Linde earnings drop on one-time impacts

MOSCOW (MRC) -- Linde reported second-quarter 2020 income from continuing operations of USD458 million, down 11% year-on-year (YOY), said the company.

Excluding purchase accounting impacts and one-time charges, income from continuing operations was USD1.0 billion, up 1% YOY as stronger price and cost savings offset volume declines. Adjusted earnings per share were USD1.90, up 4% YOY.

Second-quarter sales were USD6.4 billion, down 5% YOY excluding negative currency translation, cost pass-through and divestitures. Price improved 2% YOY. Volume decreased 7% as growth from project start-ups and engineering was more than offset by the global macroeconomic slowdown as a result of the COVID-19 pandemic.

"Looking ahead, the full effects of COVID-19 and the rate of recovery are uncertain,” said Linde CEO Steve Angel. “However, the growth opportunities for Linde remain strong from our high-quality project backlog, defensive end markets and leading infrastructure and technology in support of the secular trend in clean energy.” Linde said it saw second-quarter YOY volume gains in electronics and healthcare, which awas offset by declines in food and beverage; manufacturing; chemicals and refining; and metals.

Linde expects full-year 2020 adjusted earnings of USD7.60-$7.80/share, up 7%-9% YOY excluding current impacts. It expects third-quarter adjusted earnings of USD1.90-USD1.95/share, up 1%-4% excluding currency impacts. The low-end of the range assumes no economic improvement from the second quarter and the high end of range assumes gradual economic improvement in the second half, Linde says.

Americas sales of USD2.4 billion were down 13% YOY as 2% higher pricing was more than offset by a 9% volume decline led mainly by manufacturing and metals end markets. Americas operating profit of USD662 million, down 4% YOY.

Asia Pacific (APAC) sales of USD1.3 billion were down 13% YOY. Price increased 1% versus prior year but was more than offset by negative 9% volumes driven by lower demand in the manufacturing end market and a prior-year sale of equipment. Operating profit of USD294 million was down 3% YOY.

Europe, Middle East & Africa (EMEA) sales of USD1.5 billion was down 13% YOY as 1% higher pricing was more than offset by negative 7% volumes primarily due to lower demand in the manufacturing and metals end market. Operating profit of USD303 million was down 9% YOY.

Linde Engineering sales were USD810 million, up 8% YOY. Operating profit was USD138 million, up 39% YOY due primarily to strong project execution and productivity initiatives.

As MRC informed before, in February 2020, Linde PLC received a contract to provide technology for PJSC Sibur Holding’s cracker at Amur gas chemical complex (GCC). GCC is an integrated 1.5 million tons per year polyethylene and polypropylene production complex to be built near Svobodny in Russia’s far-east Amur region. The contract was awarded to Linde under a consortium with Sibur subsidiary and project contractor NIPIgazpererabotka (Nipigaz). As per the agreement, Linde will deliver engineering, procurement, and site services based on its proprietary technology for the GCC’s cracker.

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

According to MRC's DataScope report, PE imports to Russia dropped in January-June 2020 by 7% year on year to 328,000 tonnes. High density polyethylene (HDPE) accounted for the main decrease in imports. At the same time, PP imports into Russia rose in the first six months of 2020 by 21% year on year to 105,300 tonnes. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.
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Huhtamaki reduced sales in the second quarter by 8%

MOSCOW (MRC) - Finnish company Huhtamaki (Finland), one of the largest European suppliers of food and beverage packaging, reduced sales in the second quarter by 8%, the company said.

Low demand for food packaging in restaurants and cafes during the COVID-19 pandemic affected the company's sales in the second quarter of 2020.

Thus, the sales of the Finnish packaging manufacturer Huhtamaki ("Huhtamaki") in the second quarter of 2020 decreased by 8% - to EUR797 million, as due to the pandemic the demand for its products from restaurants and cafes sharply decreased. The company's profit decreased from EUR53.3 million to EUR46.3 million.

Adjusted earnings before interest and taxes (EBIT) fell 10% to EUR70.1 million. Despite very weak second quarter results, stronger first quarter results helped Huhtamaki end the first half with modest profit growth and only marginal sales decline.

Sales of paper and plastic disposable tableware for restaurants and cafes in the food service segment fell 31% to EUR167.2 million, while adjusted EBIT declined 72% to EUR6.2 million.

