rubles (USD3.1 billion) while net debt declined to 1.495 trillion rubles (42.5 billion).

MRC

MOSCOW (MRC) -- Indonesian state-owned energy company Pertamina is in plans to shut an aromatics plant for maintenance turnaround, reported Apic-online.

A Polymerupdate source in Indonesia informed that the plant is planned to be shut in end-September 2014. It is likely to remain off-stream for around 40 days.

Located in Cilacap, Indonesia, the plant has a PX capacity of 270,000 mt/year and benzene capacity of 110,000 mt/year.

As MRC informed previously, last June, Pertamina signed an agreement to purchase petrochemical products from Thailand’s PTT Global Chemical. The agreement serves as a pre-marketing strategy for Pertamina and PTT’s joint Indonesian petrochemical business. Under the agreement, PTT will deliver at least 5,000 tonnes of polyethylene and polypropylene products each month to Pertamina for sale in Indonesia.

Pertamina and PTT already have a joint venture agreement to build a petrochemical facility with an annual production capacity of 1 million tonnes. The output from the facility will comprise of ethylene and polypropylene as well as polyethylene and polyvinyl chloride. There are no details on the facility itself.

Pertamina is an Indonesian state-owned oil and natural gas corporation based in Jakarta. It was created in August 1968 by the merger of Pertamin (established 1961) and Permina (established 1957). Pertamina is the world's largest producer and exporter of liquefied natural gas (LNG).
MRC

MOSCOW (MRC) -- In a bid to revive its diversification plan, India’s Essar Industries is in talks with Germany's BASF, the largest chemicals player in the world, for a petrochemicals joint venture, as per Plastemart.

The diversification plan had been put on hold for long, because of global factors and the company's high debt burden. Essar's refinery currently has a 20 mln tpa capacity and is capable of refining a diverse range of crude. The total project cost is expected to be USD2 bln, inclusive of debt and equity. Both sides are still to sign a definitive agreement. SBI Caps, the investment banking arm of the country's largest lender, is working as an advisor and is currently preparing a detailed project appraisal and financial feasibility report.

Essar is one of the most indebted business groups in India Inc. with over USD14 billion of net debt at the end of the last financial year as per a Credit Suisse report - a fallout of its rapid expansion in steel, power and oil refining in the past decade. In FY'14, the net debt of Essar Oil alone stood at Rs 17,410 crore with a very high net debt to equity ratio of 7.1. Essar also has a liability of Rs 6149 crore of sales tax on account of a Supreme Court ruling that it was not entitled to a tax holiday on its refinery. Consequently the company is not keen to commit to new capex just yet.

BASF is the largest diversified chemical company in the world and is headquartered in Ludwigshafen, Germany. BASF produces a wide range of chemicals, for example solvents, amines, resins, glues, electronic-grade chemicals, industrial gases, basic petrochemicals and inorganic chemicals. The most important customers for this segment are the pharmaceutical, construction, textile and automotive industries. BASF had sales of about EUR74 billion in 2013 and over 112,000 employees as of the end of the year. Second-quarter earnings before interest and tax (EBIT), adjusted for one-off items, rose 12.1% to 2.05 billion euros (USD2.76 billion).
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