Packaging supplier Cascades to close its Laval, Quebec plant

MOSCOW (MRC) -- Citing in part the effects of the COVID-19 pandemic on the marketplace, Quebec-based packaging supplier Cascades Inc. has announced that its Laval plant, which specializes in the manufacture of napkins for the away-from-home market, will be closing on June 30, 2021, said Canplastics.

In a Nov. 25 statement, officials with Cascade said the Laval plant, which has an annual converting capacity of 1.4 million cases, will move its production volume to other Cascades plants and filled by additional capacity. The plant currently employs 54 workers, and Cascades plans to offer to relocate as many employees as possible to its many other business units in Quebec.

"COVID-19 has severely impacted the number of visitors to restaurants, hotels and public buildings, markets served by the Laval plant,” said Jean-David Tardif, president and chief operating officer of Cascades Tissue Group. “This situation, combined with high logistics costs, prompted us to move production to other sites in order to optimize our operations, reduce our costs and create synergies. It is important to note that this decision will in no way affect product quality or the level of service we provide to our customers, or Cascades’ ability to meet demand for our products."

As MRC informed earlier, 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.

Founded in 1964, Cascades, which is headquartered in Kingsey Falls, Que., also operates a flexible plastic packaging division.
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DSM and Neste announce strategic partnership to create high performance materials made from sustainable feedstock

MOSCOW (MRC) -- Royal DSM, a global science-based company in Nutrition, Health and Sustainable Living, has announced that it will start a strategic partnership with Neste, the world’s leading producer of renewable diesel and sustainable aviation fuel and a forerunner as provider of renewable and circular solutions for the chemical industry, to enable the production of high performance polymers, as per the company's press release.

This enables DSM and its customers to reduce the carbon footprint of their own products whilst supporting the industry to transition to a circular economy.

In the new strategic collaboration, DSM Engineering Materials will start replacing a significant portion of the fossil feedstock used to date in the manufacture of its high performance polymers portfolio with feedstock produced from recycled waste plastics and/or 100% bio-based hydrocarbons. These polymers are used, for example, in the automotive, electronics and packaging industries.

Over the short term, the collaboration aims to replace several thousand tons of fossil feedstock in the production of polymers with alternative, sustainable feedstock: bio-based and waste plastic based hydrocarbons.

Neste produces its bio-based hydrocarbons entirely from renewable raw materials, such as waste and residue oils and fats. For the production of waste plastic derived feedstock, Neste focuses on plastics that cannot be mechanically recycled and have previously been directed to incineration and landfilling.

Thanks to being a drop-in replacement to commonly-used fossil feedstock in the polymers production, Neste’s products are suitable for existing production infrastructures and enables DSM to produce more sustainable products with consistently high quality using its existing processes.

All of the chemically recycled and bio-based materials within the value chain will have the globally recognized ISCC Plus certification and will not require re-qualification.

The new strategic cooperation underlines a strong commitment from both partners to contribute to a circular economy by collaborating throughout the value chain, and addressing the increasing consumer, societal and regulatory demand for more sustainable circular solutions.

Shruti Singhal, President DSM Engineering Materials said: “We have a long history of delivering tangible proof points of our commitment to sustainability. As a next step we are going to even further reduce our footprint and will offer a full alternative range of our existing portfolio based on bio- and/or recycled-based materials by 2030. Together with our upstream partner Neste and other value chain partners we’re ready to drive our industry forward, seize the sustainable opportunities ahead, and deliver on our purpose of creating brighter lives for all.”

Mercedes Alonso, Executive Vice President, Renewable Polymers and Chemicals from Neste said: “Neste and DSM are frontrunners in providing sustainable solutions to the market. Both companies have a similar sense of urgency towards creating a healthier future for our children. Neste is very pleased to announce this partnership with DSM through which we can further accelerate the industry transformation towards a more sustainable, circular economy. It is exciting to see how our 100% bio-based and waste plastic based products enable DSM to produce its high performance polymers portfolio with a reduced environmental footprint.”

