LANXESS completes acquisition of Emerald Kalama Chemical

LANXESS completes acquisition of Emerald Kalama Chemical

MOSCOW (MRC) -- Specialty chemicals company LANXESS completed the second-largest acquisition in its history on August 3 with the takeover of Emerald Kalama Chemical, as per the company's press release.

The US-based specialty chemicals manufacturer was majority-owned by affiliates of private equity firm American Securities LLC. All required regulatory approvals have been received. The enterprise value of Emerald Kalama Chemical was USD1.075 billion (EUR 900 million). After deducting liabilities, the purchase price was approximately USD 1.04 billion (EUR870 million), which LANXESS financed from existing liquidity.

“Emerald Kalama Chemical gives us another major boost on our growth path. The new businesses are an optimal strategic fit for us. We are strengthening our position in markets with attractive growth rates and opening up new high-margin application areas, especially in the beverage and food sector or in cleaning and cosmetic products. What's more, Emerald Kalama Chemical is perfectly backward integrated - strengthening our value chain in Consumer Protection. This segment is thus an important engine on the way to making LANXESS even more stable and profitable,” said Matthias Zachert, Chairman of the Board of Management of LANXESS AG.

With the closing of the transaction, LANXESS grows by around 470 employees and the three production sites in Kalama/Washington (USA), Rotterdam (Netherlands) and Widnes (Great Britain).

In 2020, Emerald Kalama Chemical achieved global sales of approximately USD425 million (EUR 375 million) and EBITDA pre exceptionals of around USD90 million (EUR80 million). Within three years, LANXESS expects an additional annual EBITDA contribution of around USD30 million (EUR25 million) from synergy effects. The acquisition will already be earnings per share accretive in the first fiscal year after its completion.

As MRC reported earlier, in April 2021, LANXESS expanded its Colortherm Yellow pigment range for heat-resistant high-performance plastics. Two new inorganic yellow pigments are now available, namely Colortherm Yellow 5 and Colortherm Yellow 26.

We remind that Russia's output of chemical products rose in June 2021 by 10.2% year on year. However, production of basic chemicals increased year on year by 8.2% in the first six months of 2021. according to Rosstat's data. According to the Federal State Statistics Service of the Russian Federation, polymers in primary forms and synthetic rubbers accounted for the greatest increase in the output in January-June 2021.

LANXESS is a leading specialty chemicals company with about 19,200 employees in 25 countries. The company is currently represented at 74 production sites worldwide. The core business of Lanxess is the development, manufacturing and marketing of chemical intermediates, additives, specialty chemicals and plastics. Through Arlanxeo, the joint venture with Saudi Aramco, Lanxess is also a leading supplier of synthetic rubber.
MRC

China fuel demand is on track to hit record highs in 2021 despite COVID cloud

China fuel demand is on track to hit record highs in 2021 despite COVID cloud

MOSCOW (MRC) -- China's fuel demand is on track to hit record highs this year on a rebound in car sales and booming domestic air travel, even as a resurgence of COVID cases slows movement in some cities in the near term, reported Reuters with reference to analysts.

Despite slowing growth for diesel, the main industrial fuel, overall consumption of gasoline, diesel and aviation fuel in the world's top crude oil importer is expected to grow by 7% to 11% in 2021 to a record between 8.4 million and 8.9 million barrels per day, analysts at consultancy SIA Energy, IHS Markit and Energy Aspects estimated.

By comparison, the International Energy Agency (IEA) in March forecast China's demand for gasoline, jet fuel and diesel would rise by 6.5% to 8.2 million bpd in 2021.

China's strong growth in fuel use has helped stoke a 50% jump in global crude oil prices from 2020.

The latest outbreaks of the COVID-19 Delta variant across 17 provinces are expected to constrain travel in the near term, but analysts say the overall growth trend remains intact.

"If fast containment can be achieved by mass testing, and future large-scale outbreaks can be avoided with the vaccination rollout, gasoline and jet will be still on track to hit a record," ISH Markit analyst Shi Fenglei said.

Gasoline demand, which accounts for a quarter of China's refined fuel use, is forecast to rise by 11% to 13% this year to a record 3.8 million to 4.1 million barrels per day, well above the IEA's March forecast of 3.5 million bpd.

"Gasoline leads the growth as people drive more for long-distance travel, (there are) more ride-hailing services and motorbike e-commerce deliveries," said Seng Yick Tee, senior director at SIA Energy.

New passenger vehicle sales are expected to rise 7% this year, marking China's first annual growth since 2017, said Tao Gao, light vehicle specialist with IHS Markit.

As MRC wrote earlier, China's crude oil imports rebounded in July from a six-month low as state-backed refiners ramped up output after returning from maintenance, though independent refineries slowed restocking amid probes by Beijing into trading and taxes.

