Reliance Industries acquires 37.7% stake in Alok Industries

MOSCOW (MRC) -- Alok Industries Ltd on Saturday allotted 83.33 crore equity shares of Rs1 each at a premium of Rs2 per equity share for cash at a total consideration of Rs250 crore to Reliance Industries Ltd (RIL), according to The Hindu BusinessLine.

Pursuant to this acquisition, RIL will hold 37.7 per cent equity share capital of the Mumbai-headquartered integrated textile manufacturer.

In a stock exchange notice, RIL said the acquisition is in accordance with the approved Resolution Plan.
RIL further said that in accordance with the approved Resolution Plan, Alok Industries has today also allotted 250 crore - 9 per cent optionally convertible preference shares (OCCP) of Rs1 each for cash at par, for a total consideration of ?250 crore to RIL.

In March 2019, RIL had intimated the exchanges regarding approval by the National Company Law Tribunal, Ahmedabad Bench (NCLT) of the Resolution Plan, jointly submitted by RIL and JM Financial Asset Reconstruction Company Ltd (JMFARC) for acquisition of Alok Industries under the Corporate Insolvency Resolution Process of the Insolvency and Bankruptcy Code 2016, vide its order dated March 8, 2019.

"Approval of National Company Law Tribunal, Ahmedabad Bench and Competition Commission of India have been received. The acquisition does not fall within related party transactions and none of RIL’s promoter/promoter group/ group companies have any interest in the transaction," RIL’s statement said.

Alok Industries, incorporated in India on March 12, 1986, has interests in polyester and cotton segments. It has a product suite comprising cotton yarn, apparel fabrics, bed linen, terry towels, embroidery, garments and polyester yarn. It has representative offices for sales promotion in Sri Lanka and Bangladesh

As per RIL’s statement, Alok Industries turned around in FY19, posting a net profit of Rs2,284 crore against a huge net loss of Rs18,207 crore in FY18.

As MRC reported before, in November 2019, Reliance Industries confirmed plans to invest 700 billion Indian rupees (USD9.75 billion) to establish a crude-oil-to-chemicals (COTC) complex at the company's Jamnagar, India.

The MCC/HSFCC complex will have combined capacity for 8.5 million metric tons/year (MMt/y) of ethylene and propylene, and total extraction capacity for 3.5 MMt/y of benzene, toluene, and xylenes. It will also have combined capacity for 4.0 MMt/y of para-xylene (p-xylene) and ortho-xylene. The steam cracker will have combined capacity for 4.1 MMt/y of ethylene and propylene, and feed crude C4s to a 700,000-metric tons/year butadiene extraction plant. Reliance will also add 1.3 MMt/y of p-xylene capacity at existing plants at Jamnagar.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,093,260 tonnes in 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments rose from both domestic producers and foreign suppliers. The estimated PP consumption in the Russian market was 1,260,400 tonnes in January-December 2019, up by 4% year on year. Supply of almost all grades of propylene polymers increased, except for statistical copolymers of propylene (PP random copolymers).

Reliance Industries is one of the world's largest producers of polymers. Thus, the company produces among others polypropylene, polyethylene and polyvinyl chloride.
MRC

MOSCOW (MRC) - SIBUR Holding can enter the market with the offer of recycled PET within about 1.5 years, said Sergei Komyshan, Executive Director of SIBUR, during a press conference.

The executive director of SIBUR Sergey Komyshan said that the company is successfully moving in the development of a project for the production of secondary PET.

Recycled polymer packaging made of polyethylene terephthalate (PET) can begin to be used in SIBUR's technological processes in the coming years. PET-flex - a secondary raw material, the result of sorting and grinding PET bottles into flakes, the Holding plans to use in the production of primary polyethylene terephthalate (PET) at Polyef (Blagoveshchensk, Bashkortostan, part of SIBUR Holding).

In November 2019, SIBUR and EcoTechnology Group of Companies signed an agreement on cooperation in the field of sustainable development, according to the website of the petrochemical holding. The purpose of the partnership is to establish mutually beneficial cooperation aimed at developing a closed-loop economy, namely the recycling of polymer packaging.

In January, the SIBUR Board of Directors approved a strategy for the sustainable development of the company. One of the goals is to increase by 50% investments in R&D projects aimed at processing polymer waste and involving renewable sources of raw materials, building an effective system of interaction on sustainable development throughout the supply chain, as well as achieving a share of PET production with secondary granule content from the total PET production in the amount of not less than 40%.

According to ScanPlast of Market Report, last year, the import of PET granules to Russia increased by 13% compared to 2018 and amounted to 144.8 thousand tons compared to 128.5 thousand tons (excluding supplies from Belarus over the past two month). Last month, import deliveries of material to the Russian market increased by 10% to 13.6 thousand tons against 12.3 thousand tons in November; last December, material imports amounted to 12.4 thousand tons.

It was previously reported that on October 9, 2019, industrial wastewater partially entered the territory adjacent to the enterprise due to the collapse of a fragment of the wall of the reserve tank.

EcoTechnology Group of Companies is an integrated Russian operator that has been implementing projects in Russia in the field of municipal solid waste sorting, recycling and separate waste collection, as well as social and educational programs since 2005. Today it is one of the largest plastic processors in Russia.

