Croda to acquire Iberchem for USD975 million

MOSCOW (MRC) -- Croda says it has agreed to acquire the entire issued share capital of flavors and fragrances company Iberchem Group (Murcia, Spain) from investment company Eurazeo for EUR820 million (USD975 million) on a debt-free, cash-free basis, said Chemweek.

The sum will be funded via a combination of Croda's existing debt facilities and the proceeds of a ?600-million ($798 million) equity placing representing 8% of Croda's issued share capital, the company says. Acquiring Iberchem marks Croda's entry into the flavors and fragrances market. The transaction is expected to close by the end of 2020, Croda says.

The acquisition price represents a multiple of 20.5 times Iberchem's estimated 2020 EBITDA, according to Croda. “We have known Iberchem’s team for many years and their business is highly compatible with Croda’s. Iberchem stands out with its significant exposure to emerging markets, extensive product portfolio well placed to adapt to sustainability trends, strong customer focus and R&D capability, and 10-year track record of consistent year-on-year growth. By bringing our businesses together, we are creating a new, full-service offering to our customers in consumer-care markets and a compelling platform from which to grow the combined business in the years ahead,” says Steve Foots, CEO of Croda.

Eurazeo acquired 71.5% of Iberchem in 2017 for EUR405 million, less than half what Croda is paying for the business. Iberchem's management owns the rest of the company. Iberchem's sales have increased at a compound annual growth rate of 15% since 2010, Croda says.

The acquisition will help drive Croda’s objectives by focusing on faster-growing core consumer markets, adding a new, high-growth adjacency to its existing personal-care and home-care businesses, it says. After acquiring Iberchem, Croda will report under four sectors from 2021—consumer care, life sciences, performance technologies, and industrial chemicals. The newly created consumer-care sector will comprise the current personal-care business, the home-care business unit that currently sits within performance technologies, and Iberchem.

Iberchem will operate as an independent entity but with extensive support from Croda, the company says. According to Croda, Iberchem will continue to be led by its current management team, with the CEO of the company, Ramon Fernandez, committing to stay to provide continuity and a smooth transition to Croda.

Iberchem generated €174 million in revenue in 2019, and had EBITDA of EUR34 million, Croda says. It has continued to "trade well" in 2020, despite COVID-19, and its revenue forecast for 2020 is EUR187 million with an EBITDA of EUR40 million, Croda says. Iberchem generates 80% of its sales from fragrances, split evenly between personal-care and home-care products. The remaining 20% of its sales are from flavors. Iberchem has 14 manufacturing facilities and 10 R&D centers across 120 countries.

Croda expects the deal to generate synergies leading to annualized cost reductions of EUR25 million after three years and EUR48 million after five years.

As MRC informed earlier, Croda International (Goole, UK) says it has entered a partnership with Sentient Science (Buffalo, New York), an asset management and software services company, for the recommended use of Croda’s Rewitec additives for wind turbine gearboxes and main bearings.

As MRC informed earlier, Nexam Chemical has received an order from an existing customer in the area of PET additives for deliveries to the USA. The customer is a market-leading manufacturer of PET foam. It is the single largest order in the United States and also one of the largest ever for Nexam Chemical globally. Nexam Chemical has previously delivered products to this customer and this order confirms good growth in the business. The value of the order is SEK 9 million and applies to deliveries up to and including the spring of 2021.

We remind that Russia's output of chemical products rose in September 2020 by 6.7% year on year. At the same time, production of basic chemicals increased by 6.1% year on year in the first nine months of 2020, according to Rosstat's data. According to the Federal State Statistics Service of the Russian Federation, polymers in primary form accounted for the greatest increase in the January-September output. Last month's production of primary polymers decreased to 852,000 tonnes from 888,000 tonnes in August due to shutdowns in Tomsk, Ufa and Kazan. Overall output of polymers in primary form totalled 7,480,000 tonnes over the stated period, up by 16.4% year on year.

Croda acquired Rewitec in 2019 and began to offer to energy technology customers nano- and micro-particle-based additives to increase the durability of machinery by lowering friction and reducing wear, the company says. Prior to the acquisition in 2017, Sentient Science validated Rewitec’s DuraGear gearbox oil additives for use in wind turbine gearboxes, it says.

MRC

MOSCOW (MRC) -– Ascend Performance Materials has launched several new grades of its HiDura long-chain polyamides (PA) for engineered plastics, monofilaments and cable ties. HiDura polyamide 610 and 612 are designed to provide exceptional dimensional stability and long life with enhanced resistance to chemicals, impact and abrasion, as per the company's press release.

Ascend, the largest fully integrated producer of PA66 resin, has developed multiple new grades of HiDura PA610 and 612 for use in automotive fuel system and brake line applications, cable ties for solar power systems, battery seals and monofilaments for brush bristles.

“Customers choose Ascend because they can rely on our materials’ performance in some of their most challenging applications,” said Kaan Gunes, HiDura business manager. “We developed HiDura to endure in extreme conditions and uses. Whether used in a connector for solar panels or as brush bristles, our customers can count on HiDura LCPAs to perform well over the life of the application.”

