Huntsman sells chemicals units to Indorama for USD2bn

MOSCOW (MRC) -- Huntsman Corp, the US chemicals group, is selling two of its businesses to Thailand-based petrochemicals company Indorama Ventures for more than USD2bn, said FT.

Texas-based Huntsman said in a statement late on Wednesday that the Bangkok-listed group would pay $2bn in cash and transfer about $76m of net underfunded pension and other liabilities to buy its chemical intermediaries and surfactants divisions, which make ingredients for lubricants and cleaning products.

As part of the deal, Indorama will acquire Huntsman manufacturing facilities in Texas, India and Australia.

Peter Huntsman, the US group’s chief executive, said that the deal “further transforms Huntsman’s balance sheet and future”, and was in line with its strategy of focusing more on its downstream and specialty businesses. Huntsman, with revenues of more than USD9bn last year, makes and markets differentiated and specialty chemicals, and has business in about 30 countries.

In 2017, it was forced to call off a USD20bn tie-up with Switzerland’s Clariant due to investor opposition, during a time of significant consolidation in the chemicals industry.

Indorama Ventures is part of Singapore-based Indorama Corp. The group is headed by the Indian-born Indonesian billionaire Sri Prakash Lohia and makes a range of petrochemical products, including PET, packaging, fibers, and recycled products.

Aloke Lohia, group chief executive of Indorama Ventures, said: “This acquisition is a momentous propellant in our journey towards our stated goal of being a global, diversified chemicals company with multiple, and related earnings streams."

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MOSCOW (MRC) -- U.S. crude oil stockpiles rose unexpectedly for a second week in row as refineries cut output last week, while fuel inventories posted surprise drawdowns with gasoline demand hitting a record high, the Energy Information Administration said, as per Hydrocarbonprocessing.

Crude inventories rose by 1.6 million barrels in the week to Aug. 9, compared with analysts' expectations in a Reuters poll for a decrease of 2.8 million barrels. At 440.5 million barrels, inventories were about 3% above the five-year average for this time of year, the EIA said in its weekly report.

Crude stocks at the Cushing, Oklahoma, delivery hub for U.S. crude futures fell 2.5 million barrels, the EIA said. Stocks in Cushing have declined steadily since July to their lowest in four months due to heavy activity from Midwest refiners, who tend to pull barrels from the Cushing hub.

Midwest crude stocks fell 3.3 million barrels to 132.6 million barrels, their lowest since late January.

Refinery crude runs fell by 475,000 barrels per day, EIA data showed. Refinery utilization rates fell by 1.6 percentage points to 94.8% of overall capacity.

"We might be starting to see the signs of seasonal maintenance creep in and extended maintenance coming into play and so that's one of the headwinds that oil will have to deal with," said Phil Flynn, analyst at Price Futures Group in Chicago.

Oil prices were under pressure prior to the report due to widening fears about slowed global economic growth. Following the EIA report, the market extended loses. U.S. crude futures were down $1.99 per barrel, or 3.5%, at $55.12 by 10:52 a.m. EDT (1452 GMT), while Brent fell $1.94 a barrel, or 3.1%, to $59.40.

Gasoline stocks fell 1.4 million barrels, compared with forecasts for 25,000 barrel-build and were about 4% above the five-year average for this time of year, the EIA said.

U.S. gasoline demand jumped by 281,000 bpd to a record 9.93 million bpd last week, according to EIA data going back to 1991.

Distillate stockpiles, which include diesel and heating oil, fell by 1.9 million barrels, versus expectations for a 1 million-barrel increase, the EIA data showed.

Net U.S. crude imports fell last week by 252,000 bpd. Exports rebounded from the previous week, rising to 2.7 million bpd. U.S crude production was flat last week at 12.3 million bpd.
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MOSCOW (MRC) -- DOMO Chemicals (Ghent, Belgium) and Solvay (Brussels, Belgium) have signed an agreement for DOMO to acquire Solvay’s Performance Polyamides Business in Europe, said Chemengonline.

This includes Engineering Plastics operations in France and Poland; High-Performance Fibers in France; Polymer and Intermediates operations in France, Spain and Poland. The agreement also involves a joint venture between BASF and DOMO in France for the production of adipic acid. The business comprises production, sales, technical support, R&D and innovation services, which currently have a combined headcount of approximately 1,100 employees. The acquisition, which is subject to approval by the competent competition authorities, is expected to close by the end of Q4 2019. The purchase price to be paid by DOMO on a cash and debt-free basis would amount to EUR300 million.

