SABIC working on tightening Clariant ties

MOSCOW (MRC) -- Saudi Basic Industries Corp (SABIC) is considering increasing its holding in Clariant and pursuing joint ventures as the Saudi firm looks to strengthen ties with the Swiss chemicals group, sources told Reuters.

The world's number four chemical firm bought a 24.9 percent stake in Clariant this year and is expected to intensify research and development with the Swiss specialty chemicals maker as well as hike its stake over time, the sources said.

It already has a New Jersey-based partnership with Clariant that licenses chemical process technology to customers including Huntsman and Akzo Nobel.

"SABIC's narrative is clearly not to stay at 25 percent and do nothing," a person close to the matter said, adding that a combination of businesses would precede any potential merger.

In January SABIC said it had no current plans to launch a full takeover of Clariant.

However, the Riyadh-based group wants to extract value from its investment in a friendly manner, the sources said, adding that it does not want to be perceived as an aggressive acquirer and any attempt to hike its stake may take time.

SABIC declined to comment, while a spokesman for Clariant said it was in ongoing talks with SABIC about "possible future collaboration prospects" and any outcome would be communicated at the appropriate time.

Middle Eastern firms have been eager to expand into advanced downstream chemicals operations like the catalysts that Clariant produces to help speed up processes at chemicals plants.

Saudi state-owned oil company Saudi Aramco in 2015 bought half the synthetic rubber business of Germany's Lanxess for around 1.2 billion euros.

The moves show that Saudi companies are increasingly trying to raise their influence outside the kingdom as part of the ambitious Vision 2030 plan which was set out by Crown Prince Mohammed bin Salman to diversify the country's economy from oil.

SABIC, which is 70 percent owned by Saudi Arabia's Public Investment Fund sovereign wealth fund, would initially stop short of taking control of Clariant which has a market value of $7.8 billion, the sources said.

Under Swiss takeover rules anybody with 33.3 percent of the shares would have to make an offer for the full company.

While SABIC's purchase of a stake in Clariant ended the Swiss firm's fight with activist investors, it must be vetted by regulators in countries including Brazil, Germany and Austria.

The sources said the deal would be cleared during the summer and would pave the way to the implementation of closer ties.

Clariant's boss Hariolf Kottmann told investors in March that management viewed SABIC's commitment as "very positive" and a strategic update would be provided in September.

Plastics production is an area where SABIC may implement closer ties with Clariant, two of the sources said.

SABIC has a strong plastics business since its USD11.6 billion purchase of GE Plastics in 2007 and a combination with Clariant's would make sense, one of the sources said.

Plastics & Coatings accounts for more than 40 percent of Clariant's 6.4 billion francs in annual sales.

Although the division's revenue grew by 5 percent last year, producing much of Clariant's cash flow, its profitability trails that of divisions like catalysts and care chemicals, which include soap and shampoo ingredients.

Last year Clariant abandoned a USD20 billion deal with U.S. group Huntsman to create the world's second-biggest specialty chemicals maker behind Evonik after opposition from activist investors.

Saudi Basic Industries Corporation (Sabic) ranks among the world's 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.

Clariant AG is a Swiss chemical company and a world leader in the production of specialty chemicals for the textile, printing, mining and metallurgical industries. It is engaged in processing crude oil products in pigments, plastics and paints. Clariant India has local masterbatch production activities at Rania, Kalol and Nandesari (Gujarat) and Vashere (Maharashtra) sites in India.
MRC

LyondellBasell receives EU antitrust clearance for acquisition of A. Schulman

MOSCOW (MRC) -- LyondellBasell, one of the largest plastics, chemicals and refining companies in the world, have announced that it has received antitrust clearance from the European Commission for its pending acquisition of A. Schulman, Inc., as per the company's press release.

The European Commission's clearance for the transaction satisfies one of the conditions for the closing of the pending acquisition, which remains subject to other customary closing conditions, including the receipt of other required regulatory clearances and approvals. Shareholders of A. Schulman voted in favor of the transaction on June 14.

As previously announced, on February 15, 2018, LyondellBasell and A. Schulman, a leading global supplier of high-performance plastic compounds, composites and powders, entered into a definitive agreement under which LyondellBasell will acquire A. Schulman for a total consideration of USD2.25 billion. The acquisition builds upon LyondellBasell's existing platform to create a premier Advanced Polymer Solutions business with broad geographic reach, leading technologies and a diverse product portfolio.

