Azelis increases its market presence in Vietnam

MOSCOW (MRC) -- Azelis, a leading distributor of specialty chemicals and food ingredients, has acquired a majority shareholding of MKVN Chemicals Co Ltd (MKVN Chemicals) and Viet Chemicals Trading and Service Co Ltd (Viet Chemicals) through their parent company Bellekimia Singapore Pte. Ltd (Bellekimia), according to ACN Newswire.

Both companies are active in personal care, industrial chemicals, agro and food segments as well as supply chain solutions. Founded in 2000 and with offices in Hanoi and Ho Chi Minh, MKVN Chemicals and Viet Chemicals have a strong reputation in Vietnam, serving first-class international principals and 700 customers.

Mr. Kamal Hezry Kassim, Managing Director of MKVN Chemicals and Viet Chemicals, will continue to manage the business and will report to Azelis Asia Pacific CEO & President, Laurent Nataf.

Mr. Laurent Nataf, CEO & President of Azelis Asia Pacific, explains: "Growth in Asia Pacific has been one of the strategic priorities for Azelis. By strengthening our presence in Vietnam, we will gain better coverage in the entire region which is key for us to attract new mandates with our existing principals. Azelis and our new partners MKVN Chemicals and Viet Chemicals have highly complementary business models which will help us diversify our product portfolio significantly. MKVN Chemicals and Viet Chemicals currently operate best-in-class personal care laboratories in Vietnam. These laboratories will provide important added value to Azelis' existing technical expertise and will bring benefits to the entire region. Last but certainly not least, the Kassim family have an excellent reputation on the market and the entire management team is well known and respected in the country."

Azelis has been active in Vietnam since 2015 and it employs some of the best industry professionals in the country. Azelis runs application laboratories for Personal Care, Home Care, CASE and Textiles in Vietnam.

As MRC informed before, in January 2021, chemicals distributor Azelis signed an agreement to acquire Came Chemical Mineral and Engineering (CAME), an Italy-based distributor of chemicals for friction and sintering applications, cosmetics, as well as coatings, adhesives, sealants and elastomers (CASE).

We remind that Russia's output of chemical products rose in February 2021 by 5.3% year on year. Thus, production of basic chemicals increased year on year by 7.5% in the first two months of 2021, according to Rosstat's data.
February production of polymers in primary form was 861,000 tonnes versus 196,000 tonnes in January. Overall output of polymers in primary form totalled 1,770,000 tonnes over the stated period, up by 8.4% year on year.

Azelis is a leading distributor of speciality chemicals and food ingredients present in over 50 countries across the globe with around 2,200 employees. Our knowledgeable teams of industry, market and technical experts are each dedicated to a specific market within Life Sciences and Industrial Chemicals.
MRC

MOSCOW (MRC) -- The EIA’s April Short-Term Energy Outlook (STEO) expects vaccinations and fiscal stimulus to support continuing economic recovery and drive demand growth for petroleum products in the United States, reported Hydrocarbonprocessing.

Gasoline and distillate fuel consumption is expected to increase from last summer, but remain less than in 2019.

As some of the economic and behavioral effects of COVID-19 subside over the next year, we forecast that US demand for transportation fuels will increase. We forecast that gasoline consumption in 2021 will peak in August at 9.1 million barrels per day (b/d), more than the 8.5 million b/d we saw in August 2020 but less than the 9.8 million b/d in August 2019. We forecast that gasoline consumption during the summer of 2021 will average 8.8 million b/d, a 1.0 million b/d (13%) increase from summer 2020 but a 0.7 million b/d (7%) decrease from 2019.

The retail price of regular-grade gasoline in the United States is forecast to average USD2.78 per gallon (gal) during summer 2021, 72 cents/gal more than last summer’s average of USD2.06/gal. The forecast of significantly more global economic activity this summer compared with last summer contributes to higher crude oil prices, which are the largest determining factor in US gasoline prices.

The response to the COVID-19 pandemic has not affected US diesel fuel demand as much as it has affected gasoline demand. We forecast that consumption of distillate fuel, which includes diesel fuel and heating oil, will average 4.0 million b/d this summer, an 11% increase (400,000 b/d) from last summer when distillate consumption levels reached their lowest point for the summer in the United States since 2009. However, distillate consumption is expected to be nearly equal to 2019 levels (down less than 1%).

As MRC wrote before, gasoline sales in the United States have moved year on year into positive territory for the first time - on the one-year anniversary of the first major declines that resulted from COVID-induced stay at home orders. However, demand still trails pre-pandemic levels by a considerable margin, according to the latest data from Oil Price Information Service (OPIS) by IHS Markit.

We remind that Chemical Activity Barometer (CAB), a leading economic indicator created by the American Chemistry Council (ACC), rose 1.2% in March on a three-month moving average (3MMA) basis, following a 1.0% increase in February. On a year-over-year (Y/Y) basis, the barometer rose 5.5% in March. The unadjusted data show a 1.2% gain in March following a 0.9% gain in February, ACC said. The diffusion index rebounded to 82% in March, well above the long-term average of 58%.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,220,640 tonnes in 2020, up by 2% year on year. Only shipments of low density polyethylene (LDPE) and high density polyethylene (HDPE) increased. At the same time, polypropylene (PP) shipments to the Russian market reached 1 240,000 tonnes in 2020 (calculated using the formula: production, minus exports, plus imports, excluding producers' inventories as of 1 January, 2020). Supply of exclusively PP random copolymer increased.
MRC

MOSCOW (MRC) - Pakistani company Engro Corp will spend USD31.4 million on design, engineering and technical studies for the proposed propane dehydrogenation unit and polypropylene (PP) production, the company said.

