Axalta acquires leading Chinese wire enamels producer

MOSCOW (MRC) -- Axalta announced that it has acquired Anhui Shengran Insulating Materials Co., Ltd., a leading Chinese producer of high-quality wire enamels used in a wide range of consumer electronics, electric vehicle, and industrial applications, according to Kemicalinfo.

The transaction is expected to close in the second quarter of 2021, subject to customary closing conditions. Financial terms have not been disclosed.

The acquisition will add new wire enamel products and capabilities to enhance Axalta’s offerings to customers across several end markets, including automotive, renewable energy, and consumer electronics.

“Anhui Shengran’s wire enamel products and capabilities are highly complementary to our growing Energy Solutions business,” said Shelley Bausch, senior VP of Global Industrial Coatings at Axalta. “This will be a solid platform for further specialization and growth as we support key customers in China. I am also excited to welcome the Anhui Shengran team to Axalta.”

“It was important to me that we were acquired by a company I could trust to treat my employees well, and I believe Anhui Shengran is in good hands,” said Zhangying Tu, executive director of Anhui Shengran. “We are excited to become part of Axalta, and we look forward to working together to add value and increase market share in the growing Energy Solutions market in China.”

With three distinctive product segments - wire enamels, impregnating resins and electrical steel coatings - Axalta’s Energy Solutions business provides a comprehensive portfolio of innovative and ecologically responsible insulating solutions for customers in new energy vehicles and other industrial markets.

As MRC informed earlier, in 2017, Axalta Coating Systems completed its previously announced acquisition of the Spencer Coatings Group, a leading manufacturer of high performance industrial coatings for heavy-duty equipment, general industrial, oil and gas, and glass coatings segments.

We remind that Russia's output of chemical products rose in November 2020 by 9.5% year on year. At the same time, production of basic chemicals increased in the first eleven months of 2020 by 6.6% year on year, according to Rosstat's data. According to the Federal State Statistics Service of the Russian Federation, polymers in primary form accounted for the greatest increase in the January-November 2020 output. November production of polymers in primary form rose to 896,000 tonnes from 852,000 tonnes in October. Overall output of polymers in primary form totalled 9,240,000 tonnes over the stated period, up by 17.1% year on year.
MRC

MOSCOW (MRC) -- South Korean SK Global Chemical (SKGC) has signed a deal with Chinese producer Zhejiang Satellite to build a 40,000 tonne/year ethylene (C2) acrylic acid (EAA) plant at Lianyungang in eastern China, said Chemengonline.

SK Global Chemical (Seoul, South Korea), a subsidiary of SK Innovation, signed an MOU with Chinese company Zhejiang Satellite for the establishment of a joint company that will be responsible for the production and sales of ethylene acrylic acid (EAA), a type of adhesive copolymer.

This joint company will be established this year with the total investment of approximately KRW 200 billion, with six to four contributions of SK Global Chemical and Zhejiang Satellite, respectively. This move is aimed at preoccupying the Chinese and Asian markets through the strategic ties of SK Global Chemical’s EAA production technology and sales channels, and Zhejiang Satellite’s stable source of raw materials.

Ever since the acquisition of the EAA business from Dow Chemical Company in 2017, it had been SK Global Chemical’s goal to expand the high value-added packaging material business, mainly in emerging countries in Asia including China. By securing the EAA plant in Lianyungang, China, SK Global Chemical will be able to complete the triangular formation of global high value-added materials production bases in USA, Europe and Asia. Two other EAA plants of SK Global include one in Texas, the U.S., and one in Tarragona, Spain.

SK Global Chemical shared that this strategic investment reflects the surging demand for EAA materials in emerging Asian countries, including China. The packaging materials market for fresh food has been rapidly growing due to the high demand for boxed or delivered foods in China. SK Global Chemical’s EAA materials are renowned for their green packaging technologies in the growing fresh food packaging materials market.

Luanyungang, China, the new land for EAA factories, has recently started creating a massive eco-friendly chemical and industrial complex. It is expected to grow into the No. 1 chemical and industrial complex in China. The site has been selected for its advantageous location near the exporting and importing infrastructure and utilities such as the power grid and waste-water disposal, as well as a stable source of ethylene, one of the key ingredients.