Polyef JSC (Blagoveshchensk, Republic of Bashkortostan) is a part of SIBUR, the only producer of terephthalic acid and the largest supplier of polyethylene terephthalate in Russia. The capacity for the production of TPA after modernization is 350 thousand tons per year, PET - 219 thousand tons per year.

SIBUR is a vertically integrated gas processing and petrochemical company, operating at 26 production sites located in various regions of the Russian Federation. SIBUR sells products to more than 1.4 thousand consumers in the fuel and energy complex, the automotive industry, construction, production of consumer goods, chemical and other industries in 75 countries of the world.
MRC

MOSCOW (MRC) -- The federal judge overseeing Philadelphia Energy Solutions’ bankruptcy proceedings on Friday resolved a fight between two sets of lenders over which of them has first dibs on the potential USD1.25 billion in insurance proceeds for a June 2019 explosion and fire at its Girard Point refinery, reported Reuters.

US Bankruptcy Judge Kevin Gross found that ICBC Standard Bank and Cortland Capital Market Services each hold a perfected security interest in the proceeds of the policy, which includes USD1 billion in property damage coverage and USD250 million in business insurance (BI) coverage.

As MRC wrote before, a June fire at the 335,000 barrel-per-day PES refinery led the company to file for bankruptcy and shut the plant over the summer, laying off more than 1,000 workers and ending long-standing ties with dozens of businesses. The refinery endured years of financial trouble, hurt by poor access to US crude oil production and heavy costs of complying with federal laws on blending biofuels with gasoline. The PES plan to exit bankruptcy includes a USD240 million sale of the refinery to a real estate developer, Hilco Redevelopment Partners, which is expected to use the site largely for warehousing. Los Angeles developer, Industrial Realty Group, was selected as a backup buyer.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,093,260 tonnes in 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments rose from both domestic producers and foreign suppliers. The estimated PP consumption in the Russian market was 1,260,400 tonnes in January-December 2019, up by 4% year on year. Supply of almost all grades of propylene polymers increased, except for statistical copolymers of propylene (PP random copolymers).
MRC

MOSCOW (MRC) - Danaflex (Tatarstan) will produce only fully recyclable film by 2025, RBK reports.

The marketing director of the Danaflex group of companies, Evgeny Bantukov, told RBC Tatarstan that the company was preparing to launch industrial production of packaging films that could be 100% recycled.

According to him, the company also developed a biodegradable film: based on petroleum products and organic granules. However, in the first case, the film decomposes into small fractions, and the world community has come to the conclusion that the so-called microplastic is unsafe for the environment, said Bantukov. In the second case, a product with a high cost was obtained. Therefore, it was decided to start the production of 100% recyclable films. "For us and for the industry, this is a breakthrough. For a long time it was believed that it was practically impossible," said Bantukov.

Danaflex is the main supplier from among the Tatarstan companies, from which about 70% of the total packaging material is purchased. Individual and group packaging for sweets and a laminate film for packing mayonnaise, sauces and jams are purchased from a Tatarstan manufacturer.

Earlier it was reported that Danaflex (Tatarstan) in February launched the production of IML labels for food and non-food products. Danaflex has created a product that meets the most important requirement of the time - recycling, as the product and packaging are made of mono-raw materials. It is with this that the general trend of the transition of other types of marking (self-adhesive, dry label, direct printing, etc.) to the IML label is associated.

1.6 million tons of waste are generated annually in Tatarstan, of which about 10% is sent for recycling. Moreover, landfills for waste storage are 80% full. In Russia, the figure is about 7%.

Danaflex Group of Companies was founded in 2001. The main activity is the production of flexible packaging materials for various industries. The group positions itself as the largest manufacturer of packaging materials. The structure of the group of companies includes four production facilities: CJSC Danaflex, LLC Danaflex-Nano, LLC Danaflex-Alabuga and DGPack s.r.o (in the Czech Republic). In 2018, the group's revenue amounted to 12.1 billion rubles.
MRC

MOSCOW (MRC) -- Imports of bottle grade polyethylene terephthalate (PET) in Ukraine grew by 37% year on year to 12,500 tonnes in January from 9,100 tonnes a year earlier. PET imports in the country reached 9,400 tonnes in December 2019, according to MRC DataScope.

Deliveries of Chinese bottle grade PET to the Ukrainian market fell to the two times in January amounted to 3,100 tonnes compared to 7,000 tonnes in January last year. Imports were at 4,700 tonnes in December 2019.

The share of imports from China in the total volume amounted to 50% in January against 77% in January 2019. The key suppliers of injection moulding Chinese PET chips to the Ukrainian market were producers Dragon, China Resources Chemicals and Yisheng Petrochemical.
Nevertheless, the import of injection moulding PET chips from Lithuania by Neo Group grew four times in January compared to the same period last year and reached the maximum value of the last ten years - 7,300 tonnes. This figure was 1,800 tonnes in January 2019. In December last year, the volume of external supplies from Lithuania to Ukraine was at the level of 3,800 tonnes.

The total volume of Lithuanian PET imports to the country increased to 59% in January 2020 against 40% in December last year. In January 2019, the share of imports was at about 20%.

The main buyers of Lithuanian bottled PET were Coca-Cola Beverages Ukraine Limited and Retal.
MRC