Solvay to sell its US-based Eco Services business unit to CCMP Capital

MOSCOW (MRC) -- Solvay has signed a binding agreement to sell its sulfuric acid virgin production and regeneration business Eco Services to affiliates of CCMP Capital Advisors, LLC, as per the company's press release.

"The divestment of Eco Services is another step in Solvay’s transformation aimed at achieving higher growth and greater returns. Eco Services has a market leading position and generates stable cash flows, but its business profile differs from Solvay’s strategic ambitions," said Jean-Pierre Clamadieu, CEO of Solvay. "CCMP Capital is committed to working with the management team to make the investments necessary to support the long term growth of the business".

The transaction terms correspond to an enterprise value of USD 890 million (EUR 660 million), which represents just over 8,0x adjusted EBITDA for the last twelve months ending June 30th, 2014.

CCMP specializes in middle market buyouts and growth equity investments of USD100 million to USD500 million in North America and Europe. CCMP’s core strategy is to enhance the value of its portfolio companies through an active approach to operational transformation. With offices in New York, Houston and London, CCMP invests in four primary industries: Consumer/Retail, Industrial, Energy and Healthcare.

Solvay announced in February that it was exploring strategic options for Eco Services. Completion of the transaction, expected in the fourth quarter, is subject to customary closing conditions.

As MRC reported earlier, in June, Solvay SA and Ineos Group AG have given a name to their chlorovinyls joint venture, Inovyn, as the two firms prepare the launch the company by the end of 2014. The new company will officially open following divestments by both companies required by the European Commission. Until completion, Solvay and Ineos will continue to run their businesses separately.

Solvay S.A. is a Belgian chemical company founded in 1863, with its head office in Neder-Over-Heembeek, Brussels, Belgium. The company has diversified into two major sectors of activity: chemicals and plastics. Solvay supplies over 1500 products across 35 brands of high-performance polymers – fluoropolymers, fluoroelastomers, fluorinated fluids, semi-aromatic polyamides, sulfone polymers, aromatic ultra polymers, high-barrier polymers and cross-linked high-performance compounds.
MRC

MOSCOW (MRC) - Ufaorgsintez owned by "United Petrochemical Company" (UPC), announced an increase in contract prices of low density polyethylene (LDPE) and polypropylene (PP), effective from 1, August, according to ICIS-MRC Price Report.

The company raised its contract LDPE prices by roubles (Rb) 2,000-2,500/tonne, compared with the price level on 15, July. PP prices increased by Rb2,000-2,500/tonne, depending on grade. PE and PP prices were risen because of the strong demand and upcoming shutdown for the long scheduled maintenance works.

We remind that the turnaround will be done in two steps. First stage includes the shutdown of the part capacities for 158, 153 LDPE and the whole PP production capacities for 30 days from 15, August. The second stage includes the shutdown of the second LDPE line (108 PE) for 30 days from 1, September.

Tomskneftekhim announced an increase in LDPE contract prices of Rb1,000/tonne on 28, July.

OAO Ufaorgsintez manufactures organic synthesis products in Russia and Europe. Its products include ethylene, propylene, ethanol, cumol, ethyl benzol, phenol, acetone, copolymer rubber, polyolefines, poly vinyl chloride and polyethylene items, thinners, and dilutants. The company exports its products to Byelorussia, Kazakhstan, Finland, Germany, France, and Brazil. Ufaorgsintez was founded in 1956 and is based in Ufa, Russia. Total PE and PP production at Ufaorgsintez was 44,100 tonnes and 64,100 tonnes in the first six months of 2014, respectively.
UPC owns 87.76% of the share capital Ufaorgsintez. Bashneft sold stake Ufaorgsintez to UPC in May 2013.
MRC

MOSCOW (MRC) -- The plastic additives market was valued at USD11.16 bln in 2012, and is expected to reach USD15.90 bln by 2019, growing at a CAGR of 5.2% from 2013 to 2019, as per Plastemart with reference to Transparency Market Research.

Lack of adequate power infrastructure and increasing demand for reliable electricity delivery are the major driving forces of this market. The Plastic additive is a diversified industry with various types of additives such as property modifiers, property extenders, property stabilizers and processing aids and is set to demonstrate a high growth rate over the next few years. Major end use markets served by the industry include commercial construction, automotive, consumer appliances industry and general manufacturing industries.

The plastic additive industry being energy and capital intensive, oil and gas are considered as major raw material suppliers for the industry. The global plastic additives market continues to grow and discover new growth opportunities mainly due to increase in end use markets such as commercial construction, automotive, consumer appliances industry and general manufacturing industries.

