Mitsui & Hankuk Carbon Co in strategic alliance agreement for processing of composite materials

MOSCOW (MRC) -- Mitsui & Co., Ltd. and Hankuk Carbon Co., a company listed on the Korea Exchange, have entered into a strategic alliance agreement to engage in collaborative business activities relating to the processing of composite materials, according to Mitui's press release.

Based on this agreement, Mitsui will acquire a 10% equity stake in HC (on a voting rights basis) for an investment of KRW 30.6 billion.

Action to tackle global warming has become an urgent international priority. The development of lighter parts and materials to reduce energy consumption by transportation equipment, especially in motor vehicles, is seen as an important approach to the solution of this problem, and the market for lightweight materials, such as carbon fiber, is expected to expand rapidly. However, use of these materials has so far been limited by high manufacturing costs, and wider use will require the development of cost-competitive materials and parts.

HC, established in 1984, has developed and expanded its unique capabilities to manufacture a variety of composite products. It plans to accelerate the development of its composite materials by targeting aerospace, automotive and other transportation equipment fields for which high growth is projected in the future.

Mitsui strives to develop business initiatives in the seven key strategic domains defined in its New Medium-term Management Plan. This investment spans two of those key strategic domains: "mineral resources and materials", and "mobility".

In April 2015, Mitsui signed an agreement concerning cooperation on composite materials research and an equipment lease agreement with the Innovative Composite Materials Research and Development Center of the Kanazawa Institute of Technology. Mitsui and ICC have since commenced collaborative development of new manufacturing methods for automotive parts and other products made of carbon fiber composite materials.

On February 27, 2016, Mitsui entered into an agreement to acquire a 25% stake in Hexagon Composites ASA, a Norwegian manufacturer of composite pressure vessels.

Mitsui and HC have built a strong partnership based on a business relationship spanning almost 30 years. Under the new capital alliance, the two companies will respond to the need for lighter transportation equipment by building and strengthening a manufacturing supply chain for materials and parts made of carbon fiber and other composites.

We remind that, as MRC wrote before, in late 2014, Mitsui Chemicals announced that its Shanghai Sinopec Mitsui Elastomers Co. joint venture with Sinopec had launched commercial production of ethylene propylene diene terpolymer (EPT). In 2012, the two companies created the equally-owned joint venture to build a 75,000-t/y EPT plant using metallocene catalyst technology in China's Shanghai Chemical Industry Park.

Mitsui Chemicals is a leading manufacturer and supplier of value added specialty chemicals, plastics and materials for the automotive, healthcare, packaging, agricultural, building, and semiconductor and electronics markets. Mitsui Chemicals is a Japanese Chemicals company, a part of the Mitsui conglomerate. The company has a turnover of around 15 billion USD and has business interests in Japan, Europe, China, Southeast Asia and the USA. The company mainly deals in performance materials, petro and basic chemicals and functional polymeric materials.
MRC

MOSCOW (MRC) - Last week Chinese producers announced an increase in export prices for acetylene polyvinyl chloride (PVC) for March deliveries of USD30/tonne, according to ICIS-MRC Price Report.

Producers from the north of China announced an increase in export prices for acetylene resin for shipments in March in Russia and Kazakhstan of USD30/tonne compared with the February level on the back of rising PVC price in the domestic market.

At the same time, Chinese producers said they temporarily can not ship the resin in containers by rail way.
Prices for acetylene PVC increased to USD650-680/tonne DAP Dostyk from 10 March, while resin for February delivery ranged USD620-650/tonne DAP Dostyk.

March deals for container shipments by direct train to the Moscow region were discussed in a range of USD680-700/tonne CIP. However, because of the lack of sufficient number of containers Chinese producers temporarily refrained from this kind of PVC supplies.

As it was reported earlier, in addition to PVC price growth in China, Russian companies may be faced with the problem of customs clearance. Indicative price (Estimated price for taxes valuation) on acetylene resin is USD850/tonne.
MRC

MOSCOW (MRC) -- Grupa Azoty, the European Union’s second-largest fertiliser producer, reported a strong set of annual results on Friday, closing FY2015 with a record-high net profit of PLN692m (PLN265m in 2014, +PLN427m y/y), and exceeding PLN10bn in sales revenues for the first time (PLN9.9bn in 2014), said the producer on its site.

Grupa Azoty is Poland’s largest chemical company and the EU’s second-largest producer of fertilisers. In December 2015, the company featured in a Boston Consulting Group ranking of top ten most value-creating chemical companies in the world.