In the North American region, also hit by the coronavirus shutdown, sales fell 3% to EUR296.1 million, but adjusted EBIT rose 17% to EUR37.9 million on lower energy, fuel and polymers. Huhmataki noted that demand for finished food packaging in the flexible and woven packaging segments remains robust despite COVID-19.

The company's sales of flexible plastic packaging rose 6% to EUR263.1 million, driven by strong demand in most markets, especially “higher than usual” in Europe. At the same time, Adjusted EBITDA declined 5% to EUR19.1 million due to COVID-19 production interruptions in India and the UAE.

Fiber Packaging sales declined 2% to EUR75.7 million, but adjusted EBIT jumped 12% to EUR8.5 million, driven by higher volume and prices. Earlier it was reported that in December last year Huhtamaki put into operation a new line in the city of Ivanteevka (Moscow region). The commissioning of new equipment is part of an investment project that was presented in November 2018 and valued at USD7 million.

According to MRC's DataScope report, PE imports to Russia dropped in January-June 2020 by 7% year on year to 328,000 tonnes. High density polyethylene (HDPE) accounted for the main decrease in imports. At the same time, PP imports into Russia rose in the first six months of 2020 by 21% year on year to 105,300 tonnes. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.

Huhtamaki is a manufacturer of food grade consumer packaging made from paper, molded paper fiber and plastic. The company has 76 factories in the world with more than 16 thousand employees. Since 1994, one of the two Russian factories Huhtamaki has been operating in Ivanteevka for the production of disposable tableware and packaging made of plastic, paper and molded paper fiber for food and eggs. This plant is the largest company in Eastern Europe, as well as the largest producer of egg packaging in Russia and the CIS. The total investment in the plant is EUR125 million. In Russia, "Huhtamaki" has two production sites - in Ivanteevka (Moscow region) and in Alabuga (Tatarstan), where it produces packaging for catering and packaging for eggs.
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Teijin Carbon Europe and the UK National Composites Centre strengthen innovation partnership

MOSCOW (MRC) -- Teijin Carbon Europe GmbH, the Teijin Group's carbon fiber business in Europe, has upgraded to Tier 2 membership with the National Composites Centre (NCC) in Bristol, UK as a key part of Teijin’s strategy to support next generation aerospace manufacturing projects, said Jeccomposites.

Teijin originally joined the NCC as an associate member in November 2018. As a global manufacturer of carbon fiber, Teijin Carbon Europe is well placed to support the NCC to advance its materials and manufacturing technologies. Many of their digital automated deposition technologies were funded by the Aerospace Technology Institute (ATI) as part of the NCC iCAP program (Digital Capability Acquisition Program, an investment program for digitalizing composite manufacturing, increasing production rates and quality while improving efficiency and reducing costs), including the Ultra High Rate Deposition Cell, which has two huge industrial robots that automate the aircraft wing production process. The robots measure, cut, lift and place pieces of carbon fiber fabric (‘plies’) with millimetric accuracy – laying 5m wide strips of composite material, up to 20m long, in one precise movement.

This cuts the number of fabric components required from around 100,000 to just 150 and therefore can significantly reduce wing component build time. This has the potential to revolutionize aircraft production and is playing a critical role in the Wing of Tomorrow – a research and development program led by Airbus to deliver the next generation of aircraft wings, which also includes UK-based Tier 1 suppliers GKN Aerospace and Spirit AeroSystems.

Teijin Carbon Europe looks forward to supporting the NCC and partners on various highperformance aerospace projects as well as contributing to the UK composites community. As a Tier 2 member, the company will provide unique carbon fiber non-crimp fabrics as well as thermoset and thermoplastic prepreg materials for diverse applications in these projects and in other NCC development programs.

Enrique Garcia, Chief Technology Officer at the NCC, commented: "We’re delighted that Teijin are enhancing their membership with the NCC, which will enable us to explore many more opportunities for future collaboration. We have already established a fruitful working relationship with Teijin, who have consistently provided us with materials, so that we can continue to develop new processes and products across all sectors. This strengthened partnership will make a valuable contribution to both the NCC’s and Teijin’s future growth in the composites industry."

As one strategic focus of its medium-term management plan for 2020-2022, the Teijin Group is intensively accelerating its development of mid- to downstream applications for aircraft. Teijin Carbon Europe has already been selected to supply carbon fiber based Non-Crimp Fabric (NCF) to the Wing of Tomorrow project.

Going forward, Teijin intends to further strengthen its carbon fiber and its intermediate material business as a leading solution provider for aircraft applications, targeting annual sales in this field in excess of USD 900 million by around 2030.

