Braskem announces 3Q 2014 results

MOSCOW (MRC) -- Brazilian petrochemical firm Braskem announces its results for 3Q 2014, said the company in its press release.

In 3Q14, average cracker utilization rate stood at 90%, increasing 6 p.p. from 2Q14. Resumption of operations at the Triunfo site and the higher capacity utilization rate at the Rio de Janeiro complex offset the scheduled maintenance shutdown at the Sao Paulo cracker.

Braskem sales followed the resins market trend and reached 939 kton. Sales of PP (USA and Europe) totaled 470 kton, 2% lower than in 2Q14. Compared to 3Q13, sales grew 9%, supported by the better economic scenario.

EBITDA of RD1,502 million, benefitting from higher spreads in international markets and the growth in sales volume. Compared to 3Q13, EBITDA decreased 10%. In dollar, EBITDA was USD660 million.

Braskem's leverage stood at 2.71x. Fitch revised its rating outlook for Braskem to "stable," reflecting the reduction in its leverage levels, the continued improvement of its results and progresses in its growth and feedstock diversification project.

Mexico project's construction reached 82% completion with the beginning of the hiring and training Team Members to run the future industrial operation. Pre-marketing activities advanced, with the number of active clients reaching 276.

On August 11, the subsidiary BRASKEM-Idesa withdrew the fourth installment of the project finance in the amount of USD383 million. Regarding the Ascent project, Ineos, LyondellBasell and Technip were chosen to supply the technologies to be used in the project.

In a partnership with Think Plastic and Aduaneiras, the "Exporter Qualification Project" was created to increase exports of manufactured goods made from plastic.

As MRC wrote before, Braskem plans to build a new polyethylene (PE) plant at its existing complex in La Porte, Texas. The new plant will manufacture ultra-high molecular weight polyethylene (UHMWPE), making it the first time for Braskem to produce UHMWPE outside of its home base in Brazil. Construction on the plant will begin in the third quarter of 2014, with completion expected in the first half of 2016.

Braskem is Brazilian main producer of polyethylene and polypropylene. In addition with ongoing plants located in both petrochemical complexes, in April 2008 Braskem opened a 300,000 metric ton polypropylene plant in the city of Paulinia (Sao Paulo).
MRC

MOSCOW (MRC) -- Solvay's Rhodia chemical producer in Brazil is halting some of its units amid a water shortage, widening the list of companies being impacted by Sao Paulo’s worst drought in more than eight decades, according to Hydrocarbonprocessing.

Rhodia shut four of its 22 output units at its Paulinia plant in Sao Paulo state because the river where it collects water is drying up, spokesman Roberto Custodio said by phone. The company is carrying out unscheduled maintenance on the units until water supplies return to normal.

Businesses across Sao Paulo, from restaurants to factories, are facing cuts to supplies, threatening economic growth in the state that’s responsible for a third of Brazil’s gross domestic product. Pulp producer Fibria Celulose is working on a contingency plan should its water be cut, and sugar association Unica is warning mills to come up with a backup plan. Textile group Abit said its members are already experiencing water shortages.

"Given its importance, anything that happens in Sao Paulo affects Brazil’s economic growth," said Leonardo Dutra, sustainability consultant director of Ernst & Young. "This lack of water can slow the country’s economic recovery."

Brazil’s economy slipped into a recession from January to June for the first time since 2009. With 40 million people residing across 96,000 square miles (250,000 square kilometers), Sao Paulo state is geographically bigger than the UK Seventy of the 645 cities in the state are already facing water shortages and 38 have started rationing, newspaper O Estado de S. Paulo reported this month.

As MRC wrote before, in 2011, Rhodia and SIBUR signed a letter of intent to create a joint venture in specialty surfactants. This strategic alliance would be focused on creating a leader in the CIS market where specialty surfactants are used particularly in home & personal care, and oil & gas industries, with the surfactants sector growing at more than 6% per year.

Solvay is an international chemicals and plastics company. In 2011, Solvay acquired Rhodia for approximately EUR 3.4 billion. Rhodia is one of the three sectors of activities of Solvay. Rhodia is a world leader in the development and production of specialty chemicals, and partner of major players in the automotive, electronics, flavors and fragrances, health, personal and home care markets, consumer goods and industrial markets.
MRC

MOSCOW (MRC) -- APPE, part of bankrupt Spanish PET group La Seda de Barcelona, has been acquired by U.S.-based Plastipak Packaging Inc. for 360 million euros (USD447.7 million), said Plasticsnews.

