SABIC purchases Clariant 50% share in their JV Scientific Design

MOSCOW (MRC) -- Clariant, a focused, sustainable and innovative specialty chemicals company, has signed definitive agreements to divest its 50 % stake in the joint venture (JV), which owns Scientific Design Company Inc., to its long-term JV partner, SABIC, as per Clariant's press release.

SABIC is executing a call option raised in 2015 to acquire this stake, originally purchased by Sud-Chemie AG in 2003 and acquired by Clariant in 2011, pursuant to a change-of-control clause in the Joint Venture agreement.

Clariant reports a book value for the 50 % stake in Scientific Design Company Inc. of CHF 108 million as of 31 December 2020. Both Clariant and SABIC completed a comprehensive, arms-length due diligence process to value Scientific Design at USD 260 million and Clariant’s 50% share at USD130 million. Together with a profit-sharing agreement beginning on January 1, 2021 until the closing of the transaction, this represents an attractive valuation for Clariant’s 50% stake at around 12 times Scientific Design’s 2021 expected EBITDA, assuming a mid-2022 closing.

The final amount is payable at closing, which is subject to the receipt of the required regulatory approvals. The closing is expected to take place in mid-2022.

In 2020, Scientific Design Company Inc. generated sales of CHF 121 million. Scientific Design Company Inc., headquartered in Little Ferry, New Jersey, United States, is present in the development, licensing and catalyst supply of proprietary processes for the production of ethylene oxide (EO), ethylene glycol (EO/EG), bio-ethylene, bio-EO, bio-EG, EO derivatives, polyols and maleic anhydride. In addition to these technologies, Scientific Design Company Inc. produces proprietary catalysts and equipment for use in their own and other industrial processes.

As MRC reported earlier, in October 2020, Clariant 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, Russia's estimated PE consumption totalled 2,265,290 tonnes in the first eleven months of 2021, up by 14% year on year. Shipments of all grades of ethylene polymers increased. PP shipments to the Russian market were 1,363,850 tonnes in January-November, 2021, up by 25% year on year. Supply of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased, whereas supply of injection moulding PP random copolymers decreased significantly.

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.

SABIC is a diversified company manufacturing chemicals, industrial polymers, fertilizers and metals. It is the largest state-owned company in Saudi Arabia. Sabic is currently the world's second largest ethylene glycol producer, the third largest polyethylene producer, and the fourth largest polypropylene producer.
MRC

MOSCOW (MRC) -- BASF will start marketing several polyamide (PA) and polyphthalamide (PPA) grades in Europe that it acquired as part of the takeover of Solvay’s PA66 business, said the company.

These engineering plastics, previously sold as Technyl®, will continue at BASF under the established brand name Ultramid®. Customers globally will benefit from an extensive plastics portfolio including both PA66 grades and Ultramid® One J, a PPA based on PA66/6T. Thus, BASF will support its customers in developing innovative plastics solutions across all industries, for example for E&E applications like connectors and circuit breakers, for consumer and household electronics, and for autonomous driving and emobility.

The European Commission granted BASF approval for the acquisition of Solvay’s polyamide business subject to certain conditions. As a result, BASF started to successfully sell the integrated engineering plastics in growth markets in Asia as well as North and South America.

BASF and Solvay signed an agreement on the acquisition of Solvay’s integrated polyamide business in September 2017. The European Commission approved the acquisition in January 2019 under certain conditions, including the sale of Solvay’s polyamide 66 production plants in Europe. BASF concluded the acquisition of the polyamide business on January 31, 2020. Because of the backward integration for the key raw material adiponitrile (ADN), BASF now covers the entire value chain for polyamide 66 and improves its supply reliability. The business has been integrated into BASF’s Performance Materials and Monomers divisions.

BASF's Intermediates division develops, produces and markets an extensive range of more than 600 intermediates worldwide. The most important product groups include amines, diols, polyalcohols, acids and specialties. Intermediates serve, for example, as starting materials for coatings, plastics, pharmaceuticals, textiles, detergents and crop protection products. Innovative intermediates from BASF help to improve the properties of the products manufactured with them and the efficiency of production processes. The ISO 9001-certified Intermediates division operates from sites in Europe, Asia and North America. In 2020, the business sector generated sales to third parties of approximately EUR2.6 bn.
MRC

1. ExxonMobil posts mixed Q4 2021 financial results

MOSCOW (MRC) -- Exxon Mobil Corporation, the world's petrochemical major, has reported Q4 FY 2021 earnings that were mixed, according to Investopedia. Adjusted earnings per share (EPS) came in at USD2.05, above what analysts had forecast for the quarter and climbing to the highest levels in at least four years. However, Exxon's revenue gains, while substantial, came up short compared to predictions. Analysts had expected the company's revenue to roughly double to USD90.8 billion amid recovery from the COVID-19 pandemic. Exxon's revenue instead climbed by 82.6% year over year to USD85.0 billion. Additionally, the company posted its highest cash flow from operating activities since 2012, indicating a robust recovery process.

