DuPont separates performance chemical segment

MOSCOW (MRC) -- DuPont's Board of Directors has authorized management to execute a full separation of its Performance Chemicals segment, which includes the Titanium Technologies and Chemicals & Fluoroproducts businesses, according to the company's statement.

DuPont intends to execute the separation through a tax-free spin-off to shareholders, subject to customary closing conditions. Upon completion of the separation in about 18 months, 100% of the new public entity will be owned by DuPont shareholders.

"Following a thorough strategic review process over the last year, the spin-off of Performance Chemicals is clearly the best option to deliver enhanced value for our shareholders. This separation will advance the transformation of DuPont and result in two strong, highly competitive companies," said DuPont Chair and CEO Ellen Kullman.

The Performance Chemicals spin-off is DuPont’s latest portfolio enhancement guided by its strategic direction. Since 2010, DuPont has executed a number of acquisitions and divestitures, including divesting its Performance Coatings segment earlier this year.

DuPont’s Performance Chemicals segment will operate as an independent, publicly traded company after the separation. The new company will have world leading businesses in Titanium Technologies and Chemicals & Fluoroproducts, solid fundamentals, strong cash flow generation, and well established positions in attractive markets. The Performance Chemicals segment generated about USD7 billion in 2012 revenues.

DuPont announced on July 23 that it would explore strategic alternatives for its Performance Chemicals businesses as part of an ongoing portfolio review to determine the optimal mix of businesses for maximizing shareholder value. Evercore and Goldman Sachs are strategic advisors on the separation.

As MRC wrote previously, in late 2012 DuPont reported of investments that the company were making in all its divisions kept on delivering results which were offset by the weakness in titanium dioxide (TiO2) markets. "Excluding the performance chemicals unit, which includes TiO2, the company expects earnings growth of at least high-teens in 2013 versus 2012. Performance chemicals margins are expected to fall six to seven percentage points in 2013," DuPont said.

DuPont is an American chemical company that was founded in July, 1802. The company manufactures a wide range of chemical products, leading extensive innovative research in this field. The company is the inventor of many unique plastics and other materials, including neoprene, nylon, Teflon, Kevlar, Mylar, Tyvek, etc. DuPont was the developer and main producer of Freon used in the production of refrigeration equipment.
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MOSCOW (MRC) -- Foster Wheeler has been selected by Farabi Petrochemicals Company to undertake a concept study and technology selection contract for the Jazan Petrochemicals Project in Saudi Arabia, said Hydrocarbonprocessing.

The Foster Wheeler contract value was not disclosed and will be included in the company’s fourth-quarter 2013 bookings. "Farabi Petrochemicals are pleased to award this contract to Foster Wheeler and look forward to working with them to develop this key investment in our company’s future," said Mohammed Al-Wadaey, president of Farabi Petrochemicals Company.

Foster Wheeler’s scope of work will include development of the overall concept for the project, which is planned to include a world-scale linear alkyl benzene plant and a range of units producing specialty chemicals derived from diesel feedstock.

Foster Wheeler will also recommend the technology for the production of low aromatics solvent and for the treatment of heavy fuel oil, as well as develop a capital and operating cost estimate and the invitation to tender for the front-end engineering design.

The study is scheduled for completion in the first quarter of 2014. "We are delighted that Farabi Petrochemicals Company has awarded this important strategic study to Foster Wheeler, continuing a relationship that stretches back over a decade," said Umberto della Sala, chief operating officer of Foster Wheeler.

"We look forward to making a key contribution in assisting our client to progress this significant investment, and delivering a strong performance that will position us well for subsequent phases of the project," he added.

We remind that, as MRC wrote previously, Foster Wheeler has recently announced that a subsidiary of its global engineering and construction (E&C) group was awarded a contract by Dow Chemical to provide services for the LA-3 crack more ethane (CME) project at Dow’s Plaquemine petrochemical complex in Louisiana. The objective of the project is to improve the plant's ethane flexibility to take advantage of low-cost feedstock. The scope will include brownfield additions and retrofit modifications to the plant.

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MOSCOW (MRC) -- Austrian petrochemical company Borealis has begun preparations for the start of Borouge 3 in Ruwais, Abu Dhabi, reported Apic-online with reference to Borealis CEO Mark Garrett's statement at the K fair international plastics and rubber fair in Dusseldorf, Germany.

"We have begun preparations for the start up of Borouge 3 like air testing and drying of units. The different units will start up in a staggered way through 2014," he said.

Borouge 3, includes an 1.5 million mt/year ethane cracker, three polyethylene (PE) units with a capacity of 1.43 million mt/year and two polypropylene (PP) with a capacity of 960,000 mt/year.