As per MRC, SK Global Chemical (SKGC), one of the largest producers of petrochemical products in South Korea, closed its cracking unit No. 1 in Ulsan (Ulsan, South Korea) on a permanent basis on December 8, 2020. According to a letter from the company to its customers, production at this facility with a capacity of 190,000 tonnes of ethylene and 135,000 tonnes of propylene per year will be halted due to unfavorable market conditions. However, SKGC will continue to supply ethylene to its domestic customers from other crackers.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 241,030 tonnes in January 2021 versus 217,890 tonnes a year earlier. Only shipments of low density polyethylene (LDPE) and high density polyethylene (HDPE) increased. At the same time, PP shipments to the Russian market reached 141,870 tonnes in January 2021 versus 123,520 tonnes a year earlier. Supply of homopolymer PP and PP block copolymers increased.

SK Global Chemical is a division of SK Group, Korea's first refinery in operation for over 50 years. SK Group has more than 70 thousand employees working in 113 offices around the world. Its largest enterprises produce mainly petrochemical products.

(USD1 = W1,137)
MRC

MOSCOW (MRC) -- State-run Indian Oil Corporation, the country's top refiner, plans to sell hydrogen-producing units at its plants to private sector entities, reported Reuters with reference to the company's chairman S. M. Vaidya's statement.

In her annual budget for the 2021/22 fiscal year presented last month, Nirmala Sitharaman, India's finance minister proposed the sale of some assets of state-run companies to mobilise funds.

To begin with IOC plans to sell two hydrogen units of 72,500 tonnes per annum capacity each at its 276,000 barrels per day (bpd) Koyali refinery in western Gujarat state by the end of 2021, Vaidya told reporters on the sidelines of an industry event. "We are starting with the Gujarat refinery. Let's see how it goes before we start the process for other refineries," Vaidya said.

IOC operates about a third of India’s 5 million bpd refining capacity.

Vaidya said the IOC will pay annual operation and maintenance charges to the new owner.

"We are trying to leverage hydrogen units. The asset value and O&M (operation and maintenance) cost will be taken into consideration for selecting a licensor or new buyer," he said.

However, he said the firm had no plans to sell other units of the refineries for now.

The sale of hydrogen units made sense, however, as IOC would be the sole customer of the hydrogen produced by the new owner from the units located at its Koyali refinery, he said.

As MRC informed before, Indian Oil has just announced plans to expand the capacity of its refinery at Panipat, India, from 15 million metric tons/year (MMt/y), to 25 MMt/y. The company will also build a polypropylene (PP) unit and a catalytic dewaxing unit at the site. The cost of the project is 329.46 billion Indian rupees (USD4.45 billion). The plan is the latest in a series of projects approved by Indian Oil to improve integration with petrochemicals at the company's refinery sites. The capacity of the planned PP facility has not been disclosed.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated polyethylene (PE) consumption totalled 241,030 tonnes in January 2021 versus 217,890 tonnes a year earlier. Only shipments of low density polyethylene (LDPE) and high density polyethylene (HDPE) increased. At the same time, PP shipments to the Russian market reached 141,870 tonnes in January 2021 versus 123,520 tonnes a year earlier. Supply of homopolymer PP and PP block copolymers increased.
MRC

MOSCOW (MRC) -- Pembina Pipeline booked a Canadian dollar (CD) 323m (USD256m) impairment charge in Q4 on its share of a planned integrated propane dehydration/polypropylene (PDH/PP) project in Alberta province, the Canadian midstream energy company said the company.

The project by Pembina's joint venture with Kuwait’s Petrochemical Industries, Canada Kuwait Petrochemical (CKPC), remains suspended indefinitely, Pembina confirmed. The suspension is the result of “the significant risks arising from the ongoing COVID-19 pandemic, most notably with respect to costs under the lump sum contract for construction of the PDH plant, which remains under a force majeure condition,” it said.

CKPC is working through a process to manage, defer or cancel existing agreements with, among others, the lump-sum consortium, lenders, and technology licensors, in order to minimise the need for additional capital contributions, Pembina said. The impairment charge is for the full amount of Pembina’s investment in CKPC.

