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Everchem Updates
VOLUME XXI
September 14, 2023
Everchem’s exclusive Closers Only Club is reserved for only the highest caliber brass-baller salesmen in the chemical industry. Watch the hype video and be introduced to the top of the league: — read more
June 24, 2021
Sheela Foam will set up a new plant in Jabalpur at an investment of around Rs 200 crore: Rahul Gautam, MD
zeebizindia@gmail.com (Zee Business) 1 hour ago 
Rahul Gautam, Managing Director, Sheela Foam Ltd, talks about the completion of 50 years, growth strategy, International markets, eCommerce platform, TDI Prices, margin expectation and M&A opportunities among others during a candid chat with Swati Khandelwal, Zee Business. Edited Excerpts:
Q: Congratulations! The company has completed 50 years, which is a big milestone. How will you sum up these 50 years and what are the plans for the upcoming 50 years?
A: The last 50 years have been a long journey and it seems like it was just yesterday. The company was started by my mother and me, at that time I was about 18 years old. Interestingly, it doesn’t seem that these 50 years have passed but the journey has been very long. And, when it was started then it was not felt like this or anyone could have guessed at that point of time that we will imagine or reach the position at which we are at present. The era was another. But would like to say that everyone was with us and everyone, including the customers and suppliers, have helped and we have been able to reach this position. We have completed 50 years on June 18, 2021.
Q: You have been able to maintain growth momentum in the last years. Tell us what is your strategy for the next three to five years and what is your outlook for the period as the Indian Mattress Market will grow in the coming years?
A: The primary change that is happening in the conversion from unorganized to organized sector, since GST has started and is continuing to increase. The second part is related to CORONA in which few people are saying that there will be the third wave or fourth wave. But account for it or factor in, I feel that the next three years will be extremely good for the industry in general in India and it will be a good period for the mattress industry. When it comes to our growth then it will continue as it has been happening. If we have a look at the last year then the first two months were impacted by CORONA but after that, the conditions improved in India as well as outside. You are well aware that we are also present in Australia and Spain and the growth has been good in both the geographies. So, I believe that things will continue to go in the same manner.
Q: Which are the segments that are showing promising growth and what is the growth scope in the sections or areas where you are a leader? Also, tell us about the new products on which you will focus and what will be the play of India Vs the international market?
A: Undoubtedly, the growth will be at the lower average selling price. The conversion is happening from unorganised to organised segment at the lower price levels and therefore the pressure will be there. But a number of units, the size of the market increasing will continue to happen. So, this characteristic will be there that the lower price points will be there. We have a constant effort to improve the price points and provide the best products to the customers and continue with a force in a different direction. But this is a time and as the last year has passed, I think, people want a new mattress but at the same time not being able to afford it. So, the average selling price is definitely going to be lower.
As far as, India Vs other countries is concerned, I think the growth potential that is available in India is not available anywhere else. Definitely, it has happened, even in the developed countries because people have spent more time at home and the investment that they would have made on travel was available with them, therefore spending on mattresses or spending on furniture increased. But they have matured markets, stabilized at a point and as soon as there is some improvement in conditions the avenues where money is spent will open. India will continue to grow; the number of units will continue to grow.
Two areas that are important for us are the distribution side and eCommerce, which was open earlier but has accelerated due to CORONA and people have started accepting things at home. In this, we have a process in which we also try to take the product to their place and help them to choose, see in by spreading it in their bedroom. It is a facility in which they can make a choice in that environment and in presence of family members, it is called Sleepwell At Home and that is picking up, at least in five cities and that will be a new trend that will be there. Secondly, we will try to expand our distribution in the lower end markets.
Q: Current, eCommerce platform that you are using at present will be expanded. So, which kind of distribution levels you are seeing and in how many new touchpoints or cities you will be present? What kind of investments will be made for expansion? Also, tell us about the CapEx that is being lined up?
A: The existing facilities and units are running at a capacity of around 55-60%. As the consumption increases, the capacity exists with us. We are going to make a big investment in central India at Jabalpur and that is going to be our largest plant and will have newer technology. And, we are thinking of making eCommerce products from the same plant because it is located in the central part due to which ease distribution is possible from there. So, if we have a look at the value of these investments collectively then it will be around Rs 200 crore in the next two years’ time.
Q: How are TDI Prices and how do you see this impacting you? Going forward, what levels are you expecting from it?
