EU conditionally approves DIC acquisition of BASF pigments business

MOSCOW (MRC) -- The European Commission says it has approved, under EU merger regulation, the proposed acquisition of BASF's worldwide pigments business, BASF Colors & Effects, by DIC Corp. (Tokyo, Japan), reported Chemweek.

To address the Commission's competition concerns, DIC offered to divest a pigment manufacturing facility operated by its wholly-owned subsidiary Sun Chemical at Bushy Park, South Carolina. The approval is conditional on full compliance with a commitments package offered by DIC, including the Bushy Park divestment, the Commission says.

The Commission says it had concerns that the proposed transaction, as originally notified, would have reduced competition on the market for the supply of perylene and quinacridone pigments. DIC’s commitment to divest the Bushy Park facility, which manufactures a large majority of the company's perylene and quinacridone pigments, removes almost entirely the overlap between DIC's and BASF's activities in the relevant pigments, the Commission says.

The commitments ensure that the same number of suppliers will remain active on these markets and that customers retain the same level of choice, the Commission says. DIC’s divestment commitment includes the full transfer of the Bushy Park plant, including technology, brands, manufacturing equipment, and other intangible assets, to a manufacturer with proven expertise in pigment production, according to the Commission.

“Pigments are essential inputs for many consumer products that require a coloring process, for example in the automotive and advanced plastics value chains. There are only a few alternative producers for these products and the combination of DIC and BASF Colors & Effects risked depriving customers of high-quality pigments. This merger is approved on the condition that the companies divest DIC's main manufacturing facility for pigments, thereby preserving effective competition in the market,” says Margrethe Vestager, Commission executive vice president.

BASF Colors & Effects and DIC are market leaders in the production and sale of pigments and other colorants, and the two main suppliers of perylenes and quinacridone pigments worldwide, the Commission says. DIC is mainly active in pigments and colorants through Sun Chemical, the Commission says.

As MRC informed previously, German chemicals maker BASF said in early November it 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. BASF signed a memorandum of understanding with Abu Dhabi National Oil Company (ADNOC), Adani Group and Borealis AG in October 2019 to evaluate a collaboration to build the chemical site in Mundra, in India’s Gujarat state.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,760,950 tonnes in the first ten months of 2020, up by 3% year on year. Only high density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments increased. At the same time, PP shipments to the Russian market reached 978,870 tonnes in January-October 2020 (calculated using the formula: production minus exports plus imports minus producers' inventories as of 1 January, 2020). Supply of exclusively of PP random copolymer increased.

BASF is the leading chemical company. It produces a wide range of chemicals, for example solvents, amines, resins, glues, electronic-grade chemicals, industrial gases, basic petrochemicals and inorganic chemicals. The most important customers for this segment are the pharmaceutical, construction, textile and automotive industries.
MRC

MOSCOW (MRC) -- Halix (Leiden, Netherlands), a biopharmaceutical contract development and manufacturing organization (CDMO), says it has signed an agreement with AstraZeneca to provide large-scale commercial manufacturing of drug substance AZD1222 for the COVID-19 vaccine candidate co-invented by the University of Oxford, UK, and its spin-out company Vaccitech, said Chemweek.

Halix says it has expanded production at its 6,700 square-meter current good manufacturing practice (cGMP) facility at the Bio Science Park at Leiden with two additional viral vector production lines, to meet the increased demand.

Halix continues its role as one of the original partners in the University of Oxford’s consortium for the manufacture of AZD1222, the company says. “Through the consortium, the partners are bringing their collective expertise and manufacturing capabilities to support vaccine production and combat this evolving crisis,” says Alex Huybens, COO at Halix.

As MRC informed earlier, Wacker will support production of CureVac’s COVID-19 mRNA-based vaccine candidate at its biotech site in Amsterdam, with production scheduled to start in the first half of 2021.

As MRC reported earlier, Wacker Chemie operates a 90 ktpa EVA compounding plant at the Ulsan site, consisting of two lines. The second line with a capacity of 40 thousand tons of products per year was launched in 2013.

According to MRC's DataScope, September EVA imports to Russia fell by 30,32% year on year to 2,38 tonnes from 3,420 tonnes a year earlier, and overall imports of this grade of ethylene copolymer into the Russian Federation dropped in January-September 2020 by 9,85% year on year to 26,340 tonnes (29,220 tonnes a year earlier).
MRC

MOSCOW (MRC) -- Valero Energy Corp shut the large crude distillation unit (CDU) and other units at its 195,000 barrel-per-day (bpd) McKee refinery in Sunray, Texas, for planned work, reported Reuters with reference to sources familiar with plant operations.

The 95,000-bpd CDU, 30,000-bpd hydrocracker and 28,000-bpd reformer were shut for planned work expected to take at least two weeks to complete, the sources said.

A Valero representative was not immediately available to discuss operations at the McKee refinery.

CDUs do the initial breakdown of crude oil into feedstock for all other units. Hydrocrackers convert gas oil into diesel and other motor fuels. Reformers convert refining by-products into octane-boosting components added to gasoline.

