Wacker increases sales in Q3 2014

MOSCOW (MRC) -- Wacker Chemie AG achieved a year-on-year increase in sales in the period July through September 2014 due to higher volumes in many product areas and higher prices for some products, especially solar silicon, according to the company's report.

The Munich-based chemical company generated third-quarter sales of EUR1,232.2 million (Q3 2013: EUR1,165.4 million), almost 6% more than a year earlier. All five business divisions contributed to this growth, and the group as a whole almost matched its sales figure for the strong preceding quarter (EUR1,242.3 million).

Wacker’s earnings before interest, taxes, depreciation and amortization (EBITDA) in Q3 2014 more than doubled relative to the year-earlier period, rising to EUR347.5 million (Q3 2013: EUR167.9 million). Compared to the preceding quarter (€229.5 million), the increase was over 51%. The EBITDA margin rose accordingly to 28.2% from 14.4% in Q3 2013 and 18.5% in Q2 2014. The group’s third-quarter earnings before interest and taxes (EBIT) were almost six times higher year on year, coming in at EUR196.3 million (Q3 2013: EUR35.1 million).

In its full-year 2014 outlook, Wacker presented a more specific earnings forecast. It now expects to post EBITDA of around EUR1 billion (2013: EUR678.7 million), while the full-year EBITDA margin is expected be over 20% (2013: 15.2%).

"After the first nine months of the year, we are well on track to achieve our targets for 2014," said Group CEO Rudolf Staudigl in Munich on Thursday. "Demand has remained robust in numerous sectors and regions, and there have also been positive price signals for key WACKER products, particularly for our polysilicon business. Additionally, the measures introduced to improve our cost structures are having a tangible effect, helping us enhance our competitiveness and our profitability."

The Wacker Group invested EUR152.9 million in the third quarter of 2014 (Q3 2013: EUR98.2 million). This represents a project-related increase of almost 56% on the prior-year period and over 51% on the preceding quarter (EUR101.0 million). The group’s net cash flow in the third quarter of 2014 was EUR178.4 million, compared with EUR164.7 million a year ago, a year-on-year increase of around 8%.

Investing activities during the reporting quarter remained centered on the construction of the new polysilicon production site in Charleston (Tennessee, USA). Almost two-thirds of the Group’s investment spending was allocated to this project in the July-through-September period. The facilities there are expected to be completed by the middle of next year, with the start-up in the second half of 2015.

At the Burghausen site in Germany, the expansion of production capacity for dispersible polymer powders is proceeding according to plan. Wacker is constructing a new spray dryer there with an annual capacity of 50,000 metric tons. The facility is scheduled to come on stream in the first quarter of 2015 and will be one of the largest of its kind worldwide. A total of around EUR20 million has been budgeted for the project.

Production capacity for dispersible polymer powders is also being extended at the Nanjing site in China, with a number of individual measures being taken there to eliminate production bottlenecks and thus enhance productivity. Once these measures are completed, Wacker expects to be able to produce up to 60,000 metric tons of dispersible polymer powder at the site annually, depending on the product mix.

Wacker Polymers is a leading producer of state-of-the-art binders and polymeric additives based on polyvinyl acetate and vinyl acetate copolymers. These take the form of dispersible polymer powders, dispersions, solid resins, and solutions. They are used in construction chemicals, paints, surface coatings, adhesives and nonwovens, and in fiber composites and polymeric materials based on renewable resources. Wacker Polymers has production sites in Germany, China, South Korea and the USA, as well as a global sales network and technical centers in all major regions.
MRC

MOSCOW (MRC) -- Total and Rosneft said Friday they have signed a Term Sheet that envisages the main terms and conditions of the purchase by Rosneft of a 16.67% share held by Total in a refinery located in Schwedt, Germany (PCK Raffinerie GmbH), as per Eurasia Review.

The document was signed in Sochi by the Head of Rosneft Igor Sechin and Chief Executive Officer of Total Patrick Pouyanne.

