Evonik to acquire US catalyst rejuvenation firm Porocel

MOSCOW (MRC) -- Evonik Industries says it is acquiring catalyst rejuvenation firm Porocel Group (Houston, Texas) for USD210 million, as per the company's press release.

The purchase price is 9.1 times adjusted EBITDA in 2019, which Evonik says “is an attractive valuation for a high-quality asset in the catalyst sector.” The transaction will be financed by Evonik's "strong cash position" and is expected to close by the end of 2020 subject to approval by the relevant authorities, the company says.

The acquisition of Porocel expands significantly Evonik’s catalyst portfolio and especially its catalyst production capabilities, the company says. Sales of the combined catalyst business are expected to grow to more than EUR500 million (USD590 million) by the end of 2025 without the need for investment in new capacities, Evonik says.

“This acquisition is the next logical step in the strategic development of our portfolio. Our focus is on stable and high-margin specialty chemicals,” says Christian Kullmann, chairman of Evonik. “We are systematically expanding the share of our specialty businesses - and at an attractive valuation.”

Porocel generated sales of approximately USD100 million with an EBITDA of about USD23 million and EBITDA margin at about 23% in 2019, which is above Evonik's target range of 18-20%, the company says. Porocel has increased its EBITDA significantly in the last three years, driven by new product development through an expansion of R&D capabilities, Evonik says. It has more than 300 employees worldwide and production facilities in the US, Canada, Luxembourg, and Singapore.

Porocel offers a technology for rejuvenation of desulfurization catalysts, which are in increasing demand for producing low-sulfur fuel, Evonik says. Rejuvenation reduces CO2 emissions by more than 50% compared with the production of new desulfurization catalysts, it says.

As MRC reported before, Dow and Evonik have recently entered into an exclusive technology partnership. Together, they plan to bring a unique method for directly synthesizing propylene glycol (PG) from propylene and hydrogen peroxide to market maturity.

Propylene is the main feedstock for the production of polypropylene (PP).

According to MRC's DataScope report, 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.

Evonik is one of the world leaders in specialty chemicals. The focus on more specialty businesses, customer-oriented innovative prowess and a trustful and performance-oriented corporate culture form the heart of Evonik’s corporate strategy. They are the lever for profitable growth and a sustained increase in the value of the company. Evonik benefits specifically from its customer proximity and leading market positions. Evonik is active in over 100 countries around the world with more than 36,000 employees.
MRC

MOSCOW (MRC) -- Henkel says its subsidiary in North America, Henkel North America, has joined the US Plastics Pact, a collaborative initiative that aims to drive significant systems change by unifying diverse cross-sector approaches, setting a national strategy, and creating scalable solutions to create a path toward a circular economy for plastics in the US by 2025, reported Chemweek.

The US Plastics Pact is the first North American collaboration of its kind and is led by The Recycling Partnership, World Wildlife Fund, and Ellen MacArthur Foundation, the company says.

The US pact is complementary to, and follows the precedents set by the existing global network of plastics pacts, but it will be tailored to meet the unique needs and challenges of the US market, Henkel says. It will convene more than 70 brands, retailers, NGOs, and government agencies across the plastics value chain to bring one voice to US packaging through coordinated initiatives and innovative solutions for rethinking products, packaging, and business models, the company says.

The first task of the founding members of the US Plastics Pact will be to establish a “roadmap” in the first quarter of 2021 to identify key milestones and national solutions to achieving the US targets and realize a circular economy in which plastic never becomes waste, the company says.

As part of its broader sustainability strategy, Henkel has set global climate and energy commitments including being climate positive by 2040, with 2025 targets that include a 65% reduction in CO2 emissions from its production, and a reduction of 100 million metric tons of CO2 saved together with its consumers, customers, and suppliers, the company says.

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 is 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.
MRC

MOSCOW (MRC) -- China's Jiangsu Sailboat Petrochemical, also known as Jiangsu Shenghong, will maintain the run rate at its second 260,000 mt/year acrylonitrile (ACN) plants at Lianyungang at half the rate for the short run, reported S&P Global.

The company shut down its both 260,000 mt/yr ACN plants on July 16, 2020 due to the unexpected outage of its upstream methanol-to-olefins plant. The second ACN plant resumed operations on August 6, 2020.

Jiangsu Sailboat is not running the second ACN plant at full due to the lack of propylene feedstock.

As MRC informed before, in March 2018, Honeywell announced that Jiangsu Sailboat Petrochemical Company, Ltd. had accepted a new methanol-to-olefins (MTO) unit provided by Honeywell UOP, and that the plant was operating and had met all guarantees. With a production capacity of 833,000 metric tons per year, the unit is the largest single-train MTO unit in the world. Honeywell UOP, which pioneered MTO technology, started its first MTO unit for China's Wison Clean Energy in 2013.

ACN is a feedstock for the production of acrylonitrile-butadiene-styrene (ABS).

According to MRC's ScanPlast report, the estimated consumption decreased in January-June 2020 by 18% year on year in the Russian ABS sector, totalling 19,360 tonnes. 2,680 tonnes of ABS plastics were processed in Russia in June 2020.

