Company News
October 24, 2022
Dow Earnings Call Transcript Urethane Highlights
Dow Inc. (DOW) Q3 2022 Earnings Call Transcript
Oct. 20, 2022 11:53 AM ETDow Inc. (DOW)
Q3: 2022-10-20 Earnings Summary
EPS of $1.11 misses by $0.04 | Revenue of $14.12B (-4.87% Y/Y) beats by $1.10B
Dow Inc. (NYSE:DOW) Q3 2022 Earnings Conference Call October 20, 2022 8:00 AM ET
Company Participants
Pankaj Gupta – Investor Relations, Vice President
Jim Fitterling – Chairman and Chief Executive Officer
Howard Ungerleider – President and Chief Financial Officer
Jim Fitterling
Thank you, Pankaj. Beginning on Slide 3, in the third quarter, team Dow continued to proactively navigate higher energy costs and geopolitical uncertainties that are impacting consumer demand, particularly in Europe. As macroeconomic conditions began to erode in the quarter, we responded quickly by implementing a set of actions to prioritize resources toward higher return products, align production rates to supply chain and logistics constraints as well as demand and reduce operational costs across the enterprise.
In addition, our advantage portfolio enabled us to capitalize on demand strength in higher value functional polymers in Packaging & Specialty Plastics, and performance silicones in Performance Materials & Coatings.
Third quarter net sales were $14.1 billion, with sales declines of 5% year-over-year and 10% quarter-over-quarter. Local price increased 3% year-over-year with gains in Performance Materials & Coatings and Industrial Intermediates & Infrastructure. Sequentially, price declined 6% and was down across all operating segments and regions.
Volume was down 4% versus a year ago period as declines in Europe, the Middle East, Africa and India or EMEA more than offset volume growth in the U.S. and Canada and Asia Pacific. Sequentially, volume was down 3% led by EMEA. Continued strength of the U.S. dollar also impacted net sales by 4% year-over-year and 1% sequentially.
Operating EBIT for the quarter was $1.2 billion. Our consistent focus on cash flow generation and working capital management in the quarter supported cash flow from operations of $1.9 billion or a conversion of 104% of EBITDA and free cash flow of $1.5 billion.
We returned $1.3 billion to shareholders in the quarter, including $800 million in share repurchases and $493 million in dividends. And our balance sheet continues to have no substantive long-term debt maturities due until 2027.
Turning to our operating segment performance on Slide 4. In the Packaging & Specialty Plastics segment, net sales were $7.3 billion, down 5% year-over-year as price gains and resilient demand in functional polymers were more than offset by lower polyethylene pricing. Sequentially, net sales were down 11%, also driven by lower polyethylene prices with reduced volumes as we decreased operating rates in response to continued global marine pack cargo logistics constraints and lower demand in EMEA.
Operating EBIT for the segment was $785 million, compared to $2 billion in the year ago period and $1.4 billion in the prior quarter. These results were impacted primarily by higher raw material and energy costs and lower local prices.
Moving to the Industrial Intermediates & Infrastructure segment, net sales were $4.1 billion, down 9% from the year ago period with price gains in both businesses. Volume was down as strong demand for pharmaceutical, agricultural, and energy applications in Industrial Solutions were more than offset by declines in polyurethanes and construction chemicals due to inflationary pressures in EMEA, decreased consumer durable demand and the slowing housing market. Sequentially, net sales were down 7% and stable volumes primarily in mobility end-markets were more than offset by lower local price and currency.
Operating EBIT for the segment was $167 million compared to $713 million in the year ago period and $426 million in the prior year. As lower EMEA demand and increased energy and raw material costs were partly offset by higher prices. Sequentially, operating EBIT margins declined by 560 basis points on lower price and higher energy costs.
And in the Performance Materials & Coatings segment, we reported net sales of $2.7 billion, up 5% year-over-year, with price gains in both businesses and all regions. Volume was down as resilient demand in mobility and home care end-markets were more than offset by declines in building and construction.
Sequentially, net sales were down 12%, driven primarily by lower demand and decreased local price for siloxanes due to supply additions in China as well as with planned maintenance turnaround activity.
Operating EBIT for the segment was $302 million compared to $284 million in the year ago period as margins expanded by 20 basis points due to price gains for both silicones and coatings applications. Sequentially, operating EBIT declined $259 million driven by lower prices for siloxanes and increased raw material and energy costs.
Howard Ungerleider
Throughout the third quarter, Dow implemented plans to reduce natural gas consumption at our sites in Europe by more than 15% due to high energy costs. In August, we also temporarily lowered our polyethylene nameplate capacity by 15% and have now implemented a cold furnace idling program at our crackers for fixed and energy cost savings. In parallel, we continue to prioritize higher margin functional polymers to capitalize on continued demand strength while working to ease logistics constraints along the U.S. Gulf Coast.