The Plymouth, Mich.-based packaging company Plastipak submitted a sealed bid for the company along with two other bidders — European PET container maker Petainer and U.S.-based Anchorage investment fund — on Oct. 29.

Barcelona-based PET rigid packaging producer, APPE, has nine plants in Europe, North Africa and Turkey. Plastipak currently has 7 facilities in Europe. None are in Spain and it has no holdings in North Africa.

Plastipak’s winning bid included a gross up of 65 million euros (USD80.8 million) of accounts payable that will be transferred with the business, but will be discounted from the bid, and result in an actual consideration for the business of 295 million euros (USD366.8 million), Plastipak said in a statement.

Plastipak states that the transaction is subject to closing conditions, but is anticipated to complete late in the first quarter of 2015.

Plastipak currently has more than 27 sites in the US, South America and Europe, with over 4,000 employees.

As MRC wrote before, Portugal’s Selenis has finalised the purchase of Artenius Italia, the last remaining PET production company of La Seda de Barcelona (LSB). The PET subsidiary of the Imatosgil Investimentos group of Portuguese entrepreneur Matos Gil, once a major shareholder of La Seda, paid EUR1m for the assets. According to La Seda, Selenis will employ 30 staff at the Italian PET production facility and assume redundancy costs for another 75 workers.

Seda de Barcelona (LSB) is an industrial plastic packaging group operating internationally through its 14 facilities across Europe, Turkey and North Africa. It is the only European producer capable of supplying PET containers in a fully integrated way from raw material feedstock, conversion technology and design, injection and blow moulding up to the delivered finished product, by means of guaranteeing the quality of all its production processes.The PET and recycling division of LSB has four production plants in Spain, Italy, Greece and Turkey, and two recycling sites in Spain and Italy.

MRC

MOSCOW (MRC) -- Brent headed for a seventh weekly drop, the longest declining streak since November 2001, as OPEC predicted it will need to supply less crude amid the U.S. shale boom, said Bloomberg.

Futures in London were poised to fall 3.4 percent this week. The Organization of Petroleum Exporting Countries reduced every forecast for demand for its crude through 2035 except next year’s, according to the group’s annual World Oil Outlook, released yesterday. Libya plans to resume production from its biggest field that was halted after an attack, an official said.

Oil has slumped into a bear market amid signs that global supply growth is outpacing consumption. Leading OPEC members have resisted calls to cut output even as a surplus develops amid the shale boom in the U.S., which is pumping at the fastest pace in more than 30 years. Saudi Arabian Oil Minister Ali al-Naimi met with his Venezuelan counterpart Rafael Ramirez this week.

Brent for December settlement was little changed at USD82.95 a barrel on the London-based ICE Futures Europe exchange at 11:49 a.m. after erasing an earlier drop of 0.8 percent. The volume of all futures traded was about 12% below the 100-day average for the time of day. Prices have fallen 25 percent in 2014.

Global demand for crude from OPEC, which is responsible for about 40% of the world’s oil supply, may fall to a 14-year low of 28.2 million barrels a day in 2017, its outlook showed. That’s 600,000 a day less than last year’s projection and 800,000 below the amount required this year.

Oil will rebound by the second half of next year as supply and demand don’t justify the market’s collapse and prices are low enough to threaten investment in production, according to OPEC Secretary-General Abdalla El-Badri. The 12-member group, scheduled to meet Nov. 27 in Vienna, is "concerned but not panicking," he said yesterday.
MRC

MOSCOW (MRC) -- Celanese Corporation, a global technology and specialty materials company, has announced that the company's board of directors increased its share repurchase authorization to USD500 million, as per the company's press release.

As of September 30, 2014, the company had USD199 million remaining under its previous authorizations. The authorization gives management discretion in determining the timing and conditions under which shares may be repurchased.

As MRC wrote before, Celanese Corporation has increase the price of vinyl acetate-based emulsions sold in the Americas. Thus, PVAc homopolymer, vinyl acetate ethylene (EVA) and vinyl acrylic emulsions will increase by up to USD0.05/wet pound effective November 1, 2014, or as contracts allow. This price increase affects all applications including, but not limited to, adhesives, paints and coatings, building products, nonwovens, glass fiber, carpet, paper and textiles.

Celanese Corporation is a global technology leader in the production of differentiated chemistry solutions and specialty materials used in most major industries and consumer applications. Based in Dallas, Texas, Celanese employs approximately 7,400 employees worldwide and had 2013 net sales of USD6.5 billion.
MRC