Sipchem 2020 net profit falls on lower prices

MOSCOW (MRC) -- Sipchem's net profit fell by 41.3% year on year to Saudi riyal (SR) 175.9m last year, partly weighed by lower selling prices for most of its products, the Saudi Arabia-based producer said in a stock exchange filing, said Argaam.

Sahara International Petrochemical Co. (Sipchem) reported a net profit after Zakat and tax of SAR 175.9 million in 2020, down 41% compared to a net profit of SAR 299.5 million a year earlier.

The profit drop was attributed to lower sales revenue and selling prices for most of Sipchem’s products, along with lower production in the polypropylene plant, due to unplanned shutdown and turnaround maintenance.

Sipchem also recorded an impairment loss of SAR 280 million in 2020 from cash generating units, namely International Diol Company (IDC) (SAR 100 million) and EVA Film Plant, owned by Saudi Specialized Products Company (SAR 180 million).

As per MRC, Sahara International Petrochemical Co. (Sipchem) is planning to mothball the Polybutylene Terephthalate (PBT) plant, owned by its affiliate, Sipchem Chemical Co., and Ethylene Vinyl Acetate (EVA) Film plant that is owned by affiliate firm, Saudi Specialized Products Co. Steps to implement the decision are underway, Sipchem said in a statement to Tadawul, adding that the suspension of both plants will start on Jan. 1, 2021, until further notice. The company expects a positive financial impact starting from Q1 2021 results.

According to ICIS-MRC Price report, on Wednesday, 10 March, 1,500 tonnes of Turkmenbashi refinery's PP raffia grade were put up for export sale at the State Commodity and Raw Materials Exchange of Turkmenistan. The starting price was set at USD1,515/tonne FOB/FCA. PP prices were growing dynamically during the trades and finally reached another record - USD1,775/tonne FOB/FCA, the total volume of PP was sold in one day.
MRC

MOSCOW (MRC) -- Clariant, a focused and innovative specialty chemical company, has announced global price increases across its product portfolio, as per the company's press release.

The increase, which is effective March 19th, 2021 or as soon as contracts allow, is necessary to recover significant on-going cost inflation for basic raw materials, energy and transportation.

Prices for the pigment portfolio will increase by 1.2 USD/KG and for pigment preparations by 0.5 USD/KG or its equivalent in local currency.

Selected individual products will experience higher price increases due to the severe impact of their specific raw material costs.

As MRC reported earlier, in October 2020, Clariant (Muttenz, Switzerland) announced the construction of a new state-of-the-art catalyst production site in China. This project represents a significant investment which further strengthens Clariant’s position in China and enhances its ability to support its customers in the country’s thriving petrochemicals industry.

The new facility will be primarily responsible for producing the Catofin catalyst for propane dehydrogenation, which is used in the production of olefins such as propylene. Thanks to its excellent reliability and productivity, Catofin delivers superior annual production output compared to alternative technologies, resulting in increased overall profitability for propylene producers, says the company. Construction at the Dushan Port Economic Development Zone in Jiaxing, Zhejiang Province was scheduled to commence in Q3 2020, and Clariant expects to be at full production capacity by 2022.

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

According to MRC's ScanPlast report, PP shipments to the Russian market reached 141,870 tonnes in January 2021 versus 123,520 tonnes a year earlier. Supply of homopolymer PP and PP block copolymers increased.

Clariant AG is a Swiss chemical company and a world leader in the production of specialty chemicals for the textile, printing, mining and metallurgical industries. It is engaged in processing crude oil products in pigments, plastics and paints.
MRC

MOSCOW (MRC) -- Fibers producer Lenzing swung to a net loss of EUR10.6 million (USD12.7 million) in 2020 from a net profit of EUR114.9 million the year before, on sales of EUR1.6 billion, down 22.4%, said Chemweek.