We’re also reducing operating rates and shifting production across polyurethane, siloxane and acrylic monomer assets in Europe to manage our costs and our inventory levels. And as we plan for next year, we have additional actions focused on production optimization, turnaround spending, and reductions in purchase services with the potential to deliver more than $1 billion in cost savings on a run rate basis.
In the Industrial Intermediates & Infrastructure segment, demand for energy applications, particularly in the U.S. and a seasonal increase in deicing fluid demand are expected to positively impact the quarter. Inflationary pressures however continue to impact consumer durables and building a construction demand particularly in Europe.
We also expect continued pressure on propylene oxide and MEG margins due to increased supply from producers in Asia. After completing major plan maintenance activity in the prior quarter on a net basis, we expect similar dynamics with a typical seasonality on a sequential basis.
Jeff Zekauskas
Thanks very much. Two questions. Can you talk about MDI prices and volumes sequentially and your general expectations? And secondly, in Performance Materials, there seems to be a fair amount of pressure in siloxane prices. Are we entering some kind of cyclical downturn in that business? And so what we should expect is a relatively level of earnings from the fourth quarter going forward.
Jim Fitterling
Yes. Good morning, Jeff. Thank you for the question. On MDI in Industrial Intermediates & Infrastructure, the supply demand balances through the middle part of the decade look good on MDI, where we’ve seen market weaknesses in consumer durables, mobility is held up pretty well. Electric vehicles are really probably the shining star on growth in that space. But it’s housing and construction where we’ve seen the biggest weakness. And then of course, appliances closely related to that. I would also say, what you see in the numbers and what you see in the guide, remember that we have quite a bit of footprint in Europe, and so with the energy situation there that just really compresses the margins there. I think it’s less pricing and less that issue than it is the input cost issue.
So that’s why we brought rates down to low levels in Europe. China also seeing housing and construction slow. And so I think we’ll see what happens after we come out of this party Congress and whether we see a change in COVID restrictions that might signal that 2023 would be better. In siloxanes capacity has come on in China and that’s really what’s brought the prices down. And we’re really back to the kind of the long-term mid-cycle average prices for siloxanes in the marketplace, and yes, we expect that will continue into 2023. And so I think it’s more, the timing of the supply coming on that’s put that pressure on.
Unidentified Analyst
Hi, this is Richard on for Mike. Just wanted some color on the $1 billion in cost savings for 2023. Is any part of this embedded in the $3 billion to $3.9 billion that you’re targeting to increase sort of the – your earnings range through the cycle? And also is that – does that also include the temporary 15% reductions in polyethylene and maybe additional reductions in capacity, potentially in maybe II&I.
Jim Fitterling
Yes, that’s a good question, Richard. So, our target is to come up with more than a $billion in cost saves. I would break it down into a few different buckets for you. One is, what we can do with optimizing our mix, so flexing the assets across geographies and product and application mix tax when improve margins. The second would be what you talked about in terms of plant idlings were shutdowns. Right now we don’t have anything lined up for shutdowns, but we obviously reduce rates for higher cost plants, and we’ll continue to do that, especially in Europe while energy costs remain as high as they are.
And then we’re working on always things to drive operational excellence. And the other big moving part next year is, we’re going to reduce turnaround spending. We’re starting to see commodities come down and input costs come down and some relief on freight and logistics costs. So, we’ve got a big effort on purchased materials and freight and logistics to get costs down and also on purchased services including contract labor. And then we’ve been implementing digital and acceleration of finishing those projects delivers bottom line margins and productivity to us.
So those are really the five big buckets that we’re working on. The target here, if you looked at the earnings corridor that we published back in Investor Day, our 2023 lower end of that corridor is about $7.2 billion. So our efforts here are really driven to protect that earnings corridor that we put out there. A lot of the path to zero project growth in that earnings corridor the Alberta project, which is a $1billion of underlying EBITDA growth, starts in 2027. That project will come on in two phases between 2027 and 2030, but the other $2 billion comes on through the years as we bring on these smaller, higher return, lower risk projects.
Josh Spector
Yes. Hi, good morning. So I was curious if there is a way to think about the costs you guys are absorbing in Europe from higher energy. So we think about 3Q and 4Q expectations versus the level of 2Q. Is there any way to quantify how much you feel like you’ve had to absorb and not be able to kind of shift away from flexing your production or through pricing or other means? So if pricing or energy prices were to move down would demand environment remains similar? How would you think that would play out? Thanks.
