BASF Group releases preliminary figures for full year 2023

BASF is expecting to undershoot its earnings and sales guidance for 2023 as the squeeze to margins outpaced cost reduction savings, although investors are taking some comfort from a stronger cashflow than in 2022, according to sources, said the company.

The Germany-based chemicals major expects operating income before special items of around €3.81bn for the year, compared to its forecast range of €4bn-4.4bn and consensus analyst estimates of €3.9bn.

A weak December may be a factor in missing that €3.9bn target, according to Konstantin Wiechert, a chemicals analyst at Baader Bank.

“According to the company before knowing the December figures it still looked like [EBIT pre-specials] guidance of ~€3.9bn could be achieved, so it is likely one month that really was below expectations,” he said.

BASF had already cut back financial performance guidance for the year, cutting projections for operating income before special items to €4bn-4.4bn from earlier projections of €4.8bn-5.4bn in July.

Full-year sales are likely to come in around the €68.9bn mark, the company added, compared to revised estimates of €73bn-76bn, or initial forecasts of €84bn-87bn.

Sales-related low margins are the cause for the company likely undershooting its guidance, with chemicals division operating income pre-specials falling “considerably short” of analysts estimates, BASF said.

The chemicals division is the key cause for below-expectations profitability during the year, with smaller drops reported for surface technologies and nutrition and case division earnings.

We remind, BASF HERAEUS Metal Resource (BHMR) JV has started up operations at a new facility in Pinghu, China to recover precious metals from spent automotive catalysts. The facility has a recycling capacity of about 10,000 tonnes/year of auto catalysts. It employs more than 100 people and involved a mid-double digit million euro investment.

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WPT Nonwovens Corp. has recently opened a new manufacturing facility in Ohio County, Kentucky, investing a substantial amount of $19.5 million, said Chemanalyst.

This family-owned nonwoven manufacturer's strategic expansion has not only added to its production capacity but has also created 35 new jobs, injecting vitality into the local economy. At the core of this progress is a state-of-the-art manufacturing facility spanning 75,000 square feet, complete with an advanced carded nonwoven production line. This innovative line is poised to add 12,000 annual metric tons of capacity for HVAC filtration media and hygiene fabrics. The impact of this expansion extends beyond WPT, promising positive effects on the local job market in Kentucky and fortifying the domestic supply chain for related products throughout the community.

The Kentucky Economic Development Finance Authority played a crucial role in fostering this investment. In May 2021, the authority preliminarily approved an incentive agreement under the Kentucky Business Investment program. This agreement serves as a testament to the state's commitment to economic development by allowing WPT Nonwovens to retain a portion of the new tax revenue generated. The incentives, claimable against income tax liability and wage assessments, provide a financial boost, supporting WPT's ambitious growth plans and its contributions to the community.

Travis Robbins, the President of WPT, expressed genuine enthusiasm about meeting the increasing demand for American-made nonwoven filtration media. His statement reflects the company's commitment not only to meeting market needs but also to doing so in Ohio County, specifically in the community of Beaver Dam. This displays WPT's dedication to local growth and community engagement.

Founded in 2008, WPT Nonwovens Corp. is a third-generation family-owned nonwoven manufacturer with deep roots in Beaver Dam, Kentucky. The company is 100% American-owned, FDA-registered, and holds the distinction of being a service-disabled veteran-owned small business (SDVOSB). WPT's operations span key nonwoven sectors, including medical, hygiene, filtration, and industrial markets, supported by three production facilities in Ohio County, featuring six nonwoven lines and five medical products converting lines.

Governor Andy Beshear celebrated WPT as a homegrown success story, showcasing the thriving manufacturing landscape in Kentucky. His commendation not only recognizes the company's achievements but also anticipates its continued growth within Ohio County. The expansion signifies success for WPT and promises additional opportunities for the growing manufacturing ecosystem in Ohio County. Overall, WPT's strategic investment stands as a beacon of economic progress, blending innovation, job creation, and community development in the heart of Kentucky.

We remind, Neotex, a company based in Kireevsk, in the Tula region of Russia, has recently completed the construction and launch of a state-of-the-art production complex for Non-Woven Fabric. These materials are composed of various layers of spun-bond and meltblown, both made from polypropylene fibers. This project is supported by the Federal Industrial Development Fund (IDF), and the facility is set to produce a substantial 16 thousand tons of non-woven material annually.

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Shell UK has reached a significant milestone by making a final investment decision (FID) on the Victory gas field located in the UK North Sea, positioned approximately 47 kilometers northwest of the Shetland Islands, said the company.

This strategic move, once the field becomes operational, is poised to contribute to the sustenance of domestically produced gas, catering to the energy needs of homes, businesses, and power generation in Britain.

Simon Roddy, Senior Vice President of Shell UK Upstream, emphasized the critical role of the UK North Sea as a national resource, serving as a reliable source of fuels that are integral to meeting the country's energy demands and enhancing energy security. He highlighted the ongoing necessity for continued investment to uphold domestic production, particularly in light of the declining pace of production compared to the demand for oil and gas in the UK.

Statistics from the North Sea Transition Authority reveal that only 38% of the UK's gas consumption in 2022 was sourced domestically, with the remainder being imported. In response to this scenario, the Victory gas field is anticipated to commence operations in the mid-2020s, aiming to produce sufficient gas at its peak to heat nearly 900,000 homes annually. This translates to approximately 150 million standard cubic feet per day of gas or roughly 25,000 barrels of oil equivalent per day. The majority of the recoverable gas from the Victory field is expected to be extracted by the end of the decade.

