Epoxy
October 1, 2021
Propylene Falls 3c/lb in September
Chemical grade settled at $0.825/lb
October 1, 2021
Propylene Falls 3c/lb in September
Chemical grade settled at $0.825/lb
September 29, 2021
Hexion to Split Into Two Companies
Hexion Holdings Corporation Announces Plan to Separate Into Two Independent Companies
Hexion Holdings Corporation Plans to be Listed Publicly on the NYSE; Plans to Execute a Spinoff of its Coatings & Composites Businesses to Current Shareholders
Creates Two Focused Companies Poised to Drive Long-Term Shareholder Value September 29, 2021 09:25 AM Eastern Daylight Time
COLUMBUS, Ohio–(BUSINESS WIRE)–Hexion Holdings Corporation (“Hexion Holdings” or the “Company”) today announced its plan to separate into two independent companies. The two companies will be “Hexion Holdings,” composed of the Company’s Adhesives and Versatic Acids™ and Derivatives product lines, and “Hexion Coatings and Composites (US) Inc.” (“HCC”), composed of Hexion Holdings’ former epoxy-based Coatings and Composites products. HCC will be renamed at a later date.
“Today marks the beginning of an exciting new chapter in Hexion’s 122-year history, and continues our strategy of narrowing our focus, improving the Company’s financial flexibility and driving long-term value creation for our shareholders”Tweet this
Hexion Holdings anticipates that the HCC separation transaction will be in the form of a distribution of 100% of the stock of HCC, a new and independent company to current holders of Hexion Holdings common stock and warrants. Upon completion of the HCC spin, current Hexion Holdings shareholders will own shares of both Hexion Holdings and HCC. As previously disclosed, Hexion Holdings will file a registration statement on Form S-1 with the U.S. Securities and Exchange Commission for a proposed initial public offering on the New York Stock Exchange.
“Today marks the beginning of an exciting new chapter in Hexion’s 122-year history, and continues our strategy of narrowing our focus, improving the Company’s financial flexibility and driving long-term value creation for our shareholders,” said Craig Rogerson, Hexion Chairman, President and Chief Executive Officer. “With our recent strong performance, and after a comprehensive evaluation of strategic actions aimed at unlocking the value of our businesses, our Board and management team have determined that now is the right time to pursue a separation through an IPO and spinoff. The transaction will provide each company with significant liquidity, a sharper strategic focus and appropriately capitalized balance sheets while we continue to serve our customers’ needs. It is a testament to our people and our focus on operational execution that we have reached this successful milestone where our businesses are ideally positioned to be two strong standalone companies.”
The Company believes that this separation will result in material benefits to the standalone companies, including:
- Distinct strategic and management focus on specific operational, R&D and growth priorities, including the analysis of macroeconomic trends and the implementation of financial targets that best fit each business;
- A capital structure, dividend policy and capital deployment strategy tailored to specific business models and growth strategies. Both businesses are expected to have direct access to the debt and equity capital markets to fund their respective growth strategies; and
- An investor base that is aligned with the streamlined value proposition for each company.
Hexion Holdings Building on Strong Momentum and Aligned with Growing Demand for Environmentally Preferred Building and Coatings Materials
Following the separation, Hexion Holdings will consist of the Company’s existing Adhesives and Versatic Acids™ and Derivatives product lines. Hexion Holdings will continue to build on its strong momentum, driven primarily by strong new residential construction and remodeling demand in North America, continued capacity expansion progress and gains from innovative new products, as well as the need for more sustainable building and coatings materials. As a standalone company, Hexion Holdings is expected to have favorable cash flow attributes and a stronger financial profile.
Hexion Holdings generated historical net sales of $2.5 billion and pro forma net sales of approximately $1.4 billion for the year-ended December 31, 2020. Hexion is expected to maintain appropriate debt levels going forward.
HCC Well Positioned to Expand Leadership and Global Presence
HCC will consist of Hexion Holdings’ former base and specialty epoxy resins product lines. HCC will remain a leading global supplier of epoxy resins and systems. As a standalone company, HCC will have greater ability to grow and expand its leadership position in attractive global markets. Importantly, HCC is also focused on addressing customers’ demands for more environmentally preferred solutions, and providing innovative solutions for the wind energy and automotive industries.
