Kuwaiti petchems holding company cashes in Aramco shares

MOSCOW (MRC) -- Boubyan Petrochemical Co. (BPC) has sold its entire stake of 3,326,371 shares in Saudi Aramco for 126 million Saudi riyals, reporyed Chemweek with reference to the company's regulatory filing.

BPC, a shareholder in Equate and Kuwait Olefins Co., said it generated a profit of KWD1.6 million (USD5.3 million) from the share sale, which will be reflected in the company’s third-quarter results ending 31 January 2020. BPC bought the shares in Aramco for SR106.44 million.

BPC is a shareholding company created for the purpose of investing in Kuwait government–owned petrochemicals sector. The company holds 9% in Equate, a joint venture in which government-owned Petrochemical Industries Co. and Dow have 42.5% each and Qurain Petrochemical Industry has 6%.

BPC decided to cash in its shareholding in Aramco soon after the latter debuted on the Riyadh stock exchange. Shares in Aramco started trading on 11 December. Saudi Arabia sold 3 billion shares in Aramco, equivalent to 1.5% of the company’s share capital, subsequently increased to 3.45 billion shares, or 1.725% of the share capital, via the greenshoe option. The offering generated USD29.4 billion, making it the world’s largest IPO.

On 13 December, Aramco share price of SAR36.80, on the third day of trading, has risen 15% above the launch price, valuing the entire company at USD1.98 trillion, very close to the USD2 trillion originally targeted by Crown Prince Mohammed bin Salman. Apart from a few hedge funds, who saw the opportunity for a quick profit, investors outside Saudi Arabia and the Arab Gulf region largely abstained from the IPO. A survey of 31 major institutions carried out by the brokerage firm, Stanford C. Bernstein, and reported in Fortune magazine, for instance, showed they value the company at an average of only USD1.26 trillion. Analysts outside the region cite reports that wealthy Saudi families and individuals were pressured into supporting the issue, and that government itself, through the Saudi Public Pension Fund, among others, also pumped money into it. They note that if continued pressure from low oil prices forces Riyadh to monetize more of its Aramco holding - via, for instance, a share sale to the Chinese government or its proxies or a second issue on an international stock exchange - it would be in Riyadh's interest to have the highest possible Aramco share price as a base valuation.

As MRC informed before, Saudi Aramco, which temporarily lost half of its oil production following the September 14 attacks on two key oil facilities, is running its local refineries at full capacity and is forging ahead with plans to start up new refineries. The company is also starting up a joint venture refinery in Malaysia next year. According to Aramco's bond prospectus released in April, the refining and petrochemical joint venture with Petronas - the Malaysian national oil company - collectively known as PRefChem, was supposed to start this year.

The PRefChem joint venture includes a 300,000 b/d refinery, an integrated steam cracker with capacity to produce 1.3 million mt of ethylene located in Johor, Malaysia. Aramco was supposed to provide a significant portion of PRefChem's crude supply under a long-term supply agreement. Jazan and PrefChem will help Aramco reach a gross refining capacity of 5.6 million b/d, it said in the prospectus. The company currently owns and has stakes in four refineries abroad with a total refining capacity exceeding 2 million b/d.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,724,670 tonnes in the first ten months of 2019, up by 7% year on year. Shipments of all PE grades increased. The estimated PP consumption in the Russian market in January-October 2019 totalled 1,066,520 tonnes, up by 7% year on year. Supply of block copolymers of propylene (PP block copolymer) and homopolymer of propylene (homopolymer PP) increased, demand for statistical copolymers (PP random copolymer) decreased.

Saudi Aramco is an integrated oil and chemicals company, a global leader in hydrocarbon production, refining processes and distribution, as well as one of the largest global oil exporters. It manages proven reserves of crude oil and condensate estimated at 261.1bn barrels, and produces 9.54 million bbl daily. Headquartered in Dhahran, Saudi Arabia, the company employs over 61,000 staff in 77 countries.
MRC

MOSCOW (MRC) -- Hanwha Chemical will be renamed as Hanwha Solution in January next year after merging with Hanwha Q CELLS and Advanced Materials, reported BusinessKorea.

Hanwha Chemical will merge with Hanwha Q CELLS and Advanced Materials in January of next year and start anew as Hanwha Solution.

Hanwha Chemical announced on Dec. 12 that it will hold a general shareholders meeting on Jan. 2, 2020 to pass an amendment to the articles of incorporation that include a change in the company name.

The new name Hanwha Solution means that he company will provide new solutions through business integration in the face of growing uncertainties at home and abroad.

"We plan to cope with the rapidly changing business environment at home and abroad by integrating the oil and material businesses, which are seeking to make a leap through the development of high value-added products, and the photovoltaic business which leads the global market," a Hanwha official said. The company intends to promote the even growth of its flagship businesses through business diversification and increase corporate value by boosting management efficiency and business synergies.

As MRC informed before, Hanwha Chemical took off-stream its polyvinyl chloride (PVC) plant in South Korea for maintenance in mid-June, 2019. The plant remained under maintenance for about 10 days. Located at Yeosu, South Korea, the PVC plant have a production capacity of 300,000 mt/year.