The extracted gas from the Victory field will undergo processing onshore at the Shetland Gas Plant before being transported to the UK mainland through pipelines, ultimately entering the National Grid at St Fergus. This aligns with Shell UK's broader involvement in advancing the Acorn Carbon Capture and Storage project, contributing to the company's commitment to a sustainable and low-carbon energy system.

A noteworthy aspect of the Victory project is its tie-back to existing infrastructure, resulting in operational emissions that are lower compared to many current gas fields in the UK North Sea. This strategic choice aligns with Shell's Powering Progress strategy, which emphasizes delivering greater value with reduced emissions. The project reflects a dual commitment to meeting current energy needs while contributing to the development of a low-carbon energy system for the future.

The acquisition of a 100% interest in Corallian Energy Ltd in November 2022 solidified Shell UK's position in the Victory gas field development. The acquisition, specifically encompassing the P2596 Victory license for gas development West of Shetland, underscores Shell's dedication to being a significant investor in the UK energy system. This commitment is complemented by the company's engagement in diverse low-carbon and renewable projects, spanning electric vehicle charging, floating offshore wind initiatives, and carbon capture and storage.

We remind, Shell Chemicals and Braskem will collaborate to increase the amount of circular content used in Braskem’s production of polypropylene as part of a wider value chain enhancement, said the company. The circular polypropylene will be produced using a ISCC PLUS-certified feedstock, based on a mass alance approach and will be used by Braskem’s customers in a variety of applications such as in the packaging and automotive sectors.

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Linglong, based in Changchun, Jilin, has achieved a significant milestone by successfully producing its first giant radial tire using domestically developed technology at its manufacturing plant in Jilin, China, said Chemanalyst.

This notable achievement took place on January 10, with the tire being in size 27.00R49. Linglong emphasized that this development addresses a crucial gap in the company's portfolio of engineering radial tires, showcasing the tire manufacturer's commitment to innovation and advancement.

The production of the giant tire in Jilin is hailed as a noteworthy enhancement to Linglong's off-highway tire product system. According to Linglong, this accomplishment signifies a substantial leap forward, indicating that the company's off-highway tire development has entered a phase of rapid growth. The production of this giant radial tire is regarded as an integral component of Linglong's broader off-road tire expansion strategy known as '3+3.'

In alignment with the '3+3' strategy, Linglong aims to manufacture off-highway tires at three domestic plants in China and three overseas units. This strategic approach positions Linglong as a key player in the global off-highway tire market, leveraging both domestic and international production capabilities.

Linglong emphasized the vital role played by Jilin Linglong, the manufacturing facility in Jilin, in providing crucial technological support for the company's off-highway tire development, particularly in the realm of giant radial tires. The facility is recognized for its intelligent and digital manufacturing capabilities, underscoring the importance of cutting-edge technology in advancing tire manufacturing processes.

Linglong's strategic investment in the Jilin plant aligns with the tire manufacturer's commitment to expanding its production capabilities, enhancing product offerings, and meeting the evolving demands of the tire market. The successful production of the first giant radial tire is not only a testament to Linglong's technological prowess but also a significant step toward establishing the Jilin facility as a key contributor to the company's global footprint.

The tire industry, marked by constant innovation and technological advancements, places a premium on manufacturers who can adapt to changing market dynamics. Linglong's foray into giant radial tires demonstrates its commitment to staying at the forefront of tire technology, meeting the needs of various industries that rely on specialized and high-performance tires.

As Linglong continues to advance its off-highway tire product system and expand its global presence, the successful production of the first giant radial tire in Jilin serves as a symbol of progress and innovation. The tire industry, a critical component of the automotive and transportation sectors, relies on manufacturers like Linglong to pioneer advancements that enhance safety, efficiency, and sustainability.

We remind, Zhongce Rubber Group (ZC Rubber), China's largest tire producer, has officially announced its plans to construct a new tire manufacturing plant in Indonesia, adding to its expanding global presence. The company aims to commence tire production at the new facility by the end of 2024. Furthermore, ZC Rubber is actively assessing the viability of establishing another tire factory in Mexico, with plans currently in the final stages of evaluation.

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Arkema has taken an unspecified stake in its French compatriot Tiamat, a pioneer in sodium-ion battery technology, having also contributed to Tiamat's recent €22 million fund-raising, said Specchemonline.

The company said this is “once again demonstrating its willingness to be a key player in battery materials, offering a unique range of products adapted to all energy storage technologies”.

Tiamat was spun off from the Centre National de la Recherche Scientifique (CNRS) in 2017 and has since been developing, and marketing sodium-ion batteries, an alternative to lithium-ion technology that avoids the constraints associated with the supply lithium. It aims to build a dedicated 5 GWh Giga-factory in France, of which of 0.7 GWh could be operational by the end of 2025.

We remind, Arkema has begun production of Sartomer® specialty UV/LED curing resins at its expanded facility in Nansha, China, where the Group invested to double the capacity, as announced end-2021, said the company. This will support the development of more sustainable solutions for fast-growing applications in Asian markets, such as cutting-edge solutions in electronics, driven by 5G technology, and in renewable energies.

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