Company News

December 6, 2019

More Spray Foam Consolidation

Huntsman Announces the Acquisition of Icynene-Lapolla, Expanding its Downstream Footprint in Spray Polyurethane Foam Insulation

THE WOODLANDS, Texas, Dec. 5, 2019 /PRNewswire/ — Huntsman Corporation (NYSE: HUN) today announces its agreement to acquire Icynene-Lapolla, a leading North American manufacturer and distributor of spray polyurethane foam (SPF) insulation systems for residential and commercial applications, from an affiliate of FFL Partners, LLC.

Icynene-Lapolla has annual revenues of approximately $230 million with two manufacturing facilities located in Houston, Texas and Mississauga, Ontario.  Under terms of the agreement, Huntsman will pay $350 million, subject to customary closing adjustments, in an all-cash transaction funded from available liquidity.  Based on full year 2019 adjusted EBITDA estimates, the purchase price represents an adjusted EBITDA multiple of approximately 10 times, or approximately 7 times adjusted EBITDA pro forma for synergies.  The transaction is expected to close in the first half of 2020.

Commenting on the acquisition, Tony Hankins, President of Huntsman’s Polyurethanes division, said: “I am delighted that Icynene-Lapolla is joining our downstream, high-growth MDI urethanes insulation business.  Icynene-Lapolla is well recognized by architects, builders and contractors as a market leader in the manufacture and supply of high-performance, energy-efficient building envelope solutions.  Almost half of all energy consumption is used in the heating and cooling of buildings, making the choice of insulation critical.  SPF is the most effective insulant available in the market.  The combination of Icynene-Lapolla, with its SPF product range and reflective roof coatings, with Demilec, the SPF business we acquired in 2018, will significantly strengthen our energy-saving insulation business and provide customers with an unmatched offering of choice while accelerating the globalization of our spray foam technology.” 

Peter Huntsman, Chairman, President and CEO further commented: “As the demand for energy efficiency continues to grow, both in residential and commercial construction, this combination of companies will provide Huntsman with the largest global array of spray foam technology, integration of raw materials and associates.  This is the size and type of downstream assets that we will continue to add to our Company as we strengthen margins, move downstream and be less reliant on a single product or application.”

https://ir.huntsman.com/news-releases/detail/424/huntsman-announces-the-acquisition-of-icynene-lapolla

December 4, 2019

Covestro to Buy Robinson Township from Bayer

Covestro to purchase Robinson Township campus

Covestro campus in Robinson Township
Covestro LLC entered into an agreement with Bayer Corporation to purchase the Robinson Township campus, which has served as Covestro’s U.S. headquarters for more than 60 years.

Pittsburgh, December 4, 2019 — Covestro LLC has entered into an agreement with Bayer Corporation to purchase Bayer’s Robinson Township campus in Pittsburgh, which is home to Covestro’s U.S. headquarters.

The change in ownership is planned for December 31, 2020.

Covestro has about 750 employees at the Robinson campus, which includes sales and marketing, administrative, and research and development functions. Bayer separated its material science business, rebranded Covestro, in 2015.

“Not only does Pittsburgh share our passion for innovation and sustainability, but this region also offers a number of strategic advantages to help grow our business – access to world-class talent, a thriving innovation community and a strong customer base,” said Haakan Jonsson, president of Covestro LLC.

“With this purchase, we’ll reinforce our commitment to the region that has served us well for more than six decades,” he added. “Our employees are as much a part of the Pittsburgh community as it is a part of Covestro – and we couldn’t be more proud to continue building our future here.”

About Covestro LLC:

Covestro LLC is one of the leading producers of high-performance polymers in North America and is part of the global Covestro business, which is among the world’s largest polymer companies with 2018 sales of EUR 14.6 billion. Business activities are focused on the manufacture of high-tech polymer materials and the development of innovative solutions for products used in many areas of daily life. The main segments served are the automotive, construction, wood processing and furniture, electrical and electronics, and healthcare industries. Other sectors include sports and leisure, cosmetics and the chemical industry itself. Covestro has 30 production sites worldwide and employed approximately 16,800 people at the end of 2018.