Jim Fitterling
Simple answer two-thirds of the total EBITDA decline in third quarter whether it was versus previous quarter or last year was in EMEAI, and that’s the impact of high inflation, elevated energy costs on our raw materials and then what that high inflation has done to consumer demand in EMEAI. Volume was down 12% in the quarter in EMEAI.
Jaideep Pandya
EO and MEG?
Jim Fitterling
EO and MEG. MEG is the weak spot in EO. If you look at our industrial solutions strategy, it is to keep investing in high value EO applications. And so all the alkoxylate investments that you see, investments in our oil and gas franchise for means those are continuing to do very, very well. And we’re going to continue investing there to try to increase the amount of business that goes to those higher value applications for purified EO and away from MEG.
MEG prices were actually at a low spot in the third quarter and had improved a little bit since because of falling inventories. I think a big part is going to be dependent on higher China activity after they stopped the zero COVID lockdowns.
https://seekingalpha.com/article/4547815-dow-inc-dow-q3-2022-earnings-call-transcript
October 20, 2022
Urethane Related Firms in the Top 50
C&EN’s Global Top 50 chemical firms for 2022
The world’s chemical industry has recovered from the COVID-19 pandemic and is now riding the wave of higher prices
by Alexander H. Tullo
The world’s chemical industry didn’t just grow in 2021, it positively swelled.
According to C&EN’s latest Global Top 50 survey, the world’s 50 largest chemical companies, in aggregate, posted sales of $1.1 trillion in 2021, the fiscal year that forms the basis of the ranking. That’s a 38% increase over the combined total for the same 50 firms in 2020.
Profits more than kept up. Chemical operating income for the 41 firms that break out such numbers jumped 148% in 2021, hitting $127 billion.
There are two big reasons for the spike in chemical sales and earnings in 2021. First, the world’s economy sagged in 2020 on account of the COVID-19 pandemic. This downturn hit the chemical industry, albeit not as severely as it did industries like aerospace and automotive. The 50 firms that appeared a year ago in C&EN’s survey posted a 7% decline in sales. And they posted earnings declines for the second year in a row. With the world economy recovering in 2021, it stands to reason that chemical sales recovered as well.
Also related to the spike is inflation, the likes of which some countries around the world haven’t seen in decades. According to the Energy Information Administration, the US benchmark oil price rose from $47.07 per barrel in December 2020 to $71.69 a year later.
The chemical industry, most of which relies on oil as a raw material, responded by raising prices in kind. According to LyondellBasell Industries, US and European ethylene prices increased by 35% and 60%, respectively, in 2021, while polyethylene prices rose about 45%. Prices for ammonia more than doubled.
Thus, the healthiest sales increases seen in the Global Top 50 came from petrochemical companies. Sabic, Formosa Plastics, PetroChina, LyondellBasell Industries, and ExxonMobil Chemical all clocked in with sales increases of 40% or more. Also riding the crest of the commodity price wave are fertilizer makers such as Yara, Nutrien, and Mosaic, which posted astounding increases in sales.
1 BASF
2021 chemical sales: $93.0 billion
For the third consecutive year, BASF heads the Global Top 50. Because it has a home base in Germany, the company was strongly impacted by Russia’s invasion of Ukraine. BASF pledged in April to wind down operations in Russia and Belarus, which represent about 1% of its sales. The company says it will continue supplying agrochemicals to these countries to avoid disrupting the world’s delicate food supply chain. BASF has also been affected by the severe increase in European natural gas prices that the war has exacerbated. In March, BASF chairman Martin Brudermüller told a Houston audience at the IHS Markit World Petrochemical Conference that “European industry really has to rethink” its strategy, given its dependence on natural gas from Russia. The war has also affected the company’s Wintershall Dea energy joint venture, which has extensive operations in Russia. During the first quarter, BASF took a $1.2 billion write-off related to the cancellation of Nord Stream 2, a natural gas pipeline between Germany and Russia that Wintershall helped finance. BASF is also anticipating the coming energy transition. The company is carving out its emission catalyst business, which it acquired with its 2006 purchase of Engelhard. The move is a response to the dim outlook for internal combustion engine vehicles and could be a prelude to a sale. BASF has simultaneously been trying to grow as a producer of materials for electric vehicle batteries and aims to spend $5 billion on production capacity outside Europe.