With its senior management team based in Rotterdam, the Netherlands, HCC expects to maintain a significant global presence. Stafford, Texas, will serve as its primary U.S. office and HCC will also maintain an executive office in Shanghai, China. In addition, HCC will continue to operate world-scale epoxy plants in Pernis and Deer Park, Texas, as well as additional manufacturing operations in the United States, Germany, Spain and South Korea.
HCC generated total sales of approximately $1.1 billion for the year-ended December 31, 2020. HCC is expected to maintain appropriate debt levels going forward.
Experienced and Proven Leadership
Craig Rogerson will continue to lead Hexion Holdings as Chairman, President and Chief Executive Officer. George Knight will continue in his role at Hexion Holdings as Executive Vice President and Chief Financial Officer. Ann Frederix, currently Senior Vice President, Coatings & Composites, Hexion Holdings, is expected to serve as Chief Executive Officer of HCC. Joost Vierhout, currently Senior Finance Director, Global Epoxy and Versatics, Hexion Holdings, is expected to serve as Chief Financial Officer of HCC.
Additional Details
Hexion Holdings and HCC are expected to enter into a Shared Services Agreement, which will provide for Hexion Holdings to provide to HCC, on a transitional basis, certain services or functions that the companies historically have shared, and one or more commercial agreements relating to the ownership, management, maintenance, support and use of certain shared operations services by Hexion Holdings to HCC.
The HCC separation transaction is currently targeted to be completed in the fourth quarter 2021, subject to final approval by the Board of Directors, customary regulatory approvals and tax and legal considerations.
Advisors
Moelis & Company LLC and Morgan Stanley & Co. LLC are serving as strategic advisors in connection with the strategic review, and Paul, Weiss, Rifkind, Wharton & Garrison LLP and Davis Polk & Wardwell LLP are serving as offering and M&A counsel to Hexion.
This press release is not an offer to sell securities.
About Hexion Holdings Corporation
Based in Columbus, Ohio, Hexion Holdings Corporation (“Hexion Holdings”), is the indirect parent of Hexion Inc. (“Hexion”). Hexion is a global leader in thermoset resins. Hexion serves the global adhesive and industrial markets through a broad range of thermoset technologies, specialty products and technical support for customers in a diverse range of applications and industries. Additional information about Hexion, its products and sustainability is available at www.hexion.com.
September 29, 2021
Hexion to Split Into Two Companies
Hexion Holdings Corporation Announces Plan to Separate Into Two Independent Companies
Hexion Holdings Corporation Plans to be Listed Publicly on the NYSE; Plans to Execute a Spinoff of its Coatings & Composites Businesses to Current Shareholders
Creates Two Focused Companies Poised to Drive Long-Term Shareholder Value September 29, 2021 09:25 AM Eastern Daylight Time
COLUMBUS, Ohio–(BUSINESS WIRE)–Hexion Holdings Corporation (“Hexion Holdings” or the “Company”) today announced its plan to separate into two independent companies. The two companies will be “Hexion Holdings,” composed of the Company’s Adhesives and Versatic Acids™ and Derivatives product lines, and “Hexion Coatings and Composites (US) Inc.” (“HCC”), composed of Hexion Holdings’ former epoxy-based Coatings and Composites products. HCC will be renamed at a later date.
“Today marks the beginning of an exciting new chapter in Hexion’s 122-year history, and continues our strategy of narrowing our focus, improving the Company’s financial flexibility and driving long-term value creation for our shareholders”Tweet this
Hexion Holdings anticipates that the HCC separation transaction will be in the form of a distribution of 100% of the stock of HCC, a new and independent company to current holders of Hexion Holdings common stock and warrants. Upon completion of the HCC spin, current Hexion Holdings shareholders will own shares of both Hexion Holdings and HCC. As previously disclosed, Hexion Holdings will file a registration statement on Form S-1 with the U.S. Securities and Exchange Commission for a proposed initial public offering on the New York Stock Exchange.