EBITDA fell 39.9% to EUR196.6 million. The EBITDA margin decreased from 15.5% to 12.0%. Fourth-quarter figures have not been disclosed. The immediate effect of the pandemic on Lenzing’s business was to increase pressure on prices and volumes in the textile fiber segment, in particular in the second quarter of 2020. There was a recovery of demand in the second half of the year, primarily for wood-based specialty fibers including Tencel™, which had a positive impact on revenue and earnings, but could not compensate for losses, Lenzing says.

Lenzing says it responded to the tough market environment caused by COVID-19 by implementing a package of measures and says it remains on track in terms of its strategy. The company adjusted production volumes. It also intensified measures for structural earnings improvement to mitigate the effect of the pressure on fiber prices and demand, and reduced its operating costs.

"2020 was largely dominated by the COVID-19 pandemic,” says Stefan Doboczky, CEO of Lenzing. “Lenzing responded quickly and with determination to the increased pressure on prices and volumes. In the second half of the year, we saw a broad recovery of the fiber market."

Lenzing says that in 2020 the company reached its target to generate 50% of revenue from specialty fibers. The company says it aims to generate more than 75% of its fiber revenue from specialties by 2024. Lenzing says it is on track to start up a lyocell fiber plant in Thailand at the end of 2021. The EUR400-million plant will have a capacity of 100,000 metric tons/year.

The project in Thailand, and a dissolving wood pulp plant under construction in Brazil, also form part of Lenzing’s target to reduce its greenhouse gas emissions per ton of product 50% by 2030 and be climate-neutral by 2050. The plant in Brazil will feed more than 50% of the electricity it generates into the public grid as renewable energy.

Lenzing says the outlook for its business is unclear because of uncertainty surrounding the pandemic, but that there are signs of an upturn. Meanwhile, “the currency environment is expected to remain volatile in the regions relevant to Lenzing,” the company says.

"The significant recovery of demand from the third quarter of 2020 onwards, starting in China, continued into the first quarter of 2021 and is currently providing a friendly market environment,” Lenzing says. “With the prospect of a broad population being vaccinated against COVID-19 in the near future, optimism and confidence in an early return to normality are also growing within the textile value chain."

As a result, earnings visibility remains limited, Lenzing says. The company expects its 2021 operating result to develop “at a similar level in 2021 as in the pre-crisis year 2019."

As per MRC, textile fiber manufacturer Lenzing reports a steep fall in net profit for the first half of 2020, to EUR1.5 million (USD1.8 million) from EUR78.8 million in the first half of 2019, on revenue down 25.6% from EUR1.09 billion to EUR810.2 million.

According to ICIS-MRC Price report, on Wednesday, 10 March, 1,500 tonnes of Turkmenbashi refinery"s PP raffia grade were put up for export sale at the State Commodity and Raw Materials Exchange of Turkmenistan. The starting price was set at USD1,515/tonne FOB/FCA. PP prices were growing dynamically during the trades and finally reached another record - USD1,775/tonne FOB/FCA, the total volume of PP was sold in one day.
MRC

MOSCOW (MRC) -- Hexion has reported a fourth-quarter net loss that narrowed to USD35 million, from USD46 million in the year-ago period. Net sales grew 4.0% year on year (YOY), to USD655 million, reported Chemweek.

Segment EBITDA was up 39.6% YOY, to $74 million. Volumes were up, led by increases in formaldehyde, and specialty epoxy and epoxy resins, while pricing cut into sales figures due to higher raw material costs.

“In the fourth quarter of 2020, our Adhesives segment reflected continued strength in North America residential construction and gains in our global formaldehyde business,” says Hexion chairman and CEO Craig Rogerson. “Segment EBITDA in our coatings and composites segment increased more than 100% year over year owing to strong results in specialty epoxy from wind energy demand and versatic acids and derivatives due to increasing demand in architectural coatings, as well as improved results in our base epoxy resins.”