Nevertheless, Pembina continues to believe in the strategic rationale of the project, it said. “We remain equally committed to supporting further development of the petrochemical industry in Alberta and are ideally positioned to do so as the leading transporter of ethane in the province of Alberta,” it added.

Meanwhile another Canadian midstream energy company, Inter Pipeline, continues to look for a partner for its PDH/PP project in Alberta, due to start up in early 2022. Inter Pipeline also initiated a review of strategic alternatives for the company, a move that came after it recently received an unsolicited takeover bid valued CD13.5bn.

As MRC wrote before, in February 2019, it was announced that Pembina Pipeline and Petrochemical Industries Co. of Kuwait are moving forward with plans to build a propane dehydrogenation (PDH) and polypropylene complex in Alberta. The plant will convert about 23,000 barrels of propane per day into about 550,000 metric tons of polypropylene (PP) per year. The partners expect it to cost USD4.5 billion and come onstream in 2023. Another firm, Inter Pipeline, is already building a PDH and PP complex in Alberta. It is expected to cost USD3.5 billion and be completed in 2021.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 241,030 tonnes in January 2021 versus 217,890 tonnes a year earlier. Only shipments of low density polyethylene (LDPE) and high density polyethylene (HDPE) increased. At the same time, PP shipments to the Russian market reached 141,870 tonnes in January 2021 versus 123,520 tonnes a year earlier. Supply of homopolymer PP and PP block copolymers increased.

(USD1 = CD1.26)
MRC

MOSCOW (MRC) -- India is becoming one of the world’s largest economies, driving consumer trends that affect chemical consumption - a massive, opening market. Meanwhile, changes resulting from the energy transition are driving new investment patterns in the country, with an increased focus on petrochemical opportunities, reported Chemweek.

New government regulations are enabling this change, driving India toward a basket of energy sources and refinery/petrochemical integration.

The India forum, held on Friday during IHS Markit’s World Petrochemical Conference (WPC) 2021, being held in a virtual format, moderated by Ravi Narayanaswamy, vice president/business development at IHS Markit, addressed these themes as well as the challenges of the COVID-19 pandemic, the lessons learned, and what the future holds for the post-COVID world. “Some of the habits formed during the pandemic, for example the working-from-home culture, will result in a lesser commute, leading to lesser demand,” he said.

Narayanaswamy said that the transition will to some extent be offset by a preference in India for use of private vehicles instead of public transport. He also questioned whether plastics sustainability will take a back seat with customers preferring to use virgin plastic as a packaging option instead of using recycled material from a hygienic perspective.

SM Vaidya, chairman of Indian Oil, told the forum that the imposition of lockdown and work-from-home rules was a massive challenge for a state-owned company, particularly from an IT perspective. “However, our robust and ready IT infrastructure that has been built over the years ensured a seamless transition,” he said. The company faced an unforeseen crash in demand for its products. Vaidya said that the challenge was to adjust production runs at the company’s 11 refineries in sync with reduced demand, and to manage inventories.

The unprecedented situation created unique challenges in different product lines, said Vaidya. “While demand for some products was plummeting, the demand for liquefied petroleum gas (LPG) was soaring,” he said.

Vaidya said that for construction projects, the pandemic hurt international supply chains and equipment availability, and that licenses from different countries were severely affected during the early part of 2020. “During the lockdown, activities came to a standstill and sent the project timelines haywire,” he said. Vaidya said that when the restrictions were eased, mobilization of labor became a big challenge, given the weakening of contractors' financial situation. Vaidya also noted that large-scale lockdown had induced rural migration and interstate restrictions in India.

“However, work started progressively, and at present work is going on in full swing at all the company’s 3,200 project sites,” Vaidya said. He added that the company is confident of achieving its capital-expenditure target of almost 260.0 billion Indian rupees (USD3.5 billion).

Vaidya noted that domestic primary-energy demand is growing. India's per-capita energy consumption is only a third of the worldwide average and with demand going up, there is a place for all forms of energy including fossil fuels, renewables, gas, biofuels, and hydrogen, he added.

