Epoxy
February 18, 2021
Dow Continues Asset Light Theme
Dow Inc seeks buyers for German chemical parks infrastructure: sources
FRANKFURT (Reuters) – U.S. chemicals maker Dow Inc has put German infrastructure assets up for sale in a potential 800 million euro ($966 million) deal as it seeks cash for investment elsewhere, sources close to the matter told Reuters.FILE PHOTO: A Dow sign is seen at the third China International Import Expo (CIIE) in Shanghai, China November 5, 2020. REUTERS/Aly Song
Chief Executive James Fitterling last month said that Dow would continue to offload infrastructure companies from its balance sheet and make use of the funds for capex, smaller acquisitions or share buybacks.
While Dow would sell the infrastructure at petrochemicals sites in Stade, Schkopau und Boehlen, it would continue to produce plastics and intermediates there, paying usage fees to the new owner. Dow is the main user but not the only one operating in the three chemical parks.
Chemical parks typically provide infrastructure for the likes of electricity, steam, natural gas and other services to resident producers.
“Dow has informed employees in Germany that it is exploring opportunities related to certain site infrastructure assets and services at its Stade, Schkopau and Boehlen sites, but no final decision has been made”, a company spokesman said.
In a similar deal in 2019, Bayer and Lanxess sold integrated chemical site operator Currenta to Macquarie in a 3.5 billion euro deal.
Dow has sent out information packages to prospective bidders including KKR, Blackstone, BlackRock, Brookfield Asset Management, Macquarie, First Sentier and DIF Capital Partners, the sources said.
The business is being marketed with an annual sales figure of 300 million euros with core profit of about 65 million euros.
Bidders could value the infrastructure assets at about 12-13 times core earnings, the sources added.
Dow is working with Morgan Stanley on the divestiture the sources said.
February 18, 2021
Dow Continues Asset Light Theme
Dow Inc seeks buyers for German chemical parks infrastructure: sources
FRANKFURT (Reuters) – U.S. chemicals maker Dow Inc has put German infrastructure assets up for sale in a potential 800 million euro ($966 million) deal as it seeks cash for investment elsewhere, sources close to the matter told Reuters.FILE PHOTO: A Dow sign is seen at the third China International Import Expo (CIIE) in Shanghai, China November 5, 2020. REUTERS/Aly Song
Chief Executive James Fitterling last month said that Dow would continue to offload infrastructure companies from its balance sheet and make use of the funds for capex, smaller acquisitions or share buybacks.
While Dow would sell the infrastructure at petrochemicals sites in Stade, Schkopau und Boehlen, it would continue to produce plastics and intermediates there, paying usage fees to the new owner. Dow is the main user but not the only one operating in the three chemical parks.
Chemical parks typically provide infrastructure for the likes of electricity, steam, natural gas and other services to resident producers.
“Dow has informed employees in Germany that it is exploring opportunities related to certain site infrastructure assets and services at its Stade, Schkopau and Boehlen sites, but no final decision has been made”, a company spokesman said.
In a similar deal in 2019, Bayer and Lanxess sold integrated chemical site operator Currenta to Macquarie in a 3.5 billion euro deal.
Dow has sent out information packages to prospective bidders including KKR, Blackstone, BlackRock, Brookfield Asset Management, Macquarie, First Sentier and DIF Capital Partners, the sources said.
The business is being marketed with an annual sales figure of 300 million euros with core profit of about 65 million euros.
Bidders could value the infrastructure assets at about 12-13 times core earnings, the sources added.
Dow is working with Morgan Stanley on the divestiture the sources said.
February 18, 2021
Consumer Spending Surge
US: Consumers went on an Unexpected Rampage in January
Dan North | February 17, 2021 The US consumer came roaring back with a vengeance in January as retail sales sky-rocketed 5.3% m/m, far beyond expectations of 1.2%. It was the first gain after three consecutive months of losses. Outside of the pandemic, it was the third-largest monthly gain ever, and it was the largest gain since October 2001, the month after the 9/11 attacks. Of the 15 categories reporting for December, there wasn’t a single decline.
Unquestionably, the $600 direct checks from the December stimulus bill fueled the spending.