“Our customers are responding to broader shifts in the market and their products’ reliability is a key differentiator,” said Isaac Khalil, senior vice president of Ascend’s polyamide business. “We support our customers’ growth plans with high-performance materials and the application development, processing and technical expertise to get the most out of those materials.”

As MRC wrote previously, in May 2016, Ascend Performance Materials said it had put plans to build a propane dehydrogenation (PDH) plant on hold because of market conditions. The two-train project at Chocolate Bayou, TX, with a combined capacity of more than 1 million m.t./year of propylene, was expected to become the largest such facility in the United States and cost an estimated USD1.2 billion. It has already been delayed once from the original onstream date of 2016 to mid-2019. Ascend is expected to use the UOP Oleflex PDH technology.

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

According to MRC's ScanPlast report, PP shipments to the Russian market reached 880,130 tonnes in the nine months of 2020 (calculated using the formula: production minus exports plus imports, exluding producers' inventories as of 1 January, 2020). Supply increased exclusively of PP random copolymer.

Ascend Performance Materials is a global leader in the production of Nylon 6,6.
MRC

MOSCOW (MRC) -- BASF and PETRONAS will close a butanediol (BDO) plant at their joint venture site in Kuantan, Malaysia, in the first quarter of 2021, said Chemweek.

BASF PETRONAS Chemicals (BPC) intends to shut down the unit, which produces BDO and derivatives, by March 2021, the companies said, due to “significant” overcapacity in the region due to new investments by competitors into coal-fired production units.

“The decision to close the BDO plant will have long-term strategic benefits to BPC and its stakeholders, given the shift in business landscape as well as its unfavourable long term prospect,” said PETRONAS Chemical CEO Datuk Sazali Hamzah.

BPC managing director Marko Murtonen noted the company would work to provide assistance to employees affected by the move, without stating how many workers at the site will be losing their jobs. No other production units at the site are affected, the companies said in a statement.

As MRC informed earlier, BASF and Petronas were considering jointly investing around EUR1bn (USD1.34bn) to produce specialty chemicals in Malaysia.

However, Petronas and German chemical company BASF said they had scrapped a proposed joint venture to develop a specialty chemicals production facility in Malaysia. The proposed partnership was terminated because both parties couldn't agree on the "terms and conditions" for the project in the southern state of Johor, the companies said in a joint statement.

As MRC informed earlier, BASF had put a project to build a petrochemicals complex in India worth up to USD4 billion on hold due to the economic uncertainty caused by the COVID-19 pandemic.

We remind that Russia's output of chemical products rose in September 2020 by 6.7% year on year. At the same time, production of basic chemicals increased by 6.1% year on year in the first nine months of 2020, according to Rosstat's data. According to the Federal State Statistics Service of the Russian Federation, polymers in primary form accounted for the greatest increase in the January-September output. Last month's production of primary polymers decreased to 852,000 tonnes from 888,000 tonnes in August due to shutdowns in Tomsk, Ufa and Kazan. Overall output of polymers in primary form totalled 7,480,000 tonnes over the stated period, up by 16.4% year on year.
MRC

MOSCOW (MRC) -- The Hengyi Industries petrochemicals joint venture (JV) in Brunei has selected LyondellBasell’s Hostalen technology for a 450,000 tonne/year high density polyethylene (HDPE) facility to be built in Pulau Muara Besar, Brunei Darussalam, said the company.

The plant - part of an integrated petrochemicals complex - will also use LyondellBasell’s catalysts to produce multi-modal HDPE products. Project costs or timelines for construction and completion were not disclosed.

Chen Liancai, CEO of Hengyi stated: “We selected the Hostalen ACP process technology for its extraordinary ability to produce strong and long-lasting products such as PE pipes, film and many other HDPE based applications."

With these new capacity additions, Lyondell Basell has licensed over 9000 KTA of benchmark multi-modal HDPE resins.

The Hostalen ACP low-pressure slurry process technology manufactures high performance, multi-modal HDPE resins with an increased stiffness/toughness balance, impact resistance and high stress cracking resistance used in pressure pipe, film and blow moulding applications.

The Hengyi HDPE plant will commence operations using Avant Z501 and Avant Z509 catalysts to produce a full range of multi-modal HDPE products.

As MRC informed earlier, LyondellBasell, the world’s largest licensor of polyolefin technologies, today announced that Hengyi Industries SDN BHD (Hengyi) will use the LyondellBasell Hostalen “Advanced Cascade Process” technology for a new facility.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,594,510 tonnes in the first nine months of 2020, up by 1% year on year. Only high denstiy polyethylene (HDPE) shipments increased. At the same time, PP shipments to the Russian market reached 880,130 tonnes in the nine months of 2020 (calculated using the formula: production minus exports plus imports, exluding producers' inventories as of 1 January, 2020). Supply increased exclusively of PP random copolymer.

Hengyi Industries is a JV between China’s Hengyi and a Brunei government capital fund.
MRC

MOSCOW (MRC) -- Gov. John Bel Edwards and Fidelis Infrastructure co-founders Daniel J. Shapiro and Bengt Jarlsjo announced their portfolio company Gron Fuels LLC is studying the feasibility of a renewable fuel complex at the Port of Greater Baton Rouge, according to Hyrocarbonprocessing.