Credit: BASF
Mixed metal oxide cathode materials being prepared at BASF
3 Dow
2021 chemical sales: $55.0 billion
In 2020, Dow revealed its aspiration to reach carbon emission neutrality by 2050, and at an investor event in October, it detailed its plans to get there. The company aims to spend $1 billion per year, about a third of its capital budget, to decarbonize its petrochemical sites around the world one by one. Topping that list is Fort Saskatchewan, Alberta, where in an industry first, the company will build a carbon-neutral ethylene cracker. An autothermal reformer will process the cracker’s off-gases to generate hydrogen that will be burned in the cracker’s furnaces instead of natural gas. Dow will capture the resulting carbon dioxide and inject it into Alberta’s CO2 pipeline for sequestration. Dow’s sustainability push extends beyond greenhouse gases and into plastic waste. At the October event, for example, the company said it would collaborate with Fuenix Ecogy to build a waste plastics pyrolysis plant in the Netherlands.
9 LyondellBasell Industries
2021 chemical sales: $39.0 billion
Some chemical companies have been ditching commodities to focus on specialties. LyondellBasell Industries is exiting refining so it can better home in on commodities. In April, the company said it would shutter its 100-year-old Houston refinery by the end of 2023. The refinery, part of LyondellBasell Industries since it spun off from Atlantic Richfield in 1989, has long been an issue for the company. It was a joint venture with the Venezuelan state oil company PDVSA for more than a decade before Lyondell bought out its partner for $2.1 billion in 2006. Company officials say they may repurpose the property for sustainability projects such as a plastics pyrolysis plant. Meanwhile, LyondellBasell has been steadily growing its commodity chemical business. It bought 50% stakes in ethylene complexes in the US and China. And according to newly surfaced government documents, it is considering building a high-density polyethylene plant in Corpus Christi, Texas.
17 Wanhua Chemical
2021 chemical sales: $22.6 billion
The Chinese polyurethane and petrochemical maker has been rocketing up the Global Top 50 because of its prodigious growth in recent years. And 2021 was another enormous year for Wanhua Chemical—its revenues nearly doubled from 2020. Ambitious capital expansion projects have helped fuel the growth. In Yantai, China, it opened an ethylene cracker and derivatives plants and revamped methylene diphenyl diisocyanate production. In April, the company announced it would spend $3.6 billion to build a chemical complex in Penglai, China. The project, to be completed in 2024, will feature a propane dehydrogenation unit as well as downstream plants for polypropylene, propylene oxide, and other chemicals. The company also started producing cathode materials and the biodegradable polymer poly(butylene adipate-co-terephthalate).
21 Covestro
2021 chemical sales: $18.8 billion
The polyurethane specialist Covestro unveiled a plan late last year to cut up to 1,700 jobs—about 10% of its workforce—by the end of 2023. Most of the cuts will be in Germany. At the same time, the company is resuscitating a plan to build a world-scale methylene diphenyl diisocyanate plant by 2026. While the previous plan pinpointed Texas as the site of the complex, Covestro now says it may build it in either the US or China. The company is also increasing capacity for another polyurethane raw material, toluene diisocyanate, in Dormagen, Germany. And with the biotechnology firm Genomatica, Covestro plans to make biobased hexamethylenediamine, used in the manufacture of polyurethanes and nylon 6,6.
Credit: Covestro
Covestro technician Mario Lopes works at the pilot plant where the company is producing biobased hexamethylenediamine.
23 Evonik Industries
2021 chemical sales: $17.7 billion
Evonik Industries is yet another major chemical maker planning a portfolio transformation. The German company intends to divest its performance material businesses by the end of 2023. These commodities, such as C4 chemicals, isononyl alcohol, and superabsorbent polymers, generate about 20% of the firm’s sales. Evonik had been considering a sale of superabsorbents—used in diapers and similar applications—since late 2020. At the same time, the firm plans to invest $3.2 billion in sustainable businesses. Separately, in June, Evonik announced it would build a $220 million plant in Lafayette, Indiana, for lipids used in messenger RNA applications like COVID-19 vaccines. The company has been supplying this burgeoning market from facilities in Germany. Evonik is also building a plant to make rhamnolipids, a class of biobased surfactants, in Slovakia.
24 Shell
2021 chemical sales: $17.0 billion
Later this year, Shell will open an ethylene and polyethylene complex in Monaca, Pennsylvania. The facility was the only one among a wave of new US ethylene crackers to be situated far from the Gulf Coast. The project took a long time. It was announced a decade ago, and construction began in 2017. It may be Shell’s last conventional ethylene project for a while. The company is collaborating with Dow to electrify the steam cracking process. The partners recently started an experimental unit in Amsterdam to test designs that could replace current natural gas–fired cracker furnaces. They want to build a large pilot plant by 2025. And at a recent conference, Shell officials said the company is running feedstocks based on biomass and plastic pyrolysis oil through its ethylene complex in Norco, Louisiana. The company intends to process 180,000 metric tons (t) of the alternative feedstocks by 2023 and to ramp up use to 600,000 t in 3–5 years.
