PolyOne to relocate North American production assets

MOSCOW (MRC) -- PolyOne Corporation, a leading global provider of specialized polymer materials, services and solutions, has announced it will realign its North American manufacturing assets, according to the company's press release.

This company will relocate is assets in order to better serve customers, improve efficiency, and deliver previously announced synergy-related cost savings in connection with its March 2013 acquisition of Spartech Corporation.

Over the next several months, the company will close six manufacturing plants and relocate production to other PolyOne facilities. These actions are expected to be completed by the end of 2014 and generate annualized pre-tax savings of approximately USD25 million in 2015. Cash costs are expected to approximate USD45 million over the next 12-18 months, primarily related to severance, asset relocation and additional capital investment.

"These actions are entirely consistent with our previously announced plans to integrate PolyOne and Spartech and to accelerate our specialty transformation," said Stephen D. Newlin, chairman, president and CEO. "By combining our resources, we expect to better serve our customers with a more competitive cost structure, improved product quality and on-time delivery with increasingly innovative technologies."

PolyOne expects to recognize estimated charges of USD35 million related to this realignment over the next 12-18 months. This includes approximately USD20 million in cash charges, primarily associated with severance and asset relocation costs, and approximately USD15 million in non-cash charges, primarily associated with accelerated depreciation of exited facilities and equipment.

As MRC reported earlier, in October 2012, PolyOne bought Spartech Corp. The transaction was valued at about USD393 mln including assumption of Spartech's net debt of USD142 mln. By this aquistion, PolyOne intend to turn Spartech's businesses into higher value added operations. Spartech's aerospace and security markets are wedded to its cast acrylic and PVC multilayer sheet operations for applications such as aircraft windows and canopies, bullet-resistant armor for banks, and aircraft interior components. These operations, however, are small compared with Spartech's predominant commodity sheet business of filled polypropylene.

PolyOne Corporation, with 2012 revenues of USD2.9 billion, is a premier provider of specialized polymer materials, tailored services and end-to-end solutions.
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MOSCOW (MRC) -- Chevron Corp. agreed to fund most of a USD1.5 billion joint venture with Argentina's state-run energy company, YPF SA to develop the South American country's vast shale oil and gas deposits, said Wall Street Journal.

The deal is the first significant investment by a major international oil company in Argentina since President Cristina Kirchner expropriated a 51% stake in YPF from Spain's Repsol just over a year ago.

It also marks Chevron's most aggressive effort to date to tap oil from shale outside the U.S., illustrating the American oil giant's willingness to shoulder both geological and political risk in pursuit of promising reserves.

Tuesday's announcement represents the culmination of almost seven months of complicated negotiations involving challenges such as Argentine price controls, export taxes and a ban on sending profits abroad and Chevron's legal battle with Ecuadorean indigenous groups, all of which influenced the final agreement.

As part of the deal, Chevron will initially invest USD1.24 billion in a pilot project to develop shale deposits in the famed Vaca Muerta, or "dead cow," formation in the arid Patagonian province of Neuquen, Chevron and YPF said in statements. YPF has already invested another USD260 million in the project.

The first phase of the pilot includes plans to drill more than 100 wells through 2014; a second program would entail drilling 1,500 wells in hopes to raising production to 50,000 barrels of oil and 3 million cubic meters of natural gas a day.

YPF currently produces around 10,000 barrels a day of shale oil in Neuquen, up from 4,000 at the beginning of the year.

YPF didn't say how much Chevron might invest in a second stage.

YPF is betting on the development of Vaca Muerta to wean Argentina off costly imported fuels, with the hope that one day it will once again become a major oil and gas exporter.

For Chevron, the partnership with YPF is an aggressive attempt to replicate the success of tapping shale in the U.S. and Canada. The company has begun to explore shale deposits from South Africa to China, and holds leases to thousands of acres in Canada and several million overlying shale across Eastern Europe.
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MOSCOW (MRC) -- INDORAMA Eleme Petrochemicals Limited has unveiled plans to invest USD1.2 billion (N192 billion) in the expansion of its polyethylene, polypropylene and polyethylene terephthalate plants in the next few years, said Ngrguardiannews.