The Borealis CEO added that the cracker will start before the polyolefins unit. "We will have shipments of ethylene to balance the usage. We can also balance usage within our Borouge system," he added. He did not specify the exact start up dates.

The existing capacity of Borouge 1 and 2 is 2.1 million mt/year of ethylene, 1.14 million mt/year of PE, 860,000 mt/year of PP and an olefins conversion unit with a capacity of 752,000 mt/year.

As MRC wrote earlier, in 2012, Borealis and Borouge combined their expertise to serve the automotive market by introducing a new grade of polypropylene (PP) specified for use in lightweight bumper applications for two new Renault automotive platforms.

Borouge is a joint venture between the Abu Dhabi National Oil company and Borealis.
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MOSCOW (MRC) -- Mexico's state-owned oil and gas company Pemex expects petrochemical production to rise 25% to 10 million tpy if sweeping energy policy overhaul measures are approved, according to Hydrocarbonprocessing.

Pemex wrote on its official Twitter page that output would increase from its current 8 million tpy with the reform, which is expected later this year.

The reform would allow more private sector participation within the petrochemical sector and the broader downstream industry, which analysts have said is a prime target for growth.

The reform was proposed in August by President Enrique Pena Nieto, who is looking to spur economic growth in Mexico by attracting billions of dollars in investments and improve competitiveness in the country by lowering energy prices for manufacturers.

Though Mexico has the world's fourth biggest reserves of shale gas, crude oil production has fallen for nearly a decade due to a model in which Mexico pays foreign companies to drill wells and provide other services.

Under Nieto's plan, new constitutional and contractual arrangements could potentially reverse that decline.

As MRC reported earlier, Pemex and Mexichem have recently entered into a joint venture, which will enable greater competitiveness of the domestic petrochemical industry in the global market through the integration of a new company, which will create value to the chlorine-vinyl chain. The joint venture includes a cash investment and assets contribution up to the amount of USD518 million, of which PEMEX will participate with USD228 million in assets while Mexichem will contribute with both, USD90 million in assets and USD200 million in cash in order to modernize the Pajaritos complex.

Pemex, Mexican Petroleum, is a Mexican state-owned petroleum company. Pemex has a total asset worth of USD415.75 billion, and is the world"s second largest non-publicly listed company by total market value, and Latin America's second largest enterprise by annual revenue as of 2009. Company produces such polymers, as polyethylene (PE), polypropylene (PP), polystyrene (PS).
MRC

MOSCOW (MRC) -- GS Caltex has opened a chemical plant in the Czech Republic to increase its supply of compounded resin in Europe, as per GV.

The plant is built on a 40,000 square meters land at an industrial complex in Karvina (370 km east of Prague), according to the firm, South Korea’s second-largest oil refiner.

It said the plant can produce 30,000 tons of compounded resin, a functional plastic widely used in manufacturing cars and electronics products, per year. The company added its annual supply of the product will reach 190,000 tons worldwide.

"The completion of the plant has allowed us to take a meaningful step in the compounded resin market in Europe as an international manufacturer," said GS Caltex Vice Chairman and CEO Huh Jin-soo at the ceremony held on the site to celebrate the establishment of the plant.

This is the first time that a Korean enterprise is running a plant with a capacity to manufacture 30,000 tons of compounded resin, according to the firm.

It said it will sell its polymer compounds to the Korean companies operating in the region. They include the country’s two biggest automakers - Hyundai Motor and Kia Motors - and the electronics giant Samsung Electronics.

"We also plan to expand our sales to other global enterprises such as Mercedes-Benz, BMW, and Volkswagen in the near future," GS Caltex said.

The firm said it will increase the amount of annual production at the Karvina plant to 50,000 tons by 2016. It also said the plant is anticipated to have annual sales of 1 billion won (USD 94.1 million) in 2017.

GS Caltex sold 6,000 tons of the compounded resin in Europe last year. The total size of the regional market in the same time period was 12,000 tons.

With the new plant, the firm said it anticipates increasing annual production of compounded resin to 240,000 tons by 2016 worldwide.

As MRC reported previously, CB&I was recently awarded a contract by GS Caltex for the license, basic engineering and catalyst supply for a new paraxylene (PX) unit to be built in Yeosu, Korea. The unit will use the BP paraxylene technology, exclusively licensed by CB&I, and will have a world-scale design capacity. Start-up is expected in 2016.

GS Caltex has been producing compounded resin domestically as well as overseas. Its domestic plants include the ones at the industrial complex in Yeosu, South Jeolla Province and Jinju, South Gyeongsang Province. In Langfang, China, it operates a plant with an annual production capacity of 40,000 tons. The plant in Heibei Province has supplied polymer compounds to China and neighboring nations such as Russia, Taiwan and Thailand. It also has another Chinese unit in Suzhou, Jiangsu Province.
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