A. Schulman to build PP compounding in Saudi Arabia

MOSCOW (MRC) -- Materials supplier A. Schulman Inc. is expanding capacity in the Middle East with a large polypropylene (PP) compounding plant, in a joint venture with Saudi resin maker National Petrochemical Industrial Co., said the company in its announcement.

The company said the new facility, in Yanbu, Saudi Arabia, will have capacity of 220 million pounds a year. It will be located next to an existing 880 million pound PP resin manufacturing plant operated by Natpet, which will supply the material for compounding.

The US firm seems increasingly interested in the region, and said the 50/50 joint venture with Natpet will let it better supply customers in Europe, the Middle East, Asia, Africa and India.

Horst Klink, vice president of engineering plastics for Europe, the Middle East and Africa, said the majority of Yanbu’s production would be targeted outside the immediate Persian Gulf region.

He said Natpet’s PP resin plant uses LyondellBasell’s Spheripol technology, and provides the joint venture with compounding capacity to enter large volume markets.

"It puts us in a position to compete with the big producers, as if we’re backward integrated, which we are as a JV," he said in at the PlastEurasia show in Istanbul. "We are also in a position to offer large volumes. So far we have been a niche player, in niche applications."

The company said it is seeing increased demand from durable goods, automotive and electronics markets in the Middle East, Africa and India.

The joint venture plant will make the company’s line of Polyfort and Polyflam flame retardant compounds, along with other materials, Klink said.

Fairlawn, Ohio-based Schulman announced earlier this year it was building a smaller masterbatch facility in Turkey, and in a Dec. 3 interview at a trade fair in Istanbul, an executive said the company may follow that with an engineering plastics compounding plant in Turkey.

As MRC wrote previously, Materials firm A. Schulman Inc. plans to spend 5 million to EUR7 mln (USD5.5 mln to USD7.7 mln) on a new masterbatch facility in Turkey, to tap into market growth in the region.

A. Schulman is a global plastics supplier, headquartered in Akron, Ohio, and a leading international supplier of high-performance plastic compounds and resins, which are used as raw materials in a variety of markets. A. Schulman has 33 manufacturing facilities globally. A. Schulman's fiscal third-quarter earnings fell 69% amid continued sluggishness in European markets and higher-than-expected costs in Latin America, where the company has been consolidating its Brazilian operations.
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MOSCOW (MRC) -- Saudi Basic Industries Corp. said it will consolidate three of its technology and innovation operations into its Selkirk facility, reported Rubber&Plastics News.

The firm will close its Pittsfield Polymer Processing Development Center, located in Pittsfield, N.Y., and its facility in Exton, Pa.

The moves are expected to be complete in 2017, once necessary modifications are done at the Selkirk site.

"This integration will not only drive important efficiencies, it will also merge material science, process engineering and application development into a collaborative environment that will lead to new innovation breakthroughs," Awadh Al-Maker, executive vice president, Sabic Technology & Innovation, said in a statement.

Sabic specializes in engineering thermoplastic resins and compounds, such as composites, functional surfaces and substrates, and also offers additive manufacturing solutions, part design, finished parts and materials processing. It serves industries such as mass transportation, health care, displays and electronics, and architectural specialties.

"A collaborative R&D environment will result in a wide variety of problem-solving options for our customers and will accelerate our development cycle," Thierry Materne, vice president, Technology & Innovation, said in a statement.

As MRC wrote previously, in early 2015, Sabic and South Korean petrochemical company SK Global Chemical inaugurated a new industrial plant to manufacture a range of high-performance polyethylene products using the cutting-edge Nexlene Solution Technology. The 50-50 joint venture holding company, SABIC SK Nexlene Company (SSNC) was established last July and is headquartered in Singapore. Its wholly-owned subsidiary, Korea Nexlene Company (KNC), owns the plant in Ulsan, which has an annual capacity of 230,000 tons. The aggregate purchase price for the technology and plant is approximately USD 640 million.

Sabic, headquartered in Riyadh, Saudi Arabia, claims to be the world’s third largest diversified chemical company, producing polyethylene, polypropylene and other advanced thermoplastics, glycols, methanol and agri-nutrients. It recorded a net profit of USD6.2 billion in 2014 and posted sales of USD50.2 billion. Sabic’s businesses are grouped into Chemicals, Polymers, Agri-Nutrients, Metals and Innovative Plastics. It has hubs in five regions - the U.S., Europe, Middle East, Southeast Asia and Northeast Asia - operating in more than 50 countries with 40,000 employees worldwide. The Saudi Arabian Government owns 70 percent of Sabic shares with the remaining 30 percent publicly traded on the Saudi stock exchange.
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MOSCOW (MRC) -- The 2016 sector outlook for North American chemicals is stable, according to a new Fitch Ratings report.

Producers are benefiting from solid demand in domestic manufacturing and the recovery in US construction and consumption, despite the sector being comprised of many heterogeneous products, each with its own competitive dynamics and end-market exposure.

Fitch expects producers to manage trade headwinds from weaker emerging markets and the stronger dollar, as well as commodity price deflation.

Fitch believes rating changes will be related to event risk from recapitalization events, divestitures or acquisitions rather than a slowing global economy.

