Grupa Azoty targets 10 deals in diversification drive

MOSCOW (MRC) -- Poland’s largest chemical company is to embark upon a global dealmaking spree, targeting as many as 10 acquisitions as it seeks to diversify away from its domestic market, said Financial Times.

Grupa Azoty, Europe’s second-largest fertiliser company, is eyeing potential targets in the Czech Republic, Hungary and Lithuania, as well as Africa and South America, as part of a concerted effort by Poland’s biggest companies to expand globally.

Europe has three major regional fertiliser players: Norway’s Yara, with assets in France and Germany; Austria’s Borealis, whose empire stretches the length of the Danube River; and Grupa Azoty, which wants to consolidate its position as eastern Europe’s undisputed champion.

Mr Jarczewski cites Agrofert, a Czech company, and unnamed Hungarian and Lithuanian players as businesses he is interested in, from a list of 10 potential targets that Grupa Azoty have whittled down from 2,000 initial takeover candidates. The company will turn to international lenders and Polish banks to raise debt for each acquisition, according to Mr Jarczewski.

Grupa Azoty’s move comes as Poland’s government has loosened the state’s grip in a tacit understanding that its domestic businesses need to grow globally to survive.

KGHM, a Polish state-controller copper miner, opened a mine in Chile this month, while state-run petrochemical company PKN Orlen bought a Canadian oil and gas producer in June.

Poland’s big state-owned assets, mainly in the energy, petrochemical and banking sectors, are domestically dominant but lack the global clout of their western European rivals. An effort to internationalise their businesses has grown in recent years, and the recent trade sanctions applied by Russia and the EU this year as a result of the conflict in Ukraine has highlighted the importance for Poland’s biggest companies in diversifying away from reliance on their domestic market.

Grupa Azoty, which has allocated EUR2bn to spend on non-acquisitive capital expenditure between now and 2020, is looking at buying fertiliser production facilities in Africa, evaluating an investment in Malaysia and is also keen on a South American acquisition.

In May of last year, Acron, a Russian rival, began to acquire shares in the company, and today owns 20 per cent of Grupa Azoty.

MRC

MOSCOW (MRC) -- INEOS Barex has announced that it will cease operations at its Barex plant in Lima, Ohio.
The company said that the resins facility has been suffering from financial problems, and efforts to reduce costs and improve profitability were unsuccessful, said the producer in the press-release.

INEOS announced that the company's only Barex resin producing facility is expected to shut down early next year.
"The proposed closure will affect about 50 jobs in Lima and Houston in the US, and Switzerland."
INEOS Barex CEO David Schmidt said: "We regret having to take the decision to close our Barex plant and wind-down the Barex business.

"We will work with our customers and employees to ensure an orderly closure of the Barex business over the coming months."

Barex is a specialised acrylonitrile-methyl acrylate co-polymer used for packaging food, correction fluid, gasoline additives and agrochemicals, as well as medical and pharmaceutical, personal care, cosmetics and fruit juice beverages.

At the Lima complex, INEOS Barex also runs acrylonitrile and catalyst plants. Operations at these facilities will not be impacted by the closure of the resins facility.

The company operates sales and technical offices in Delaware and Texas in the US, and in Switzerland.
An INEOS Barex spokesman was quoted by Plastics News saying that the proposed closure will affect about 50 jobs in Lima and Houston in the US, and Switzerland.

Consulting firm Montesino Associates' managing director, Peter Schmitt, was quoted by the website saying that the plastics industry "will hope that a suitor can be found to buy (the Barex plant) and avoid shuttering it.

MRC

MOSCOW (MRC) -- Yeochun Naphtha Cracking Center is likely to shut a styrene monomer (SM) plant for maintenance turnaround, according to Apic-online.

A Polymerupdate source in South Korea informed that the cracker is planned to be shut in mid-May 2015. It is likely to remain off-stream for around one month.

Located at Yeosu in South Korea, the plant has a production capacity of 290,000 mt/year.

We remind that, as MRC reported earlier, Styrindo Mono Indonesia (SMI) shut down its No. 2 SM plant in Indonesia for maintenance turnaround in mid-October 2014. It is expected to remain off-stream for around one month. Located at Merak in Indonesia, the plant has a production capacity of 250,000 mt/year.
MRC

MOSCOW (MRC) -- Health Water Bottling Company (HWB, Riyadh / Saudi Arabia), part of the Saudi Olayan Group, has acquired a complete PET production line from liquid packaging and equipment supplier Sidel (Hunenberg), said Plasteurope.

The machinery representing the latest generation of Sidel’s Matrix brand products is claimed to have one of the world’s fastest turnover rates. From February 2015, HWB will be able to produce PET water bottles in 330 ml and 600 ml formats at a speed of 134,000 bottles per hour.

The bottling line will be equipped with two Sidel Matrix Combis, integrating blow-fill-cap in one enclosure. Because of the neck-handling and positive transfer of bottles between blow moulding and filling, Sidel said its machinery is not bound by the limitations imposed by air conveyors. Its use will offer HWB greater design freedom in terms of bottle shape and the ability to package lightweight bottles at high speeds. Moreover, the overall efficiency and design of the machinery, along with its lower energy consumption will contribute to “real cost reductions,” the Swiss company added.

Due to its growing population, Saudi demand for bottled water (both still and carbonated) is said to have risen by 52.4% between 2007 and 2012, from 1,063 to 1,620 million litres sold, and is forecast to grow even further in the coming years.

As MRC wrote before, beverage packaging equipment supplier Sidel (Le Havre/France) developed a PET bottle base for still drinks, which is says is stronger, lighter and cheaper to produce in August 2013.

Sidel is a manufacturing company providing packaging for liquids such as water; carbonated and non-carbonated soft drinks; and sensitive beverages like milk, liquid dairy products, juices, nectars, tea, coffee and isotonics; as well as edible oil, beer and other alcoholic beverages. Sidel manufacturers and services equipment that enables other companies to package such liquids using one of three main materials: plastic (especially PET, and also HDPE and PP).

MRC

MOSCOW (MRC) -- Foster Wheeler has announced that a subsidiary of its global engineering and construction business has been awarded an engineering, procurement, and construction (EPC) contract by ExxonMobil Petroleum & Chemical (Esso) to upgrade its Antwerp refinery in Belgium, as per Hydrocarbonprocessing.

The Esso project is officially named the Antwerp Northwest Europe Resid Upgrade Project - Revamp and Offsites facilities.

Foster Wheeler's contract value was not disclosed, and a small initial release of work was included in the company’s first-quarter 2014 bookings.

The full release of work was included in the company's second-quarter 2014 bookings.

"After the successful completion by Foster Wheeler of the front-end engineering design for this project and for the new delayed coking unit that will be built at the same facility, we are very pleased to have won this significant EPC contract for this challenging project," said Roberto Penno, CEO of Foster Wheeler's global engineering and construction group.

Foster Wheeler’s scope of work is expected to be completed in December 2016.

As MRC informed previously, in early 2014, ExxonMobil officially opened its multi-billion dollar Singapore chemical plant expansion on Jurong Island, to serve growth markets in the Asia-Pacific region. The expansion included a second 1-million-t/y steam cracker, two 650,000-t/y polyethylene plants, a 450,000-t/y polypropylene plant, a 300,000-t/y specialty elastomers unit, an aromatics extraction facility to produce 340,000 t/y of benzene, and a 125,000-t/y oxo-alcohol expansion.

ExxonMobil is the largest non-government owned company in the energy industry and produces about 3% of the world's oil and about 2% of the world's energy.
MRC