Dow and DuPont receive conditional regulatory approval in Brazil for proposed merger of Equals

MOSCOW (MRC) -- DuPont and The Dow Chemical Company have announced that Brazil's Administrative Council for Economic Defense (CADE) has granted conditional regulatory approval of their proposed merger of equals, as per DuPont's press release.

CADE's approval of the merger is subject to the implementation of remedies that maintain the strategic logic and value creation potential of the transaction for all stakeholders. The remedies include the divestment of a select portion of Dow AgroSciences' corn seed business in Brazil, including some seed processing plants and seed research centers, a copy of Dow AgroSciences' Brazilian corn germplasm bank, the Morgan brand and a license for the use of the Dow Seeds brand for a certain period of time.

This local remedy is incremental to the previously announced divestment of certain parts of DuPont's global crop protection portfolio and R&D pipeline and organization and Dow's global Ethylene Acrylic Acid copolymers and ionomers business, consistent with commitments already made to the European Commission and regulatory agencies in other jurisdictions.

The receipt of conditional approval in Brazil represents a very positive outcome for the merger transaction, which will position the companies to unlock significant value for all stakeholders as they pursue the subsequent intended separation into three industry leaders in Agriculture, Materials Science, and Specialty Products.

Dow and DuPont continue to work constructively with regulators in the remaining relevant jurisdictions to obtain clearance for the merger, which they are confident will be achieved. The companies continue to anticipate closing the merger between August 1, 2017 and September 1, 2017, with the intended spins to occur within 18 months of closing. The companies expect that the first step of the intended separation process will be the spin-off of the Materials Science Company, assuming such sequencing would allow for the completion of all intended spin-offs within 18 months of merger closing and would not adversely impact the value of the intended spin-offs.

As MRC reported earlier, the deal, unveiled in December 2015, will combine two of the oldest companies in the U.S. into a chemical giant called DowDuPont, initially valued at about USD130 billion. The combined company will then split itself into three separately-traded companies focused on agricultural products, material sciences, and specialty products about 18 to 24 months after the merger closes.

DuPont is an American chemical company that was founded in July, 1802. The company manufactures a wide range of chemical products, leading extensive innovative research in this field. The company is the inventor of many unique plastics and other materials, including neoprene, nylon, Teflon, Kevlar, Mylar, Tyvek, etc. DuPont was the developer and main producer of Freon used in the production of refrigeration equipment.

The Dow Chemical Company is an American multinational chemical corporation. Dow is a large producer of plastics, including polystyrene, polyurethane, polyethylene, polypropylene, and synthetic rubber. In 2016, Dow had annual sales of $48 billion and employed approximately 56,000 people worldwide. The Company's more than 7,000 product families are manufactured at 189 sites in 34 countries across the globe.
MRC

PE production in Belarus fell by 52% in January-April 2017

MOSCOW (MRC) -- Belarus's overall production of low density polyethylene (LDPE) was about 20,800 tonnes in the first four months of 2017, down by 52% year on year, according to MRC's DataScope Report.

According to the National Statistics Committee of Belarus, April LDPE production by the local producer Polymir was slightly more than 5,000 tonnes against 5,300 tonnes a month earlier. Thus, Polymir's overall LDPE output totalled 20,800 tonnes in January-April 2017 versus 43,200 tonnes a year earlier.

The fire at one of the ethylene units in last June, which led to a two-fold reduction in the olefin production, was the main reason for a major fall in the output in 2016.

The company's customers said Polymir planned to shut its LDPE capacity for scheduled maintenance works from 3 June. The preventive shutdown will take about a month, but some of the capacities will still be launched two weeks after the shutdown.

As reported earlier, an outbreak of gas-air mixture with the further flare combustion of outgoing products happened at workshop No. 104 on 18 June 2016. The fire damaged technological equipment in the production of ethylene, and some of the capacity has been idle since that.
According to the representatives of the company, this year the capacity for the production of ethylene will not be fully rebuilt.

Plant Polymir ("Naftan") is the largest petrochemical company in Belarus, produces a wide range of chemical products, such as low density polyethylene (LDPE), acrylic fibers, products of organic synthesis, hydrocarbon fractions, etc. Polymir was founded in 1968. Technologies of the largest foreign companies from Great Britain, Japan, Germany, Italy (Courtaulds, Asahi Chemical Co. Ltd, Kanematsu Gosho, SNIA BPD, etc.), As well as the development of scientific research institutes and design institutes of the CIS countries. The LDPE production's annual capacity is 130,000 tonnes.


MRC

Rosneft and Eni to cooperate on refining, petrochemicals

MOSCOW (MRC) -- Rosneft and Eni S.p.A. have entered into a Cooperation extension agreement in the areas of upstream, refining, marketing and trading during the visit of an Italian delegation to Russia, as per Rosneft's press release.

The document was signed by Rosneft CEO Igor Sechin and Eni CEO Claudio Descalzi in the presence of Russian President Vladimir Putin and Italian Prime Minister Paolo Gentiloni.

The Agreement provides for the development of cooperation between Rosneft and Eni in Russia and abroad in the following areas: exploration and production of hydrocarbons, refining, trading, logistics, marketing and sales, petrochemicals, technology and innovation.