We remind that earlier this year, Sinopec Engineering (Group) and ExxonMobil (Huizhou) Chemical (EMHCC) entered into a BEPC (basic design, engineering, procurement and construction) contract for the proposed Huizhou Chemical Complex Project (Phase I). The main units of the project include a 1.6 million tonnes/year ethylene flexible feed steam cracker, downstream polymer and derivative units and utilities. The main product units include two performance polyethylene (PE) lines and two differentiated performance polypropylene (PP) lines.

Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 953,400 tonnes in the first five months of 2021, which virtually corresponded to the same figure a year earlier. High density polyethylene (HDPE) shipments decreased. At the same time, PP shipments to the Russian market were 607,8900 tonnes in January-May 2021, up by 33% year on year. Shipments of homopolymer PP and PP block copolymers increased, whereas deliveries of PP random copolymers decreased.
MRC

Alpek newly acquired rPET facility to start up in Q3 2021

Alpek newly acquired rPET facility to start up in Q3 2021

MOSCOW (MRC) -- Alpek (Monterrey, Mexico) expects to finish commissioning and begin production at a Reading, Pennsylvania, recycled polyethylene therephthalate (PET) facility in the third quarter of 2021, reported S&P Global with reference to CEO Jose de Jesus Valdez' statement.

DAK Americas, Alpek's US subsidiary, bought the facility in late-May for USD98.1 million at an auction in the bankruptcy case of California recycled PET producer CarbonLite.

Valdez said the recycling and pelletization facility is one of the largest recycled PET units in the Americas, and can produce food-grade pellets.

The acquisition brought Alpek's total recycled PET capacity to 282,000 mt, "reaffirming its position as the largest PET recycler in the Americas and achieving the company's target of supplying its customers with 25% of rPET content before 2025," Valdez said.

Thailand-based Indorama Ventures, the world's largest virgin PET manufacturer, bought CarbonLite's rPET facility in Dallas, Texas, at the bankruptcy auction for USD63.87 million, and TGS Shelf II Acquisition LLC, an affiliate of Houston private equity firm The Sterling Group, bought a third CarbonLite facility in Riverside, California, at the auction for USD57.5 million, according to bankruptcy records.

Indorama is one of Alpek's partners in a major PET/purified terephthalic acid complex awaiting further construction near Corpus Christi, Texas. Valdez said July 22 he had no update on the progress of that project, which is undergoing a cost review throughout 2021. Alpek, Indorama and their partner Far Eastern New Century, aim to finalize engineering and construction contracts by year-end so construction can begin in early 2022.

The project includes a 1.1 million mt/year PET plant and an upstream 1.3 million mt/year purified terephthalic acid (PTA) unit. The three companies bought the unfinished project out of prior owner M&G Chemical's bankruptcy in 2018 for USD1.25 billion.

Since then, they have evaluated costs to restart construction that M&G halted in October 2017, and those efforts were suspended in 2020 amid COVID-19 restrictions.

When an analyst asked whether Alpek would buy a larger stake in the project and proceed if one or both partners decided not to push forward with it, Valdez said the company would consider those options if that situation arises.

Valdez noted that demand for virgin PET and polypropylene, which Alpek also produces, was seen strong as COVID-19 vaccinations have improved market confidence, which has strengthened the global economy. PP is heavily used in the automotive sector for dashboards, door panels and other vehicle plastics, but also is used to make plastic food takeout containers, carpet, and other products.

"Alpek has reached 1.2 million tons this period, setting a record for any second quarter in our history and achieving an 8% increase year-on-year," CFO Jose Carlos Pons De La Garza added.

Volumes in the company's plastics and chemicals segment rose 45% on the year, while polyester segment volumes rose 1%.

As MRC informed earlier, Mexican polyester producer Alpek reported a rise in Q2 net income because sales rose faster than costs. Quarter on quarter, sales rose because of higher prices and margins. Alpek did not discuss year-on-year trends. Quarter on quarter, Alpek noted higher margins for PET. In addition, margins for PP maintained their strength for longer than expected following the winter storms that hit the US in mid-February. Quarter on quarter, EBITDA fell because the rise in feedstock costs was not as pronounced as it was in the first quarter. Such increases cause positive inventory and carry-forward effects for the segment's earnings.

According to MRC's ScanPlast report, Russia's estimated PET consumption totalled 411,200 tonnes in the first six month of 2021, up by 12% year on year. Russian companies processed 62,910 tonnes in June, compared to 85,890 tonnes a month earlier.

Alpek operates two main business segments, focused on polyester, and plastics and chemicals, and is a leading producer of purified terephthalic acid (PTA) and polyethylene terephthalate (PET). It is also the largest EPS manufacturer in the Americas.
MRC

Eni to deliver carbon-neutral LNG cargo to Taiwanese CPC Corporation

Eni to deliver carbon-neutral LNG cargo to Taiwanese CPC Corporation

MOSCOW (MRC) -- Italy's Eni said Aug. 6 it had agreed to deliver a carbon-neutral LNG cargo to Taiwan's CPC Corp. at the Yung An receiving terminal as the Italian company looks to move forward with its decarbonization strategy, reported S&P Global.