As mRC informed earlier, Teijin Chemicals plans to resume production at its polycarbonate (PC) plant in Matsuyama, Japan in early August, after preventive maintenance. Repair work at this enterprise with a capacity of 130,000 tonnes/year began at the end of June.

According to MRC's ScanPlast, the total estimated consumption of PC granulate in Russia in January - May 2020 (excluding imports and exports to Belarus) increased to 38,900 tonnes, an increase of 19% relative to the same period in 2019 (32, 700 tonnes).

Taiyo Petrochemical Co. Ltd. manufactures petrochemical products. In particular, the company manufactures and markets styrene monomer.
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Ineos launches consumer healthcare business

MOSCOW (MRC) -- Ineos has launched its previously announced consumer healthcare business, Ineos Hygienics. The new business will produce a range of hospital-grade hand gels, sanitizer sprays for hands and surfaces, and sanitizer wipes for retail sale, available for the home and to the public, said Chemweek.

Ineos Hygienics is headquartered in the UK and operates manufacturing plants at Newton Aycliffe, UK; Herne, Germany; Etain, France; and at Jacksonville, Arkansas, and Neville Island, Pennsylvania.

"To date, we’ve delivered more than four million bottles of sanitizer to hospitals around the world, bringing confidence to thousands of frontline medical staff and care providers,” says George Ratcliffe, chief operating officer at Ineos Hygienics. “Now, we’re able to offer that same level of protection to the public."

Ineos Hygienics will formulate its sanitizers with 75% alcohol as advised by the World Health Organization, the US Food and Drug Administration, and European health services.

As MRC informed earlier, Ineos is enacting a series of ‘social distancing’ measures in order to protect its employees who play a vital role in the production of essential products. Ineos announced a series of measures to protect employees and thereby ensure the continued operation of its plants and businesses through the coming weeks and months. As the manufacturer of essential materials that are vital to life, the company is taking immediate action to limit the spread of the virus.

As MRC informed earlier, Russia's output of chemical products rose in June 2020 by 2.6% year on year. However, production of basic chemicals increased year on year by 4.9% in the first six months of 2020. According to the Federal State Statistics Service of the Russian Federation, polymers in primary form accounted for the greatest increase in the output in January-June. Production of benzene was 106,000 tonnes in June 2020, compared to 110,000 tonnes a month earlier. Overall output of this product reached 721,000 tonnes over the stated period, up by 3.9% year on year.
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MFG Chemical to move headquarters

MOSCOW (MRC) -- MFG Chemical, a global leader in specialty and custom chemical manufacturing, says it is moving its corporate headquarters to Chattanooga, Tennessee from Dalton, Georgia, according to Chemweek.

The move is due to growth at the company, which has created a need for more work space at the headquarters.

MFG’s manufacturing sites at Dalton will continue to operate, with executive, finance, human resources, and sales staff relocating to Chattanooga, which is 25 miles from Dalton.

“MFG Chemical has outgrown its original headquarters in Dalton, Georgia,” says MFG president and CEO Paul Turgeon.

The new headquarters location will be in downtown Chattanooga.

As MRC reported earlier, in October 2019, MFG Chemical successfully renewed its ISO 9001:2015 Certifications at each of its three Dalton, Georgia facilities. MFG was one of the first chemical companies to achieve ISO 9001: 2015 certification in October of 2016, and has now been audited and certified four times.

We remind that MFG Chemical has upgradied its Pasadena, Texas plant, which the company acquired in March 2018. The acquisition of the Pasadena plant, together with the company’s 3 plants in Northwest Georgia, made MFG Chemical one of America’s largest consumers of Maleic Anhydride (MA). Pasadena plant improvements were scheduled for completion by the end of the 1st Quarter of 2019, and entail a multi-million dollar investment.

Maleic anhydride is a feedstock for the production of tetrahydrofuran, tetrahydrophthalic anhydride, films and synthetic fibers, pharmaceuticals, detergents, plasticizers, maleic, succinic, fumaric and malic acids, and a number of agricultural chemicals.

Plasticizers are substances introduced into a polymeric material to make it elastic and plastic during processing and operation. In particular, plasticizers are used for the production of polyvinyl chloride (PVC). The share of plasticizers used for the production of PVC products is about 80%.

According to MRC's DataScope report, imports of suspension polyvinyl chloride (SPVC) into Russia totalled 13,800 tonnes in the first half of 2020, up by 5% year on year, whereas exports grew by 7% year on year.
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