We have been predicting for some time that over the next few months as COVID becomes more under control and the weather gets warmer, consumers will unleash all of the trillions of dollars of excess savings they will have and go on a huge spending spree. It appears that this was the first round of spending, but it’s probably just the beginning.
To recap the stimulus programs, in April the CARES act sent out $1,200 checks totaling around $300B, and in December 2020 the next round of stimulus sent out $600 checks totaling $166B. In addition to those direct payments, there have also been huge extra unemployment benefits paid since April. As a result, from April through December of 2020, Americans have saved up approximately $1.5T in excess savings, waiting to be unleashed. Apparently, this latest round of stimulus checks burst the dam, as consumers flooded the economy with $568B of speeding on retail goods and services.
And there’s more to come! Sometime over the next month, President Biden’s $1.9T American Rescue Plan (ARP) will be passed which will include yet a third round of direct payments in the form of $1,400 checks, in addition to extended unemployment benefits. Certainly, income support is needed for those who are still unemployed because of COVID. But given Feb. 17th’s report, perhaps it would be wise to put a pause on the direct payments to see if consumers will continue to spend enough of those excess savings to boost the economy. After all, the government could always provide more stimulus later if needed. Two other arguments for a pause are that there are now signs of inflation bubbling up in the economy, and of course, those direct payments will add to the debt load. But it’s highly unlikely that a pause will even be considered.
Retail sales since before COVID have made a remarkable comeback in most categories, but of course bars and restaurants have been left behind.
We would like to think that Feb. 17th’s report is the first sign of our scenario coming to fruition.
February 18, 2021
Consumer Spending Surge
US: Consumers went on an Unexpected Rampage in January
Dan North | February 17, 2021 The US consumer came roaring back with a vengeance in January as retail sales sky-rocketed 5.3% m/m, far beyond expectations of 1.2%. It was the first gain after three consecutive months of losses. Outside of the pandemic, it was the third-largest monthly gain ever, and it was the largest gain since October 2001, the month after the 9/11 attacks. Of the 15 categories reporting for December, there wasn’t a single decline.
Unquestionably, the $600 direct checks from the December stimulus bill fueled the spending.
We have been predicting for some time that over the next few months as COVID becomes more under control and the weather gets warmer, consumers will unleash all of the trillions of dollars of excess savings they will have and go on a huge spending spree. It appears that this was the first round of spending, but it’s probably just the beginning.
To recap the stimulus programs, in April the CARES act sent out $1,200 checks totaling around $300B, and in December 2020 the next round of stimulus sent out $600 checks totaling $166B. In addition to those direct payments, there have also been huge extra unemployment benefits paid since April. As a result, from April through December of 2020, Americans have saved up approximately $1.5T in excess savings, waiting to be unleashed. Apparently, this latest round of stimulus checks burst the dam, as consumers flooded the economy with $568B of speeding on retail goods and services.
And there’s more to come! Sometime over the next month, President Biden’s $1.9T American Rescue Plan (ARP) will be passed which will include yet a third round of direct payments in the form of $1,400 checks, in addition to extended unemployment benefits. Certainly, income support is needed for those who are still unemployed because of COVID. But given Feb. 17th’s report, perhaps it would be wise to put a pause on the direct payments to see if consumers will continue to spend enough of those excess savings to boost the economy. After all, the government could always provide more stimulus later if needed. Two other arguments for a pause are that there are now signs of inflation bubbling up in the economy, and of course, those direct payments will add to the debt load. But it’s highly unlikely that a pause will even be considered.
Retail sales since before COVID have made a remarkable comeback in most categories, but of course bars and restaurants have been left behind.
We would like to think that Feb. 17th’s report is the first sign of our scenario coming to fruition.
February 17, 2021
Highlights from Today’s Event
There were many interesting topics in today’s virtual lunch event, including the fact that estimates of total U.S. cracker capacity (ethylene and propylene) that is down because of the recent freeze were from roughly 40 to 60 percent. Refineries are down as well, and they produce a lot of propylene. That will trickle downstream into an enormous number of chemical chains.
Learn more here:
https://sdci.clubexpress.com/content.aspx?page_id=0&club_id=11039&sl=467783333
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