With expansions and associated projects, the complex could involve up to USD9.2 billion of total investment over several phases. A final investment decision is expected in 2021, which will determine the final cost of the project’s first phase.

Through all phases and associated projects, the complex would create an estimated 1,025 new direct jobs, with an average annual salary of $98,595, plus benefits. Louisiana Economic Development estimates the project and subsequent phases would result in up to 4,560 new indirect jobs, for a total of 5,585 new jobs for the Capital Region.

“This renewable fuel production facility will help to secure Louisiana’s place as a leader in environmentally friendly energy production,” Gov. Edwards said. “Growing global demand for renewable transportation fuels creates a significant growth opportunity for our state. Once again, Louisiana’s port, rail and pipeline infrastructure and other logistical advantages are making possible an important industrial complex that will deliver many quality jobs for our skilled workforce. We look forward to the final investment decision for Gron Fuels to launch this innovative project at the Port of Greater Baton Rouge.”

The project would be built in stages over nine years at a site leased from the port on the west bank of the Mississippi River, near Port Allen. The first phase of construction would involve a capital investment of over USD1.25 billion and create 340 new direct jobs by 2024. The base project is expected to produce up to 60,000 barrels per day of low-carbon renewable diesel, with an option to produce renewable jet fuel utilizing non-fossil feedstocks, including soybean oil, corn oil and animal fats. Upon completion of all phases - potentially by 2030 - the site would be one of the largest renewable fuel complexes in the world.

“Louisiana’s core strengths in the field of building and operating plants that produce fuels and products for the world, coupled with its logistically advantaged deepwater location at the nexus of energy and agriculture, serve as the launching point for a new ‘high tech’ transition of the region into the next generation of energy,” Fidelis Managing Partner Dan Shapiro said. “I’m proud to be involved in this exciting project as we work to advance it through feasibility and its next steps.”

Houston-based Fidelis Infrastructure is an asset management firm specializing in specific industry sectors, including renewable energy, low-carbon transportation fuels, sustainable and circular economy infrastructure, and digital infrastructure. The Fidelis team has been involved in complex infrastructure projects ranging from $40 million up to $2 billion, including fiber-optic networks; solar power generation; downstream petrochemical; long-haul, high-voltage electric transmission; and gas pipeline projects. Company partners Shapiro and Jarlsjo both attended Louisiana State University and previously worked for The Shaw Group in Baton Rouge.

“It definitely feels good to work to advance this project and give back to Louisiana and the Baton Rouge region,” Jarlsjo said.

LED began formal project discussions with Fidelis Infrastructure about Gron Fuels in March 2020. To secure the project, the State of Louisiana offered a competitive incentive package – subject to a final investment decision – that includes the comprehensive solutions of LED FastStart®, the nation’s No. 1 state workforce development program for the past 11 years. The package also includes a performance-based grant of up to $15 million, payable at up to $2.5 million per year for six years, for project development and infrastructure. The company also is expected to utilize the state’s Quality Jobs and Industrial Tax Exemption programs.

“The port is excited to have finalized the ground lease and assist Fidelis Infrastructure in advancing the investment in the Gron Fuels new renewable diesel project for Louisiana and the Greater Baton Rouge region,” said Executive Director Jay Hardman of the Port of Greater Baton Rouge. “The project is great for the people of Louisiana, the port and the community and economic development mission it serves, the agricultural industry, and those who benefit from the clean fuels the plant will produce.”

Gron Fuels and its sponsor, Fidelis Infrastructure, intend to use qualified local businesses to assist in the delivery, operations and maintenance of the facility. CSRS Inc. is assisting Gron Fuels in compiling prequalification of firms interested in providing services for the project.

“This project would significantly contribute to the West Baton Rouge Parish economy, the people and businesses of our community, as well as our farmers and related industries,” West Baton Rouge Parish President Riley Berthelot Jr. said. “We look forward to working with those involved in the project to help progress it through feasibility and investment.”

“This is a transformative new company and investment for the Capital Region, and we have enjoyed working this project with company executives over the last year,” said President and CEO Adam Knapp of the Baton Rouge Area Chamber. “Fidelis brings hundreds of quality, high-paying jobs and huge capital investment during a critical time for both jobs and innovation for this sector. This is a big deal, and puts metro Baton Rouge on the map as home to the largest renewable fuel refinery in the world.”

As MRC reported earlier, ExxonMobil operates a cracker at Baton Rouge refinery in Louisiana with the annual production capacity of 1 mln tonnes of ethylene и 575,000 tonnes of propylene, which was shut for maintenance on 11 February 2019 to mid-Apirl 2019.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,594,510 tonnes in the first nine months of 2020, up by 1% year on year. Only high denstiy polyethylene (HDPE) shipments increased. At the same time, PP shipments to the Russian market reached 880,130 tonnes in the nine months of 2020 (calculated using the formula: production minus exports plus imports, exluding producers' inventories as of 1 January, 2020). Supply increased exclusively of PP random copolymer.
MRC