"This is in continuation to our letter to the PSX dated April 26, 2019, in relation to the company’s intent to explore investment opportunities in the petrochemical sector and the approval by the Board of Directors of the company (the “Board”) for commencement of a study in relation to a polypropylene facility based on propane dehydrogenation (“PDH-PP Project”)," the company said in a statement to the bourse.

Engro said that its Board in its meeting held on April 8th, 2021, has approved an amount of up to USD 31,400,000 towards conducting engineering, design and technical studies including a Front End Engineering Design (FEED) study in relation to the PDH-PP Project.

"The results of these studies, when completed, are expected to inform the final investment decision in relation to this project, which decision will also be based on a conducive policy environment and arranging the right mix of debt and equity partners at such time," the company added.

Earlier it was reported that Pakistani Nimir Chemicals resumed production of phthalic anhydride in Bhikki, Pakistan on January 7 after scheduled repairs. This production with a capacity of 30 thousand tons of phthalic anhydride was closed on December 24 last year. The company closed its two-line plant for regular maintenance during this period, a company source said.

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

According to the ScanPlast review by MRC, the total PP production in Russia increased by 8% in the first two months of this year compared to the same indicator in 2020 and amounted to about 350 thousand tons. All manufacturers, except for Nizhnekamskneftekhim, have increased their operating time.

Engro Corp, a fertilizer and petrochemicals manufacturer in Pakistan, is the largest listed conglomerate in the country.

MRC

MOSCOW (MRC) - Net profit of Nizhnekamskneftekhim in 2020 decreased by 81% to 4.4 billion rubles, but not because of the lockdown caused by the coronavirus, but because of gigantic loans in euros, BUSINESS Online reports.

NKNK's revenue also decreased, but not so much - by 15%, or 26.2 billion, to 147.9 billion rubles. According to the consolidated financial statements in accordance with IFRS, the operating result fell generally by only 5.4 billion to 22.7 billion rubles.

Earlier it was noted that the key owners of the TAIF group, which includes Nizhnekamskneftekhim, decided that financing of the construction of an olefin complex with a capacity of 600 thousand tons of ethylene per year would be carried out mainly through borrowed funds. And in 2018, at the St. Petersburg economic forum, they signed an agreement with a consortium of banks to raise EUR807 million.The general contractor was Linde Engineering, an agreement with which the Taif people signed in 2017 at the same forum in the presence of Vladimir Putin.

One of the consequences was an increase in long-term and short-term loans of NKNK by 47 billion to 103 billion rubles based on the results of 2020. On currency revaluation of assets and debts, NKNK received a negative balance of 16.5 billion rubles. In the consolidated financial statements, the net exchange rate difference is estimated at minus 11.8 billion rubles.

As for other external sources of funds, in 2020 the accounts payable (to suppliers and customers) of NKNK doubled to 22 billion rubles, while accounts receivable (counterparties' debts) decreased by EUR0.5 billion to EUR13.9 billion. Together with the fall in retained earnings and the growth of bank debts, this is a wake-up call, especially if we take into account the decline in the company's revenue. If this trend continues, the debt burden of petrochemists will sharply increase relative to their own funds, which could potentially lead to a revision of credit conditions.

At the same time, about half of NKNK's revenue is generated in the ruble zone, that is, making foreign currency loans unprofitable, the weak ruble simultaneously helps smooth out the price dip. Against the dollar, the Russian currency dropped 11% over the year to 72.1 rubles per dollar, while prime cost declined slightly more slowly than revenue, dropping 14% to 111.7 billion rubles. At the same rate, commercial expenses (storage, advertising, sales) decreased by 14%.

Earlier it was reported that by the end of 2020, sales of Nizhnekamskneftekhim were able to restore to the level that was before the coronavirus crisis. However, due to the pandemic, the demand for all types of rubber has decreased, which has led to overstocking of warehouses on a huge scale.

According to the ScanPlast of MRC, Nizhnekamskneftekhim produced just over 19,000 tonnes of propylene polymers in the last month of 2020 against 18,000 tonnes a month earlier. During the period under review, the total polymer output at the Nizhnekamsk enterprise reached the level of 219,700 tonnes against 211,700 tonnes in 2019.

PJSC "Nizhnekamskneftekhim" (NKNKH) is one of the largest Russian producers of petrochemical products. The production complex of the company includes ten factories of the main production and ten departments (railway transport, main ethylene pipelines, etc.). NKNKh produces over 120 types of chemical products, including synthetic rubber, polyethylene, polypropylene, polystyrene, surfactants. Nizhnekamskneftekhim is part of TAIF Group.
MRC

1. Russia sees pandemic impact on crude oil demand to last until 2023-2024

MOSCOW (MRC) -- Russia expects the fallout from the COVID-19 pandemic on the global consumption of oil and oil products may last until 2023-2024, a draft government document, seen by Reuters, showed. The global oil and liquid fuels production dropped in 2020 to 94.25 million barrels per day (bpd) from 100.61 million bpd in 2019, amid the pandemic, which led to lockdowns, halting 80% of air traffic and a quarter of road traffic at its peak and denting fuel consumption. The Organization of the Petroleum Exporting Countries expects oil demand to grow by 5.6 million barrels per day this year under its base case scenario. Russian Deputy Energy Minister Alexander Novak has also projected similar growth.


MRC