According to MRC's ScanPlast report, exports of suspension polyvinyl chloride (SPVC) from Russia totalled 175,600 tonnes in the first eleven months of 2019, up by 22% year on year. Imports increased more significantly - by 230% year on year to 48,500 tonnes.

Hanwha Group is one of the largest business conglomerate in South Korea. Founded in 1952 as Korea Explosives Inc., the group has grown into a large multi-profile business conglomerate, with diversified holdings stretching from explosives, their original business, to retail to financial services.
MRC

MOSCOW (MRC) -- President Donald Trump signed off on a phase-one trade deal with China, averting the Dec. 15 introduction of a new wave of U.S. tariffs on about USD160 billion of consumer goods from the Asian nation, according to people familiar with the matter, said Bloomberg.

The deal presented to Trump by trade advisers Thursday included a promise by the Chinese to buy more U.S. agricultural goods, according to the people. Officials also discussed possible reductions of existing duties on Chinese products, they said. The terms have been agreed but the legal text has not yet been finalized, the people said. A White House spokesperson declined to comment.

While there was no official confirmation from the government in Beijing on Friday, an announcement is expected in Washington as early as today, according to people familiar with the Americans’ plans. One possible option is for U.S. Trade Representative Robert Lighthizer to sign the agreement with Chinese Ambassador Cui Tiankai, according to people briefed on the matter.

Global stocks hit a record high for the first time since early 2018 and bond yields climbed on optimism over trade. On Thursday, Trump tweeted that the U.S. and China are “VERY close” to signing a “BIG” trade deal, also sending equities higher. The yuan surged the most in a year, rising above 7 per dollar.

“They want it, and so do we!” he tweeted five minutes after equity markets opened in New York, sending stocks to new records.

The administration has reached out to allies on Capitol Hill and in the business community to issue statements of support once the announcement is made, people said. Before meeting his trade advisers, Trump engaged with members of the Business Roundtable, which represents some of the largest U.S. companies, they said.

Trump changed his mind on deals with China before. Negotiators have been working on the terms of the phase-one deal for months after the president announced in October that the two nations had reached an agreement that could be put on paper within weeks.

The U.S. has added a 25% duty on about $250 billion of Chinese products and a 15% levy on another $110 billion of its imports over the course of a roughly 20-month trade war. Discussions now are focused on reducing those rates by as much as half, as part of the interim agreement Trump announced almost nine weeks ago.
MRC

MOSCOW (MRC) -- BASF to expand production capacity of acrylic dispersions in Malaysia, said Asiapacificcoatingsjournal.

BASF intends to double its acrylic dispersions capacity by constructing a new manufacturing line at its Pasir Gudang site in Malaysia.

The project aims to give a reliable supply of high-quality dispersion formulations to clients in the rapidly increasing ASEAN, New Zealand and Australian markets.

This new development also includes upgrading the facility's waste water treatment plant by adding a condensed water stripping system.

As MRC informed before, in early September 2019, SIBUR, the largest petrochemical comples in Russia and Eastern Europe, and BASF, Geman petrochemical major, agreed to closely cooperate on sustainable development to share their best practices. SIBUR held a design session on sustainable development in the petrochemical industry. At the event, BASF shared details on its new sustainability strategy and its integration into the company's overall strategy. The participants were also presented with the company's methods of environmental impact assessment and approach to the circular economy, which embraces opportunities for chemical recycling of plastics, such as the ChemCycling project. With chemical recycling, fossil resources for chemical production can be replaced with recycled material from plastic waste.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,589,580 tonnes in the first nine months of 2019, up by 7% year on year. Shipments of all PE grades increased. The estimated PP consumption in the Russian market was 976,790 tonnes in January-September 2019, up by 4% year on year. Shipments of PP block copolymer and homopolymer PP increased.

BASF is the leading chemical company. It 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.
MRC

MOSCOW (MRC) -- Plastic Turned Parts (PTP) has reported a doubling in company turnover since 2015. The revenue increase is related to on-going investment in new manufacturing equipment, said PRW.

Over this same period, the Hertfordshire-based company has invested more than ?750,000 in six new CNC turning machines. Five of the machines were delivered by Citizen Machinery. Four of these featured Cincom sliding head lathes, with the fifth using a Miyano fixed-head model.

The additions mean there are now nine lathes operating at the site. The company also uses three turn-mill centres for machining bar and billets between 65 and 150mm in diameter. A Haas CNC mill, installed in 2005, is used for second-work operations and also destructive testing.

All equipment, apart from two Citizen lathes, are fitted with bar magazines from Italian manufacturer Iemca. Commenting on the new equipment, PTP MD and owner Jonathan Newis, said: "To enable us to achieve sustained business growth, we only use the best production equipment on the market. That applies to everything in use on the shopfloor, including the barfeeds, which is why there are seven Iemcas in use here.

Newis singled out the Iemca Boss 338-HD Superfast, feeding a 20mm capacity slider for particular praise. He noted that turning flexible plastic bar is an “esoteric art”, as unlike metal bars, thinner stock can sag under its own weight, both within the magazine and in the space between it and the lathe.

The Italian manufacturer customised the machine to use solid panels instead of standard cross struts for supporting the plastic bars along the length of the magazine to eliminate this issue.

Bespoke clamping blocks are used to ensure smaller-diameter bars remain horizontal within the gap between the barfeed and entry into the turning centre.

MRC