PS production in Russia grew by 3% in January-February 2015

MOSCOW (MRC) - Production of general purpose polystyrene (GPPS) and high impact polystyrene (HIPS) in Russia increased to 61,700 tonnes in January-February 2015, up 3%compared with the same time a year earlier, according to MRC ScanPlast.

February production of GPPS and HIPS in Russia was about 30,000 tonnes, down almost 6% year on year. The capacity utilisation at Russian plants practically did not change. The decline in production in February is traditionally resulted from a shorter calendar month.

Traders said that the demand in the spot market of GPPS exceeded the demand for HIPS in the first two months of the year. At the same time there was a strong buying activity for XPS.

Some traders experienced a shortage of GPPS from Gazprom neftekhim Salavat. Nizhnekamskneftekhim is the largest producer of general purpose polystyrene and high impact polystyrene in Russia.

The second largest producer of GPPS in the country is Penoplex. General purpose polystyrene Styrovit brand (produced by Penoplex in St Petersburg) goes completely for the processing needs of the company.
MRC

Saudi Kayan olefins plant resumes production

MOSCOW (MRC) -- Saudi Kayan Petrochemical Company has restarted production at its olefins plant following a near two-month shutdown for maintenance work, the company said on Sunday, reported TradeArabia.

Saudi Kayan said on February 1 it would shut several units at its petrochemicals complex in Jubail for about five weeks, while on March 12 it revealed it had extended maintenance work at its olefins plant after a fault was discovered.

This plant resumed operations on Thursday, the company said in a Sunday bourse filing.

Olefins are a form of hydrocarbons, two of which include ethylene and propylene.

As MRC wrote before, Saudi Arabia’s Oil Ministry 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. 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.

Manufacturing a wide range of petrochemicals, the Riyadh-based company’s products include ethylene, propylene and derivatives. Saudi Basic Industries Corporation (SABIC) formed Saudi Kayan Petrochemicals Company in 2007 to produce chemicals for export at the Jubail Industrial City on the Kingdom’s east coast. SABIC owns 35% of the company. A private shareholder, Al Kayan Petrochemical Company, holds a further 20%. The remaining 45% is held by Saudi shareholders following an initial public offering last year.
MRC

Chandra Asri seeks new incentives for cilegon polybutadiene project

MOSCOW (MRC) -- Jakarta-listed PT Chandra Asri Petrochemical (CAP), the country’s largest petrochemical producer, has filed a request with the Indonesian government seeking additional tax incentives for a polybutadiene (BR) plant under construction in Cilegon, Indonesia, The Jakarta Post reported.

CAP's Petrokimia Butadiene Indonesia (PBI) subsidiary and Michelin in 2013 formed Synthetic Rubber Indonesia as a joint venture to build a USD435-million BR facility in Cilegon.

The plant will produce BR using a neodymium catalyst and solution styrene butadiene rubber, with feedstock supplied by PBI. Production is scheduled to begin in 2017.

The government's current incentives involve an income tax reduction over a period of five to 10 years for projects with a minimum investment of USD76.7-million in high-priority industries, one of which is petrochemicals. The project has already received a five-year tax holiday.

Revised tax holiday and tax allowance regulations, as well as additional incentives, are currently under review by the government. The review is expected to be completed before July.

As MRC informed earlier, in 2013, German petrochemical company Ferrostaal Industrial Projects GmbH and Chandra Asri agreed to work on studies for the development of a petrochemical plant. Under an agreement, Ferrostaal and Chandra Asri will develop 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.
MRC

Evonik develops new lubricant additives to save fuel

MOSCOW (MRC) -- Evonik Industries, one of the world’s leading specialty chemicals companies, has developed a new generation of lubricant additives. With the launch of these products, Evonik has expanded the range of lubricant solutions that they offer to the automotive industry, as per the company's press release.

These additives maintain the viscosity (thickness) of the lubricant at an optimized level across a broad range of temperatures, while offering additional protection against wear and tear. In addition to reducing vehicle fuel consumption by three to four percent, this latest generation of Evonik lubricant additives also extends the life of engines and transmissions.

