Shin-Etsu taps Taiwan in 20% boost to chipmaking material capacity

Shin-Etsu taps Taiwan in 20% boost to chipmaking material capacity

MOSCOW (MRC) -- Japan's Shin-Etsu Chemical will spend an estimated 30 billion yen (USD285 million) to raise capacity for a crucial semiconductor plant material by 20%, expanding its supply for cutting-edge chip production, according to NikkeiAsia.

New facilities for photoresist, used to form circuit patterns on silicon wafers, will be built in Japan and Taiwan.

The capacity increase by one of Japan's leading photoresist makers comes as competition in the field heats up, with chip demand rising for 5G devices, data centers and other applications.

The Taiwanese addition will come first, at a Yunlin County plant, by around February 2021. Shin-Etsu will begin Taiwanese production of photoresist compatible with cutting-edge extreme-ultraviolet (EUV) lithography technology -- a material it previously made only in Japan -- to meet rising demand from such customers as Apple supplier Taiwan Semiconductor Manufacturing Co.

In Japan, the new facilities at the Naoetsu plant in Niigata Prefecture are slated to begin operating in February 2022. Production capacity will go up 50% in Taiwan and 20% at Naoetsu, with their staffs expanding as well.

The capacity increase will raise output for customers in South Korea, mainland China and other markets as well.

Japanese rivals JSR and Tokyo Ohka Kogyo also produce EUV photoresist both in Japan and overseas, and Sumitomo Chemical and Fujifilm are preparing to enter this field.

Shin-Etsu photoresist is known for high sensitivity and efficient circuit formation. The company also makes other semiconductor materials, such as wafers, helping it pinpoint the source of any production troubles at customers.

Japanese companies together hold about 80% of the global photoresist market, with Shin-Etsu alone controlling 20% to 30%.

The photoresist market will grow 60% between 2019 and 2024 to about 250 billion yen, research firm Fuji Keizai projects.

As MRC informed earlier, Shin-Etsu declared force majeure on deliveries of all polyvinyl chloride (PVC) grades from its plant in Pernis, the Netherlands on October 13, 2020. The plants production capacity is 450,000 tons/year.It is not yet known when the force majeure will be lifted.

According to MRC's ScanPlast report, Russia's overall PVC production totalled 718,500 tonnes in January-September 2020, down by 0.3% year on year. At the same time, only two producers managed to increase their PVC output.
MRC

Big Oil's selling spree might prove tricky

Big Oil's selling spree might prove tricky

MOSCOW (MRC) -- The world’s leading energy companies are hoping to sell dozens of oil and gas fields and refineries worth over USD110 billion to reduce ballooning debt and their carbon footprint, said Reuters.

But with the outlook for oil and gas prices shrouded in uncertainty because of the coronavirus epidemic and the looming energy transition, finding buyers and agreeing on asset prices might prove tricky.

"This is not a very good time to sell assets," Total CEO Patrick Pouyanne said while presenting the French giant’s strategy to switch to renewables energy.

Eight of the world's top oil companies - Exxon Mobil, Chevron, Royal Dutch Shell, BP, Total, Equinor, Eni and ConocoPhillips - are expected to sell in the coming years assets with resources of around 68 billion barrels of oil and natural gas equivalent, around two years of today's global demand, according to Norwegian consultancy Rystad Energy.

Those assets carry an estimated value of USD111 billion, Rystad said in a note.

As it was written earlier, petrochemical companies are suspending production expansion projects in the US amid declining margins due to slowing demand growth. According to the American Chemistry Council, chemical companies have invested USD96 billion since 2010 to complete more than 200 shale oil projects in the United States, and another USD99 billion has been invested in projects underway. planning or building.

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

According to MRC's ScanPlast report, Russia's overall PE production totalled 1,712,400 tonnes in the first seven months of 2020, up by 58% year on year. Linear low density polyethylene (LLDPE) accounted for the greatest increase in the output. At the same time, overall PP production in Russia increased in January-July 2020 by 24% year on year to 1,063,700 tonne. ZapSibNeftekhim accounted for the main increase in the output.
MRC

Devon Energy to buy shale peer WPX for USD2.56B in Delaware push

MOSCOW (MRC) -- U.S. oil and gas producer Devon Energy Corp announced it will buy Permian basin peer WPX Energy Inc for USD2.56 billion as it looks to boost its presence in the Delaware portion of the prolific shale field, said Hydrocarbonprocessing.

The deal comes as U.S. shale companies post losses due to weak crude prices and struggle to raise new capital to restructure debt. But as producers seek out combinations to survive a coronavirus-induced slump in demand, deals at little or no premium are becoming the norm.

"Sector consolidation remains a critical focus, though we think news of a DVN/WPX combination is somewhat unexpected and could be complicated by likely shareholder votes on both sides given relatively similar market caps," Cowen analysts said.

Devon's deal is the second big merger after a price shock in April. In July, Chevron Corp agreed to buy Noble Energy Inc for USD5 billion. Devon said the deal, expected to close in early 2021, will help cut costs and increase annual cash flow by USD575 million by the end of next year.

The combined company, in which Devon will own 57% stake, will hold 400,000 net acres in the Delaware and can produce 277,000 barrels of oil per day. It will pay dividends using a "fixed plus variable" strategy, issuing a set 11 cents per share per quarter along with up to 50% of the remaining free cash flow.

Such a payout plan is seen as a new model for the industry that has fallen out of favor with investors after years of poor returns. As part of the deal, WPX shareholders will get 0.5165 shares of Devon common stock for each share of WPX common stock owned.

As MRC informed earlier, Devon Energy agreed with chemicals major Dow to jointly develop a portion of Devon’s STACK oil and gas acreage in central Oklahoma. Under the agreement, Devon will monetise half of its working interest in 133 undrilled locations in exchange for about USD100m, over the next four years.

