BASF announced preliminary 2015 operating results

MOSCOW (MRC) -- BASF, the world's petrochemical major, has announced preliminary, non-audited figures for 2015. As forecast by BASF, sales and income from operations (EBIT) before special items for the full year 2015 are slightly below the level of the previous year, reported the producer on its site.

Thus, sales decline by 5% to EUR70.4 billion (2014: EUR74.3 billion). EBIT before special items in 2015 is expected to be EUR6.7 billion (2014: EUR7.4 billion). The decrease in sales is primarily due to the divestiture of the natural gas trading and storage activities. The decline in EBIT before special items is due in particular to significantly lower earnings in the Oil & Gas and Chemicals segments in the fourth quarter of 2015 compared with the same period of 2014. In the Chemicals segment, this is mainly due to lower margins in the Petrochemicals division.

For the full year 2015, EBIT of BASF Group is expected to be EUR6.2 billion. This significant decline compared with the level of the previous year (2014: EUR7.6 billion) is mainly due to impairments in the Oil & Gas segment. The company had previously expected only slightly lower EBIT in the full year 2015. The reason for the impairments in the Oil & Gas segment is the strong decline in oil and gas prices in the past months. BASF anticipates that prices for oil and gas will remain at a low level in 2016. The assumptions for oil and gas prices have also been reduced for subsequent years. This results in impairments of around EUR600 million in the Oil & Gas segment. This amount, which does not affect cash flow, is reported as a special item and reduces EBIT in the Oil & Gas segment in the fourth quarter of 2015.

On February 26, 2016, BASF will publish its Consolidated Financial Statements for 2015 and will comment on the figures at its Annual Press Conference.

As MRC reported earlier, last year, BASF sold its 25% share in the joint venture SolVin to Solvay. The transaction took place on July 1, 2015. Financial details were not disclosed. In addition, BASF said it had reached agreements with Solvay and Inovyn to continue to supply BASF’s site in Antwerp with basic chemicals.

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 over EUR74 billion in 2014 and over 113,000 employees as of the end of the year.
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US Farathane continues global expansion with move into China

MOSCOW (MRC) -- Injection molder US Farathane Corp. has staked out more international territory by acquiring Shanghai-based Boston Plastics, said Plasticsnews.

The firm finalized the purchase Jan. 22 for undisclosed terms, a spokesperson said. The Jan. 27 announcement of the deal came two weeks after Farathane revealed it bought Tepso Plastics Mex to give it two manufacturing plants in Mexico.

Boston Plastics does injection molding and assembly in Shanghai, Taicang and Changchun. About half its business is molding automotive parts such as interior components, with the rest split between industrial and other markets. It was established in Singapore in 2005.

Farathane’s international profile is expanding a year after private equity Gores Group acquired the company. Gores’s principals have experience in Asia and other markets and are helping guide Farathane’s growth. A spokesperson said Farathane is now looking at Eastern Europe for a potential manufacturing location.

Farathane said the China deal puts it into the largest global auto market in the world, and will help the firm serve carmakers in both the United States and China.

"The acquisition will enable us to increase US Farathane’s immediate reach into the China market, while simultaneously opening up new business with direct OEMs," said Boston Plastics general manager Eddie Chia in a news release.

The latest deal gives Farathane a total of 16 manufacturing plants in China, Mexico and the United States. It is headquartered in Auburn Hills, Mich.

Stout Risius Ross Advisors LLC and Mummert & Co. served as financial advisers to Boston Plastics.

With 16 manufacturing facilities in the United States, Mexico, and China and headquartered in Auburn Hills, MI, US Farathane Corporation is a leading solutions partner to the North American automotive OEMs providing functional black plastic and interior and exterior plastic components. US Farathane is ISO 9001 and ISO 14001 certified as well as TS 16949 certified. US Farathane customers include FCA, Ford, General Motors, Honda, Toyota, and several other large global OEMs.
MRC

Saudi Sadara set to start up butyl glycol plant in H2

MOSCOW (MRC) -- Saudi Arabia’s Sadara Chemical Co. (Sadara) is on schedule to start up the new butyl glycol (BG) plant in the second half of 2016, said Argaam.