Claus Rettig, who heads up Evonik’s Resource Efficiency Segment, notes: "We offer our customers solutions that enable them to use resources efficiently. Our latest high-performance additive expands our leadership in lubricant additive technology. At the same time, it also strengthens our position as a provider of environmentally sound, energy-efficient system solutions for the automotive industry."

The growth of the global market for high-performance lubricant additives is outpacing that of other markets. The reasons for this, according to Rettig, are increasing mobility as well as increasing demand in Asia for high-performance lubricants containing a higher proportion of additives. In response, Evonik has recently and significantly expanded its production capacities at its Singapore manufacturing facilities.

This new generation of additives represents an extension of a class of polymers known as comb polymers. On the market since 2010, these materials are gaining increasing acceptance for use in high-performance lubricants. Because they reduce fuel consumption, and thereby help reduce carbon dioxide emissions, their use in factory, or first-fill oils for new cars is becoming increasingly common.

As MRC wrote previously, Evonik Industries is paving the way for a new technology whose applications include automotive finishes that are more scratch-resistant than ever before. In March 2014, the specialty chemicals company developed an industrial-scale method for producing silane-modified binders for automotive finishes. The advantage of these silane-modified binders: silane groups increase crosslinking density, making it possible to create automotive finishes that are flexible yet harder, leading to improved scratch resistance.

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 2014 more than 33,000 employees generated sales of around EUR12.9 billion and an operating profit (adjusted EBITDA) of about EUR1.9 billion.
MRC

Poland to build biggest propylene plant in Europe

MOSCOW (MRC) -- Poland’s Grupa Azoty is making a USD450m entry into the global propylene market, in a move that underscores its position as one of Europe’s biggest chemical companies, said Financial Times.

The investment, the largest in the company’s history, will create Europe’s biggest production plant for propylene, a critical chemical in the production of plastics and solvents, used in a range of products including car parts, carpets and toys.

Grupa Azoty is one of only a handful of Polish business giants that has managed to turn national dominance into international clout, amid long-overdue efforts by the country’s government to encourage overseas expansion and investment in new business areas among its largest corporates.

Pawel Jarczewski, the company’s chief executive, said the investment was of "historical magnitude". "It opens up a whole new sphere for future development for the company," he told the Financial Times. "This investment confirms Grupa Azoty’s position as?.?.?.?Europe’s emerging player on the chemical market."

The new plant is capable of producing 400,000 tonnes of propylene a year and will begin production in 2019. This is expected to increase the Warsaw-listed company’s annual revenue by 20 per cent to 12bn zloty (USD3.2bn).

Europe is estimated to have a deficit of about 1,000 tonnes of propylene per year. The plant, to be built in Police on Poland’s northern Baltic coast, will export 60 per cent of its production, the company said.

"There is a significant market gap in Europe [for propylene]," Mr Jarczewski said. "This is a highly profitable project."
The investment, part of Grupa Azoty’s planned USD2bn capital expenditure push between now and 2020, is expected to be funded by new financing, but the company declined to provide details.

Grupa Azoty, which is controlled by Poland’s government, is also eyeing up as many as 10 overseas acquisitions, as part of an aggressive diversification push to catch up with global rivals. The company is evaluating takeover options in the Czech Republic, Hungary and Lithuania, as well as investment opportunities in Africa, Malaysia and South America.

The spending spree comes as Warsaw tentatively steps back from a risk-averse approach to managing its state-run enterprises, in a tacit acknowledgment that the country’s national champions lag behind their global rivals and must expand internationally in order to stay competitive.

KGHM, a Polish state-controller copper miner, snapped up mines in Canada, the US and Chile in 2012, state-run petrochemical company PKN Orlen bought a Canadian oil and gas producer last year, and PKO Bank Polski has been given the green light to start operations in the rest of Europe.

Poland’s treasury minister Wlodzimierz Karpinski, who ultimately oversees the government’s investments, said in a statement that he supported Grupa Azoty’s "innovative investment of strategic importance for the country and the continent".

As MRC informed earlier, Grupa Azoty has signed a contract with Uhde Inventa-Fischer of Germany under a project to construct a new Polyamide 6 Plant in Tarnow. The contract is for the purchase of licences, process design and project equipment. The capex budget for the project totals PLN 320m. The project is scheduled for completion in December 2016 and will add 80,000 tonnes to Grupa Azoty’s annual polyamide production capacity.

MRC