No.3 MEG plant to restart operations by Nan Ya Plastics

MOSCOW (MRC) -- Nan Ya Plastics is in plans to resume operations at its No.3 monoethylene glycol (MEG) plant, said Apic-online.

A source in Taiwan informed that the plant was taken off-stream during early September 2015. The plant is likely to resume production on October 9, 2015 following a maintenance turnaround.

Located in Mailiao, Taiwan, the No.3 MEG plant has a production capacity of 360,000 mt/year.

Nan Ya Plastics Corporation was founded in 1958. The four main product categories of the company are plastics processing, plastic materials, electronics materials and polyester product. Nan Ya Plastics Corporation believes, based on public information released by its competitors, that it 's the world's largest manufacturer of secondary plastics in terms of production capacity. It's also a leading manufacturer of polyester fibers and copper clad laminates of the electronic materials in the world.
MRC

Moodys assigns Baa2 issuer rating to Covestro AG; stable outlook

MOSCOW (MRC) -- Moody's Investors Service, ("Moody's") has today assigned a Baa2 issuer rating to Covestro AG (Covestro). This is the first time that Moody's has assigned ratings to Covestro. The outlook on the rating is stable, said the agency.

The Baa2 issuer rating reflects Covestro's leading positions in the global polyurethane and polycarbonate markets, which are characterized by oligopolistic structures and significant barriers to entry reflecting high capital intensity and limited access to tightly held proprietary process technologies. Covestro's high performance plastics and engineering resins enjoy solid long-term demand fundamentals driven by a number of global megatrends, such as urbanisation, rising living standards and the need for improving energy efficiency.

While exhibiting some degree of product concentration (with about three quarters of its sales and two thirds of its profits generated by polyurethanes and polycarbonates), Covestro's portfolio enjoys significant geographical and end-market diversification reflecting the global footprint of its manufacturing and sales activities, and its ability to serve global customers in a wide range of applications.

Also, Covestro's cost position is underpinned by world scale production facilities located across the main three regions of Europe, North America and Asia and complemented by an extensive network of polyurethane systems houses and polycarbonate compounding facilities, efficient process technologies and backward integration into some key feedstocks such as chlorine and carbon monoxide, which are typically produced on site, and propylene oxide, for which there is no sizeable, liquid merchant market.

However, Covestro remains exposed to the volatility of raw materials, which account for more than 50% of its total cost of goods sold and include primarily petrochemical derivatives such as benzene and phenol, whose pricing is linked to the price of crude oil. Its ability to pass onto customers fluctuations in raw materials costs may be constrained by periodic demand/supply imbalances affecting the global polyurethane and polycarbonate markets arising mainly from extended investment cycles. In recent years, Covestro's financial performance has been affected by weak utilisation rates due to the rapid build-up of new capacity leading to intensifying competition, while trading conditions in polycarbonates were further depressed by the rapid decline in demand for optical data storage.

Looking ahead, while the start-up of additional capacity is likely to keep industry utilisation rates for polyurethanes under pressure in 2015-2016, we expect Covestro to grow future volumes by leveraging the production capacity recently added to its portfolio. Its future operating profitability should be further underpinned by the further optimization of its asset base, including the closure of the Belford Roxo MDI plant in Brazil and the consolidation of its TDI asset base in Germany, as well as a continuous focus on efficiency helping to generate savings in excess of fixed cost inflation.

Following the recent IPO, the capital structure of Covestro is positioned in line with its conservative financial policies, which target leverage as measured by reported net financial liabilities (including EUR1.5 billion of net pension liabilities) to EBITDA of 2.5x to 3.0x.

As MRC informed earlier, Covestro AG gained as much as 12% on the first day of trading after slumping global stock markets forced the plastics maker owned by Bayer AG to cut the size of its initial public offering by 40%.

Bayer is a global enterprise with core competencies in the fields of health care, agriculture and high-tech polymer materials. As an innovation company, it sets trends in research-intensive areas. Bayer's products and services are designed to benefit people and improve their quality of life. At the same time, the Group aims to create value through innovation, growth and high earning power. Bayer is committed to the principles of sustainable development and to its social and ethical responsibilities as a corporate citizen. In fiscal 2014, the Group employed 118,900 people and had sales of EUR 42.2 billion.

MRC

Chandra Asri shuts HDPE plant

MOSCOW (MRC) -- Chandra Asri shut its high density polyethylene (HDPE) plant for a maintenance turnaround, said Apic-online.

A source in Indonesia informed that the plant was taken off-stream on September 25, 2015. It is likely to remain shut for around 3 months.

Located in Cilegon, West Java, Indonesia the HDPE plant has a production capacity of 135,000 mt/year.