The Jubail-based plant will have a combined BG and and butyl di-glycol (BdG) capacity of 200,000 tons per year.

As MRC informed earlier, on 8, December 2015, Sadara Basic Services, fully owned by Sadara Chemical, started at its polyethylene (PE) plant in Jubail Industrial City II. The plant is designed to produce 375,000 metric tons per year of products used in specialty applications, such as the manufacture of food-grade plastics, industrial and consumer packaging and health and hygiene films, it said in a bourse statement.

The USD20 billion Sadara is 65 percent-owned by Saudi Arabian Oil Co. and 35 percent-owned by the United States' petrochemical major, Dow Chemical.

Located in Jubail Industrial City, Sadara is deemed the world’s largest chemicals complex built in a single phase with 26 integrated manufacturing plants.


MRC

PET market in North America to be driven by beverage bottles

MOSCOW (MRC) -- Replacement of traditional packaging applications and reduced atmospheric emissions are the reasons for increase in the demand of Polyethylene Terephthalate (PET) market, as per Research and Markets.

About 72% of the PET resin demand was from the bottle application, driven by the beverage bottles for mineral water, carbonated soft drinks, ready to drink tea, and functional, dairy, and energy drinks. It is expected that light weight PET bottle trend will continue in future as it is a cost saving measure. Polyethylene terephthalate (PET) are used in an increasing number of markets - from Packaging, Automotive, Electrical & electronics, Consumer Appliances and others.

The key drivers of PET industry are population growth, rise in disposable income, urbanization in developing economies, and growing fast moving consumer goods, and restraint such as being a capital and technology intensive industry.

Demand for PET is rising with polyester and food and beverages industries determining market behavior.
The market is and will be characterized by excessive capacity bringing it to oversupply. The influence of PET performs sector is decreasing as packaging industry witnesses change to lighter-weighted bottles and carbonated drinks consumption decline (especially in North America), besides the share of recycled material application is growing.

As MRC informed previously, global bio based PET market is expected to reach 5,800 kilo tons by 2020 , according to a new study by Grand View Research, Inc.
MRC

Mexican Etileno XXI cracker PE production inches closer

MOSCOW (MRC) -- Polyethylene production at Mexico's Etileno XXI petrochemical complex is on course to begin in Q1-2016, with resins available to the US market, said Plastemart, citing Platts.

"We hope to start production of the first PE grades in March and by Q2 we will have various grades available to export to the US,' the source said. Company officials previously said the cracker would begin operations in February, with the startup of output at the polyethylene plants coming in March. There was market talk that PE resins from the complex would not be available to the US market. However, that claim was dismissed as exports to the US have always played a part in the company's strategy.

The project is anchored by a 1 mln mt/year ethylene steam cracker and includes 1 mln mt/year of PE capacity.

The joint venture between Brazil's Braskem (with 75%) and Mexico's Grupo Idesa (25%) will focus on meeting Mexico's growing PE demand, with remaining output available for export, including to the US and South America.

As MRC wrote before, in 2012, Braskem Idesa announced the approval of a line of credit in the amount of USD700 million by the Brazlian National Economic and Social Development Bank - BNDES to finance the construction of the largest petrochemical complex being developed in the Americas: Braskem Idesa- Etileno XXI Project. The group of financial institutions will also include Mexico's development banks, Bancomext and Nafinsa- Nacional Financiera, and commercial whose loans are subject to the completion and closing of the formal documentation.

Braskem is Brazilian main producer of polyethylene and polypropylene. In addition with ongoing plants located in both petrochemical complexes, in April 2008 Braskem opened a 300,000 metric ton polypropylene plant in the city of Paulinia (Sao Paulo).
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