A number of global LNG players have started offering carbon-neutral LNG cargoes, including Shell, BP and Russia's Gazprom, as buyer interest in securing greener LNG continues to grow.

Eni said it would source the LNG from the Bontang liquefaction facility in Indonesia as part of its contract with Eni Muara Bakau, the joint venture operated by Eni that owns and operates the Jangkrik gas field.

"This is a milestone transaction for Eni, which shows how the company is moving forward in its decarbonization strategy while creating value for its LNG portfolio through own equity projects," it said in a statement.

The greenhouse gas emissions related to the entire value chain of the LNG cargo are to be offset through the retirement of high-quality nature-based credits, Eni said.

Eni's long-term strategy aims to achieve full carbon neutrality in its products and operations by 2050, with intermediate reduction targets of net lifecycle emissions (Scope 1, 2, 3) of 25% by 2030 and 65% by 2040 compared with 2018 levels.

As MRC informed previously, Italian energy group Eni is evaluating conversion of its Livorno refinery in northwest Italy into a biorefinery, as part of the Italian company's wider strategy to make its activities more environmentally sustainable. Eni has already converted two of its Italian refineries and is looking to almost double its biorefining capacity to around 2 million mt/year by 2024, and expand this to at least five times by 2050, as part of its pledge to achieve complete carbon neutrality by 2050.

Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 953,400 tonnes in the first five months of 2021, which virtually corresponded to the same figure a year earlier. High density polyethylene (HDPE) shipments decreased. At the same time, PP shipments to the Russian market were 607,8900 tonnes in January-May 2021, up by 33% year on year. Shipments of homopolymer PP and PP block copolymers increased, whereas deliveries of PP random copolymers decreased.

Eni, abbreviation of Ente Nazionale Idrocarburi, in full Eni SpA, Italian energy company operating primarily in petroleum, natural gas, and petrochemicals. Established in 1953, it is one of Europe's largest oil companies in terms of sales.
MRC

Phillips 66 invests in software developer in a move to expand its advanced analytics capabilities

Phillips 66 invests in software developer in a move to expand its advanced analytics capabilities

MOSCOW (MRC) -- Phillips 66 is driving to expand its advanced analytics capabilities with an investment supporting Seeq, a developer of software applications for analyzing and sharing insights on process manufacturing data, according to Hydrocarbonprocessing.

The investment is through the Altira Group, a venture capital firm that counts Seeq as one of its portfolio companies. It is the first investment by Phillips 66’s Digital Ventures organization, which is part of the AdvantEdge66 program launched by the company to drive digital transformation and innovation.

“Data can yield incredible value and insights when properly gathered and refined through advanced analytics,” said Zhanna Golodryga, Senior Vice President and Chief Digital and Administrative Officer for Phillips 66. “That’s why it’s important for us to collaborate with companies to advance innovation in the digital and analytics spaces. This investment provides a pathway for us to help Seeq grow and continue to improve its products, which we believe will be beneficial for our digital transformation journey.”

Seeq is a privately held virtual company headquartered in Seattle with a comprehensive set of process manufacturing and Industrial Internet of Things software applications.

As MRC informed previously, Worley has been recently awarded a front-end engineering services contract by Phillips 66 to convert its San Francisco refinery in Rodeo, California, USA into a renewable fuels-manufacturing facility. Under the contract, Worley will provide front-end engineering design services for the facility, which will be executed by Worley’s North America West team with support from Worley’s Global Integrated Delivery team.

Besides, in October 2020, Phillips 66 said it plans to reconfigure its refinery in Rodeo, California to produce renewable fuels from used cooking oil, fats, greases and soybean oils.

We remind that US-based Phillips 66 remains open to developing another ethane cracker for its Chevron Phillips Chemical (CP Chem) joint venture, the refiner's CEO said in March 2018.

Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 953,400 tonnes in the first five months of 2021, which virtually corresponded to the same figure a year earlier. High density polyethylene (HDPE) shipments decreased. At the same time, PP shipments to the Russian market were 607,8900 tonnes in January-May 2021, up by 33% year on year. Shipments of homopolymer PP and PP block copolymers increased, whereas deliveries of PP random copolymers decreased.

Phillips 66 is a diversified energy manufacturing and logistics company. With a portfolio of Midstream, Chemicals, Refining, and Marketing and Specialties businesses, the company processes, transports, stores and markets fuels and products globally. Phillips 66 Partners, the company’s master limited partnership, is integral to the portfolio. Headquartered in Houston, the company has 14,300 employees committed to safety and operating excellence. Phillips 66 had USD55 billion of assets as of Dec. 31, 2020.
MRC