Meghna Group teams up with Thai firm to form PP joint venture

MOSCOW (MRC) -- Meghna Group of Bangladesh and PM Group of Thailand have joined hands to set up a polypropylene (PP) factory that will support packaging industries at home and abroad, reported GV.

The factory will be the first of its kind in Bangladesh as polypropylene consumers, including garment exporters, now meet their demand by imports.

PM Group will invest around USD 150 million, equivalent to around Tk 1,170 crore, to set up the plant at Meghnaghat in Narayanganj. Both sides signed a deal in Bangkok last week. However, the shareholding issue has not been finalised yet.

"Half of the products will be exported," Mostafa Kamal, chairman of Meghna Group, told The Daily Star.

Apparel exporters will be benefitted, as it will reduce costs of using biaxially-oriented polypropylene (BOPP).

Meghna Group has 32 companies. The local conglomerate has an annual turnover of USD 2 billion and asset worth USD 1 billion, while PM Group is a private firm valued at more than USD 2 billion.

Meghna wanted to sell all the products from the new factory in the local market, but PM Group wants to export half the products to enjoy the facility of generalised system of preferences (GSP) given to Bangladesh by the European Union.

We remind that, as MRC wrote previously, in November 2014, Union Minister of State for Petroleum and Natural Gas, Mr. Dharmendra Pradhan, laid the foundation of USD509.58 million (Rs.3150 Crore) polypropylene plant at IndianOil’s Paradip Refinery project complex. Addressing the gathering, Mr. Pradhan described the project as a dawn of new era for the industrial development.
MRC

MOSCOW (MRC) -- There are steps that plastics business owners can take to keep the mergers and acquisitions parade rolling into 2015, said Plasticsnews.

M&A pros Deborah Douglas and Rick Weil tackled this topic at the 2015 Plastics News Executive Forum, Feb. 4-6 in Lake Las Vegas. Douglas is managing director of the Douglas Group in St. Louis. Weil is managing director with Mesirow Financial in Chicago. "Private business owners do a great deal of good for this country," Douglas said. "They deserve to win, and that’s what we help them do."

She added that although selling a business "can be traumatic" for business owners, it can also create "tremendous opportunities." "There are more buyers than ever before," Douglas said. “But owners face a lot of trauma when they sell. We had one owner recently sell for USD32 million when he had an offer for USD35 million, because he thought the lower deal would be better for his people."

Weil cited a Deloitte survey that said almost half of mid-market firms — with annual sales between USD50 million and USD1 billion — said they were likely to buy another company in the next year. Mega deals of USD5 billion and up also could be returning to the industry, he added.

"There’s so much information out there — companies are asking who do we go after and how much are we willing to spend," he said. Douglas listed several characteristics that could enhance the value of a plastics firm, including strong gross margins, steady growth, patented products or processes and powerful second-tier management.

"Buyers want people with some kind of skill that the competition can’t match," she said. When seeking a buyer, it also helps to have customer contracts up to date and to have non-compete agreements in place with your employees. Possible detractions from making a deal include being dependent on a single customer, lack of a niche focus and a need for major equipment improvements, Douglas added.

Weil cited Novolex as an example of a recently successful plastics M&A deal. Chicago private equity firm Wind Point Capital assembled Novolex from plastics packaging firms Hilex Poly, Duro Bag, Fortune Plastics and Packaging Dynamics. "It’s remarkable to see what [Novolex] has put together and what they’re going to do in the next couple of years," he said.

MRC

MOSCOW (MRC) -- Ufaorgsintez, owned by United Petrochemical Company, has announced an adjustment in its contract polypropylene (PP) prices, whereas the plant's prices of low density polyethylene (LDPE) remained unchanged, according to ICIS-MRC Price report.

Company's customers said that, starting from 1 March, prices of injection moulding homopolymer of propylene (homopolymer PP) were reduced by Rb700/tonne from the level of mid-February, whereas prices of extrusion grade block copolymers of propylene (PP-block) grew by Rb2,000/tonne. At the same time, prices of extrusion grade statistical copolymer of propylene (PP-random) went up by Rb3,000/tonne.

LDPE prices for the production of general purpose films and shrinkable films remained unchanged compared with the level as of 15 February.

Ufaorgsintez OAO was founded in 1956 and is based in Ufa, Russia. Ufaorgsintez OAO manufactures organic synthesis products in Russia and Europe. Its products include ethylene, propylene, ethanol, cumol, ethyl benzol, phenol, acetone, copolymer rubber, polyolefines, polyvinyl chloride and polyethylene items, thinners, and dilutants. "United Petrochemical Company" (UPC) owns 87.76% of Ufaorgsintez's registered capital. Bashneft sold Ufaorgsintez's stake to UPC in May 2013.

According MRC ScanPlast, the overall plant's production of PE and PP totalled 8,700 tonnes and 10,800 tonnes, respectively, in January 2015.
MRC

MOSCOW (MRC) -- Stronger demand for polypropylene (PP) from Turkish companies has led to a price rise in the commodity market in Turkmenistan. PP prices rose by USD300/tonne in the last week's trades, according to ICIS-MRC Price report.

The last week of February was quite productive in the state commodity and feedstock market of Turkmenistan as regards PP sales. 10,000 tonnes of PP were sold only during one day of the trades (26 February). At the same time, prices increased to USD1,150/tonne FOB Turkmenbashi in the trades, with a starting price being at USD850/tonne.

Trades participants said Turkish companies accounted for all PP sales in the trades in Turkmenistan.
MRC

MOSCOW (MRC) -- German chemicals maker Evonik Industries AG forecast slight growth in profit and sales this year on demand for animal-feed ingredients, sid the producer in its press release.

Adjusted earnings before interest, tax, depreciation and amortization will probably gain from last year’s 1.87 billion euros (USD2.09 billion), the Essen-based company said Tuesday in a statement. Additional "upside" is possible should the dollar-euro exchange rate stay at the start of the year’s level, Evonik said. Analysts predict profit of 2.04 billion euros, according to a Bloomberg survey.

"Now that the first few weeks of the year are behind us, I can already say that the upward trend that started in 2014 will continue," Chief Financial Officer Ute Wolf said today in Essen. "We expect to report a strong start to the year and a strong first quarter."

Chief Executive Officer Klaus Engel has been seeking opportunities to accelerate growth through acquisitions. The chemical maker has expressed interest in multibillion-euro businesses such as Bayer AG’s plastics unit and Dutch competitor Royal DSM NV, people familiar with the matter have said.

While those deals failed to materialize, the CEO emphasized his willingness to acquire at a capital markets day in October, saying that a purchase could accelerate entrance into adjacent markets and businesses.

Adjusted Ebitda rose 18 percent to 442 million euros in the fourth quarter, beating the 433 million-euro average of analyst estimates compiled by Bloomberg. Sales gained 4 percent to 3.23 billion euros, also exceeding the consensus.

Evonik shares rose 1.5 percent to 31.27 euros as of 9:45 a.m. in Frankfurt, valuing the company at 14.6 billion euros. The stock has gained 15 percent this year, compared with the 19 percent increase in the MDAX index of medium-sized German companies.

As MRC wrote before, Evonik Industries, a leading specialty chemicals manufacturer, will be able to produce the plasticizer alcohol 2-propyl heptanol (2-PH) much more efficiently at the Marl site. This is made possible by the development of the new ligand OxoPhos 64i; ligands are important components of catalysts and essential for many large-scale processes.

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.
MRC