30 Indorama Ventures
2021 chemical sales: $14.6 billion
The Thai polyester maker Indorama Ventures made another big acquisition to diversify its business earlier this year when it bought the ethoxylated surfactant maker Oxiteno from the Brazilian conglomerate Ultrapar Participações for $1.3 billion. Oxiteno has about $1 billion in annual sales. In 2020, Indorama bought Huntsman’s US-based surfactant unit, its first big move into surfactants. Indorama, already a big mechanical recycler of polyethylene terephthalate (PET), is plunging into the chemical recycling of plastics. It plans to build a plant in Longlaville, France, that will depolymerize PET using an enzymatic process from the start-up Carbios. The facility will be close to an Indorama PET plant.
37 Arkema
2021 chemical sales: $11.3 billion
Over the past year, Arkema has placed a lot of emphasis on one of its core businesses, adhesives, as well as on an emerging business, battery materials. The French specialty chemical maker bought Ashland’s adhesives business in February for $1.65 billion. The business has $360 million in annual sales of water-based polyurethane wood glues and acrylic, pressure-sensitive adhesives for packaging labels and other applications. In 2015, Arkema bought the adhesives maker Bostik from Total for $2.2 billion. With Nippon Shokubai, Arkema is studying the feasibility of producing lithium bis(fluorosulfonyl)imide electrolyte salts, used in next-generation batteries, in France. Arkema’s goal is to have sales to the battery market of at least $1 billion per year by 2030. To that end, it is also expanding capacity for poly(vinylidene fluoride) in Pierre-Bénite, France. The polymer is used as a binder and separator material in lithium-ion batteries.
39 Hanwha Solutions
2021 chemical sales: $10.9 billion
In June, Hanwha Solutions detailed plans to reach net-zero carbon emissions by 2050. Some 70% of the carbon reduction at the South Korean chemical and solar material maker will come from using renewable energy. Replacing fossil fuels in its manufacturing processes with hydrogen will yield another 15%. The balance of cuts will come from better efficiency and carbon capture. The company is also making investments in sustainability. It helped lead a $21 million venture capital investment in Novoloop, a California-based start-up that is developing a technology to convert postconsumer polyethylene into thermoplastic polyurethanes and other chemicals.
49 Lanxess
2021 chemical sales: $8.9 billion
Lanxess is planning a likely exit from the polymer business. The German company and the private equity firm Advent International formed a joint venture to buy DSM’s engineering polymer business—a producer of high-end nylon resins—for $4.1 billion. Lanxess is contributing its own business, which makes polybutylene terephthalate and nylon 6, to the partnership. It will own an up to 40% stake in the joint venture for 3 years, after which it will have an option to sell. At the same time, Lanxess is growing in specialty chemicals. Earlier this month, it completed the purchase of International Flavors & Fragrances’ microbial control business for about $1.3 billion. The business, which once belonged to Dow, makes glutaraldehyde biocides and isothiazolinone-based antimicrobials and has $450 million in annual sales.
Credit: Lanxess
A worker at a Lanxess polymer plant in Gastonia, North Carolina. The plant will become part of a joint venture with Advent International.
https://cen.acs.org/business/finance/CENs-Global-Top-50-2022/100/i26
October 20, 2022
Urethane Related Firms in the Top 50
C&EN’s Global Top 50 chemical firms for 2022
The world’s chemical industry has recovered from the COVID-19 pandemic and is now riding the wave of higher prices
by Alexander H. Tullo
The world’s chemical industry didn’t just grow in 2021, it positively swelled.
According to C&EN’s latest Global Top 50 survey, the world’s 50 largest chemical companies, in aggregate, posted sales of $1.1 trillion in 2021, the fiscal year that forms the basis of the ranking. That’s a 38% increase over the combined total for the same 50 firms in 2020.
Profits more than kept up. Chemical operating income for the 41 firms that break out such numbers jumped 148% in 2021, hitting $127 billion.
There are two big reasons for the spike in chemical sales and earnings in 2021. First, the world’s economy sagged in 2020 on account of the COVID-19 pandemic. This downturn hit the chemical industry, albeit not as severely as it did industries like aerospace and automotive. The 50 firms that appeared a year ago in C&EN’s survey posted a 7% decline in sales. And they posted earnings declines for the second year in a row. With the world economy recovering in 2021, it stands to reason that chemical sales recovered as well.
Also related to the spike is inflation, the likes of which some countries around the world haven’t seen in decades. According to the Energy Information Administration, the US benchmark oil price rose from $47.07 per barrel in December 2020 to $71.69 a year later.
The chemical industry, most of which relies on oil as a raw material, responded by raising prices in kind. According to LyondellBasell Industries, US and European ethylene prices increased by 35% and 60%, respectively, in 2021, while polyethylene prices rose about 45%. Prices for ammonia more than doubled.
