Air Liquide completes sale of Schülke to EQT for up to USD1.17 billion

MOSCOW (MRC) -- Air Liquide says it has closed the sale of its subsidiary Schulke & Mayr (Norderstedt, Germany) to private equity firm EQT (Stockholm, Sweden) for up to EUR1 billion (USD1.17 billion). The two companies entered into exclusive negotiations in April, said Chemweek.

The total value of the transaction, which is subject to an earn-out provision, is between €925 million and €1 billion, it says. The deal “illustrates Air Liquide’s strategy to review its business portfolio regularly and to focus on its core gases and healthcare businesses,” it says. The company intends to continue to develop its healthcare activities, while providing Schulke “with the best opportunity for its long-term development," it adds.

Schulke is a global leader in infection prevention and hygiene solutions, with a proposed disposal of the company by Air Liquide first revealed in November last year. The acquisition would be by EQT’s EQT VIII fund, the companies said in April when confirming they had entered into exclusive talks.

Christian Last, Schulke’s CEO, welcomed EQT as the company’s new shareholder, saying it would “continue to focus on launching new and innovative products and leveraging our customer partnerships worldwide.” Together with EQT, Schulke will shape the continuous development and growth of the company, led by Last, based on shared and sustainable values, the company states.

"Schulke is a very impressive company with a long track record of developing innovative hygiene solutions to help protect people’s health. The dedication and hard work of the entire team during the current pandemic has underlined this once again. EQT is now looking forward to supporting Schulke’s management team as the company enters the next chapter of its long growth history,” says Matthias Wittkowski, partner at EQT Partners.

Schulke, founded in 1889 in Hamburg, operates three production sites in Germany, France, and Brazil.

As MRC informed earlier, Air Liquide has entered into a long-term supply agreement with NLMK Group (Moscow) that will see it invest around EUR100 million (USD114 million) in the steel producer’s site at Lipetsk, Russia, on the construction of a new air separation unit (ASU) and the acquisition of existing hydrogen and rare gases production units.

We remind that Shell Singapore restarted its naphtha cracker in Bukom Island in early December 2019, following a two months maintenance shutdown since the beginning of October 2019. Thus, this cracker was taken off-stream for the turnaround on 1 October 2019. The cracker is able to produce 960,000 tons/year of ethylene and 550,000 tons/year of propylene.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 595,170 tonnes in the first five month of 2020, up by 10% year on year. Deliveries of all ethylene polymers, except for linear low density polyethylene (LLDPE), rose partially because of an increase in capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market was 457,930 tonnes in January-May 2020 (calculated by the formula production minus export plus import). Deliveris of exclusively PP random copolymer increased.
MRC

Henkel acquires 75% stake in German D2C platform

MOSCOW (MRC) -- Henkel signed an agreement with Invincible Brands Holding, headquartered in Berlin, to acquire a 75 percent stake in a business comprising three fast-growing premium direct-to-consumer (D2C) brands: HelloBody, Banana Beauty and Mermaid+Me, said the company.

Through this transaction, Henkel will significantly expand its D2C go-to-market footprint in Beauty Care and add strong digital capabilities in areas such as performance marketing, analytics and fast innovation.

The transaction comprises the three attractive brands HelloBody, Banana Beauty and Mermaid+Me, which are mostly sold in Europe. The brands offer premium beauty care products and they also address the growing trend of sustainable and clean beauty. HelloBody is active in the skin, body and hair care categories, Mermaid+Me focuses on hair care products. Banana Beauty offers decorative cosmetics such as lipsticks and eyeliners.

In the last twelve months as of June 2020, the businesses generated total sales of around 100 million euros and employed around 180 people, including an experienced incubator team with a strong track record of launching new D2C brands.

The three D2C brands capture more than 1.5 million active consumers and will significantly strengthen Henkel Beauty Care’s digital footprint. The remaining 25 percent stake in the business will stay with the founders of Invincible Brands Holding – Bjoern Keune and Gennadi Tschernow – and private equity fund manager capital D. The founders and existing management team will remain onboard to further expand the existing as well as establishing new businesses.