The acquisition of this leading PA 6,6 business will significantly strengthen Domo Chemicals’ downstream nylon-based engineering plastics business and create a European leader with scale, entering the market with a top position in PA6/6,6 in Europe. The result: a backward integrated business with unique technology capabilities and a secured supply of key raw materials. There will be a strong focus on driving combined innovation, while accelerating future growth. Through the acquisition, Domo Chemicals turnover will grow from 900 million EUR to 1,600 million EUR.

Speaking for DOMO Chemicals, Alex Segers, CEO called the acquisition "a major step forward." “By integrating the complementary strengths of the diverse teams and talents of both companies, we will enhance our excellence towards our customers by building a unique and competitive integrated Nylon solution provider (6 and 6.6) driven by a strong innovation platform to push future sustainable growth.

The strong reputation of the Technyl brand will perfectly complement DOMO’s wide DOMAMID range of engineered and virgin polyamide resin grades and ECONAMID range of recycled polyamides. We are looking forward to offering employees from both companies great opportunities for personal and career development.”
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MOSCOW (MRC) -- The Abu Dhabi National Oil Company (ADNOC) announced a strategic investment in global storage terminal owner and operator VTTI BV (VTTI), said Hydrocarbonprocessing.

As part of this agreement, ADNOC will acquire a 10% equity stake in VTTI. Following the transaction, VTTI will be owned 10% by ADNOC, 45% by IFM Global Infrastructure Fund (IFM GIF), an investment vehicle managed by IFM Investors, and 45% by Vitol (both directly and through Vitol Investment Partnership II Ltd, an investment vehicle sponsored and managed by Vitol).

VTTI is an independent global owner of 15 hydrocarbon storage terminals across 14 different countries. The VTTI storage network holds around 60 million barrels (9.5 million m3) of combined storage capacity, much of which is in locations that are complementary to ADNOC’s trade flows.

The investment in VTTI provides ADNOC access to storage capabilities across some of its key export markets such as Asia, Africa and Europe while also securing additional facilities at the port of Fujairah, UAE, its main storage hub. This transaction also significantly contributes to the development and growth of ADNOC’s global marketing, supply and trading platforms, providing greater access to knowledge and capabilities that will further enable ADNOC’s growth plans.

“We are delighted to be entering into this strategic investment opportunity in VTTI, alongside Vitol and IFM GIF, which will further complement the development of ADNOC’s integrated global trading platform while also delivering a solid financial return. VTTI’s diverse portfolio of storage assets across key target markets such as Asia, Africa and Europe, provides us with direct access to our customers around the world, a key building block to accelerating ADNOC’s transformation into a more integrated and commercially-minded global energy player," H.E. Dr. Sultan Ahmed Al Jaber, UAE Minister of State and ADNOC Group CEO said.

He added: “As one of Fujairah’s largest storage operators, VTTI is a natural partner for ADNOC. This investment further strengthens ADNOC’s strategic position in Fujairah and supports the continued development of Fujairah as a strategic hub for our operations.”

By expanding its international storage capabilities and reach, ADNOC will move closer to its customers, allowing it to be more agile and respond quickly to market needs and dynamics. It will also unlock incremental revenue, margin and cost saving opportunities from the trading, transportation and storage of its products, giving ADNOC better control over where, when and how its products are being supplied to key markets and customers.
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MOSCOW (MRC) -- Goldman Sachs Group Inc (GS.N) said on Sunday that fears of the U.S.-China trade war leading to a recession are increasing and that Goldman no longer expects a trade deal between the world’s two largest economies before the 2020 U.S. presidential election, said Reuters.

“We expect tariffs targeting the remaining USD300bn of US imports from China to go into effect,” the bank said in a note sent to clients.

U.S. President Donald Trump announced on Aug. 1 that he would impose a 10% tariff on a final USD300 billion worth of Chinese imports on Sept. 1, prompting China to halt purchases of U.S. agricultural products.

The United States also declared China a currency manipulator. China denies that it has manipulated the yuan for competitive gain.

The year-long trade dispute has revolved around issues such as tariffs, subsidies, technology, intellectual property and cyber security, among others.

Goldman Sachs said it lowered its fourth-quarter U.S. growth forecast by 20 basis points to 1.8% on a larger than expected impact from the developments in the trade tensions.

“Overall, we have increased our estimate of the growth impact of the trade war,” the bank said in the note authored by three of its economists, Jan Hatzius, Alec Phillips and David Mericle.

Rising input costs from the supply chain disruption could lead U.S. companies to reduce their domestic activity, the note said. Such “policy uncertainty” may also make companies lower their capex spending, the economists added.
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