Bain, Cinven to acquire Lonza specialty ingredients business for USD4.7 billion

MOSCOW (MRC) -- Lonza says it has reached an agreement with a consortium of private equity firms Bain Capital and Cinven for the previously announced sale of the Lonza Specialty Ingredients (LSI) business and operations, for an enterprise value of 4.2 billion Swiss francs (USD4.7 billion), said Chemweek.

The transaction is expected to close in the second half of 2021, subject to customary closing conditions, Lonza says.
Lonza's plans to carve out LSI were first announced in June 2019. The company started to look for potential buyers in July last year and since October 2020 reports emerged of a potential sale of LSI to Bain and Cinven, or other financial and industry firms.

Bain and Cinven say they intend to collaborate closely with Lonza going forward, as well as with employee representative bodies in Switzerland and across the group. “Bain Capital and Cinven have shown they understand the value of the experience and expertise of our specialty ingredients employees. They presented the most compelling industrial strategy and vision for the business, they are also keen to prioritize R&D and innovation, as well as to invest in existing facilities to unlock the potential of the business," says Albert Baehny, chairman of Lonza.

LSI is one of two segments within Lonza. The other is pharma, biotech, and nutrition. The LSI business is a provider of microbial control solutions for professional hygiene and personal care products that operates across 17 manufacturing sites worldwide and has approximately 2,800 permanent employees. LSI was reported as discontinued operations in Lonza’s 2020 results. The segment’s sales declined 2.1% to SFr1.68 billion in 2020.

Baehny says that selling the LSI business “will allow Lonza to focus on its position as a leading partner to the healthcare industry, and the free cash flows resulting from the sale will allow us to accelerate our strategic priorities."

According to David Danon, managing director at Bain, “LSI has multiple attractive growth opportunities as the leading global player in the growing market for microbial control. Our strategy is to reinforce the company’s market position, to accelerate growth through further investment in R&D and innovation, and to use LSI as a platform for further industry consolidation, in line with Bain Capital’s and Cinven’s strategies in other sectors."

Bain owns chemical companies Diversey (Fort Mill, South Carolina) and Italmatch (Genoa, Italy), and in the past it owned Brenntag and Trinseo. Cinven has a majority stake in chemical distributor Barentz International (Hoofddorp, Netherlands), owns the construction chemicals firm Chryso (Daventry, UK), and in the past bought and sold the advanced ceramic business CeramTec (Plochingen, Germany) and the plastic packaging manufacturer Kloeckner Pentaplast (Luxembourg).

Bain says that advisors to the consortium include Kirkland & Ellis, Freshfields, Lenz & Staehelin, Ernst & Young, Boston Consulting Group, Alvarez & Marsal, ERM, Nexant, The Valence Group, Opus Corporate Finance, and Trumont International (London, UK).

As per MRC, Lonza said it is making a “significant” investment to expand particle-engineering and drug-product capabilities at its Bend, Oregon, site with a total of 11 new suites, to meet increased market demand.

We remind that in 2012, Lonza set up a task force to look at new supply routes and vendors to feed its cracker in Visp, Switzerland, following the shutdown of Petroplus’ refinery at Cressier in January, 2012. Lonza’s cracker has an ethylene capacity of 25,000 tonnes/year.

Ethylene and propylene are feedstocks for producing 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, exluding producers' inventories as of 1 January, 2020).
MRC

MOSCOW (MRC) -- Howard Energy Partners (HEP) announced that it has executed an agreement with a subsidiary of MPLX LP to purchase the Javelina Facility (Javelina) located in Corpus Christi, Texas, said Hydrocarbonprocessing.

Javelina is a treating and fractionation plant that extracts olefins, hydrogen, and natural gas liquids (NGLs) from the gas streams produced by local refineries, creating purity products that are then sold to local markets on behalf of its refiner-customers.