Jiangsu Sailboat Petrochemical, part of the Shenghong Holding Group, is a major petrochemical manufacturer in China, including polyethylene (PE) and ethylene-vinyl-acetate (EVA). The company's production facilities are located in the new Xuwei Industrial Park in Lianyungang City, Jiangsu Province.
MRC

MOSCOW (MRC) -- Brazil’s Petrobras has initiated the sale process for a group of 26 onshore and shallow water oilfields and a small nearby refinery in the northeastern part of the country, as the state-run company forges ahead with its ambitious divestment program, reported Reuters.

In a securities filing, Petroleo Brasileiro SA, as the firm is formally known, said it had begun the teaser phase for the sale of the oilfields and the nearby Clara Camarao refinery in the state of Rio Grande do Norte. The oilfields, known collectively as Polo Potiguar, produced roughly 23,000 barrels per day (bpd) of oil in 2020 and 124,000 cubic meters per day of gas, while the refinery has an installed capacity of 39,600 bpd, the company said.

Petrobras is years into a drive to sell of tens of billions of dollars of non-core assets in a bid to reduce its hefty debt load and sharpen its focus on deepwater oil production.

Clara Camarao adds to the list of eight refineries Petrobras has previously put up for sale: RNEST, REPAR, RLAM, REFAP, REGAP, REMAN, LUBNOR and SIX. That group accounts for half of Brazil’s refining capacity, or 1.1 million bpd.

Following the crash in crude oil prices earlier this year, the company announced that it was permanently idling its shallow-water fields, which tend to have relatively high lifting costs.

During the teaser phase, Petrobras makes certain information about the assets and the eligibility criteria for bidders available.

The Clara Camarao refinery serves the regional market, and its main products are diesel, gasoline and jet fuel, Petrobras said.

As MRC reported previously, Petrobras may need more than a year to divest its stake in Braskem, said Andrea Almeida, Petrobras CFO, in early July. She said during the company’s recent webinar that Petrobras plans to give more time for potential investors to make offers for the company's assets, including for its refineries and stakes at its petrochemical and fuel distribution affiliates. The divestment of Petrobras's stake in Braskem in 2020 would be desirable but "might not be possible" as the COVID-19 pandemic has changed market conditions, she said. The company plans to close part of its refinery sales in 2021. In December, Roberto Castello Branco, CEO of Petrobras, said that he wants to sell the company’s stake in Braskem within a year. Petrobras owns 32.15% of Braskem.

We remind that Braskem is no longer pursuing a petrochemical project, which would have included an ethane cracker, in West Virginia. And the company is seeking to sell the land that would have housed the cracker. The project, announced in 2013, had been on Braskem's back burner for several years.

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.

Headquartered in Rio de Janeiro, Petrobras is an integrated energy firm. Petrobras' activities include exploration, exploitation and production of oil from reservoir wells, shale and other rocks as well as refining, processing, trade and transport of oil and oil products, natural gas and other fluid hydrocarbons, in addition to other energy-related activities.
MRC

MOSCOW (MRC) -- Solvay says it has issued a new perpetual EUR500-million (USD591 million) hybrid bond, to be used for general corporate purposes, including the possible repayment of other indebtedness, according to Chemweek.

The bond has a perpetual maturity with a first call date on 2 December 2025 and will pay a fixed coupon of 2.5% with corresponding yield of 2.625% until 2 March 2026, which is the first date the coupon resets, and will do so every five years thereafter, the company says.

Solvay says that in accordance with IFRS requirements, the notes will rank junior to all senior debt and will be recorded as equity, and coupons will be recorded as dividends. The hybrid bond will also benefit from 50% rating agency equity treatment by Moody’s and S&P, the company adds.

Solvay has concurrently launched a tender offer to repurchase any-and-all its EUR500-million perpetual hybrid bond with a first call date in June 2021, which bears interest at a rate of 5.118%, the company says. The offer will expire on 1 September 2020, it says.

As MRC wrote previously, through the acquisition of the Solvay polyamide (PA) business, BASF has enhanced its R&D capabilities in Asia Pacific with new technologies, technical expertise, and upgraded material and part testing services.

We remind that BASF-YPC, a 50-50 joint venture of BASF and Sinopec, undertook a planned shutdown at its naphtha cracker on 30 April 2020. The company initially planned to start turnaround at the cracker on April 5, 2020. The plant remained under maintenance unitl 18 June, 2020. Located in Jiangsu, China, the cracker has an ethylene capacity of 750,000 mt/year and propylene capacity of 400,000 mt/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.

Solvay is a science company whose technologies bring benefits to many aspects of daily life. With more than 24,100 employees in 64 countries, Solvay bonds people, ideas and elements to reinvent progress. The Group seeks to create sustainable shared value for all, notably through its Solvay One Planet plan crafted around three pillars: protecting the climate, preserving resources and fostering better life. The Group’s innovative solutions contribute to safer, cleaner, and more sustainable products found in homes, food and consumer goods, planes, cars, batteries, smart devices, health care applications, water and air purification systems. Founded in 1863, Solvay today ranks among the world’s top three companies for the vast majority of its activities and delivered net sales of EUR10.2 billion in 2019.
MRC