Sumitomo Demag reports jump in H1 despite coronavirus

MOSCOW (MRC) -- Japanese-German injection moulding machine manufacturer Sumitomo Demag saw H1 orders for machines produced in Germany and China rise nearly 25% year on year, despite the coronavirus health crisis, said Canplastics.

Compared with the first half of 2019, injection molding machine manufacturer Sumitomo (SHI) Demag is ending the first half of 2020 with what it calls "a healthy order book." During the first six months, the value of incoming orders for machines produced in Germany rose by almost 25 per cent.

In an Aug. 12 statement, the German-Japanese company described itself as “cautiously optimistic for the future". CEO Gerd Liebig attributes the positive results primarily to demand coming from the packaging and medical technology sectors. "Our intentional strategic focus on these two growth markets over the past few years has placed us in a stronger position, helping us to survive during these difficult times with a strong order increase,” he said in the statement.

By contrast, demand from the automotive industry has slumped sharply for the firm, and its forecast for the consumer segment is also cautious: “Due to the tense situation on the labour market and the declining propensity of consumers to buy, [we] anticipate a lower inclination among molders to invest," the statement said.

As a result of stable sales, Sumitomo (SHI) Demag expects to report a year-on-year 17per cent increase in overall incoming orders for 2020. "Our plant in Wiehe [Germany] is operating at full capacity and from November 2020 we will be producing the all-electric small machines at the historic high cycle,” Liebig said. “The strategic focus on this series is now paying off in full: By the second half of 2020, we will double our production capacity once again in order to meet demand.

As a result of this increase, Sumitomo (SHI) Demag is pushing ahead with the planned cooperation with its Japanese parent company, with Japan commencing production of IntElect machines later in 2020.

As it was written earlier, in July, Sumitomo (SHI) Demag Plastics Machinery completed the expansion and modernisation of its training centre and embarked on the next phase of its growth strategy by breaking ground on a new 1600 m2 warehouse, both at its site in Schwaig, Germany.

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.

MRC

MOSCOW (MRC) -- Sealed Air (Charlotte, North Carolina) has signed a collaboration agreement with Plastic Energy (London, UK), a chemical recycler of plastics, and made an equity investment in its parent, Plastics Energy Global, as per Chemweek.

"This collaboration will help us meet our 2025 sustainability pledge and lead the way in transforming our industry," says Ted Doheny, president and CEO of Sealed Air, the company that invented Bubble Wrap.

The pledge, which Sealed Air announced in 2018, sets a target of 50% average recycled content across all packaging solutions, with 60% coming from post-consumer recycled content. The pledge also includes a commitment to increase recycling and reuse rates through collaborations such as the investment in Plastic Energy, says the company. In 2019, Sealed Air joined the Alliance to End Plastic Waste.

Plastic Energy has a patented technology for the anaerobic thermal conversion of polyethylene, polypropylene, and polystyrene waste to naphtha and diesel fuel. The company, which currently operates two commercial plants in Spain, aims to process 300,000 metric tons of plastic waste by 2025. Partners include Petronas, SABIC, and Ineos.

As mRC informed earlier, bubble wrap maker Sealed Air Corp. is acquiring Automated Packaging Systems Inc. (APS), an Ohio-based manufacturer of automated bagging systems, for USD510 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.
MRC

MOSCOW (MRC) -- Lanxess says net profits in the second quarter of 2020 were almost eight times higher than in the same period of the previous year, to EUR798 million (USD943 million), said Chemweek.

This is primarily due to the sale of its 40% stake in chemical park curator Currenta to Macquarie Infrastructure and Real Assets in April, which resulted in a disposal gain of EUR740 million. Sales declined 16.7% year on year, to EUR1.44 billion, due to weak demand across many industries and lower raw material prices, the company says. EBITDA and EBIT shrank by 23.8% and 57.3%, to EUR198 million and EUR61 million, respectively.

"As expected, after the huge slump in the global economy we felt the effects of the coronavirus crisis much more strongly in the second quarter than in the first three months of the year. However, our stable positioning, strong liquidity, and high cost discipline are continuing to get LANXESS through this challenging time well. Besides, we are already seeing initial signs of a recovery in Asia. I therefore remain confident, even though a rapid macroeconomic recovery cannot be foreseen at present,” says Matthias Zachert, chairman at Lanxess.

The company’s consumer protection business posted a positive quarter with sales growing 21.9% YOY, to EUR301 million and EBITDA pre-exceptional items 41.7% higher YOY, to EUR68 million. The result was mainly due to strong business with agricultural chemicals in the Saltigo business unit and continued good demand for disinfectants in the material protection products division, the company says.