“Today marks the beginning of an exciting new chapter in Hexion’s 122-year history, and continues our strategy of narrowing our focus, improving the Company’s financial flexibility and driving long-term value creation for our shareholders,” said Craig Rogerson, Hexion Chairman, President and Chief Executive Officer. “With our recent strong performance, and after a comprehensive evaluation of strategic actions aimed at unlocking the value of our businesses, our Board and management team have determined that now is the right time to pursue a separation through an IPO and spinoff. The transaction will provide each company with significant liquidity, a sharper strategic focus and appropriately capitalized balance sheets while we continue to serve our customers’ needs. It is a testament to our people and our focus on operational execution that we have reached this successful milestone where our businesses are ideally positioned to be two strong standalone companies.”
The Company believes that this separation will result in material benefits to the standalone companies, including:
- Distinct strategic and management focus on specific operational, R&D and growth priorities, including the analysis of macroeconomic trends and the implementation of financial targets that best fit each business;
- A capital structure, dividend policy and capital deployment strategy tailored to specific business models and growth strategies. Both businesses are expected to have direct access to the debt and equity capital markets to fund their respective growth strategies; and
- An investor base that is aligned with the streamlined value proposition for each company.
Hexion Holdings Building on Strong Momentum and Aligned with Growing Demand for Environmentally Preferred Building and Coatings Materials
Following the separation, Hexion Holdings will consist of the Company’s existing Adhesives and Versatic Acids™ and Derivatives product lines. Hexion Holdings will continue to build on its strong momentum, driven primarily by strong new residential construction and remodeling demand in North America, continued capacity expansion progress and gains from innovative new products, as well as the need for more sustainable building and coatings materials. As a standalone company, Hexion Holdings is expected to have favorable cash flow attributes and a stronger financial profile.
Hexion Holdings generated historical net sales of $2.5 billion and pro forma net sales of approximately $1.4 billion for the year-ended December 31, 2020. Hexion is expected to maintain appropriate debt levels going forward.
HCC Well Positioned to Expand Leadership and Global Presence
HCC will consist of Hexion Holdings’ former base and specialty epoxy resins product lines. HCC will remain a leading global supplier of epoxy resins and systems. As a standalone company, HCC will have greater ability to grow and expand its leadership position in attractive global markets. Importantly, HCC is also focused on addressing customers’ demands for more environmentally preferred solutions, and providing innovative solutions for the wind energy and automotive industries.
With its senior management team based in Rotterdam, the Netherlands, HCC expects to maintain a significant global presence. Stafford, Texas, will serve as its primary U.S. office and HCC will also maintain an executive office in Shanghai, China. In addition, HCC will continue to operate world-scale epoxy plants in Pernis and Deer Park, Texas, as well as additional manufacturing operations in the United States, Germany, Spain and South Korea.
HCC generated total sales of approximately $1.1 billion for the year-ended December 31, 2020. HCC is expected to maintain appropriate debt levels going forward.
Experienced and Proven Leadership
Craig Rogerson will continue to lead Hexion Holdings as Chairman, President and Chief Executive Officer. George Knight will continue in his role at Hexion Holdings as Executive Vice President and Chief Financial Officer. Ann Frederix, currently Senior Vice President, Coatings & Composites, Hexion Holdings, is expected to serve as Chief Executive Officer of HCC. Joost Vierhout, currently Senior Finance Director, Global Epoxy and Versatics, Hexion Holdings, is expected to serve as Chief Financial Officer of HCC.
Additional Details
Hexion Holdings and HCC are expected to enter into a Shared Services Agreement, which will provide for Hexion Holdings to provide to HCC, on a transitional basis, certain services or functions that the companies historically have shared, and one or more commercial agreements relating to the ownership, management, maintenance, support and use of certain shared operations services by Hexion Holdings to HCC.
The HCC separation transaction is currently targeted to be completed in the fourth quarter 2021, subject to final approval by the Board of Directors, customary regulatory approvals and tax and legal considerations.