As MRC wrote before, Valero Energy Corp restarted the large crude distillation unit (CDU) at its 335,000-bpd Port Arthur, Texas, refinery the first week of September, 2020. The 268,000-bpd CDU was shut with all other units at the refinery on Aug. 25 because of the threat from Hurricane Laura.

We remind that in June 2020, Valero Energy Corp’s Memphis, Tennessee, crude oil refinery was operating at two-thirds of its 180,000 barrel-per-day (bpd) capacity because of low demand in the COVID-19 pandemic. The Memphis refinery cut production by as much as 50% in early April and has been raising production gradually since then.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,760,950 tonnes in the first ten months of 2020, up by 3% year on year. Only high density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments increased. At the same time, PP shipments to the Russian market reached 978,870 tonnes in January-October 2020 (calculated using the formula: production minus exports plus imports minus producers' inventories as of 1 January, 2020). Supply of exclusively of PP random copolymer increased.
MRC

MOSCOW (MRC) -- SIBUR started manufacturing new PP grades to produce raffia, specifically PP H043FF/3 and PP H063FF/3, which boost equipment performance and processing stability while being used for the high-speed production of flat film thread for soft woven packaging such as bags and big bags, waterproof roofing underlays, and twines, said the company.

The new grades greatly speed up the processing equipment performance owing to an improved melt flow rate, thus boosting production by up to 15% for heavy threads and by up to 23% for light threads. Processing companies can save on electricity costs on the back of a 5% lower temperature across extruder layers, pressure reduced by 10 bar for the extruder die and filter, and a better mix of chalk concentrate.

A selection of special additives developed by SIBUR PolyLab’s Compounding division helps bring reject rates down to zero when manufacturing film threads. The range of controlled parameters of PP batches is quite narrow, which ensures processing stability, reduces the frequency of process mode adjustments and results in a consistently higher quality of finished products. The new grades have also been praised by equipment manufacturers for their efficiency.

"We at Starlinger and also our customers who use new SIBUR polypropylene grades H043FF/3 and PP H063FF/3 for raffia production on Starlinger equipment report excellent processing capabilities. Together with SIBUR, the Starlinger extrusion specialists tested the new grades on the company's tape lines and circular looms. The grades achieved the best results in the extrusion process on Starlinger high-speed tape production lines: they ensure very stable production even at the top speeds of 550 m/min and the highest quality in raffia tape production. The excellent tape quality pays off during the weaving process: less tape ruptures and machine downtime greatly increase production efficiency. We recommend PP H043FF/3 and PP H063FF/3 to our customers, especially for AD*STAR block bottom bag production and other lightweight woven bags."

Peter Schmalholz, Head of R&D at Windmoller & Holscher Machinery: "The new SIBUR PP grade H063FF/3 for raffia has proven to run very well in test production on TIRATEX high-speed tape lines, offering excellent process reliability and achieving good tape quality at production speeds of 550 m/min, matching today’s increasing demands for economical production. Windmoller & Holscher Machinery therefore decided to include this grade in our reference list of recommended materials for the manufacturing of AD PROTEX® LS box-shaped sacks and other PP fabric products."

Pavel Lyakhovich, member of the Management Board, Managing Director at SIBUR’s Basic Polymer Division, said: “The new grades are our regular products which have already secured a loyal customer base and enjoy appreciation both in Russia and beyond. We are delighted to have been able to provide our partners with a solution that ensures a consistently high quality of their products and enhances manufacturing efficiency."

As MRC informed earlier, SIBUR, Russia’s top petrochemicals company, has ramped up its ZapSibNefteKhim plant in western Siberia to full capacity, signaling a shift in supplies of LPG away from Europe as more products are sold to Asia, said the company. SIBUR signed a deal in June to sell up to 1 million tons of polyethylene a year to China’s Sinopec from ZapSibNefteKhim, which uses LPG as a feedstock. The Russian company, one of the biggest petrochemical companies in the world, has been gradually cutting LPG exports to Europe as it boosts ZapSibNefteKhim’s capacity.

MRC's ScanPlast report said, Russian plants' total PP production dropped to 152,000 tonnes in October from 158,200 tonnes a month earlier ZapSibNeftekhim and Poliom"s production capacitites were shut for maintenance. Russia"s overall PP production reached 1,529,000 tonnes in January-October 2020, compared to 1,170,300 tonnes a year earlier. Six out of eight producers raised their capacity utilisation, with a new producer - ZapSibNeftekhim - accounting for the main increase in the output.
MRC

1. South Africa to review petroleum product supplies after refinery shutdown

MOSCOW (MRC) -- South Africa will urgently conduct an assessment of petroleum products supply, the Department of Mineral Resources and Energy said on Saturday after the country's second-largest crude oil refinery shut down following a fire, said Hydrocarbonprocessing. The 120,000 barrel-per-day (bpd) Engen refinery in Durban, majority-owned by Malaysia's Petronas, ceased operations as investigations started into the cause of the fire on Friday. Engen said it was taking measures to ensure security of supply. The refinery shutdown comes at a crucial time for South Africa as it looks to kickstart an economy walloped by the COVID-19 pandemic. The South African Petroleum Industry Association (SAPIA) warned in May that the country was facing a diesel shortage due to a spike in demand as restrictions on movement eased.

MRC