Thus, the healthiest sales increases seen in the Global Top 50 came from petrochemical companies. Sabic, Formosa Plastics, PetroChina, LyondellBasell Industries, and ExxonMobil Chemical all clocked in with sales increases of 40% or more. Also riding the crest of the commodity price wave are fertilizer makers such as Yara, Nutrien, and Mosaic, which posted astounding increases in sales.
1 BASF
2021 chemical sales: $93.0 billion
For the third consecutive year, BASF heads the Global Top 50. Because it has a home base in Germany, the company was strongly impacted by Russia’s invasion of Ukraine. BASF pledged in April to wind down operations in Russia and Belarus, which represent about 1% of its sales. The company says it will continue supplying agrochemicals to these countries to avoid disrupting the world’s delicate food supply chain. BASF has also been affected by the severe increase in European natural gas prices that the war has exacerbated. In March, BASF chairman Martin Brudermüller told a Houston audience at the IHS Markit World Petrochemical Conference that “European industry really has to rethink” its strategy, given its dependence on natural gas from Russia. The war has also affected the company’s Wintershall Dea energy joint venture, which has extensive operations in Russia. During the first quarter, BASF took a $1.2 billion write-off related to the cancellation of Nord Stream 2, a natural gas pipeline between Germany and Russia that Wintershall helped finance. BASF is also anticipating the coming energy transition. The company is carving out its emission catalyst business, which it acquired with its 2006 purchase of Engelhard. The move is a response to the dim outlook for internal combustion engine vehicles and could be a prelude to a sale. BASF has simultaneously been trying to grow as a producer of materials for electric vehicle batteries and aims to spend $5 billion on production capacity outside Europe.
Credit: BASF
Mixed metal oxide cathode materials being prepared at BASF
3 Dow
2021 chemical sales: $55.0 billion
In 2020, Dow revealed its aspiration to reach carbon emission neutrality by 2050, and at an investor event in October, it detailed its plans to get there. The company aims to spend $1 billion per year, about a third of its capital budget, to decarbonize its petrochemical sites around the world one by one. Topping that list is Fort Saskatchewan, Alberta, where in an industry first, the company will build a carbon-neutral ethylene cracker. An autothermal reformer will process the cracker’s off-gases to generate hydrogen that will be burned in the cracker’s furnaces instead of natural gas. Dow will capture the resulting carbon dioxide and inject it into Alberta’s CO2 pipeline for sequestration. Dow’s sustainability push extends beyond greenhouse gases and into plastic waste. At the October event, for example, the company said it would collaborate with Fuenix Ecogy to build a waste plastics pyrolysis plant in the Netherlands.
9 LyondellBasell Industries
2021 chemical sales: $39.0 billion
Some chemical companies have been ditching commodities to focus on specialties. LyondellBasell Industries is exiting refining so it can better home in on commodities. In April, the company said it would shutter its 100-year-old Houston refinery by the end of 2023. The refinery, part of LyondellBasell Industries since it spun off from Atlantic Richfield in 1989, has long been an issue for the company. It was a joint venture with the Venezuelan state oil company PDVSA for more than a decade before Lyondell bought out its partner for $2.1 billion in 2006. Company officials say they may repurpose the property for sustainability projects such as a plastics pyrolysis plant. Meanwhile, LyondellBasell has been steadily growing its commodity chemical business. It bought 50% stakes in ethylene complexes in the US and China. And according to newly surfaced government documents, it is considering building a high-density polyethylene plant in Corpus Christi, Texas.
17 Wanhua Chemical
2021 chemical sales: $22.6 billion
The Chinese polyurethane and petrochemical maker has been rocketing up the Global Top 50 because of its prodigious growth in recent years. And 2021 was another enormous year for Wanhua Chemical—its revenues nearly doubled from 2020. Ambitious capital expansion projects have helped fuel the growth. In Yantai, China, it opened an ethylene cracker and derivatives plants and revamped methylene diphenyl diisocyanate production. In April, the company announced it would spend $3.6 billion to build a chemical complex in Penglai, China. The project, to be completed in 2024, will feature a propane dehydrogenation unit as well as downstream plants for polypropylene, propylene oxide, and other chemicals. The company also started producing cathode materials and the biodegradable polymer poly(butylene adipate-co-terephthalate).