Advisors
Moelis & Company LLC and Morgan Stanley & Co. LLC are serving as strategic advisors in connection with the strategic review, and Paul, Weiss, Rifkind, Wharton & Garrison LLP and Davis Polk & Wardwell LLP are serving as offering and M&A counsel to Hexion.
This press release is not an offer to sell securities.
About Hexion Holdings Corporation
Based in Columbus, Ohio, Hexion Holdings Corporation (“Hexion Holdings”), is the indirect parent of Hexion Inc. (“Hexion”). Hexion is a global leader in thermoset resins. Hexion serves the global adhesive and industrial markets through a broad range of thermoset technologies, specialty products and technical support for customers in a diverse range of applications and industries. Additional information about Hexion, its products and sustainability is available at www.hexion.com.
September 29, 2021
China Update
China economy to slow as industries struggle from power crunch
Author: Fanny Zhang
2021/09/29
SINGAPORE (ICIS)–China’s economic prospects are being weighed down by an ongoing power crunch in a huge swathe of the country, threatening overall industrial production, with much tighter controls on energy consumption in place in selected provinces in September.
Some investment banks have shaved their GDP growth forecast for the second-biggest economy below 8% as industries struggle from power shortage stemming from high coal prices, and efforts by some provinces to keep within their respective energy consumption targets in the third quarter.
Goldman Sachs now expects China to post a 7.8% GDP growth in 2021, down from its previous forecast of 8.2%.
The US investment bank cited “significant downside pressures” from major industrial output cuts caused by power outages, which affect an estimated 44% of the country’s industrial activity.
China-based investment bank China International Capital Corp (CICC) expects the GDP drag would be 0.1-0.15 percentage point in both the third and fourth quarters, with overall industrial output to be reduced by 1.3%-1.5%.
A prolonged production cut could shave China’s fourth-quarter GDP growth by a full percentage point, according to US-based investment bank Morgan Stanley.
Japan-based Nomura has likewise revised down its full-year GDP forecast for China to 7.7% from 8.2% previously, with third-quarter and fourth-quarter growths projected to come in at 4.7% and 3%, respectively.
Power rationing is now in place at 20 of the 31 provinces/municipalities in mainland China, with coal-based power plants running at reduced rates to stem losses arising from high feedstock costs. https://e.infogram.com/5e89a67b-46d1-4592-9a81-1604a5610c85?parent_url=https%3A%2F%2Fwww.icis.com%2Fexplore%2Fresources%2Fnews%2F2021%2F09%2F29%2F10689696%2Fchina-economy-to-slow-as-industries-struggle-from-power-crunch&src=embed#async_embed
China has been leading the global economic rebound from a pandemic-driven slump in 2020, having successfully contained COVID-19 infections much earlier than the rest of the world.
Its industries have been working double time to accommodate increased export orders, thereby causing unprecedented spikes in energy consumption.
But the country also has a commitment to reduce carbon emissions, with specific annual targets on energy consumption set for each province, in line with the goal of achieving net-zero emissions by 2060, based on China’s 14th Five-Year Plan.
In September, some provinces well in excess of the limits on total energy consumption as well as intensity (consumption per GDP) in the first half of 2021 have moved to rectify the issue, aggravating the effects of the power shortage and hitting downstream industries hard.
Factories are being forced to cut production or shut operations, and in some regions, office buildings, shopping centres and even residential homes are affected.
Power companies are losing money from high cost of coal, said freelance economist Guan Qingyou.
Spot prices of coal – which accounts for 70% of China’s total power generation – nearly quadrupled from 2020 levels to $180/tonne, in line with strong gains in global commodity prices this year.
China’s energy challenges may not be resolved in the short term, Guan said.
Industrial production in China has weakened for five straight months, with the August official purchasing managers index (PMI) reading of 50.1 barely above the threshold for expansion.
Another concern looming in the background for the Chinese economy is the debt-saddled giant property developer Evergrande.
The company, which is China’s second-bigger property developer, has accumulated $305bn in debt, which was about 2% of China’s GDP.
Analysts said that Evergrande’s collapse is threatening stability of the Chinese property market, as well as financial system.
Focus article by Fanny Zhang
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