SIBUR may slow spending on some projects to curb risk

MOSCOW (MRC) -- SIBUR Holding, a leading Russian gas processing and petrochemicals company, may slow some project spending as the Russian petrochemical producer seeks to curb risks from the economy amid US and European sanctions against the country, reported Bloomberg.

"This is to avoid risks for the company in 2016 and 2017 if the price and economic situation does not change," Chief Executive Officer Dmitry Konov said in an interview in Davos, Switzerland, without identifying any specific projects.

Russia, the largest oil and gas exporter, faces a recession this year as crude prices fell more than 50% in six months. The US and Europe also sanctioned people and companies after Russia annexed Crimea in Ukraine and supported a separatist insurgency in its neighbor. Billionaire Gennady Timchenko, who owns more than 15% of SIBUR, is among those sanctioned.

While SIBUR isn't on any sanctions list, it doesn’t have any borrowing plans as wider debt costs have risen, Konov said.

"Due to the economic situation and existing sanctions against a number of Russian companies and banks, public debt sales for any Russian company will be extremely expensive if possible at all," he said.

Even if annual spending falls, SIBUR expects higher output in its crude and petrochemicals operations as recently completed projects expand capacity, Konov said.

As MRC informed previously, in May 2014, SIBUR signed a contract with China Petroleum and Chemical Corporation (or "Sinopec") to establish a joint venture for the construction of a 50,000 tpa butadiene nitrile rubber (or "NBR") plant at the Shanghai Chemical Industry Park, 50km south of Shanghai. Sinopec’s share in the joint venture will be 74.9% and SIBUR’s will be 25.1%.

SIBUR is a uniquely positioned vertically integrated gas processing and petrochemicals company. We own and operate Russia’s largest gas processing business in terms of associated petroleum gas processing volumes and are a leader in the Russian petrochemicals industry. As of 31 March 2014, SIBUR operated 27 production sites located all over Russia, had over 1,400 large customers engaged in the energy, chemical, fast moving consumer goods (FMCG), automotive, construction and other industries in approximately 70 countries worldwide and employed over 27,000 personnel.
MRC

PP prices slumped in Turkmenistan

MOSCOW (MRC) -- Polypropylene (PP) prices in Turkmenistan fell by USD400/tonne in the export trades, on 26 January, according to ICIS-MRC Price report.

Market sources said PP prices remained at USD1,200/tonne FCA in the export trades in Turkmenistan for a long time, while demand for polymer was absent. On Monday trades, participants managed to get a reduction in export prices to USD800/tonne FCA.

Almost 15,000 tonnes of PP were sold out at the trades. The CIS companies accounted for the bulk of purchasing.
MRC

PC imports in Russia decreased by 8% in 2014

MOSCOW (MRC) - Total imports of polycarbonate (PC) into Russia was about 35,000 tonnes in 2014, down 8% year on year, according MRC DataScope report.

The greatest reduction of Russia's PC granules imports has occurred for injection moulding sector. Demand for imported injection moulding PC granules fell to 6,000 tonnes in 2014, down 36% compared with the level in 2013. Russia's imports for bottle grade PC decreased to 2,600 tonnes in 2014, down 23% year on year. This sector is entirely dependent on imports.

At the same time, amid a general reduction in Russia's PC imports in 2014, external supply of PC for sheet extrusion in the country increased by 4% to 26,300 tonnes in 2014. One of the main reasons for the weakening PC imports in the country was the rouble devaluation, weaker buying activity and the deterioration of macroeconomic indicators in general.

Despite a steady downtrend in oil and its derivatives prices, polycarbonate prices had been increasing over the last year. PC converters have faced with the unwillingness of consumers to accept the increase in final product prices. Because of this the margins in the industry declined significantly.

In addition, prices for Asian PC significantly increased on the strengthening of the dollar in the world markets. Previously, Asian PC was more affordable alternative to the European material, but now the situation has changed.

Some converters, who can not diversify their procurement, suffer losses or even had to suspend production. At the same time, the only producer of PC granules in the CIS countries, Kazanorgsintez (KOS), during the reporting period followed the policy of import substitution, trying to satisfy domestic demand.