As MRC informed before, Moody's Investors Service changed the outlook of Chandra Asri Petrochemical Tbk (CAP), the country’s largest petrochemical producer, to stable from negative. Concurrently, Moody's affirmed CAP's B2 corporate family rating (CFR).

Chandra Asri Petrochemical (CAP) is the largest vertically integrated petrochemical company in Indonesia with facilities located in Ciwandan, Cilegon and Puloampel, Serang in Banten Province. CAP is Indonesia's premier petrochemical plant incorporating world-class, state-of-the-art technology and supporting facilities. At the heart of CAP lies the Lummus Naphtha Cracker producing high quality Ethylene, Propylene, Mixed C4, and Pyrolysis Gasoline (Py-Gas) for the Indonesian as well as regional export markets.
MRC

Iran starts marketing for petrochemical exports to Europe

MOSCOW (MRC) -- Director general of the Association of Petrochemical Industry Corporations (AIPC) has referred to the talks with some European petrochemicals distributors estimating increased export in petrochemicals after the removal of sanctions, said Mehrnews.

Explaining Iran’s new plans to export petrochemical and plastic products to EU member countries after the lifting of sanctions, Ahmad Mahdavi said that, "currently, we are not experiencing any problems in exporting petrochemicals."

Announcing that exports to new markets like Europe have been put on the agenda in time with the increase in production capacity of petrochemical products, he asserted that, "accordingly, negotiations with some major petrochemical and polymeric companies have been launched."

The official further referred to talks with a major petrochemicals distributor in Brussels adding that, "as a result of the preliminary agreement, the company will be in charge of marketing and sale of Iran’s petrochemicals in European countries."

Pointing to the operation of several new petrochemical complexes, he underlined that, "new petrochemical projects will soon become operational in the country leading to increased production and export of petrochemical products."

Before the rise of sanctions, 10 to 14 percent of Iranian petrochemical products were exported to Europe bringing a profit of about 2 to 2.5 billion dollars to the country.

At the moment, despite the nuclear agreement, Iran’s petrochemical exports to Europe has not made a significant improvement due to certain problems including insurance limitations, currency transfer issues as well as supply of ships.

As MRC informed earlier, a petrochemical official has announced upcoming official operation of second phase of Kavian petrochemical complex as the world’s greatest ethylene producing unit by September in Assaluyeh.

MRC

SABIC chief expects decision on USD30bn Saudi project in Q2

MOSCOW (MRC) -- Saudi Basic Industries Corp (SABIC), one of the world’s largest petrochemicals groups, expects to make a decision in the second quarter of 2016 on whether to go ahead with a USD30bn oil-to-chemicals plant project, its chief executive said, said Gulfbusiness.

Yousef Abdullah Al-Benyan, SABIC’s acting vice chairman and CEO, said the economics of the project, whose potential investment size he confirmed, were being assessed and there was a 50/50 chance it would proceed. If it went ahead, he told Reuters in an interview in Seoul, the crude to supply the plant planned for Yanbu on the west coast of Saudi Arabia would be procured at market rates.

Saudi petrochemicals companies faced by constraints in gas supplies are diversifying their feedstock mix, and use oil derivative products such as naphtha. Saudi Aramco, the world’s biggest oil producer, has also been exploring the possibility of a similar project – turning oil to chemicals or olefins, used to make synthetic fibres.

Last year, SABIC said it expected the proposed oil-to-chemicals plant to start operations by the end of 2020.

Al-Benyan also said he expected a more positive outlook for the industry in Asia in 2016, with less price volatility than this year. "Our current indications, especially for Asia, we could see 2016, to me, it’s going to be more positive than 2015," he said.

Al-Benyan was in South Korea for the inauguration of a polyethylene plant in the city of Ulsan that it owns in a 50/50 joint venture with the SK Global Chemical arm of SK Innovation. "The outlook for next year at least, we will not have more of the experience that we have experienced this year in terms of volatility," he said, referring to Asia.

Al-Benyan said demand in the region was healthy: "You don’t see any slowdown in demand per se if you compare it to the price volatility. I think the issue is the price. This is what’s really depressed some of the earnings of the companies."

As MRC informed earlier, Chemical maker Sabic Innovative Plastics will close its compounding plant in Thorndale, Pa. According to Pittsfield, Mass.-based Sabic, the plant is being shuttered because it is too far away from end users in the Pacific region of the U.S.

Saudi Basic Industries Corporation (Sabic) ranks among the worldпїЅs top petrochemical companies. The company is among the worldпїЅs market leaders in the production of polyethylene, polypropylene and other advanced thermoplastics, glycols, methanol and fertilizers.
MRC