PCK Raffinerie GmbH refinery is located in the city of Schwedt/Oder in Brandenburg, Germany. Primary distillation capacity is 11.5 mln/t, with a Nelson index of 9.2. Current shareholders include: 37.5% ROG, 37.5% Shell, 16.67% Total, 8.33% Eni.

Once the deal is closed, Rosneft together with Ruhr Oel GmbH will manage close to 55% of the refinery’s ownership.

According to Rosneft, the deal represents a deepening of the energy partnership between Russia and Europe based on the effectiveness of supply of a refinery located along the Druzhba pipeline. Total and Rosneft are further agreeing on an off-take agreement to supply Total’s retail and wholesale customers securing stable supply to the premium Berlin and surrounding areas, markets and customers supplied by pipeline from the refinery.

Commenting on the signing Igor Sechin said, "This agreement is reflective of the level of trust, long-term commitment and mutual benefit in the relationships between Total and Rosneft. It proves the effectiveness of the European-Russian energy partnership in that it delivers added value to all companies and countries involved. As for Rosneft, this deal means a strengthening of its position in one of Europe’s most efficient and effective refineries and an opportunity to serve the end-customers in its most important market".

In May 2011, Rosneft acquired a 50% share in ROG in Germany. ROG holds a share in 4 refineries in Germany (Gelsenkirchen - 100%, Bayernoil - 25%; MiRO – 24%; PCK- 37,5%). Moreover the joint venture holds stakes in five pipeline and sea crude oil terminals in the North, Baltic, Mediterranean and Adriatic Seas. Rosneft partner in the JV on a parity basis is BP Europa SE. ROG is the leader of German market in terms of refining volumes –-21.2 mln tones in 2013.

Rosneft became Russia's largest publicly traded oil company in March 2013 after the USD55 billion takeover of TNK-BP, which was Russia’s third-largest oil producer at the time. Rosneft also controls Angarsk Polymer Plant in Russia and Lisichansky refinery in Ukraine.
MRC

MOSCOW (MRC) -- The Dow Chemical Company has announced it will add four new independent directors to its Board, reported the company on its site.

The list of the new independent directors looks the following way:

- Mr. Richard Davis, Chairman, President and CEO of U.S. Bancorp;
- Mr. Mark Loughridge, former Chief Financial Officer of IBM;
- Mr. Raymond J. Milchovich, Lead Director of Nucor and former Chairman and CEO of Foster Wheeler AG;
- Mr. Robert S. (Steve) Miller, non-executive Chairman of the Board of American International Group (AIG); Former Chief Executive Officer, Hawker Beechcraft, Inc.; Former Executive Chairman, Delphi.

All four individuals will be included in Dow’s nominations for election at the 2015 Annual Meeting of Shareholders.

Loughridge, Milchovich and Miller will join the Board effective January 1, 2015, and Davis will join the Board in May 2015, following Dow’s 2015 Annual Meeting.

As MRC wrote before, Hanwha Chemical, one of South Korea's leading polyethylene and polyvinyl chloride producers, has picked Credit Suisse to advise on possible purchases from Dow Chemical's chloro-alkali business but its interest is still in the early stages.

The Dow Chemical Company is an American multinational chemical corporation. As of 2007, it is the second-largest chemical manufacturer in the world by revenue (after BASF) and as of February 2009, the third-largest chemical company in the world by market capitalization (after BASF and DuPont). Dow is a large producer of plastics, including polystyrene, polyurethane, polyethylene, polypropylene, and synthetic rubber.
MRC

MOSCOW (MRC) - Production of low density polyethylene (LDPE) in Russia decreased by 13% in In the first ten months of this year.
The long scheduled shutdowns at Kazanorgsintez and Ufaorgsintez were the main reasons for the reduction in production volumes, according to a MRC ScanPlast.