Commenting on the results announcement, Mariusz Bober, Grupa Azoty’s Chief Executive Officer, said:
These results beat analysts’ expectations, confirming our strong standing in the European fertilisers and chemical markets, and unprecedented growth rate offering one of the best investment returns in the industry globally.
I am confident that further integration of the company and investments in innovative technologies will secure sustainable growth in the future.

Compared to 2014, the EBITDA results have gone up from PLN822m to PLN1.32bn.

Increase in Fertilisers’ sales revenues by 9% (to PLN6bn), and improvement of the corresponding EBIT margin by 15% (to PLN840m), were the main drivers behind the positive financial results. Significant improvements in production, effective trade policy, and lower costs of key raw materials were among the main factors contributing to the increase.

Negative trends in the caprolactam market and economic slowdown in China affected Plastics. The EBITDA margin remained negative in FY2015, improving from -2% to -0.8%, with sales revenues of PLN1.2bn.

Despite lower sales revenues due to fall in OXO prices, Chemicals improved the margins (up to 6% from 2% in 2014), mostly thanks to lower prices of natural gas and sulphur.

Accumulated investment expenditure amounted to PLN907m with 53.7 percent (PLN487m) going into business development, and 29.9 percent into maintenance (PLN271m). The Company plans to spend further PLN2bn on investments in 2016.

As it was written earlier, March 11 Poland's largest chemicals firm Grupa Azoty, which beat 2015 profit forecasts on Friday thanks to low gas prices, plans to buy more gas from its main supplier PGNiG. State-run Azoty took advantage of gradual gas market liberalisation in Poland to buy gas from other sources, but is rethinking this now that PGNiG offers bonuses to big clients.

Grupa Azoty’s subsidiaries in Pulawy and Police were the largest contributors to the Group’s financial result with sales revenues of PLN3.8bn (PLN448m net profit compared to PLN225m in 2014) and PLN2.7bn (PLN165m net profit compared to PLN61m) respectively.
MRC

MOSCOW (MRC) -- Japan's Idemitsu Kosan is preparing to shut its Chiba aromatics unit for a scheduled maintenance in H2 March, a company source told TPS, declining to specify the exact shutdown date.

The source said the aromatics maintenance, which will not affect the ethylene cracker with the capacity of 374,000 tonnes of ethylene p/y at the site, should last until May.

The company has another facility in Tokuyama which will be operational to compensate the loss of production of some of the aromatics.

Idemitsu's petrochemical plants at Chiba can produce 265,000 tonnes of paraxylene (PX) and 577,000 tonnes of benzene. Idemitsu's aromatics plant at Tokuyama can manufacture 200,000 tonnes of PX and 274,000 tonnes of benzene.

As MRC wrote previously, in July 2015, Idemitsu signed an agreement to acquire Shell’s 33.24% stake in its Japanese venture Showa Shell Sekiyu KK for JPY 169 billion (approximately USD1.4 billion). Shell will retain a 1.80% holding in the company. The transaction is expected to complete in 2016, subject to obtaining regulatory and contractual approval.

Idemitsu Kosan is a Japanese petroleum company. It owns and operates oil platforms, refineries and produces and sells petroleum, oils and petrochemical products. The company runs two petrochemical plants in Chiba and Tokuyama. The two naphtha crackers can produce up to 997,000 tonnes of ethylene per year.
MRC

MOSCOW (MRC) -- Lotte Chemical, a subsidiary of the South Korean Lotte Group, is likely to shut its high density polyethylene (HDPE) plant, as per Apic-online.

A Polymerupdate source in South Korea informed that the plant is planned to be taken off-stream on April 11, 2016 for a maintenance turnaround. It is expected to remain shut for around one month.

Located in Yeosu, South Korea, the HDPE plant has a production capacity of 630,000 mt/year.

As MRC wrote previously, on 12 October 2015, Lotte Chemical took off-stream its low density polyethylene/ethyl vinyl acetate (LDPE/EVA) swing plant for a maintenance turnaround, which lasted for around one month. Located at Daesan in South Korea, the plant has a production capacity of 135,000 mt/year.

South Korean Lotte Chemical is a global petrochemical company, established in 1976. It produces low density polyethylene (LDPE), high density polyethylene (HDPE), linear low density polyethylene (LLDPE), polypropylene (PP), functional resins, styrene monomer (SM), polyethylene terephthalate (PET), etc.
MRC