Coatings and composites segment sales grew 14.4% YOY, to USD341 million, while segment EBITDA more than doubled, to USD36 million from USD16 million. Adhesives segment sales declined 5.4% YOY, to USD314 million, while segment EBITDA was up 1.8%, to USD58 million.

“Looking ahead, we are cautiously optimistic about the global economic conditions considering the potential ongoing impact of the pandemic,” Rogerson says. “Several key end markets - housing and wind energy in particular - were strong through year-end and those trends have continued in early 2021.” The company also expects to pursue M&A in 2021, either bolt-on acquisitions or transformational deals, Rogerson adds.

In September 2020, Hexion announced an agreement to sell its phenolic specialty resin, hexamine and European forest product resins businesses to a private equity consortium. Those businesses have been classified as held for sale and are not included in quarterly results. The deal is expected to close by the end of the first quarter.

As MRC informed before, Hexion, a major American manufacturer of phenol and bisphenol A (BPA), shut down its BPA plant in the Netherlands for scheduled maintenance in early November, 2020. The turnaround at this plant with a capacity of 120,000 mtyear of BPA, located in Pernis, the Netherlands, lasted until the end of November, 2020.

Bisphenol A is used as a hardener in the production of plastics, as well as plastic-based products. It is one of the key monomers in the production of epoxy resins and polycarbonate (PC).

According to MRC's ScanPlast report, Russia's overall consumption of PC granules (excluding exports from Belarus) totalled 8,100 tonnes in January 2021, up by 20% year on year (6,800 tonnes a year earlier).

Hexion Inc., formerly Momentive Specialty Chemicals Inc., is a chemical company based in Columbus, Ohio. It manufactures thermosetting resins and related technologies and specialty products. Hexion has two divisions: the epoxy, phenolic and coating resins division and the forest products division.
MRC

MOSCOW (MRC) -- BDA Partners is pleased to announce that its client, Hexion Inc., has sold its China phenolic resins plant to Red Avenue New Materials Group Co. Ltd. (Red Avenue), a publicly listed Chinese company providing diversified new materials for electronics, environmental protection, tire, and auto markets, said Chemengonline.

Hexion’s China phenolic resins plant was part of Hexion’s global Phenolic Resins (PSR) division, which has separately been acquired by Black Diamond and Investindustrial. The PSR business is an established technology leader with a long track record for quality and reliability.

The China phenolic resins plant was built in Zhenjiang, Jiangsu Province, as a greenfield project, which was started in 2012 and completed in 2016. The facility was constructed in line with Hexion’s global standards, enjoys convenient access to suppliers and customers, and is well regarded in the region for its unmatched product quality and high EHS standards.

The US-headquartered resins and coatings producer has sold the unit to local firm Red Avenue New Materials, according to BDA Partners, which advised on the deal. Located in Jiangsu Province, wholly operated by Hexion since 2015, the sale is separate to that of the company’s global phenolic resins business, which has been acquired by Black Diamond and Investindustrial. Deal terms were not disclosed.

As per MRC, Hexion, a major US manufacturer of phenol and bisphenol A (BPA), has resumed bisphenol A (BPA) production in Pernis, The Netherlands. According to a letter from the company to customers on February 11, the company announced force majeure for the supply of BPA from a plant in Pernis with a capacity of 120 thousand tons per year due to unexpected equipment shutdowns due to cold weather.

Bisphenol A is used as a hardener in the manufacture of plastics and plastic-based products. It is one of the key monomers in the production of epoxy resins and polycarbonate (PC).

According to MRC's ScanPlast, the estimated consumption of PC granulate in Russia (excluding imports and exports to Belarus) amounted to 89.3 thousand tons at the end of 2020, which is 14% higher than the volume in 2019 (78,500 tonnes).

Hexion Inc., formerly Momentive Specialty Chemicals Inc., is a chemical company based in Columbus, Ohio. It manufactures thermosetting resins and related technologies and specialty products. Hexion has two divisions: the epoxy, phenolic and coating resins division and the forest products division.
MRC