More than 20% of revenues for some North American issuers come from EMEA, where demand growth is expected to be positive but weak. China is struggling to shift its economy toward consumption and away from construction and exports, resulting in sharply lower growth. Brazil and Russia are in recession and their currencies have sharply depreciated. The stronger US dollar challenges exports and earnings upon translation but is less of a headwind for producers with local currency production, hedges or pricing power.

Deflation in the energy sector has filtered through to lower prices for petrochemicals, plastics and other chemicals with energy-related feedstocks, resulting in lower sales, earnings and cash flow. After three bumper crops in a row, crop prices are weak, pressuring farm economics and weighing on fertilizer, crop protection and seed prices. Low costs and/or strong market positions have resulted in resilient margins.

Low North American natural gas and natural gas liquids (NGLs) prices remain cost advantages as a result of strong supply, even after the drop in oil prices. The drop in oil has resulted in lower olefin prices, but integrated producers have benefited from better pricing dynamics as a result of robust demand for downstream polymers

Productive capacity has been increasing with China's drive for self-sufficiency in construction and agricultural chemicals, expansion of low-cost olefins and ammonia production in the US and potash in Eastern Europe and expectation for strong growth in the emerging markets. The downturn in emerging markets has resulted in excess supply for some chemicals, hurting pricing, earnings and cash flow.
MRC

MOSCOW (MRC) -- Husky Energy Inc. is considering the sale of part of its vast midstream business and will cut capital spending – particularly in Alberta – in 2016 to make itself more resilient in a low oil price environment, said Business.financialpost.

Since late 2014, the West Hercules rig has undertaken an appraisal program related to the Bay du Nord discovery in the Flemish Pass basin. Appraisal activities are progressing as expected and will continue into early 2016.

"The Bay du Nord appraisal program has been progressing well and further drilling is planned for 2016," said CEO Asim Ghosh. "We expect the results of this appraisal to further increase our understanding of the scope of this significant opportunity."

Additional information updates are expected following the conclusion of the program. Husky holds a 35% working interest in the Bay du Nord, Mizzen and Harpoon discoveries in the Flemish Pass.

The divestments at Lloydminster, which straddles the provincial border between Saskatchewan and Alberta, would "unlock value" while strengthening Husky’s balance sheet, it said.

Any divestment would not include downstream assets such as the company’s Lloydminster oil sands upgrader or its refineries, it said.

Furthermore, Husky would want to retain operatorship of the midstream assets in order to maintain a tight integration between its upstream and downstream operations, it added.

Husky’s business plans are based on a West Texas Intermediate (WTI) oil price assumption of USD40/bbl. For future investments its "earnings break-even point" is USD30/bbl or less, the company said.

As MRC informed earlier, in the late November, Husky Energy Inc. on Wednesday said it would proceed with another heavy-oil thermal development in Saskatchewan, and announced an investment in its Lima, Ohio, refinery to allow the facility to shift between light and heavy crude oil.

Husky made thin-wall molds for years, but exited in-house production in the mid-1990s to focus on its growing PET mold and hot-runner operations. In 2011, Husky bought Austrian closure-mold specialist KTW Group.
Now picking up Schottli brings a broader mold focus, but one that is still within Husky's sweet spot of thin-wall, fast-cycling parts.
MRC

MOSCOW (MRC) -- PetroRabigh is in plans to restarts its Linear density polyethylene (LLDPE) plant following a maintenance turnaround, as per Apic-online.

A Polymerupdate source in Saudi Arabia informed that the plant is expected to be back online during this week. It was under a maintenance turnaround since early October 2015.

Located in Rabigh, Saudi Arabia, the LLDPE plant has a production capacity of 600,000 mt/year.

As MRC informed earlier, PetroRabigh is in plans to resume operations at its high density polyethylene (HDPE) plant in Saudi Arabia this week. It was under a maintenance turnaround since early October 2015. Located in Rabigh, Saudi Arabia, the plant has a production capacity of 300,000 mt/year.

Besides, we remind that in April 2015, Rabigh Refining & Petrochemical Co. (Petro Rabigh) received ownership of the Rabigh Phase II project from Saudi Aramco and Sumitomo Chemical, major shareholders in Petro Rabigh, and will now integrate the project into Petro Rabigh's existing refining and petrochemical complex in Rabigh, Saudi Arabia.

The Rabigh II project, expected to cost about USD 8.1-billion, involves expanding an existing ethane cracker and adding production of ethylene propylene rubber, thermoplastic polyolefins, methyl methacrylate monomer, polymethyl methacrylate, low-density polyethylene/ethylene vinyl acetate, paraxylene/benzene, cumene and phenol/acetone. Production facilities are expected to begin operations "one after another, beginning in the first half of 2016," Sumitomo said.

PetroRabigh, a joint venture between Saudi Aramco and Japan's Sumitomo Chemical, has an annual output capacity of 18 million tonnes of refined products and 2.4 million tonnes of petrochemicals. Thus, the complex currently has a cracker to produce 1.3-million t/y of ethylene and 900,000 t/y of propylene, as well as downstream production of polyethylene, polypropylene, propylene oxide, ethylene glycol and butene-1.
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