"As part of our strategic framework for purposeful growth we pursue value-adding acquisitions to strengthen our businesses. This agreement is a proof point of how we consistently implement our strategy. It is also in line with our objective to strengthen our competitive edge in the area of digitalization by expanding our direct-to-consumer activities," said Henkel CEO Carsten Knobel.

"With this acquisition we will strengthen our portfolio with fast-growing premium brands in attractive categories. Through 1:1 interactions with consumers we will gain valuable insights that will help us to create meaningful innovations for the entire retail business,” said Jens-Martin Schwarzler, Executive Vice President and responsible for Henkel’s Beauty Care business.

"I would like to thank our entire team at Invincible Brands, together with capital D, for executing a phenomenal growth plan over the past two years. With Henkel there is now an exciting opportunity to continue building on that. The combination of our direct-to-consumer and social media marketing skills with Henkel's R&D, product knowledge and global footprint provides a winning formula. I am very much looking forward to working with the team at Henkel,” said Bjoern Keune, Co-Founder of Invincible Brands.

Stephan Lobmeyr, Co-Founder of capital D, added: "Two years ago we identified the disruptive nature and strength of the business model of Invincible Brands, a pioneer social media marketing and first-class brand incubator. We have supported Bjoern, Gennadi and the team to grow and conquer this nascent market and are really pleased that Henkel’s investment validates the strengths of the brands and the concept and that we will continue to be part of the business alongside Henkel." The agreement is subject to customary closing conditions, including regulatory approvals.

As MRC informed earlier, Henkel AG & Co. KGaA (Dusseldorf, Germany) announced that Henkel Adhesives Technologies has officially inaugurated its new production facility in Kurkumbh, India.

Henkel are also partnering with Borealis and plastics solutions company Borouge to develop flexible packaging solutions for detergents containing both virgin polyethylene (PE) and high amounts of post-consumer recyclate (PCR) in efforts to increase sustainability.

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.



MRC

US crude stocks hit 14-week low amid rising exports, refinery demand: EIA

MOSCOW (MRC) -- US crude oil inventories moved sharply lower during the week ended July 24 as exports and refinery demand climbed to multi-month highs, US Energy Information Administration data showed July 29, reported S&P Global.

Commercial crude stocks fell 10.61 million barrels to 525.97 million barrels last week, EIA data showed. While the draw pushed stockpiles to 14-week lows, they remained more than 17% above the five-year average for this time of year.

The inventory draw was concentrated on the US Gulf Coast, where stocks fell 10.46 million barrels to 295.51 million barrels, and on the US West Coast, where stocks fell 1.7 million barrels to 52.75 million barrels, the lowest since mid-March.

Meanwhile, stockpiles at the NYMEX delivery point of Cushing, Oklahoma, climbed 1.31 million barrels to an eight-week-high 51.42 million barrels. The build helped push total Midwest stocks up 2.23 million barrels to 139.74 million barrels.

Inventories at the Strategic Petroleum Reserve were unchanged for a second week at 656.15 million barrels.

An uptick in crude exports contributed to the USGC draw. Outbound crude volumes averaged at 3.21 million b/d last week, up from 2.99 million b/d the week prior, and the strongest since mid-May.

Crude exports have steadily increased in July as arbitrage incentives have improved for moving US crude into Southeast Asia and Northwest Europe. The arbitrage incentive for WTI MEH in Singapore versus Malaysian Tapis crude climbed above $1/b last week, bringing the July-to-date average up to 15 cents/b, according to S&P Global Platts Analytics data, reopening an arbitrage that had been closed since April.

The arbitrage incentive for WTI MEH in Rotterdam versus North Sea Forties has averaged at 14 cents/b to date in July. This arbitrage was last open on a monthly basis in December 2019, Platts Analytics data shows.

As exports inched higher, imports plunged to 5.14 million b/d last week, EAI data showed, down 800,000 b/d from the week prior and the weakest since the week ended April 17.