Find more information at www.covestro.us.

https://www.covestro.us/media/news-releases/2019-news-releases/2019-12-04-covestro-campus

December 4, 2019

Covestro to Buy Robinson Township from Bayer

Covestro to purchase Robinson Township campus

Covestro campus in Robinson Township
Covestro LLC entered into an agreement with Bayer Corporation to purchase the Robinson Township campus, which has served as Covestro’s U.S. headquarters for more than 60 years.

Pittsburgh, December 4, 2019 — Covestro LLC has entered into an agreement with Bayer Corporation to purchase Bayer’s Robinson Township campus in Pittsburgh, which is home to Covestro’s U.S. headquarters.

The change in ownership is planned for December 31, 2020.

Covestro has about 750 employees at the Robinson campus, which includes sales and marketing, administrative, and research and development functions. Bayer separated its material science business, rebranded Covestro, in 2015.

“Not only does Pittsburgh share our passion for innovation and sustainability, but this region also offers a number of strategic advantages to help grow our business – access to world-class talent, a thriving innovation community and a strong customer base,” said Haakan Jonsson, president of Covestro LLC.

“With this purchase, we’ll reinforce our commitment to the region that has served us well for more than six decades,” he added. “Our employees are as much a part of the Pittsburgh community as it is a part of Covestro – and we couldn’t be more proud to continue building our future here.”

About Covestro LLC:

Covestro LLC is one of the leading producers of high-performance polymers in North America and is part of the global Covestro business, which is among the world’s largest polymer companies with 2018 sales of EUR 14.6 billion. Business activities are focused on the manufacture of high-tech polymer materials and the development of innovative solutions for products used in many areas of daily life. The main segments served are the automotive, construction, wood processing and furniture, electrical and electronics, and healthcare industries. Other sectors include sports and leisure, cosmetics and the chemical industry itself. Covestro has 30 production sites worldwide and employed approximately 16,800 people at the end of 2018.

Find more information at www.covestro.us.

https://www.covestro.us/media/news-releases/2019-news-releases/2019-12-04-covestro-campus

December 3, 2019

Butadiene Markets

TPC Port Neches explosion sends ripples through global BD markets

Author: Tom Brown

2019/11/28

LONDON (ICIS)–A series of explosions that ripped through TPC Group’s Port Neches, Texas, petrochemicals facility is likely to impact global butadiene (BD) supply as fires continued to burn at the site in the early hours of the US Thanksgiving morning.

A first explosion occurred at the complex, which is one of the most significant production sites for the olefin in North America, around 01:00 local time (07:00 GMT) on Wednesday, with a second explosion ripping through the site later that day and prompting an evacuation order for the one-mile radius around the site.

Port Neches is one of North America’s largest BD production sites, with two lines totalling 426,000 tonnes/year of production capacity, 16% of total regional output and 2.7% of global supply, according to ICIS supply and demand data.

The company can also produce 400,000 tonnes/year of methyl tert-butyl ether (MTBE), 12% of North American capacity and 1% of global supply.

The extent of the damage is unclear at present, with emergency response teams continuing to fight the fire as of 12:00 GMT on Thursday, with a total power outage caused by the explosion making it impossible to see how much material was flowing through pipelines at the site, according to TPC safety director Troy Monk.

Speaking at a press conference broadcast on local media on Wednesday, Monk said that the explosion occurred in an area of the facility where the company processes BD.

The facility is located near the petrochemicals hubs of Port Arthur and Beaumont, outside of Houston, but wider impact so far has been restricted to Huntsman’s move to shut down its nearby Port Neches facility as a precautionary measure.

Lion Copolymer, which operates a styrene butadiene-ruber (SBR) production unit in the area, has also shut down operations as a precautionary measure, according to the company.

BD price movements are closely correlated between Europe, North America and Asia, which can lead to impacts in one area often resulting in arbitrage or trade shifts in other regions.

The effect of the TPC disaster will depend in part on the duration of the outage at the site, with the company reported to have declared force majeure for deliveries from the site, but with no official confirmation given at the time of publication.