However, weak demand from the automotive industry squeezed earnings in the other three segments, especially engineering materials, which recorded a 33% YOY drop in sales, to EUR244 million, dragging EBITDA pre-exceptionals down 57%, to EUR28 million, Lanxess says. Sales of the advanced intermediates business fell by 20%, to EUR469 million, with EBITDA pre-exceptionals down 12%, to EUR100 million. Specialty additives’ sales went down 20% YOY, to EUR403 million, and EBITDA pre-exceptional items declined 29%, to EUR63 million.

The company says that its ongoing strong liquidity is helping it secure financial and operating liquidity in the uncertain environment caused by COVID-19. Operating cash flow decreased 39% YOY, to EUR52 million, and net debt at the end of June was down to EUR929 million from EUR1.74 billion at the end of June 2019. Meanwhile, in response to the impact of the pandemic the company reduced its capital expenditure by 19%, to EUR88 million, it says.

Lanxess confirms the full-year forecast it presented with its first-quarter 2020 results, and expects EBITDA pre-exceptional items to be in the range of EUR800-900 million. It anticipates business momentum to improve sequentially in the third quarter. In addition, the company does not expect the global economic environment to return quickly to the prior-year level and assumes that apart from the significant negative developments in the automotive industry, the construction, agro-industry, and chemical sectors will decline in 2020.

As MRC informed earlier, Lanxess has announced that it expects its core income to decline in 2020 as the global coronavirus epidemic is expected to damage its supply chains. The company forecasts that profit before exceptional items will slash EUR 50-100 million (USD56.4-112.8 million) as a result of coronavirus, with EUR20 million (USD22.6 million) impact projected for the first quarter. However, the company anticipates its operating business will remain stable for the year.

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.
MRC

MOSCOW (MRC) -- Citing the current economic downturn, Motiva Enterprises (Houston, Texas) said Wednesday that it will slash 10% of its workforce by 1 September, including jobs at its headquarters, terminals, and Port Arthur, Texas, facilities, said Hydrocarbonprocessing.

Motiva, which operates the 639,700-b/d Port Arthur refinery near Houston, the largest in North America, said hourly operations, maintenance, and lab team members will not be impacted by this job reduction. The company had about 2,800 employees as of December 2019, according to its website.

Motiva said the workforce reduction will not affect its licensing deals with Shell and 76. Under exclusive, long-term brand licenses for the Shell and 76 brands, Motiva supplies fuel to more than 5,000 retail gas stations.

"Motiva is undergoing a rigorous exercise to capture synergies and optimize processes across the entire organization—from our corporate headquarters, terminals, and Port Arthur facilities," the Houston-based company said.

Like other US-based refineries, Motiva has experienced historic demand destruction as lockdowns and mass-gathering restrictions related to COVID-19 have virtually wiped out transportation fuel consumption, severely cutting into product margins.

The Saudi Arabian Oil Co., or Saudi Aramco, which wholly owns Motiva, reported a profit of $6.6 billion in quarter two 2020, down 74% year-over-year (YOY) from USD24.7 billion, citing challenging market conditions due to COViD-19.

Motiva refines, distributes, and markets petroleum products throughout the US. It also operates the largest lubricant plant in the Western Hemisphere. In 2019, Motiva acquired a chemical plant that manufactures ethylene, propylene, cyclohexane, and other byproducts.

As MRC informed earlier, Motiva Chemicals, the American subsidiary of the Saudi petrochemical giant Saudi Aramco, began repair work on the compressor of the cracking unit in Port Arthur (Port Arthur, Texas, USA) on 2 August. It is currently unknown how long maintenance will continue on the compressor as part of the facility's light olefins unit (LOU) with a capacity of 620 kt ethylene and 340 kt propylene per year.

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

MOSCOW (MRC) -- BASF Total's Port Arthur cracker in Texas remained shut for maintenance, with no known target date for restart, reported S&P Global with reference to sources' statement Aug. 11.

The company said in a June 21 filing with the Texas Commission on Environmental Quality that there would be flaring and maintenance at its BTP Cracker Complex as a result of an unplanned outage that began June 11.

The maintenance was scheduled to begin June 22 and was expected to last 744 hours through July 23, according to the filing.

The JV’s steam cracker at Port Arthur has a production capacity of more than 1 million metric tons/year of ethylene and 544,000 metric tons/year of propylene, according to IHS Markit data.

The company was not immediately available for comment Aug. 11 or June 22, but said in the TCEQ filing that "this activity is to repair the propylene refrigerant compressor."

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