Total net crude inputs climbed 390,000 b/d to 14.6 million b/d last week, snapping a two-week downturn. The uptick put inputs at the strongest since late March, though they were still more than 14% behind the five-year average for this time of year. Nationwide refinery utilization jumped 1.6 percentage points to 79.5% of capacity.

Notably, Midwest utilization hit 86.9% of capacity last week, less than 9% behind year-ago levels. Midwest cracking margins for Bakken ex-Clearbrook averaged USD5.33/b for the week ended July 24, up from USD3.54/b over Q2. Coking margins also rose, with benchmark Western Canada Select margins averaging USD3.30/b, up from USD2.66/b over Q2.

But on the West Coast, utilization slipped for a second week, falling 1.1 percentage points to 68.1% of capacity. USWC refinery margins have climbed in recent weeks, however, with California largely returning to lockdown status, regional refiners could see renewed pressure if product demand dips. USWC cracking margins for Alaska North Slope averaged USD9.21/b for the week ended July 24, compared with the USD8.42/b over Q2.

Major refined product inventories saw modest increases last week even as total product demand ticked higher last week.

Total gasoline stocks climbed 650,000 barrels to 247.39 million barrels, pushing inventories to 7.9% above the five-year average and halting a three-week narrowing trend. Meanwhile, nationwide distillate stocks were up 500,000 barrels at 178.39 million barrels, a fresh 38-year high.

Total product supplied, a proxy for demand, surged 1.44 million b/d to 19.1 million b/d. Product demand was the strongest since the week ended March 20, but was still more than 10% behind year-ago levels. Gasoline demand saw a 3% bump on the week, averaging at 8.81 million b/d, while distillate demand was up nearly 13% at 3.64 million b/d.

As MRC informed previously, global oil consumption cut by up to a third in Q1 2020. What happens next in the oil market depends on how quickly and completely the global economy emerges from lockdown, and whether the recessionary hit lingers through the rest of this year and into 2021.

Earlier this year, BP said the deadly coronavirus outbreak could cut global oil demand growth by 40 per cent in 2020, putting pressure on Opec producers and Russia to curb supplies to keep prices in check.

And in September 2019, six world's major petrochemical companies in Flanders, Belgium, North Rhine-Westphalia, Germany, and the Netherlands (Trilateral Region) announced the creation of a consortium to jointly investigate how naphtha or gas steam crackers could be operated using renewable electricity instead of fossil fuels. The Cracker of the Future consortium, which includes BASF, Borealis, BP, LyondellBasell, SABIC and Total, aims to produce base chemicals while also significantly reducing carbon emissions. The companies agreed to invest in R&D and knowledge sharing as they assess the possibility of transitioning their base chemical production to renewable electricity.

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.
MRC

Marathon Petroleum to permanently close two oil refineries

MOSCOW (MRC) -- Marathon Petroleum plans to permanently close two small US oil refineries in Martinez, California, and Gallup, New Mexico, the company said, eliminating 800 jobs in response to lower fuels demand, reported Reuters.

The largest US refiner by volume had earlier idled the two facilities following weak demand due to COVID-19 outbreaks in the United States. US refiners on average idled about 20% of total processing capacity on falling vehicle and air travel.

Marathon said it plans to use the Martinez facility as an oil-storage facility and is evaluating its future use to produce renewable diesel, a fuel made from industry waste and used cooking oil. Martinez is California’s fourth largest refinery.

The company on Monday is forecast to swing to a second-quarter loss of USD1.75 per share, from a USD1.73 per share profit a year ago, according to Refinitiv data.

Marathon is negotiating a sale of its Speedway gasoline station network, a deal that could fetch between USD15 billion and USD17 billion, Reuters reported last month.

Marathon shares traded at USD38.20 on Friday, down 38% year to date.

Marathon spokesman Sid Barth declined further comment about the closures on Saturday.

About 860 employees work at the 161,000 barrel per day (bpd) Martinez and 27,000-bpd Gallup refineries. “Most jobs at these refineries will no longer be necessary, and we expect to begin a phased reduction of staffing levels” in October, the company said.

The closings are not anticipated to result in supply disruptions. “We will continue to utilize our integrated system to meet customer commitments,” the company said in a statement on its website.