The document reinforces the previous agreements between the two companies, specifically in offshore to drill exploration wells as part of joint projects in the Black and Barents seas.

In addition, the parties will consider further expanding their international cooperation, including the Zohr project offshore Egypt, as well as the potential for joint supplies of refined products to the country.

Rosneft and Eni agreed to assess the potential for cooperation in refining at German refineries where both companies are shareholders, including the optimization of feedstock supplies. The parties also intend to consider using Eni technologies to refine heavy oil residues at Rosneft refineries.

In 2012, Rosneft and Eni signed a Strategic Cooperation Agreement, which provides for joint development of areas in the Black and Barents Sea in Russia, and for Rosneft to participate in Eni's international projects.

In December 2016, Rosneft signed a deal with ENI to acquire a 30% stake in the Concession for the Zohr gas field (with an option to acquire a further 5%), and a 15% stake in the Project Operator. The field is located in Egyptian offshore and is the largest gas discovery of the recent years. Rosneft is therefore becoming a participant in a project to develop Egypt's largest hydrocarbon field, and stands alongside with its global partners: Eni and BP. Once the deals between Rosneft, Eni and BP are completed, the ownership of the Concession Agreement can be structured as follows: Eni – 50%, Rosneft – up to 35%1, BP – up to 15%.

As MRC informed before, in December 2016, Rosneft said it had enough oil to fulfill new contracts with Swiss trader Glencore as markets gear up for a fierce battle between some of the world's largest merchants for supplies from the Russian company. Moscow said then that a consortium of Glencore and Qatar would buy a 19.5% stake in Rosneft for over 10 billion euros in one of the biggest energy deals of 2016.

Rosneft became Russia's largest publicly traded oil company in March 2013 after the USD55 billion takeover of TNK-BP, which was Russia’s third-largest oil producer at the time.
MRC

Wacker Neuson reports record revenue in Q1 2017

MOSCOW (MRC) -- German Wacker Chemie AG posted sales of EUR1,218.8 million (USD1,328 million) in the reporting quarter (Q1 2016: EUR1,133.1 million), said the company on its website.

This is an increase of around 8 percent, mainly due to higher volumes of silicones and polymer products. Earnings before interest, taxes, depreciation and amortization (EBITDA) were EUR229.3 million (USD250 million). That was 12 percent higher than a year ago (EUR205.3 million). Net income in the reporting quarter was strongly influenced by the deconsolidation of Siltronic as a Wacker Group segment and amounted to EUR665.9 million (USD726 million) compared to Q1 2016 (EUR16.1 million).

According to Wacker’s CEO Rudolf Staudigl, demand for silicones and polymers remains strong. Market conditions for polysilicon business were more difficult. Spot-market prices for solar silicon have declined significantly. Generally, though, we anticipate further growth in the global photovoltaic market this year, which will have a positive impact on polysilicon demand.

Wacker polysilicon generated total sales of EUR268.1 million (USD292 million) in the reporting quarter, 2 percent lower than a year ago (EUR273.1 million) and 10 percent less than in the preceding quarter (EUR297.2 million).

According to the company, the slight year-over-year decline was prompted mainly by somewhat lower volumes in the solar business. On the other hand, higher solar-silicon prices – both year over year and quarter over quarter – supported sales. Volumes fell substantially compared with Q4 2016.

The division made use of this situation to increase its inventory levels in Asia and thus considerably shorten delivery times to its customers in the region.

EBITDA amounted to EUR70.5 million, up 79 percent versus a year ago (EUR39.4 million). This strong increase was primarily due to the costs incurred last year to commission the new polysilicon plant in Charleston, Tennessee (USA). In Q1 2016, these costs had lowered the division’s EBITDA by around EUR30 million. Relative to a quarter ago (EUR86.5 million), EBITDA was down by almost 19 percent.

Group sales in 2017 are still expected to increase by a mid-single-digit percentage relative to last year (EUR4,634.2 million).
MRC

Lotte Chemical to expand production of meta-xylene and polycarbonate by 2019

MOSCOW (MRC) -- Lotte Chemical plans to more than double the production of metaxylene and polycarbonate (PC) at its plants in Ulsan and Yeosu, South Korea, by the second half of 2019, as part of a 370 billion won (USD326.39 million) investment plan, Reuters reported.

Under the expansion plan, Lotte Chemical will raise its meta-xylene production at its Ulsan plant by 200,000 tonnes to 360,000 tonnes per year (tpy), and polycarbonate production at its Yeosu plant by 110,000 tonnes to 210,000 tpy by the second half of 2019.

As MRC informed before, in December 2016, Lotte Chemical announced its plans to invest about USD215 million to increase the ethylene production capacity at its Yeosu plant by 2018. Thus, Lotte Chemical will increase ethylene capacity by 200,000 t/y to 1.2-million t/y. Through the project, propylene production will also increase to 620,000 t/y from 520,000 t/y currently. Construction is scheduled to begin in the first half of 2017, with commercial production planned at the end of 2018.

Meta-xylene is typically used as feedstock for purified isophathalic acid (PIA) to produce plastic bottles, and polycarbonate is an engineering plastic.

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