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

According to MRC's ScanPlast report, Russia's overall PE production totalled 1,712,400 tonnes in the first seven months of 2020, up by 58% year on year. Linear low density polyethylene (LLDPE) accounted for the greatest increase in the output. At the same time, overall PP production in Russia increased in January-July 2020 by 24% year on year to 1,063,700 tonne. ZapSibNeftekhim accounted for the main increase in the output.
MRC

Sika profits slip on lower sales, confirms 2023 targets

MOSCOW (MRC) -- Construction chemicals company Sika (Baar, Switzerland) says its net profits for the first nine months of 2020 were lower by almost 1% on a year-on-year (YOY) basis, to 561.5 million Swiss francs (USD619.5 million) on sales down 3.4% YOY, to SFr5.81 billion, reported Chemweek.

The company says that lower sales in the March-to-May period had a negative impact on profits, with nine-month EBIT slipping by approximately 1% YOY, to SFr797.4 million. However, EBITDA increased 3.1% YOY, to SFr1.07 billion. Third-quarter figures have not been disclosed.

“The 2020 financial year to date has been dominated by the coronavirus pandemic. With our decentralized organization, we have been able to adapt swiftly to changed local conditions in all 100 countries and gain market share,” says Paul Schuler, CEO at Sika.

Sika's sales in the first nine months includes a strong acquisition effect of 9.2%, the company says. The EMEA region business reported a 3.8% increase in sales in local currency compared with 10.8% in the same period of the previous year. The Americas region business recorded sales growth in local currencies of 0.9%, compared with 18.1% in third-quarter 2019, and in the APAC region growth amounted to 13.9%, compared with 31.1% a year earlier. Sika’s worldwide business unit recorded a decline in sales of 16.1%, compared with 3.6% growth in 2019.

Sika says that it has been observing a modest upward trend in construction markets since June, with sales returning to more normal levels due to the gradual opening of building sites. For 2020, Sika expects slightly lower sales in local currency but EBIT broadly in line with last year, which implies an over-proportional rise in EBIT in the second half, it says. Sika’s forecasts assume that markets will no longer face almost complete lockdowns, the company says.

As announced previously, Sika has confirmed its 2023 targets. It is seeking to grow by 6-8% annually in local currencies until 2023. From 2021, the company aims to increase its EBIT margin to 15-18%. Projects in the areas of operations, logistics, procurement, and product formulation should result in an annualized improvement in operating costs equivalent to 0.5% of sales, the company says.

As MRC reported earlier, in August 2015, Swiss specialty chemicals company Sika opened its forth production site in Russia. A new mortar factory and a plant to produce concrete admixtures were opened in Volgograd, in southern Russia. Thus, at the existing site in Lobnya, 30 km north of Moscow, a new production facility, which manufactures polymers for concrete admixtures, came on stream.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,496,500 tonnes in the first eight months of 2020, up by 5% year on year. Shipments of all ethylene polymers increased, except for linear low desnity polyethylene (LLDPE). At the same time, PP shipments to the Russian market reached 767,2900 tonnes in the eight months of 2020 (calculated using the formula - production minus exports plus imports - and not counting producers' inventories as of 1 January, 2020). Supply increased exclusively of PP random copolymer.

Sika is a specialty chemicals company with a leading position in the development and production of systems and products for bonding, sealing, damping, reinforcing, and protecting in the building sector and motor vehicle industry. Sika has subsidiaries in 101 countries around the world and manufactures in over 200 factories. Its more than 20,000 employees generated annual sales of CHF 7.09 billion in 2018.
MRC

Qatar Petroleum to supply ultra low sulfur diesel to the local market from its refinery in Mesaieed

MOSCOW (MRC) -- Qatar Petroleum is pleased to announce the commencement of supply of ultra low sulfur diesel (ULSD) by the QP Refinery in Mesaieed for the domestic transportation market, effective from today, bringing all diesel sold in the country to the highest specifications, said Hydrocarbonprocessing.

The ULSD is a higher grade and cleaner premium diesel fuel, which meets the European Emission Standard ‘Euro 5’ – specifications. With this announcement, Qatar Petroleum reaffirms its commitment towards the environment in the State of Qatar and globally.

The start of ULSD production follows the successful upgrade of the QP Refinery’s Diesel Hydro-treating Units, resulting in a maximum of 10 ppm sulfur diesel.

On this occasion, His Excellency Mr. Saad Sherida Al-Kaabi, the Minister of State for Energy Affairs, the President and CEO of Qatar Petroleum, said, “We are pleased to announce this new addition to our products, which supports two of our strategic objectives – continuous efficiency improvements and environmental excellence. The production of ULSD by Qatar Petroleum is an important milestone for our downstream business, and I would like to thank my colleagues in QP operations who have worked diligently and safely to ensure that we achieve this important environmental milestone, which meets the stringent ‘Euro 5’ specifications."

This important step is an integral part of Qatar Petroleum’s strategy of maximizing the added value of Qatar’s downstream businesses, and delivering on our commitment to protect and enhance the environment through world-class standards and practices.

As MRC informed earlier, in July, the Chevron Phillips joint venture postponed final approval for a USD8 billion Gulf Coast plant, which it planned to approve next year with Qatar Petroleum.

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

According to MRC's ScanPlast report, Russia's overall PE production totalled 1,712,400 tonnes in the first seven months of 2020, up by 58% year on year. Linear low density polyethylene (LLDPE) accounted for the greatest increase in the output. At the same time, overall PP production in Russia increased in January-July 2020 by 24% year on year to 1,063,700 tonne. ZapSibNeftekhim accounted for the main increase in the output.
MRC