October LDPE production in Russia increased to 48,500 tonnes, compared with 39,700 tonnes in September (scheduled maintenance works at two largest Russian producers - Kazanorgsintez and Ufaorgsintez). Total LDPE production in Russia decreased to 458,800 tonnes in January - October of this year, compared to 525,200 tonnes year on year. Structure of PE production in Russia over the reported period looked as follows.

October LDPE production at Tomskneftekhim grew to 23,900 tonnes, from 22,900 tonnes a month earlier. Total LDPE production by the producer was 214,700 tonnes in the ten months of this year, up 6% year on year.

The second largest Russian producer of LDPE - Kazanorgsintez produced in October about 19,000 tonnes of LDPE. The producer's LDPE production over the ten months of the year decreased to 152,300 tonnes, down 17% year on year. Such a serious decline in production resulted from the long emergency shutdowns of the producer in April-June and September-October this year.

October LDPE production at Ufaorgsintez increased to 7,700 tonnes, compared with 3,600 tonnes in September (scheduled maintenance works). Total LDPE production by the producer decreased to 67,800 tonnes in the first ten months of the year, down 10% year on year.

"Gazprom neftekhim Salavat" produced 3,600 tonnes in October, compared with 3,100 tonnes in September. Total LDPE production by the producer was 29,100 tonnes in the first ten months of the year, up 1% year on year.

Angarsk Polymer Plant in October reduced LDPE production to 5,600 tonnes in october, compared with 6,700 tonnes in September. The producer' LDPE output was 54,800 tonnes in the first ten months of the year, up 60% In the first quarter of the year, linear polyethylene (LLDPE) supply made about 50,500 tonnes, up 60% year-on-year.

MRC

MOSCOW (MRC) -- Bayer MaterialScience, a leading manufacturer of high-tech polymer materials, recently launched its new water-based polyurethane (PU) for the manufacture of PU leather, called INSQIN, which is working to improve worker safety and sustainability, as per Sourcingjournalonline.

INSQIN provides the footwear and apparel industries with a more sustainable and safer method of coating fabrics. It allows for all types of coated fabric processes to be carried out without using a solvent. And because the water-based method doesn’t require harsh solvents to coat the fabrics, the working environment is safer for employees too.

About seven billion pairs of shoes, two billion bags and one billion garments are produced with PU leather and other PU coated fabrics annually.

The INSQIN PU reduces environmental harm to local ecosystems by eliminating the pollution risks of the previous process, including water pollution, air pollution and hazardous solid waste. INSQIN also requires 95 percent less water and 50 percent less energy than the previous solvent-based method.

Bayer ensures the quality of the material is not at all affected without a solvent present. The INSQIN PU is specially formulated to retain the innate traits of PU leather including soft feel, high durability and voluminous, porous structure. INSQIN can be used on all types of fabrics that are commonly used in PU leather application including, wovens, non-wovens (including microfiber types) or knitwear.

Using its R&D setup and testing facilites, Bayer is able to work directly with brand owners to develop new kinds of materials that offer specific hands and characteristics they are looking to offer their customers. The company then uses its technology to create these new materials.

Bayer is also developing a quality assurance system called the INSQIN Partner Manufacturer Program, in which manufacturers will be audited to determine consistency and high standards in the application of waterborne PU technology. Brands will be able to source newly developed materials from an INSQIN partner list and have better transparency throughout the supply chain.

As MRC wrote before, Bayer MaterialScience expands technology and production by investing in a new ultra-modern technical centre for polyurethane foams and new production plant for coating raw materials. The total investment in both is more than EUR 45 million.

With 2013 sales of EUR 11.2 billion, Bayer MaterialScience is among the world’s largest polymer companies. Business activities are focused on the manufacture of high-tech polymer materials and the development of innovative solutions for products used in many areas of daily life. The main segments served are the automotive, electrical and electronics, construction and the sports and leisure industries. At the end of 2013, Bayer MaterialScience had 30 production sites and employed approximately 14,300 people around the globe. Bayer MaterialScience is a Bayer Group company.
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