LG Chem 2016 OP hits 5-year high, pledges USD2.4 bn in 2017 capex

MOSCOW (MRC) -- LG Chem Ltd., South Korea’s top chemicals company, said Thursday that its operating profit climbed 9.2 percent on year to 1.99 trillion won (USD1.72 billion) last year, the highest level in five years since 2011, said Pulsenews.

To keep up the upward momentum, the company pledged 2.76 trillion this year to expand facility. Full-year sales rose 2.2 percent to 20.66 trillion won amid increasing battery sales.

The strong business performance was driven by tangible sales in battery business and a robust cost-price spread, the company said. In particular, basic materials business for petrochemical products made large profits, more than offsetting losses in non-petrochemical units.

Fourth-quarter sales grew 9.3 percent to 5.51 trillion won and operating profit jumped 31.2 percent to 461.7 billion won. Net profit soared 30.4 percent to 270 billion won.

The company said its fourth-quarter operating profit sharply increased thanks to business improvement in basic materials despite seasonal weakness and increased orders in battery and IT materials.

LG Chem said it expects to maintain strong earnings pace this year thanks to a robust market demand for basic materials, growing sales in high value products, EV battery and energy storage products, and increased competitiveness in IT materials. In addition, sales in life science will be increasingly visible, and key subsidiary Farm Hannong will see a modest operating margin, the company said.

LG Chem said it will spend 2.76 trillion won on facility investment this year, up nearly 40 percent from a year ago.

"We set aside about 900 billion won for capex investment in battery business, which includes more than 700 billion won to increase production capacity in overseas sites in China, Europe and the U.S. and the remaining will be spent on new model development and IT process improvement," LG Chem president and chief financial officer Chung Ho-young said in a conference call.

"We will also inject some 800 billion won to strengthen basic materials business, and most of this money will go to projects to expand NCC, POE, ABS and other high-value product lineups."

Shares of LG Chem finished Thursday at 270,000 won, up 2.47 percent from the previous session in Seoul trading.

As MRC informed before, LG Chem Ltd, South Korea's largest chemical company, said it would invest about USD260 million to increase production capacity of its Daesan plant by 230,000 tpy to 1.27 MMtpy of ethylene by 2019.

South Korean Lotte Chemical is a global petrochemical company, established in 1976. It produces low density polyethylene (LDPE), high density polyethylene (HDPE), linear low density polyethylene (LLDPE), polypropylene (PP), functional resins, styrene monomer (SM), polyethylene terephthalate (PET), etc.
MRC

MOSCOW (MRC) -- Petroleo Brasileiro SA remains undecided about the sale of some refineries, a sign Brazil's state-controlled oil company might be leaning toward forming partnerships by offering stakes in some of them, said Reuters.

The person said Boston Consulting Group Inc had been analyzing potential scenarios for the company's refining operations over the past couple of years, and recently suggested several alternatives for the unit.

One of the options is breaking down Petrobras' refining network into geographic regions and then deciding which should go up for sale, the source said. A more palatable option, the source added, would be offering stakes in specific refineries to peers like Exxon Mobil Corp and Royal Dutch Shell Plc .

Rio de Janeiro-based Petrobras said extending partnerships in exploration and production to other business segments remained a key strategy whose main aspects are under consideration. Boston Consulting Group did not have an immediate comment.

The source requested anonymity because discussions on the matter are continuing.

The situation reflects changing fortunes at Petrobras since Chief Executive Officer Pedro Parente's appointment last May. This week, Parente told investors at a Credit Suisse conference that Petrobras wanted to remain a vertically integrated oil company and had ruled out an outright sale of all refining assets.

In recent months, Petrobras has stepped up the sale of some refining assets, such as the mothballed Okinawa refinery in Japan, and tightened safety and efficiency standards in the segment. Years of domestic fuel price controls and overspending in new projects led to repeated losses in the segment, helping Petrobras amass the biggest debt burden among global oil companies.

Parente has taken to asset sales and partnerships as one way to help cut the company's USD120 billion debt and diminish capital spending commitments for the years ahead. Currently, Petrobras is the sole owner of 14 refineries in operation in Brazil.

The company has set a USD21 billion asset sale target by the end of next year so it can focus investments on giant new offshore oil fields south of Rio de Janeiro, one of the world's largest discoveries in decades.
MRC

MOSCOW (MRC) -- The market size of global plastic additive market was valued over USD 38.50 billion in 2015 and it is projected to grow with a CAGR between 4.9% and 5% during the forecast period of 2016-2022 to surpass USD55 billion by 2022, as per Plastemart.

Plastic additives are chemical added polymers which are used to enhance the end user properties of plastic.

The polymers used in the plastic are mixed with monomeric units and are not in their pure form, but are harmless. These monomers i.e monomeric units are known as plastic additives and are classified as reinforcing fibers, coupling agents, stabilizers, colorants, fillers, processing aids, flame retardants, peroxides and antistatic agents. Plastic additives majorly aim to improve the processing characteristics and properties of plastic and to enhance end user performance. Furthermore, plastic additives facilitate safe handling during the manufacturing of finished products.