Consumption of diesel and gasoline will remain and Indian demand for gasoline has already exceeded pre-COVID levels, said Vaidya. Domestic demand for gas and oil is currently at 85–90% of pre-COVID levels, he said. According to estimates, demand for oil in India in 2040–50 will be about 10 million b/d, Vaidya said. To meet the increasing demand, Indian Oil is in the process of strengthening its refining capacities, he said.

Indian Oil recently announced plans to expand the capacity of its refinery at Panipat, India, from 15 million metric tons/year (MMt/y), to 25 MMt/y. The company will also build a polypropylene (PP) unit and a catalytic dewaxing unit at the site. The cost of the project is Rs329.46 billion.

Indian Oil with its affiliate Chennai Petroleum (Chennai, India) decided in June 2020 to build a 9-MMt/y refinery complex at Nagapattinam, India. The companies will also build a PP plant. The cost of this project is Rs289.8 billion. Vaidya added that Indian Oil is expanding its naphtha cracker at Panipat and looking to build a naphtha cracker at Paradip. Vaidya said that to de-risk the company's conventional fuels business, it is moving more into petrochemicals.

Mukesh Surana, chairman and managing director of Hindustan Petroleum Corp. Ltd. (HPCL), told the forum that petchems offer a risk-mitigation portfolio in case of demand destruction in transportation fuels, and yield better margins. Surana noted that refiners in India are looking to integrate with petchems and that all greenfield projects in India today include petchems.

HPCL is establishing a 9-MMt/y refinery/petchem project at Pachpadra in the Barmer district of Rajasthan State. The project involves about 25% of petchem intensity, said Surana.

Indian Oil's refineries traditionally had poor petchems intensity, somewhere in a 3–5% range, which means that less than 5% of the company's crude oil consumption was being converted into petchems, said Vaidya. “But now we are consciously upping it to 15%,” he said. Vaidya noted that the company can grow in petchems because India is an importer of petchems. The company is bullish about the petchems business and making substantive investments, he added.

Surana said demand for petchems is growing in India and that the country's upwardly mobile middle class and overall demography supports that growth. He added that domestic petchems growth is supported by several government schemes such as the national smart cities mission, and make in India and self-reliant India campaigns.

Vaidya said that Indian Oil is looking at all possible ways to extract petchem molecules from its refinery streams.

Surana said that HPCL is one of the leading domestic producers of lubricants. After saturating the domestic market, the company now plans to supply lubricants to 30 countries, up from the 14 countries it currently supplies in the Asean region, Indian subcontinent, Gulf Cooperation Council region, and some African countries.

Vaidya noted that the path to energy transition will be different in each country. “India will chart its own path,” he said.

India will lead the way in gas consumption and the use of natural gas will help drive the country's energy transition, said Vaidya. The country’s energy mix consists of about 6.2% natural gas and the government plans to increase that to 15% by 2030.

IHS Markit vice chairman Daniel Yergin, during the recent CERAWeek 2021 by IHS Markit virtual conference, noted that prime minister Narendra Modi is shifting India toward a gas-based economy. Yergin said that this will transform the use of energy across the Indian economy, reduce urban pollution, and unlock opportunities across the nation.

As MRC wrote previously, Indian Oil has just announced plans to expand the capacity of its refinery at Panipat, India, from 15 million metric tons/year (MMt/y), to 25 MMt/y. The company will also build a polypropylene (PP) unit and a catalytic dewaxing unit at the site. The cost of the project is 329.46 billion Indian rupees (USD4.45 billion). The plan is the latest in a series of projects approved by Indian Oil to improve integration with petrochemicals at the company's refinery sites. The capacity of the planned PP facility has not been disclosed.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated polyethylene (PE) consumption totalled 241,030 tonnes in January 2021 versus 217,890 tonnes a year earlier. Only shipments of low density polyethylene (LDPE) and high density polyethylene (HDPE) increased. At the same time, PP shipments to the Russian market reached 141,870 tonnes in January 2021 versus 123,520 tonnes a year earlier. Supply of homopolymer PP and PP block copolymers increased.
MRC