Currency swings help push down PepsiCo earnings by 24%

MOSCOW (MRC) -- PepsiCo, the beverage and snack giant, said that its quarterly earnings fell 24%, putting it in the ranks of companies whose finances were dented by currency swings at the end of last year, said Nytimes.

Sales declined slightly to USD19.95 billion in the quarter that ended Dec. 27, from USD20.12 billion in the year-ago period, the company said, and earnings dropped to USD1.3 billion.

Adjusting for currency swings, restructuring costs and other extraordinary charges, PepsiCo’s income was USD1.6 billion. Indra Nooyi, chief executive of PepsiCo, said 2014 "was a tough year" because of volatility in the currency markets, unrest in Russia and falling gas prices that no one anticipated. "The market was quite volatile, and as the year went on, we got to the second half of the year, we started to really experience all the volatility."

The company’s shares rose more than 2% to close at USD100.40. Pepsi’s rival Coca-Cola reported sharply lower earnings as currency fluctuations and various restructuring charges took their toll. Once analysts adjusted for those extraordinary factors, however, Coke’s stock also rose.

Both companies face a more fundamental challenge, namely, that consumers are drinking less sugary soda. PepsiCo has Frito-Lay and Quaker to cushion it from that trend, and Frito-Lay by far accounted for the largest share of Pepsi’s operating profits.

Pepsi and Coke have vast portfolios of beverage brands and have worked to attract consumers to the teas, waters and juices they sell, which may account for the slight uptick in their sales in the United States last year.

For the year, PepsiCo’s were flat at USD66.6 billion, and profits were USD6.5 billion, compared to USD6.7 billion in 2013. The company said it would spend as much as USD9 billion on higher dividends and share buybacks.
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MOSCOW (MRC) -- Styrolution, the Germany-headquartered supplier of styrenics, has reshuffled its management board, said the company in its press-release.

The moves follow the announcement of the retirement in July of Asia Pacific president Hyung Tae (HT) Chang, following more than 41 years of service in the chemical industry. Steve Harrington, currently president of global styrene monomer, will assume an additional role as president Asia Pacific, effective from 1 April.

Rob Buntinx will join Styrolution’s management board as president, Europe, Middle East and Africa (EMEA), effective from 1 March. He will replace Kevin McQuade, who took over the reigns as Styrolution’s chief executive in January.

Buntinx currently serves as senior vice president of Styrolution’s organisational unit, Global Focus Industries and research and development, and will retain this responsibility in his new role.

Pierre Minguet will fill a newly created position on Styrolution’s management board as president of operations, effective from 1 March. He currently serves as senior vice president, EMEA manufacturing.

Following implementation of these changes, Styrolution’s management board will comprise the following individuals: Kevin McQuade (chief executive), Christoph de la Camp (chief financial officer), Steve Harrington (president, Global Styrene Monomer and Asia Pacific), Rob Buntinx (president, EMEA), Alexander Gluck (president, Americas), Pierre Minguet (president, Operations).

Styrolution chief executive Kevin McQuade said: "I would like to thank HT for his valuable contribution to the success of Styrolution and his many years of dedicated service to the industry. "Steve and Rob will be strong promoters of our Triple Shift growth strategy in their regions, which is to drive even greater growth in specialties and ABS Standard, our focus industries, and emerging markets.

"I also have the same confidence that Pierre will be instrumental in further sharpening our technology and manufacturing excellence programs globally. At Styrolution, we are fortunate to have leaders who not only possess the expertise and drive to produce results but are also highly regarded internally and by their peers."

As MRC wrote before, Styrolution, the global leader in styrenics, has recently launched a pilot styrene-butadiene copolymer (SBC) plant in Antwerp. The new plant will produce all of Styrolution"s SBC grades and includes capabilities for the processing of other polymer types.
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MOSCOW (MRC) -- Saudi Arabia’s Oil Ministry has allocated an additional 10m cbf/d (2.8m cbm) of ethane to Saudi Kayan Petrochemical Co (Al Jubail / Saudi Arabia) to enable an expansion of capacity at its Al Jubail complex, said Plasteurope.

The company plans to widen its ethylene production by at least 93,000 t/y and its ethylene oxide capacity by 61,000 t/y from the second quarter of 2017.

With the increased ethane supply, Saudi Kayan – majority-owned by petrochemicals giant Sabic (Riyadh) and Al Kayan Petrochemical – will be able to reduce its dependence on butane gas feedstock. Also as part of the agreement, Sabic will lower the marketing fees it charges Saudi Kayan, saving the company SAR 280m (USD 74.6m) in 2015 and SAR 600m a year once the projects are completed.

As MRC wrote earlier, Saudi Kayan, Sadara Chemical and Saudi Acrylic Acid Company (SAAC) have joined forces to establish a new company, which will build the first butanol plant in the Middle East and the largest in the world. The Saudi Butanol Company, which will produce butanol to support the growth of the paints and coatings industry in Saudi Arabia, will be located at Tasnee Petrochemicals Complex in Jubail Industrial City and operated by Tasnee.

Saudi Kayan Petrochemical Company is a manufacturing affiliate of the Saudi Basic Industries Corporation (Sabic).MRC

MOSCOW (MRC) -- BASF-YPC, a JV of BASF, the world’s leading chemical company, is in plans to shut its low density polyethylene/ethylene vinyl acetate (LDPE/EVA) plant for maintenance turnaround, reported Apic-online.

A Polymerupdate source in China informed that the plant is likely to be shut on April 1, 2015. The duration of the turnaround could not be ascertained.

Located at Nanjing in Jiangsu province of China, it has a production capacity of 200,000 mt/year.

As MRC wrote earlier, in summer 2014, BASF undertook three key capacity expansion projects for performance materials at its Pudong site in Shanghai (China).

The capacity expansion projects includes Ultramid (polyamide, PA), Ultradur (polybutylene terephthalate, PBT), Elastollan thermoplastics polyurethane elastomers (TPU), and Technical Center and capacity expansion of Cellasto (microcellular polyurethane components).

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.
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MOSCOW (MRC) -- Dr. Andreas H. Biagosch (59) has joined Wacker Chemie AG’s Supervisory Board, the Munich-based chemical company announced in its press release.

He succeeds Dr. Bernd W. Voss, who has stepped down for health reasons.

Andreas Biagosch studied mechanical engineering and business administration for engineers at the Technische Universitat Munchen (TUM), before obtaining his doctorate (Dr.-Ing.) there. From 1980 to 1984, he worked as a development engineer at former MTU Munchen GmbH before joining the management consulting firm McKinsey & Company, Inc. He spent over 28 years there in a variety of functions. His work focused on advising companies from the high-tech, aerospace, automotive, chemical and energy sectors.

Since 2013, Biagosch has been Managing Director at Impacting I GmbH & Co.KG and Impact GmbH (consulting and investment firms). He also is a member of Aixtron SE’s Supervisory Board and the Advisory Councils of Commerzbank AG and Lurssen Werft GmbH & Co. KG. In addition, he is Non-Executive Director at the Indian commercial vehicle manufacturer Ashok Leyland and member of the TUM Board of Trustees.

We remind that, as MRC informed earlier, in 2013, Wacker Chemie AG officially launched its new production plant for ethylene-vinyl-acetate copolymer (EVA) dispersions at its Ulsan site in South Korea. The additional 40,000 tonnes from the second reactor line increases the site's EVA-dispersion capacity to a total of 90,000 tonnes per year. As MRC reported previously, the production capacity of the site has, thus, almost doubled, making the plant complex one of the biggest of its kind in South Korea.

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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