Rapidly increasing usage of plastics in industrial manufacturing, construction, automotive and mechanical engineering coupled with increasing cost of natural metal are the major factors driving the growth of plastic additives market. Increasing costs of natural metals has increased preferences for plastic additives. Moreover, augmented household applications and lower cost of plastic products are likely to boost the growth of this market over the forecast period.

On the other hand, the global plastic additives market is restrained by stringent government regulation on limited usage of plastic and environmental policies. Due to introduction of bans and regulatory obligations in recent years on usage of wide range of plastic additives is likely to hamper the growth of this market over the forecast period. Going forward, consistently increasing application of plastic additives is likely to increase opportunities to the players in this market over the forecast period.

As MRC wrote previously, in late 2016, The Lanxess Rhein Chemie Additives (ADD) business unveiled the expansion its product range of hydrolysis stabilisers for plastics and polyurethanes with the addition of Stabaxol P 110, the first product in a new line of low-emission polymeric carbodiimides based on alternative raw materials.

The stabiliser is said to show very good performance when used in TPE-Es, PET, and PBT. The product is supplied in pellet form or as an easy-flowing powder. It can be easily processed as it does not have to be pre-heated in the production process, has a high softening point of 80 C and is thus easy to meter uniformly. Typical applications include monofilaments for paper machine screens, cable sheathing, engineering injection mouldings, and electronic housings.
MRC

MOSCOW (MRC) -- Chemtura Corporation announced that at a special meeting of stockholders held today, Chemtura stockholders voted to approve and adopt the previously announced merger agreement under which LANXESS Deutschland GmbH, a wholly owned subsidiary of LANXESS AG, will acquire all of the outstanding shares of Chemtura common stock for USD33.50 per share in cash, without interest.

Approximately 99.88% percent of the votes cast at the special meeting were in favor of the approval and adoption of the merger agreement, representing approximately 81.77% percent of Chemtura’s outstanding common stock as of December 23, 2016, the record date for the special meeting.

Craig A. Rogerson, President and Chief Executive Officer of Chemtura and Chairman of the Chemtura Board of Directors, said, "We are pleased that our stockholders recognize the immediate and substantial value of this compelling transaction. We thank our stockholders for their support and look forward to a bright future ahead as part of LANXESS."

Subject to satisfaction or waiver of the remaining customary closing conditions in the merger agreement, the transaction is expected to close in mid-2017, at which time Chemtura will cease to be traded on the NYSE and Euronext Paris.

Chemtura Corporation, with 2015 sales of USD1.7 billion, is a global manufacturer and marketer of specialty chemicals.
MRC

MOSCOW (MRC) -- LyondellBasell Industries announced earnings from continuing operations for the fourth quarter 2016 of USD770 million, or USD1.89 per share. Fourth quarter 2016 EBITDA was USD1.4 billion, said the company on its site.

The quarter included a USD29 million non-cash, pre-tax charge for the impact of a lower of cost or market (LCM) inventory adjustment (USD18 million after-tax).

Excluding the LCM adjustment, earnings from continuing operations during the fourth quarter totaled USD788 million, or USD1.94 per share, and EBITDA was USD1.4 billion. The fourth quarter also included a USD58 million lump sum pension settlement and a USD61 million non-cash, out-of-period cumulative correction.

The correction, which was not material to any reporting period, relates to taxes on our cross-currency swaps for 2014, 2015 and through the third quarter of 2016. Together, the pension settlement and the non-cash, out-of-period correction adversely impacted fourth quarter earnings by USD0.24 per share. Full year 2016 income from continuing operations was USD3.8 billion, or USD9.15 per share, and EBITDA was USD6.6 billion.

The full year included a non-cash, pre-tax LCM inventory adjustment of USD29 million (USD18 million after tax). Excluding the LCM adjustment, earnings from continuing operations for the full year totaled USD3.9 billion, or USD9.20 per share, and EBITDA was USD6.6 billion. 2016 earnings were negatively impacted due to the USD58 million pension settlement, a USD74 million non-cash, out-of-period cumulative correction relating to 2014 and 2015 for taxes on our cross currency swaps and positively impacted by an after tax gain of USD78 million on the sale of our Argentine wholly owned subsidiary, Petroken Petroquimica Ensenada S.A. (Petroken). Combined, the net effect of the pension settlement, non-cash, out-of-period tax correction and Petroken gain adversely impacted full year 2016 earnings by USD0.07 per share.

As MRC informed earlier, LyondellBasell announced a planned executive leadership change. After seven years with LyondellBasell, Kevin Brown, executive vice president - manufacturing and refining and a member of the company's management board, has announced he will be retiring in mid-February.

LyondellBasell is one of the world's largest plastics, chemical and refining companies and a member of the S&P 500. LyondellBasell manufactures products at 56 sites in 19 countries. LyondellBasell is also a leading licensor of polypropylene and polyethylene technologies. The more than 250 polyolefin process licenses granted by LyondellBasell are twice that of any other polyolefin technology licensor.
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