Already, the company’s investment in the plants has crossed USD580 million (N92.8 billion). "We have recently started expansion work on all our plants, which will almost double its production capability", the company’s Head, Corporate Communication/Special Adviser to the Managing Director, Jossy Nkwocha, said while responding to The Guardian’s enquiry, adding that the company "has allocated a budget of about USD1.2 billion for the expansion of the plant.

According to him, the company is fully committed to fulfill the demand for every single plastic granule of polyethylene and polypropylene in the country.

The company had earlier signed a long term financing agreements of USD800 million with 16 global developmental financial institutions and commercial banks to construct the greenfield plant in Port Harcourt company officials said here.

Indorama Group Managing Director, Amit Lohia has said that the state-of-the-art manufacturing complex will produce 1.4 million tonnes per annum of granulated urea using natural gas as feedstock, from early 2016.

He stated: "This project envisages setting up the single largest urea manufacturing train in the world, making this one of the lowest cost producers in the world, which will also enable it to export urea to North American and Latin American markets".

As MRC wrote before, Indo Rama Synthetics (India) is going to ink Memorandum of Understanding (MoU) with Government of Tamil Nadu, according to which the company will construct a petrochemical complex for purified terephthalic acid (PTA), polyethylene terephthalate (PET) and polyester staple fiber (PSF) production.

Indorama Ventures is a leading producer in the polyester value chain in Thailand with strong global network and manufacturing across Asia, Europe and North America. Its products serve major players in diversified end use markets, including food, beverages, personal and home care, health care, automotives, textile, and industrial. The company's main products are PTA, PET and polyester fibre, which are distributed across the world.
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MOSCOW (MRC) -- Chinese National Bureau of Statistics announced that gross domestic product in the second calendar quarter increased 7.5% from the same period last yearChinese Q2 GDP climbed 7.5% in line with expectations, said Businessinsider.

This is a second consecutive slowdown in growth amid increasing worries over the health of the world's number two economy.

The GDP figure matched the median forecast of 7.5% in a survey of 10 economists by AFP. Growth in the first six months of the year came in at 7.6%, the National Bureau of Statistics (NBS) said.

China's economic performance in the first half was "generally stable" and within expectations, an NBS spokesman said in a statement.

"However we are still faced with grim and complicated economic situations," he said.

Growth in the first quarter was 7.7%, a decrease from the 7.9% recorded in the last quarter of 2012.

Chinese industrial production was up 8.9%, below expectations for a 9.1% rise. Industrial production was up 9.3% in the first half of the year. The 10.8% rise in crude oil output, following the rise in crude oil imports suggests some improvement in investment activity.

As MRC wrote before, customs data showed China's exports fell 3.1% in June against forecasts for a rise of 4% , while imports dipped 0.7% versus an expected 8.0% rise. The customs administration added that the outlook for July to September was grim.

Other figures had shown factory-gate deflation persisted for a 16th straight month, backing the view that the economy, plagued by industrial overcapacity, is losing momentum.

Annual consumer inflation accelerated more than expected in June, but remained subdued at 2.7 percent, below Beijing's annual target of 3.5 percent.

The main worry for China's leaders is if the economic slowdown leads to high unemployment that could spark social unrest. So far government officials say employment is stable.

So for now economists do not see any major stimulus or policy shift and instead expect the government to tough out the slowdown as they pursue a longer-term vision of reforming the economy towards consumer-led, rather than export- and investment-led growth.
MRC

MOSCOW (MRC) -- Hanwha Chemical is in plans to take off-stream a dioctyl phthalate (DOP) plant, said Apic-online.

A source in South Korea informed that the plant is planned to be taken off-stream in end-October 2013. It is likely to remain off-stream for around two weeks.

Located in Ulsan, South Korea, the plant has a production capacity of 80,000 mt/year.

As MRC wrote before, Hanwha Chemical Corp. is considering building a polysilicon plant in South Korea as it pursues a goal of more than doubling sales. Constructing the plant in South Korea may make it easier to operate and staff and open new customer bases, hence it is unlikely that the plant will be located (as reported) in USA or Canada to gain from lower power costs.

Hanwha Group is one of the largest business conglomerate in South Korea. Founded in 1952 as Korea Explosives Inc., the group has grown into a large multi-profile business conglomerate, with diversified holdings stretching from explosives, their original business, to retail to financial services.
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