"The Javelina facility is a multi-generational asset linked to stable, demand-driven refinery activity, further supporting our long-term growth strategy and diversification into new services and markets,” said HEP Chairman and Chief Executive Officer, Mike Howard. "We are very excited to broaden our existing footprint in the Corpus Christi market, and look forward to welcoming Javelina’s great team of employees that has been safely and efficiently running the facility for several years. We will continue to provide world class service to Javelina’s long-term customers."

The Javelina facility has a long history of reliably producing a wide range of product streams including hydrogen, ethylene, ethane, propylene, propane, mixed butane and other pentanes+ for use in the energy and petrochemical markets. Javelina is connected by pipeline to all of the major refineries in the Corpus Christi area and provides a critical service to help ensure the refineries’ productive capabilities. Additionally, excess capacity at the facility provides the opportunity for growth in the future. HEP expects to close the acquisition in early 2021.

As per MRC, Port of Corpus Christi announced the approval of a long-term lease agreement with Maverick Terminals Corpus LLC, a subsidiary of Howard Energy Partners.

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).
MRC

MOSCOW (MRC) -- Kemira (Helsinki, Finland) has announced price increases in the Americas for its entire range of polymer products for the water treatment and oil and gas industries, effective immediately or as contract terms allow, reported Chemweek.

Product prices will rise by between 3-18%.

“Recent economic rebound and positive developments in many downstream markets have led to unforeseen cost increases for key raw materials and energy,” it says.

Kemira also announced a separate price increase in the Americas for most process and functional chemicals for pulp and paper applications late last week. The 5-15% rise in prices is effective on shipments made on or after 1 March 2021 or as contracts otherwise allow. “Rapidly escalating costs for raw materials, energy, packaging, and transportation make this price adjustment necessary,” it says.

The company raised its polymer prices in the EAME region in January.

As MRC informed earlier, in September 2020, Kemira signed a multi year extension of its polymer supply agreement with Ithaca Energy. Kemira said it had signed a multiyear extension to its polymer supply agreement with Ithaca Energy (Aberdeen, UK). The agreement extends the contract between the two companies, signed in 2018, covering the supply of polymers to enhance oil extraction performance at one of the assets operated by Ithaca Energy in the UK North Sea.

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, exluding producers' inventories as of 1 January, 2020).
MRC

MOSCOW (MRC) -- Maire Tecnimont S.p.A. announced that its subsidiary Tecnimont SpA, through its Indian entity Tecnimont Private Limited, has been awarded an EPCC (Engineering, Procurement, Construction and Commissioning) contract by Indian Oil Corporation Limited (IOCL), for the implementation of new Acrylic Acid and Butyl Acrylate Units, for the production of relevant high added value products for the chemical market, said Hydrocarbonprocessing.

The units will be located in Dumad, near Vadodara, in the Gujarat state, in India. The overall value of the contract is about USD255 million. The project scope entails Engineering, Procurement, Construction and Commissioning activities up to the Performance Guarantees Test Run. Once completed, the new Acrylic Acid Unit will have a capacity of 90,000 tons per year, while the new Butyl Acrylate Unit will have a capacity of 150,000 tons per year. The time schedule is 26 months for Mechanical Completion.

"After the recent announcement of the MoU with IOCL to support the industrialization of green chemistry and circular economy in India, we consolidate a strategic relationship with such a prominent client also in the petrochemical business. Our technology-driven strategy enabled us once again to seize opportunities in a market with a very promising downstream investment cycle, thanks to the growing demand for petrochemical products. Finally, in sync with the strategic vision of the Government of India aimed at maximizing the “In Country Value”, our Indian entity will execute the job as a single point of responsibility, confirming its strong capabilities in managing big complex projects," Pierroberto Folgiero, Maire Tecnimont Group Chief Executive Officer said.