As MRC informed earlier, in September, 2020, DSM formed a 50/50 joint venture (JV) with VDL Groep (Eindhoven, Netherlands), called Dutch PPE Solutions, to produce medical facemasks and establish the first permanent production of critical facemask components in the Netherlands. The companies are investing several million euros to purchase manufacturing equipment and build manufacturing facilities to produce meltblown polypropylene (PP), the critical material layer in medical facemasks that filters viruses, and make medical masks.

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, excluding producers' inventories as of 1 January, 2020). Supply increased exclusively of PP random copolymer.
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Two-thirds of Canadian business owners negatively impacted by COVID-19

MOSCOW (MRC) -- Two-thirds (68%) of Canadian business owners continue to feel the negative impacts of COVID-19, a new study from CIBC finds, with more than half (57%) believing businesses in their area are in crisis mode and 43% believing businesses are in recovery mode, said Canplastics.

According to the study, top concerns are a reduced demand for their products and services (37%) and worries about the overall viability of operations (23%). Despite this, the majority (75%) of business owners remain optimistic they will rebound once the pandemic subsides.

“During these challenging times, Canadian business owners have shown incredible resilience by staying focused on fundamentals and being very nimble and creative,” said Laura Dottori-Attanasio, group head, personal and business banking, CIBC, in a prepared statement. “With so many feeling immediate pressures on revenues, we encourage owners to get advice about their overall financial situation including cash flow management and help managing debt levels."

Business owners have employed several strategies to continue operating, CIBC noted: a third (30%) have increased their virtual presence while a further 16% pivoted their business to operate completely online. To support cash flow, 56% have used at least one government program this year, and to limit costs, 35% are reducing operating expenses while 28% have cut employee hours. Half (52%) say they are counting on government support to survive.

Close to a third (29%) expect it will take between a year or two for things to get back to normal, with the majority (81%) agreeing the uncertainty of the current environment remains the hardest aspect to manage.

Other findings of the study include 72% of business owners say their present stress level is much higher than it was prior to the pandemic; 57% are looking to build the digital capabilities of their business; and 45% are looking to reduce their debt levels, while 41% are seeking more credit to help with operating capital and 40% are seeking advice to better manage cash flow.

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.
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COVID-19 - News digest as of 27.11.2020

1. Formosa Taiwan unit indefinitely delays USD9.4 billion Louisiana petrochemical complex

MOSCOW (MRC) -- FG LA, a division of Taiwan's Formosa Plastics Group, has indefinitely suspended construction on a USD9.4 billion petrochemical complex in Louisiana until the global coronavirus pandemic subsides and/or a vaccine is widely available, reporte S&P Global with reference to a spokeswoman's statement Nov. 23. "The widespread impacts of a global pandemic, including the challenge it creates in evaluating construction costs and the restrictions it has placed on international travel, are being felt across all industries and businesses, including FG," said Janile Parks, director of community and government relations, said in an email. "As a result, FG has deferred major construction until the pandemic has subsided and/or an effective vaccine is widely available." Work on multiple major petrochemical projects in the US was temporarily suspended or slowed in April and May, during the height of pandemic-related shutdowns that stymied construction activity. Startup dates were pushed back as much as a year for some projects, while others saw delays of a quarter or more.



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Petrobras targets oil output of 2.7 mil b/d by 2025

Petrobras targets oil output of 2.7 mil b/d by 2025

MOSCOW (MRC) -- Brazilian state-led oil company Petrobras plans to spend USD55 billion over the next five years to develop subsalt fields that will boost the company's crude oil output nearly 20% to 2.7 million b/d by 2025, reported S&P Global with reference to the company's statement in a regulatory filing Nov. 25.

"The capital allocation adheres to our strategic position, with a focus on world-class assets in deep and ultradeep waters," Petrobras said.