BD markets have trended bearish through much of the year, with pricing drifting continually downward. Demand has been weak and supply long enough that planned and unplanned outages in Europe and North America through the year have had little effect on pricing.

One of the key end markets for BD is synthetic rubber, a sector largely dependent on the automotive sector, which has remained extremely weak from late 2018 through this year, with no significant recovery expected in the near future.

Europe acrylonitrile-butadiene-styrene (ABS) prices slumped to a two-year low in late November, while BD contracts for November settled down €50/tonne down due to the softness of the market.

US spot pricing had been trending downward on the approach to December, with end users sufficiently covered and additional buying interest extremely thin. Market lethargy had seen additional orders of spot material from Asia buyers, which is where the impact of the Port Neches outage may be most immediately apparent.

There have already been increased enquiries to Europe exporters, with some US consumers though to be checking alternatives to cover near-term needs, according to ICIS senior olefins editor Nel Weddle.

The issue may therefore at the very least stall the spot price decline, but other BD units in the US are under-utilised at present, she added.

More than 10,000 tonnes of product was expected to travel from the plant on two vessels to Asia in December, and are understood to have been cancelled. This could lead to thinner spot supply in the region, which could potentially have more pronounced ramifications in early 2020 than in December, which is traditionally a weak demand month.

“BD capacity is long in [the] US, so I expect there should not be significant impact in middle term,” an Asia-based trader told ICIS earlier on Thursday.

“While outages have driven price increases in Asia in 2019 this has not been the case in the US, where prices have largely decreased throughout the year,” said James Wilson, a senior analyst at ICIS Analytics. “Supplies of US BD have recently increased on the back of new cracker start-ups.”

“It is likely that cargoes expected to be delivered to Asia in December will no longer be available but at this point it is hard to estimate if the supply disruption will last for weeks or months,” he added.

TPC operates over a third of US BD capacity out of its Houston and Port Neches sites.

The impact for the global MTBE market is not expected to be significant, as the gasoline additive is not used in the US and the site represents only a small proportion of global capacity.

The air quality around the Port Neches complex remains well below health concern levels, according to the Texas Commission on Environmental Quality (TCEQ) although there are higher than normal concentrations of volatile organic compounds (VOCs), which can cause headaches and nausea.

Despite the absence of current air quality danger, the explosion caused significant property damage in the surrounding area, with home security camera footage showing doors being blown in and windows smashed by the force of the blast.

Local law firm Provost Umphrey said on Wednesday that it had filed a class action suit against the producer and a temporary restraining order against the firm to preserve evidence. TPC has set up its own community support line to handle property damage claims and assist with clean-up in the surrounding area.

The Port Neches site has been consistently flagged as a high priority violator by the US Environmental Protection Agency (EPA), deemed to be in significant violation of regulations in 12 of the last 12 quarters, with five informal and four formal enforcement actions taken by the agency against TPC in the last half-decade. TPC is owned by private equity firms First Reserve and SK Capital.

Focus article by Tom Brown

https://www.icis.com/explore/resources/news/2019/11/28/10449220/tpc-port-neches-explosion-sends-ripples-through-global-bd-markets

December 3, 2019

Butadiene Markets

TPC Port Neches explosion sends ripples through global BD markets

Author: Tom Brown

2019/11/28

LONDON (ICIS)–A series of explosions that ripped through TPC Group’s Port Neches, Texas, petrochemicals facility is likely to impact global butadiene (BD) supply as fires continued to burn at the site in the early hours of the US Thanksgiving morning.

A first explosion occurred at the complex, which is one of the most significant production sites for the olefin in North America, around 01:00 local time (07:00 GMT) on Wednesday, with a second explosion ripping through the site later that day and prompting an evacuation order for the one-mile radius around the site.

Port Neches is one of North America’s largest BD production sites, with two lines totalling 426,000 tonnes/year of production capacity, 16% of total regional output and 2.7% of global supply, according to ICIS supply and demand data.

The company can also produce 400,000 tonnes/year of methyl tert-butyl ether (MTBE), 12% of North American capacity and 1% of global supply.