The pending acquisition has already been cleared by antitrust regulators in the United States, Brazil, China, Serbia, Turkey and Mexico. The transaction is expected to close in the second half of 2018.

As MRC informed before, in mid-June 2018, A. Schulman announced that during a special stockholder meeting its stockholders approved the merger agreement, under which LyondellBasell Industries will acquire all of the outstanding shares of A. Schulman common stock.

A. Schulman, Inc. is a leading international supplier of high-performance plastic compounds, composites and resins headquartered in Akron, Ohio. Since 1928, the company has been providing innovative solutions to meet its customers' demanding requirements. The company's customers span a wide range of markets such as packaging, mobility, building & construction, electronics & electrical, agriculture, personal care & hygiene, sports, leisure & home, custom services and others. The company employs approximately 5,200 people and has 54 manufacturing facilities globally. A. Schulman reported net sales of approximately USD2.5 billion for the fiscal year ended August 31, 2017.

LyondellBasell is one of the world's largest plastics, chemical and refining companies and a member of the S&P 500. LyondellBasell manufactures products at 55 sites in 17 countries. LyondellBasell is also a leading licensor of polypropylene and polyethylene technologies. The more than 250 polyolefin process licenses granted by LyondellBasell are twice that of any other polyolefin technology licensor.
MRC

Abadan refinery in Iran catches fire, six injured

MOSCOW (MRC) -- An Iranian oil refinery caught fire in the southwestern part of the country, the semi-official Tasnim news agency reported, leaving six people injured, as per Hydrocarbonprocessing.

Firefighters on the scene at the Abadan refinery have brought the blaze under control, a local official was quoted as saying by ISNA news agency, adding that the fire would be contained in an hour.

The cause of the incident was still unknown, Tasnim said.

The damage to the plant at Abadan had no impact on oil exports from Iran, the world’s fifth-biggest exporter, as it is involved in producing gasoline and some other fuels, not the production of crude.

ISNA reported that one of the injured was in a critical condition.

Abadan Oil Refinery is Iran's oldest crude processing facility in the southern oil-rich Khuzestan Province.

The refinery, like almost all Iranian oil and gas processing plants, needs major works and renovation.
MRC

Petrofac wins USD110m worth contracts in Iraq

MOSCOW (MRC) -- Petrofac has won a new award and a number of contract extensions for construction management, engineering, commissioning and start-up services for international oil company clients in Iraq, as per Compelo.

Petrofac has been active in Iraq since 2010 and has developed a significant track record in delivering a range of onshore and offshore greenfield and brownfield projects, project management, engineering and consultancy, operations and maintenance and training services.

Mani Rajapathy, Managing Director, Engineering & Production Services East, commented: "The extension of our Iraq portfolio is part of our ongoing growth strategy. We continue to expand our service delivery in-country through the development of strong client relationships, whilst remaining competitive in a maturing market.

"These contract extensions and additional contract award from major international oil companies further enhance our position, where our focus remains on operational excellence, the development of local resources, and safe project execution."

As MRC informed earlier, Petrofac has been awarded a contract worth USD265million for the development of the Marmul Polymer Phase 3 (MPP3) Project in southern Oman.
MRC

Zhong Tian halts production at PP plant

MOSCOW (MRC) -- Zhong Tian He Chuang a joint venture of Sinopec and China Coal Energy Group, has taken off-stream a polypropylene (PP) plant owing to a technical glitch, as per Apic-online.

A Polymerupdate source in China informed that the company has undertaken an emergency shutdown at the plant in mid-June, 2018. Further details on duration of an unplanned outage could not be ascertained.

Located at Ordos in Inner Mongolia, China, the plant has a production capacity of 350,000 mt/year.

As MRC wrote prevously, China's Sinopec group, parent of Sinopec Corp, will invest USD29.05 billion to upgrade four refining bases between 2016 and 2020 to produce higher-quality fuels.

China Petrochemical Corporation (Sinopec Group) is a super-large petroleum and petrochemical enterprise group established in July 1998 on the basis of the former China Petrochemical Corporation. Sinopec Group's key business activities include the exploration and production of oil and natural gas, petrochemicals and other chemical products, oil refining.
MRC