Thus, converters received an alternative to the imported material in a more acceptable price range. PC prices are expected to increase this year further in Russia. Now the level of PC prices is dictated largely by the exchange rate than the season factor or buying activity. Traders and converters will try to diversify their procurement of feedstock, preferring the Russian material.


MRC

Clariant to establish strategic alliance with Beraca getting 30% of its shares of Health & Personal Care Business

MOSCOW (MRC) -- Clariant, a world leader in specialty chemicals, and Beraca, a leading player in natural, sustainable and innovative ingredients, has announced a strategic alliance which comprises the intention to acquire a 30% share of Beraca’s Division Health and Personal Care by Clariant, with the possibility of major participation in the future, said the producer on its site.

The transaction will be subject to certain conditions precedent, as well as regulatory approvals.

Beraca is a leading provider of natural and organic certified ingredients sustainably drawn from Brazil’s biodiversity. The company is known and valued by customers worldwide as a reference for sustainable development due to its unique Sociobiodiversity Enhancement Program and full traceability of raw materials from Brazilian biomes, especially the Amazon Rainforest - the world's largest and most diverse rainforest. Beraca works closely with local communities and associations to ensure eco-sustainable standards and practices in its product sourcing and production.

Michael Willome, Head of BU Industrial & Consumer Specialties Clariant, comments: "The investment with Beraca will enhance Clariant’s innovation capabilities in the field of natural ingredients for cosmetics and Personal Care applications and enlarge the range of valuable solutions we offer to customers and end consumers. Both companies are looking forward to jointly developing the new Beraca for the good of our global and regional customers."

"Beraca is a key cornerstone in enhancing Clariant’s portfolio with regards to natural ingredients, biological active extracts and natural emollients, giving our customers unique and exclusive access to cherished ingredients from Brazil," adds Manlio Gallotti, Head of BU ICS Clariant Latin America.

Beraca will remain an independently managed company. Clariant and Beraca will keep their present global distribution channels and industrial operations.

As MRC reported before, in July 2014, CB&I and Clariant announced that their new Ziegler-Natta (ZN) polypropylene catalyst plant in Louisville, Kentucky, is on schedule to begin production in 2015. 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.

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.
MRC

Medical polymers market to cross USD17 bln by 2020

MOSCOW (MRC) -- The global market for medical polymers is expected to reach USD17.05 bln by 2020, according to a new study by Grand View Research, Inc., reported Plastemart.

Increasing substitution of conventional materials such as glass and metals in medical devices by high performance polymers such as PVC and polypropylene coupled with growing demand for medical devices from the fast developing Asian healthcare market is expected to drive medical polymer demand over the next six years. In addition, growing geriatric population is expected to further boost the demand for polymer based devices in minimally invasive surgeries resulting in increased demand for medical polymers.

Devices and equipments were the largest application markets, accounting for over 2,000,000 tons of medical polymer demand in 2013. Growing medical tourism due to low cost labor and advanced facilitates in emerging healthcare destinations of India, China, Malaysia and Singapore is expected to have positive impact on the market over the forecast period. Medical polymers are also extensively used in medical packaging applications owing to its superior properties and accounted for 2,271,300 tons of demand in 2013.

Further key findings from the study suggest:

- Medical polymer demand was 4,901.1 kilo tons in 2013 and is expected to reach 7,149.8 kilo tons by 2020, growing at a CAGR of 5.6% from 2014 to 2020.
- Fibers & resins were the largest product segment, with demand of 4,254.4 kilo tons in 2013 due to substitution of traditional materials used in devices, equipment and packaging by fibers and resins such as polyvinyl chloride, polypropylene, polyurethane and polystyrene.
- North America was the largest regional market for medical polymers, with revenue exceeding USD 4.18 billion in 2013. The presence of advanced medical and healthcare facility in the region was a key contributor to the high demand. In addition, the region is also expected to witness significant growth at an estimated CAGR of 8.1% from 2014 to 2020.
- Packaging applications are expected to witness fastest growth, at an estimated CAGR of 6.0% from 2014 to 2020. Packaging of syringes, tablets and other drugs takes place using polymers due to superior properties such as low weight, application specific performance and biodegradability which is expected to drive demand in this application.

As MRC informed previously, the global medical polymer market is estimated to grow from USUSD2.3 bln to over USUSD3.5 bln, a rise of more than 52%, between 2013 and 2018, as per NanoMarkets.
MRC