21 Covestro
2021 chemical sales: $18.8 billion
The polyurethane specialist Covestro unveiled a plan late last year to cut up to 1,700 jobs—about 10% of its workforce—by the end of 2023. Most of the cuts will be in Germany. At the same time, the company is resuscitating a plan to build a world-scale methylene diphenyl diisocyanate plant by 2026. While the previous plan pinpointed Texas as the site of the complex, Covestro now says it may build it in either the US or China. The company is also increasing capacity for another polyurethane raw material, toluene diisocyanate, in Dormagen, Germany. And with the biotechnology firm Genomatica, Covestro plans to make biobased hexamethylenediamine, used in the manufacture of polyurethanes and nylon 6,6.
Credit: Covestro
Covestro technician Mario Lopes works at the pilot plant where the company is producing biobased hexamethylenediamine.
23 Evonik Industries
2021 chemical sales: $17.7 billion
Evonik Industries is yet another major chemical maker planning a portfolio transformation. The German company intends to divest its performance material businesses by the end of 2023. These commodities, such as C4 chemicals, isononyl alcohol, and superabsorbent polymers, generate about 20% of the firm’s sales. Evonik had been considering a sale of superabsorbents—used in diapers and similar applications—since late 2020. At the same time, the firm plans to invest $3.2 billion in sustainable businesses. Separately, in June, Evonik announced it would build a $220 million plant in Lafayette, Indiana, for lipids used in messenger RNA applications like COVID-19 vaccines. The company has been supplying this burgeoning market from facilities in Germany. Evonik is also building a plant to make rhamnolipids, a class of biobased surfactants, in Slovakia.
24 Shell
2021 chemical sales: $17.0 billion
Later this year, Shell will open an ethylene and polyethylene complex in Monaca, Pennsylvania. The facility was the only one among a wave of new US ethylene crackers to be situated far from the Gulf Coast. The project took a long time. It was announced a decade ago, and construction began in 2017. It may be Shell’s last conventional ethylene project for a while. The company is collaborating with Dow to electrify the steam cracking process. The partners recently started an experimental unit in Amsterdam to test designs that could replace current natural gas–fired cracker furnaces. They want to build a large pilot plant by 2025. And at a recent conference, Shell officials said the company is running feedstocks based on biomass and plastic pyrolysis oil through its ethylene complex in Norco, Louisiana. The company intends to process 180,000 metric tons (t) of the alternative feedstocks by 2023 and to ramp up use to 600,000 t in 3–5 years.
30 Indorama Ventures
2021 chemical sales: $14.6 billion
The Thai polyester maker Indorama Ventures made another big acquisition to diversify its business earlier this year when it bought the ethoxylated surfactant maker Oxiteno from the Brazilian conglomerate Ultrapar Participações for $1.3 billion. Oxiteno has about $1 billion in annual sales. In 2020, Indorama bought Huntsman’s US-based surfactant unit, its first big move into surfactants. Indorama, already a big mechanical recycler of polyethylene terephthalate (PET), is plunging into the chemical recycling of plastics. It plans to build a plant in Longlaville, France, that will depolymerize PET using an enzymatic process from the start-up Carbios. The facility will be close to an Indorama PET plant.
37 Arkema
2021 chemical sales: $11.3 billion
Over the past year, Arkema has placed a lot of emphasis on one of its core businesses, adhesives, as well as on an emerging business, battery materials. The French specialty chemical maker bought Ashland’s adhesives business in February for $1.65 billion. The business has $360 million in annual sales of water-based polyurethane wood glues and acrylic, pressure-sensitive adhesives for packaging labels and other applications. In 2015, Arkema bought the adhesives maker Bostik from Total for $2.2 billion. With Nippon Shokubai, Arkema is studying the feasibility of producing lithium bis(fluorosulfonyl)imide electrolyte salts, used in next-generation batteries, in France. Arkema’s goal is to have sales to the battery market of at least $1 billion per year by 2030. To that end, it is also expanding capacity for poly(vinylidene fluoride) in Pierre-Bénite, France. The polymer is used as a binder and separator material in lithium-ion batteries.
39 Hanwha Solutions
2021 chemical sales: $10.9 billion
In June, Hanwha Solutions detailed plans to reach net-zero carbon emissions by 2050. Some 70% of the carbon reduction at the South Korean chemical and solar material maker will come from using renewable energy. Replacing fossil fuels in its manufacturing processes with hydrogen will yield another 15%. The balance of cuts will come from better efficiency and carbon capture. The company is also making investments in sustainability. It helped lead a $21 million venture capital investment in Novoloop, a California-based start-up that is developing a technology to convert postconsumer polyethylene into thermoplastic polyurethanes and other chemicals.
