Evonik cost cuts expected to result in EUR250 mln annual cost savings

MOSCOW (MRC) -- Evonik, the German specialty chemicals company, aims to reduce administrative costs by 250 million euros pa (USD338 mln) from 2016, becoming the latest European chemicals maker to announce cutbacks, said Plastemart.


The German manufacturer of feed additives, acrylic glass and high performance polymers has planned a program which includes the reduction of the number of executive board members to four from six, completes the transition from an industry conglomerate to a specialty chemicals group. "In many parts of the company the current administrative functions still reflect the needs of the former diversified group," as per the company, adding that the overhaul would also allow it to react faster to changing market conditions.


As MRC wrote before, Evonik announced a significant expansion of its Jurong Island, Singapore oil additives plant, to be completed in early 2015. With ongoing improvement and debottlenecking projects scheduled to be finalized during the first half of 2014, these optimizations and the planned expansion will nearly double the capacity of the oil additives plant in Singapore.


Evonik Industries is an industrial corporation in Germany and one of the world's leading specialty chemicals companies. Company's specialty chemicals activities focus on high-growth megatrends, especially, health, nutrition, resource efficiency, and globalization, and on entering attractive future-oriented markets. In 2012 Evonik generated sales of EUR13.6 billion and an operating result (adjusted EBITDA) of EUR2.6 billion.
MRC

MOSCOW (MRC) -- Ineos Grangemouth plant is likely to be shut down in the next three years if it continues losing over GBP100 million every year, as per Ineos chairman of Olefins and Polymers Europe, said Plastemart.


The main reasons for the massive losses are the decline in North Sea petrochemical feedstocks and the site’s pension scheme deficit of GBP200 million, two issues Ineos is now working to address. Mr Maclean said: "The plant has to become more cost effective".


Ineos has invested GBP1 billion in the Grangemouth site since 2006, but over the last three years the whole site has been losing around GBP150 million annually and that is forecast to continue. The feedstock gas from the North Sea is declining. Though this is a modern asset, it continues to run at 50% because of the lack of feedstocks. Lack of alternative feedstock to supplement the North Sea supply will result in the petrochemical side of the business not continuing beyond 2017.


Ineos are looking to source shale gas from the USA to solve this problem and get the cracker operating at 100%, but this would require an investment of GBP150 million to prepare the site for that feedstock and a further GBP200 million to offset the losses while the required new tanker facility is being built.


INEOS Group Limited is a privately owned multinational chemicals company consisting of 15 standalone business units, headquartered in Rolle, Switzerland and with its registered office in Lyndhurst, United Kingdom. It is the fourth largest chemicals company in the world measured by revenues (after BASF, Dow Chemical and LyondellBasell) and the largest privately owned company in the United Kingdom.
MRC

MOSCOW (MRC) -- Russian potash producer Uralkali said that China's sovereign wealth fund has acquired a 12.5% stake in the company by exercising an option on convertible bonds it bought late last year, said Upstreamonline.


The bonds had been issued by a special purpose vehicle called Wadge Holdings Ltd., which was owned by Uralkali's primary shareholder Suleiman Kerimov and his partners Filaret Galtchev and Anatoly Skurov.


The 12.5% stake is now held by the Chengdong Investment Corp., a subsidiary of the China Investment Corp. The bonds had been due to mature in 2014. CIC's stake is worth about 64.5 billion rubles (USD2.03 billion) based on the current share price of RUB174.75 on the Moscow Exchange.


The move comes as people close to Mr. Kerimov say he is willing to sell his 21.7% stake in Uralkali to quell an ugly dispute with Belarus that has landed Uralkali's chief executive in a Belarusian prison and prompted Belarus to issue a warrant for Mr. Kerimov's arrest. Uralkali has dismissed the charges as politically motivated.


The arrest of Vladislav Baumgertner on abuse of power charges followed Uralkali's departure from a trading partnership with Belarus' state-run potash miner that effectively ended an informal global pricing cartel and threw the market for the fertilizer additive into turmoil.
MRC

MOSCOW (MRC) -- Dow Chemical Co., the largest U.S. chemical producer by sales, no longer plans to sell its plastics-additives business because bidders did not offer enough, said Bloomberg.


Dow is "quite comfortable" continuing to run the additives business for cash, Chairman and Chief Executive Officer Andrew Liveris said today in a presentation at a conference organized by Credit Suisse Group AG.


"This is a valuable business that is currently being undervalued by buyers in the market," Liveris said. "As a result, we’re pulling the transaction off the table." He didn’t say how much was offered for the unit.


Dow, based in Midland, Michigan, continues to pursue the sale of other units as outlined earlier this year, Liveris said. The plastics-additives unit was part of USD1.5 billion in proposed divestitures, along with a fumigants unit and polypropylene licensing and catalysts, announced in March.


Liveris in July also announced possible sales of slow growing, low-profit units with USD6 billion in combined revenue. A divestiture or formation of a joint venture is "particularly" likely for the epoxy and chlorine derivatives units, Liveris said today.


Plastics additives, with about USD680 million in annual sales and USD80 million in earnings before interest, taxes, depreciation and amortization, is worth about USD520 million, Hassan Ahmed, a New York-based analyst at Alembic Global Advisors, said in an Aug. 5 note.


MRC

MOSCOW (MRC) -- Ukrplastic company jointly with the EBRD embarked on an environmental project In implementing the policy of protection of human health and environmental protection,said the company in its press0release.


Ukrplastic company continues the comprehensive implementation of technologies solvents’ recuperating at the place of production. This is the most advanced method of rational use of natural resources and protection of the nature. The project is implemented in cooperation with the European Bank for Reconstruction and Development within the frames the investment program on improvement of environmental standards and energy efficiency, and development of new technologies.


In 2012, the company installed equipment for recuperating and reclamation of used solvents in liquid form. That allowed for a significant reduction of consumption of materials, and use of exclusively recuperated products at auxiliary labours. In September 2013, the company launched the second phase of the large-scale environmental project: Ukrplastic became the first representative of the printing industry in Eastern Europe that installs the equipment for recuperation of volatile solvents’ vapours. Fully automated systems will eliminate emissions of light organic compounds into the environment and allow the recycle the solvent for the same technological process.


According to Irina Miroschnik, Chairman of the Management Board of Ukrplastic open JSC, investments in ecological safety of the production set new benchmarks for further development of the packaging industry in Ukraine and other industries. The investment program of Ukrplastic open JSC with participation of the EBRD was launched in 2010. The total investment amounts makes up EUR29.8 million.


Ukrplastic open JSC is the largest in the Eastern Europe manufacturer of flexible packaging materials for food, cosmetic, pharmaceutical and other industries. It is among the top 20 European companies of this profile. The company was founded in 1927. Ukrplastic open JSC supplies companies in Ukraine, Russia, and other CIS countries, as well as Central and Eastern Europe with flexible packaging materials and packing. The European Bank for Reconstruction and Development is the largest financial investor in Ukraine, which, as of August 1 of the current year, undertook obligations to provide EUR8.55 billion(USD 11.4 billion) to finance 327 projects in Ukraine.

MRC