Petrobras' latest five-year investment plan, which covers 2021-25, continued the company's strategic shift toward Brazil's subsalt region, where a single record-setting well at the Buzios Field recently pumped about 69,000 b/d of oil equivalent. The massive potential of the subsalt led to the sale of most of the company's high-cost legacy onshore and shallow-water production. Petrobras also reached antitrust agreements with local regulators to end monopolies in refining and natural gas.

The asset sales and ongoing coronavirus pandemic likely mean a short-term retreat in output, Petrobras said. Petrobras estimated production of 2.23 million b/d in 2021, down from an expected 2.28 million b/d in 2020, the company said. Total hydrocarbons output was forecast at 2.75 million boe/d in 2021, down from an expected 2.84 million boe/d in 2020.

"Oil production in 2021 reflects the impacts associated with the COVID-19 pandemic and the divestments that take place in 2020," Petrobras said.

Petrobras was forced to delay a hefty portion of a wide-ranging subsalt maintenance program that was expected to shutter each major floating production unit in the subsalt for 15-20 days in 2020. Social-distancing measures limited the number of people allowed on board vessels, which caused a cascade of delays that will stretch into 2021, according to Petrobras.

In addition, output could be trimmed further by asset sales that are still expected to close in 2020, Petrobras said. The production forecast didn't include adjustments for such sales, which include the recently close sale of the Bauna Field to Australia's Karoon Energy, Petrobras said. The sales could further reduce production by about 600,000 boe/d, Petrobras said.

Petrobras plans to add 13 new production systems to its fleet of floating production, storage and offloading vessels, or FPSOs, over the five-year period, the company said. That was the same number of vessels expected under the 2020-2024 plan. All of the new production systems will be installed at deep- or ultradeep-water fields, Petrobras said.

Investments will also be limited to projects that have a breakeven production price of $35/b during the plan, Petrobras said.

Crude oil output was estimated to rise to 2.3 million b/d in 2022, 2.5 million b/d in 2023 and 2.6 million b/d in 2024, Petrobras said. Total hydrocarbons output was forecast to jump to 2.9 million boe/d in 2022, 3.1 million boe/d in 2023, 3.3 million boe/d in 2024 and 3.3 million boe/d in 2025, Petrobras said.

"The oil and gas production curve estimated for the 2021-2025 period, without considering divestments, indicates continuous growth focused on development of projects that generate value, with an increase in the share of subsalt assets holding lower extraction costs," Petrobras said.

Petrobras' commercial production volume, which subtracts the volumes of natural gas that is re-injected, consumed on board floating production units or burned off during production, the company said. Petrobras expects commercial production to average 2.45 million boe/d in 2021, with the measure rising to 3 million boe/d in 2025, the company said.

Petrobras also joined the plethora of international oil companies reining in spending amid reduced demand caused by the ongoing coronavirus pandemic. The USD55 billion investment budget represents a significant retreat from the USD75.7 billion earmarked for spending under the previous 2020-2024 investment plan.

CEO Roberto Castello Branco also said last year, after investments failed to meet spending targets, that the company would make more-realistic spending estimates going forward.

Spending will remain muted in the near term, with Petrobras budgeting USD10.2 billion in 2021, the company said. That will rise to USD11 billion in 2022, USD11.9 billion in 2023, USD11.6 billion in 2024 and USD10.5 billion in 2025, Petrobras said.

Most of the investment capital will go to exploration and production, which accounts for 84% of the total budget, Petrobras said. About 70% of the USD46 billion was earmarked for exploration and production investments, Petrobras said.

Petrobras' latest five-year plan also included measures to reduce emissions, including a zero-flare policy by 2030, the company said. The company also wants to reduce water consumption in its operations by 50% over the next 10 years, Petrobras said.

As MRC informed previously, Petrobras may need more than a year to divest its stake in Braskem, said Andrea Almeida, Petrobras CFO, in early July, 2020. 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 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, excluding producers' inventories as of 1 January, 2020). Supply increased exclusively of PP random copolymer.

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.
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