Among all the geographical regions, Asia Pacific is leading globally both in terms of production and consumption of plastic additives due to increase in end use market such as automobile industry and construction industry. Moreover, the automobile industry in China and India is expected to grow at over 8% and 14% respectively. The demand from mature markets such as US and Europe is also expected to increase due to recovery from a sluggish economy. The opportunities in plastic additives market are huge as many market players are continuously investing and focusing on new product development.

BASF remains the biggest manufacturer of plastic additives; other manufacturers include Chemtura Corporation, Exxon Mobil Corporation, Bayer AG, Kaneka and many more.

The economic crisis has slowed down the growth rate of the plastic additive industry in the recent past, but it has still survived to continue growing and it is expected to develop at a CAGR of 3.8% from 2011 to 2019.

As MRC wrote before, this July, French specialty chemicals firm Arkema and Omya, a Switzerland-based global provider and distributor of specialty chemicals, entered into an exclusive pan-European distribution agreement, under which Omya will market Arkema's plastic additives range for various polymer markets (impact modifier and processing aid solutions): Plastistrength, Durastrength, Clearstrength and Biostrength across Europe, except Spain and Portugal.
MRC

MOSCOW (MRC) -- European oil giant BP Plc. reported that its profit before taxation for the second quarter of 2014 increased to USD5.15 billion from USD4.12 billion in the year ago quarter, said the producer in its press release.

Quarterly profit attributable to shareholders grew to USD3.37 billion from last year's USD2.04 billion, with earnings per ADS improving to USD1.09 from USD0.64 in the previous year.

Underlying replacement cost profit for the quarter of 2014 was USD3.6 billion, 34% higher than the USD2.7 billion reported for the same period in 2013. Underlying replacement cost profit was adjusted for non-operating items and fair value accounting effects.

But, sales and other operating revenues for the quarter dropped to USD93.96 billion from USD94.71 billion in the year ago quarter.

The company also announced a quarterly dividend of 9.75 cents per ordinary share, the same level as the previous quarter but 8.3% higher than a year earlier. The dividend is expected to be paid on 19 September 2014.

Looking ahead, the company expects third-quarter 2014 reported production to be lower than the second quarter, primarily reflecting planned major turnaround and seasonal maintenance activities in Alaska and the Gulf of Mexico. It expects the seasonal reduction to be slightly larger than it experienced in the same quarters of 2013 due to phasing of these activities.

As MRC wrote before, BP, the UK oil company with the single-biggest foreign investment in Russia, warned that more sanctions against the country could hurt its business. BP, with a 20% stake in OAO Rosneft, stands to lose the most from further sanctions in response to Russia’s annexation of Crimea. The European Union and the US are acting to intensify punitive measures aimed at key sectors of the economy -- finance, defense and energy.

BP is one of the world's leading international oil and gas companies, providing its customers with fuel for transportation, energy for heat and light, retail services and petrochemicals products for everyday items.
MRC

MOSCOW (MRC) -- Westlake Chemical Corporation announced it has closed the previously announced acquisition of German-based Vinnolit Holdings GmbH and its subsidiary companies from Advent International, a private equity firm, said The Wall Street Journal.

The Vinnolit acquisition includes six production facilities located in Burghausen, Gendorf, Cologne, Knapsack and Schkopau in Germany and Hillhouse in the United Kingdom. These operations have a combined annual capacity of 780 thousand metric tons of PVC, including specialty paste, thermoplastic specialties and suspension grades, 665 thousand metric tons of vinyl chloride monomer ("VCM") and 475 thousand metric tons of membrane grade caustic soda. Vinnolit has world class technical centers including a research and development facility in Gendorf and an applications laboratory in Burghausen.

The newly acquired business will operate as a Westlake company under the Vinnolit name and continue to provide products which are suitable for a wide range of industrial and building product applications including automotive sealants and interior trim, cable sheathing, flooring, medical applications, pipes, film, technical coatings, wall covering and window profiles.

Vinnolit's headquarters will remain in Ismaning, Germany, outside of Munich. The company employs approximately 1,400 employees.

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, caustic, VCM, PVC suspension and specialty resins and PVC building products including pipe and specialty components, windows, fence and decking.

As MRC informed earlier, last March, Westlake Chemical agreed to acquire the PVC pipe and fittings unit of Compagnie de Saint-Gobain SA's CertainTeed Corp. for USD175 million. CertainTeed's pipe and foundation group produces PVC pipe and fittings for municipalities, water wells, mining, agriculture and irrigation. The transaction was closed in the second quarter of 2013.

Vinnolit, a Westlake company, is one of the leading PVC producers in Europe, and, worldwide, is the market and technical leader in specialty PVC with headquarters in Ismaning, Germany.
MRC