The extent of the damage is unclear at present, with emergency response teams continuing to fight the fire as of 12:00 GMT on Thursday, with a total power outage caused by the explosion making it impossible to see how much material was flowing through pipelines at the site, according to TPC safety director Troy Monk.

Speaking at a press conference broadcast on local media on Wednesday, Monk said that the explosion occurred in an area of the facility where the company processes BD.

The facility is located near the petrochemicals hubs of Port Arthur and Beaumont, outside of Houston, but wider impact so far has been restricted to Huntsman’s move to shut down its nearby Port Neches facility as a precautionary measure.

Lion Copolymer, which operates a styrene butadiene-ruber (SBR) production unit in the area, has also shut down operations as a precautionary measure, according to the company.

BD price movements are closely correlated between Europe, North America and Asia, which can lead to impacts in one area often resulting in arbitrage or trade shifts in other regions.

The effect of the TPC disaster will depend in part on the duration of the outage at the site, with the company reported to have declared force majeure for deliveries from the site, but with no official confirmation given at the time of publication.

BD markets have trended bearish through much of the year, with pricing drifting continually downward. Demand has been weak and supply long enough that planned and unplanned outages in Europe and North America through the year have had little effect on pricing.

One of the key end markets for BD is synthetic rubber, a sector largely dependent on the automotive sector, which has remained extremely weak from late 2018 through this year, with no significant recovery expected in the near future.

Europe acrylonitrile-butadiene-styrene (ABS) prices slumped to a two-year low in late November, while BD contracts for November settled down €50/tonne down due to the softness of the market.

US spot pricing had been trending downward on the approach to December, with end users sufficiently covered and additional buying interest extremely thin. Market lethargy had seen additional orders of spot material from Asia buyers, which is where the impact of the Port Neches outage may be most immediately apparent.

There have already been increased enquiries to Europe exporters, with some US consumers though to be checking alternatives to cover near-term needs, according to ICIS senior olefins editor Nel Weddle.

The issue may therefore at the very least stall the spot price decline, but other BD units in the US are under-utilised at present, she added.

More than 10,000 tonnes of product was expected to travel from the plant on two vessels to Asia in December, and are understood to have been cancelled. This could lead to thinner spot supply in the region, which could potentially have more pronounced ramifications in early 2020 than in December, which is traditionally a weak demand month.

“BD capacity is long in [the] US, so I expect there should not be significant impact in middle term,” an Asia-based trader told ICIS earlier on Thursday.

“While outages have driven price increases in Asia in 2019 this has not been the case in the US, where prices have largely decreased throughout the year,” said James Wilson, a senior analyst at ICIS Analytics. “Supplies of US BD have recently increased on the back of new cracker start-ups.”

“It is likely that cargoes expected to be delivered to Asia in December will no longer be available but at this point it is hard to estimate if the supply disruption will last for weeks or months,” he added.

TPC operates over a third of US BD capacity out of its Houston and Port Neches sites.

The impact for the global MTBE market is not expected to be significant, as the gasoline additive is not used in the US and the site represents only a small proportion of global capacity.

The air quality around the Port Neches complex remains well below health concern levels, according to the Texas Commission on Environmental Quality (TCEQ) although there are higher than normal concentrations of volatile organic compounds (VOCs), which can cause headaches and nausea.

Despite the absence of current air quality danger, the explosion caused significant property damage in the surrounding area, with home security camera footage showing doors being blown in and windows smashed by the force of the blast.

Local law firm Provost Umphrey said on Wednesday that it had filed a class action suit against the producer and a temporary restraining order against the firm to preserve evidence. TPC has set up its own community support line to handle property damage claims and assist with clean-up in the surrounding area.

The Port Neches site has been consistently flagged as a high priority violator by the US Environmental Protection Agency (EPA), deemed to be in significant violation of regulations in 12 of the last 12 quarters, with five informal and four formal enforcement actions taken by the agency against TPC in the last half-decade. TPC is owned by private equity firms First Reserve and SK Capital.

Focus article by Tom Brown

https://www.icis.com/explore/resources/news/2019/11/28/10449220/tpc-port-neches-explosion-sends-ripples-through-global-bd-markets