MRC

MOSCOW (MRC) -- Exxon Mobil Corporation, the world's petrochemical major, has reported Q4 FY 2021 earnings that were mixed, according to Investopedia.

Adjusted earnings per share (EPS) came in at USD2.05, above what analysts had forecast for the quarter and climbing to the highest levels in at least four years. However, Exxon's revenue gains, while substantial, came up short compared to predictions. Analysts had expected the company's revenue to roughly double to USD90.8 billion amid recovery from the COVID-19 pandemic. Exxon's revenue instead climbed by 82.6% year over year to USD85.0 billion. Additionally, the company posted its highest cash flow from operating activities since 2012, indicating a robust recovery process.

Investors look to the key metric of net income for ExxonMobil's upstream segment, which is one of the company's three main business segments and a strong indicator of its overall success. Upstream operations are involved in the exploration and development of oil and natural gas properties as well as the extraction and production of crude oil and natural gas. ExxonMobil's upstream segment generated USD6.1 billion in net income for Q4 FY 2021, slightly below the predicted USD6.2 billion for the quarter but the best performance in this area since Q4 FY 2019.21

ExxonMobil shares fell by about 0.8% in extended hours trading immediately following the earnings release but quickly recovered. The company's stock has consistently outperformed the market in the past year and has dramatically widened that gap with a strong rally early in 2022. As of Feb. 1, 2022, ExxonMobil shares have provided a one-year trailing total return of 83.1%, well ahead of 19.6% for the S&P 500.3 In its Q4 FY 2021 earnings statement, ExxonMobil did not provide forward guidance.

Chief Financial Officer (CFO) Kathy Mikells said during a conference call that the increase in cash flow will allow ExxonMobil to accelerate the schedule for the company's planned 10 billion share buyback. The plan initially was announced as taking place over two years. Now, the company expects the buybacks to be “faster than that 12-24 month pace,” Mikells said.

As MRC reported before, earlier this month, ExxonMobil and SABIC successful started up Gulf Coast Growth Ventures world-scale manufacturing facility in San Patricio County, Texas. The new facility will produce materials used in packaging, agricultural film, construction materials, clothing, and automotive coolants. The operation includes a 1.8 MM metric tpy ethane steam cracker, two polyethylene (PE) units capable of producing up to 1.3 MM metric tpy, and a monoethylene glycol (MEG) unit with a capacity of 1.1 MM metric tpy.

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 2,265,290 tonnes in the first eleven months of 2021, up by 14% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 1,363,850 tonnes in January-November, 2021, up by 25% year on year. Supply of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased, whereas supply of injection moulding PP random copolymers decreased significantly.

ExxonMobil is the largest non-government owned company in the energy industry and produces about 3% of the world's oil and about 2% of the world's energy.
MRC

MOSCOW (MRC) -- Westlake Chemical Corporation has announced that it has completed the acquisition of Hexion Inc.’s global epoxy business for approximately USD1.2 billion in an all-cash transaction, as per the company's press release.

Based in Rotterdam, The Netherlands, the epoxy business, which will be branded as Westlake Epoxy, is an industry leader in the manufacture and development of specialty resins, coatings and composites for a variety of industries, including high-growth and sustainability-oriented end-uses such as wind turbine blades and light-weight automotive structural components.

"With this transaction, Westlake will significantly expand its integrated business by adding a leading downstream portfolio of coatings and composite products," said Westlake President and Chief Executive Officer Albert Chao. "Light-weighting is a critical feature for the manufacture of structural components for automobiles and for renewable energy, particularly the composite blades used by wind turbines, and epoxies are key ingredients for these sustainable products. The industries served by Westlake Epoxy are very attractive and the business is expected to be a synergistic addition to Westlake’s existing businesses. We welcome the epoxy employees to the Westlake family and look forward to realizing the tremendous opportunities to grow the combined businesses."

Westlake Epoxy is a global leading producer of epoxy resins, modifiers and curing agents for high-performance materials, coatings and composites. The fully-integrated business includes upstream base epoxy resins and intermediates delivered as liquid or solid epoxy resins, as well downstream specialty epoxy resins used in coatings and composites. Westlake Epoxy serves numerous industries, including adhesives; aerospace; automotive; civil engineering and construction; composite and wind energy; electronics; electrical laminates; as well as marine and protective coatings.

As MRC reported before, in 2021, Hexion Inc., a major American manufacturer of phenol and bisphenol A (BPA), has recently announced that in order to help address climate change, it has committed to reduce absolute carbon emissions by 20% by 2030.

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.

Westlake Chemical Corporation is an international manufacturer and supplier of petrochemicals, polymers and building products with headquarters in Houston, Texas. The company's range of products includes: ethylene, polyethylene, styrene, propylene, chlor-alkali and derivative products, PVC suspension and specialty resins, PVC Compounds, and PVC building products including siding, pipe, fittings and specialty components, windows, fence, deck and film.
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