As per MRC, Maire Tecnimont S.p.A. announced that its subsidiaries Tecnimont S.p.A. and KT - Kinetics Technology S.p.A. have signed with SOCAR’s subsidiary Heydar Aliyev Oil Refinery two Engineering, Procurement and Construction contracts, as part of the Modernization and Reconstruction of Heydar Aliyev Oil Refinery in Baku, Azerbaijan. SOCAR is the State Oil Company of Azerbaijan Republic. The overall contracts’ value equals to approximately USD 160 million.

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, exluding producers' inventories as of 1 January, 2020).
MRC

MOSCOW (MRC) -- A federal appeals court has handed a victory to environmentalists challenging the EPA’s registration of the insecticide, sulfoxaflor, said Chemweek.

The verdict also denies a request by the Agency to remand the approval to allow it to complete the required review of the potential impacts of legal uses of the insecticide on endangered species. The US Court of Appeals rejected the EPA’s motion to remand without comment, laying out a schedule for the case to proceed and for it to consider whether the Agency’s 2019 registration amendments for sulfoxaflor violated the Federal Insecticide, Fungicide and Rodenticide Act (FIFRA) and the Endangered Species Act (ESA).

The legal dispute stretches back to the Agency’s 2013 unconditional registration for sulfoxaflor. That registration – granted to Corteva Agriscience legacy business Dow AgroSciences – swiftly drew litigation from a coalition of environmentalists and beekeepers led by the Center for Food Safety (CFS) and the Center for Biological Diversity. They argued that the EPA had classified the insecticide as "very highly toxic" to bees and lacked adequate data on the risks to pollinators.

The EPA and Dow argued that the Agency should have been shown deference to make its judgement about the risks and benefits of sulfoxaflor, but the Ninth Circuit concluded that the EPA had simply failed to follow its own rules. In its September 2015 ruling, the Court found that the EPA had relied on "flawed and limited" data when it issued the registration and failed to adequately assess the impacts on pollinators. The Court called on the EPA to vacate the registration and obtain further studies and data regarding the effects of sulfoxaflor on bees.

The EPA revoked Dow’s registration in November 2015 and then granted an amended approval in October 2016 for uses on crops that are not attractive to bees – the new licence imposed several restrictions, including buffer zones and prohibitions on tank mixing.

The EPA moved to shift the debate in October 2020, acknowledging that it had failed to complete the required ESA review and asking the court to remand the registration to allow it to carry out its obligations. The Agency warned that farmers could turn to more harmful alternatives if sulfoxaflor was pulled from the market and suggested that it begin the ESA assessment by 2025.

The EPA argued that the ESA review could lead to additional actions under the FIFRA and said that the Court retain jurisdiction to allow for review of the pesticide law claims after the ESA analysis is complete. “Thus, EPA is not seeking to ‘get out of jail free’ or otherwise evade review,” the Agency told the Court.

The plaintiffs – along with a coalition of 11 states – pushed back, arguing that a remand would allow the EPA to indefinitely dodge legal review of the FIFRA allegations and urging the Ninth Circuit to deny the EPA’s request.

CFS senior attorney Sylvia Wu welcomed the decision, stating that “EPA does not get to put off its legal duty just so that pesticide companies can continue to sell their toxic products”. The Court’s order calls on the petitioners to file their opening briefs by February 16th.

As per MRC, US Environmental Protection Agency said it would propose to extend deadlines for refiners to prove compliance with biofuel laws, but signaled it would not decide on a slew of pending waiver requests submitted by the industry. The agency’s proposal represented mixed news for refiners hard hit by slumping energy demand during the coronavirus pandemic and eager to sidestep regulatory costs associated with US biofuel blending policy. It also marks one of the last actions from President Donald Trump’s EPA before he leaves office on Jan. 20.

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

According to MRC's DataScope report, PE imports to Russia decreased in January-November 2020 by 17% year on year and reached 569,900 tonnes. High density polyethylene (HDPE) accounted for the greatest reduction in imports. At the same time, PP imports into Russia increased by 21% year on year to about 202,000 tonnes in the first eleven months of 2020. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.
MRC