49 Lanxess
2021 chemical sales: $8.9 billion
Lanxess is planning a likely exit from the polymer business. The German company and the private equity firm Advent International formed a joint venture to buy DSM’s engineering polymer business—a producer of high-end nylon resins—for $4.1 billion. Lanxess is contributing its own business, which makes polybutylene terephthalate and nylon 6, to the partnership. It will own an up to 40% stake in the joint venture for 3 years, after which it will have an option to sell. At the same time, Lanxess is growing in specialty chemicals. Earlier this month, it completed the purchase of International Flavors & Fragrances’ microbial control business for about $1.3 billion. The business, which once belonged to Dow, makes glutaraldehyde biocides and isothiazolinone-based antimicrobials and has $450 million in annual sales.
Credit: Lanxess
A worker at a Lanxess polymer plant in Gastonia, North Carolina. The plant will become part of a joint venture with Advent International.
https://cen.acs.org/business/finance/CENs-Global-Top-50-2022/100/i26
October 20, 2022
Epichlorohydrin Plant in India
Meghmani Finechem Q2 profit up 2-fold at Rs 91.56 cr
Chemicals maker Meghmani Finechem Ltd MFL on Thursday posted an almost two-fold jump in its consolidated net profit at Rs 91.56 crore for the second quarter of 2022-23 on robust income.The company had clocked a net profit of Rs 47 crore in the same quarter of the previous fiscal, according to a regulatory filing.Net income rose by 63 per cent to Rs 557.20 crore on a consolidated basis during the July-September quarter of the current financial year, as against Rs 341.88 crore in the year-ago period.Expenses remained higher at Rs 415.54 crore as against Rs 270.54 crore earlier.
PTI | New Delhi | Updated: 20-10-2022 17:55 IST | Created: 20-10-2022 17:22 IST
- Country:
- India
Chemicals maker Meghmani Finechem Ltd (MFL) on Thursday posted an almost two-fold jump in its consolidated net profit at Rs 91.56 crore for the second quarter of 2022-23 on robust income.
The company had clocked a net profit of Rs 47 crore in the same quarter of the previous fiscal, according to a regulatory filing.
Net income rose by 63 per cent to Rs 557.20 crore on a consolidated basis during the July-September quarter of the current financial year, as against Rs 341.88 crore in the year-ago period.
Expenses remained higher at Rs 415.54 crore as against Rs 270.54 crore earlier. MFL Chairman and Managing Director Maulik Patel said: ”We achieved highest-ever revenue in Q2 FY23. The performance of the quarter is on account of high realizations from majority of our products.” The first quarter of the current fiscal was an exciting period as the company commissioned all the planned expansion projects, namely Epichlorohydrin plant and additional capacity of caustic soda, he said.
The company is working towards maximising contribution from the new projects. ”However, we expect substantial revenue impact from these projects by Q3 FY’23 onwards,” he added.
MFL, incorporated in 2007, has manufacturing facilities in Dahej, Gujarat.
October 20, 2022
Epichlorohydrin Plant in India
Meghmani Finechem Q2 profit up 2-fold at Rs 91.56 cr
Chemicals maker Meghmani Finechem Ltd MFL on Thursday posted an almost two-fold jump in its consolidated net profit at Rs 91.56 crore for the second quarter of 2022-23 on robust income.The company had clocked a net profit of Rs 47 crore in the same quarter of the previous fiscal, according to a regulatory filing.Net income rose by 63 per cent to Rs 557.20 crore on a consolidated basis during the July-September quarter of the current financial year, as against Rs 341.88 crore in the year-ago period.Expenses remained higher at Rs 415.54 crore as against Rs 270.54 crore earlier.
PTI | New Delhi | Updated: 20-10-2022 17:55 IST | Created: 20-10-2022 17:22 IST
- Country:
- India
Chemicals maker Meghmani Finechem Ltd (MFL) on Thursday posted an almost two-fold jump in its consolidated net profit at Rs 91.56 crore for the second quarter of 2022-23 on robust income.
The company had clocked a net profit of Rs 47 crore in the same quarter of the previous fiscal, according to a regulatory filing.
Net income rose by 63 per cent to Rs 557.20 crore on a consolidated basis during the July-September quarter of the current financial year, as against Rs 341.88 crore in the year-ago period.
Expenses remained higher at Rs 415.54 crore as against Rs 270.54 crore earlier. MFL Chairman and Managing Director Maulik Patel said: ”We achieved highest-ever revenue in Q2 FY23. The performance of the quarter is on account of high realizations from majority of our products.” The first quarter of the current fiscal was an exciting period as the company commissioned all the planned expansion projects, namely Epichlorohydrin plant and additional capacity of caustic soda, he said.
The company is working towards maximising contribution from the new projects. ”However, we expect substantial revenue impact from these projects by Q3 FY’23 onwards,” he added.
MFL, incorporated in 2007, has manufacturing facilities in Dahej, Gujarat.
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