As MRC reported earlier, US refiner Marathon Petroleum Corp is delaying all maintenance projects at its 102,000 barrel-per-day St. Paul Park, Minnesota, refinery for 2020 amid concerns related to the spread of the novel coronavirus. Several refiners have delayed planned maintenance at their plants this year due to concerns around the spread of the coronavirus among workers, or as part of capital and operational expense cuts.

Besides, Marathon Petroleum Corp idled its 166,000 barrel-per-day (bpd)refinery in Martinez, California beginning April 27 in response to the coronavirus pandemic’s hit to demand for refined products.

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.
MRC

Shell Australia to buy land-use carbon offsets company

MOSCOW (MRC) -- Shell Australia will fully acquire specialist carbon emissions offsetting company Select Carbon, reported S&P Global with reference to the company's statement August 3.

The move is Shell's first acquisition for its nature-focused business division which invests in forests, grasslands, wetlands and other natural ecosystems around the world.

"The scale of Australia's rangelands, ecological diversity and integrity of intact primary forests make this market a natural choice for Shell's first acquisition globally for our Nature-Based Solutions business and to further scale Shell's investment in this area here in Australia," Shell Australia Chairman Tony Nunan said in a statement.

Select Carbon partners with farmers and other landowners to develop carbon farming projects throughout Australia which aim to reduce emissions and capture CO2 while benefiting biodiversity and local communities, Shell said.

The acquisition will contribute to Shell's ambition to be a net-zero emissions energy business by 2050 or sooner.

"This ambition also involves working with customers to reduce or offset the emissions generated when they use Shell products, such as through the use of carbon credits," the company said.

Select Carbon has developed and manages a portfolio of over 70 projects covering 9 million hectares across various ecosystems and agricultural uses in Australia.

Carbon farming uses agricultural and land management practices that capture carbon in vegetation and soils or reduce greenhouse gas emissions. By using the correct land management practices, farms can transition from being net carbon emitters to carbon sinks.

The carbon credits generated through Select Carbon's projects are offered through the Australian government's Emissions Reduction Fund and other markets, creating an additional revenue stream for farmers and landowners, Shell said.

Each Australian Carbon Credit Unit generated through Select Carbon's projects represents the avoidance or removal of 1 mt of carbon dioxide and is eligible to participate in the Australian Federal government's Emissions Reduction Fund.

Australia continues to be a priority market for Shell's investment in new energy generation, offering a combination of strong growth in renewables, access to natural gas and customer demand for low-carbon energy solutions, it said.

The new acquisition complements Shell's moves into diversified and emerging energy technologies, including the acquisition of Australian commercial and industrial energy retailer ERM Power; the acquisition of Sonnen – a German company with operations in Adelaide that provides battery storage systems and solar panels for homes in Germany, Italy, the US and Australia; investing a 49% stake in Australian solar developer, ESCO Pacific; and building Shell's first industrial-scale solar power farm in central Queensland.

The acquisition of Select Carbon is expected to be completed before the end of 2020 and is subject to Australian regulatory approval, Shell said.

As MRC wrote before, Shell will announce a major restructure by the end of the year as the company prepares to accelerate its shift toward its net-zero emissions goal by 2050, said CEO Ben van Beurden to employees. The restructuring will include workforce reductions as part of broader cost-cutting measures, although no figures have been decided yet, the CEO reportedly said during an internal webcast.

We remind that Royal Dutch Shell Plc plans to idle a sulfur recovery unit (SRU) at the joint-venture Deer Park, Texas, refinery in 2021, said Shell spokesman Curtis Smith in July 2020. Currently, the refinery is operating at about 75% of its 318,000 barrel-per-day capacity because of reduced demand due to the COVID-19 pandemic.

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.

Royal Dutch Shell plc is an Anglo-Dutch multinational oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the biggest company in the world in terms of revenue and one of the six oil and gas "supermajors". Shell is vertically integrated and is active in every area of the oil and gas industry, including exploration and production, refining, distribution and marketing, petrochemicals, power generation and trading.
MRC