A: TDI price has come down significantly by now relative to what it used to be, once it even reached to Rs 250 a kilo and now it is down to Rs 160 a kilo. I expect that in the next two months it will decline further because this is a time, which is not quite productive for the markets globally. And production is there in India and export chances are low, therefore, we are expecting that the prices will fall further but not a lot because after that it will get below the economic level and the manufacturers will face difficulties, so, reverse cycle will start. But we always talk about TDI because in the last few years TDI prices have been fluctuating a lot but our second major chemical polyol unfortunately in the last four months has also gone through the roof, i.e. it used to be at a level of Rs 100-125 and that to of Rs 250 has also fallen and I feel that in the next two-three months the prices are going to remain at relatively lower levels and be stable with a variation of Rs 2-4.
Q: Which are the segments where demand ad volumes have increased? You have talked about Mattresses but also tell us about the demand situation in the automotive and furniture foam segment?
A: Automotive demand is directly proportional to how the auto industry is moving and it depends on them. So, you would know more than me that how the auto industry has been it is also going through Ups and downs. Again, the latest report some 3-4 days old it that it is picking up again, which is very good. As far as the furniture industry is concerned, people were holding things a bit and now as markets are opening, we are experiencing that people are reverting back in purchasing new products. At our place, works related to refurbishment or repairing of the existing furniture like a change of tapestry and foam has started and it seems since last week. It is at its peak during the festive season, mainly during Diwali. So, we can just pray to God that the third wave should not be there and the vehicle that has started moving should keep getting the momentum.
Q: What are your expectations about margins in the time to come and do you think that they will be better than the existing levels or slight fall can be seen which will be compensated through the volumes?
A: As a percentage, the margins will reduce but the total quantum – because the volumes will increase -will be maintained at its level. A slight impact will be seen due to a reduction in raw material prices. Therefore, there is a good chance that for the next two to four months the margins should be maintainable.
Q: But going forward what can be the margin level after maintaining it at these levels for few months? From the shareholders perspective, what are your projections related to the top line, bottom line and margins for the next two to three years?
A: It is a time, about which we have talked more, maybe it is CORONA, lockdown and open up. As stable positions are attained gradually, the general works or action taken by our end due to which constantly the margins are being pushed up and the average selling prices are being pushed up, better products that are being offered to the consumers and to be there in the markets where we are not present. So, I believe that with the percentage that is an indication that it should keep increasing in the next two years’ time. Right now, maybe we are hovering around 14% to 14.50% but expect it to go up to 15.50% to 16%.
Q: What will be your strategy in relation to acquisition and do you have any opportunities in India or abroad where you can look forward to acquisition for quick growth?
A: It is available at both the places, and we will try that the two major segments in which we work, and they are (i) foam and its manufacturing including all the technical foams that are required by the automobiles, helmets and shoes and (ii) bedding segment and branded segment, where we reach to the consumers. There are one to two opportunities in these areas in India where our interest will be there and that is on the consumer side of the business. When we see in the foreign land, we see towards where we have strength like technical parts, foam manufacturing, raw material procurement and efficiencies and this is an opportunity. And there is a stir at both places. I can’t talk specifically about anything right now but unfortunately; these are the things that when it will mature then it happens. But we are open to them and in our plan, inorganic growth is an important part.
June 24, 2021
BASF buys 49.5% of Vattenfall Dutch offshore wind farm for €300M
Jun. 24, 2021 9:17 AM ETBASF SE (BASFY)By: Carl Surran, SA News Editor1 Comment
- BASF (OTCQX:BASFY) agrees to acquire a 49.5% stake in the Hollandse Kust Zuid offshore wind farm from Swedish utility Vattenfall for €300M ($358M), as the company raises its investments in renewable energy to offset carbon emissions at production sites across Europe.
- Construction of the wind farm will start in July, with the project expected to become fully operational in 2023, pending approval by authorities.
- The project, which includes 140 wind turbines and a total capacity of 1.5 GW, will become the world’s largest wind farm and supply power to BASF’s plant in Antwerp, Belgium, and other European sites.
- BASF and German utility RWE last month announced a potential €4B offshore wind project.
June 24, 2021
BASF buys 49.5% of Vattenfall Dutch offshore wind farm for €300M
Jun. 24, 2021 9:17 AM ETBASF SE (BASFY)By: Carl Surran, SA News Editor1 Comment
- BASF (OTCQX:BASFY) agrees to acquire a 49.5% stake in the Hollandse Kust Zuid offshore wind farm from Swedish utility Vattenfall for €300M ($358M), as the company raises its investments in renewable energy to offset carbon emissions at production sites across Europe.
- Construction of the wind farm will start in July, with the project expected to become fully operational in 2023, pending approval by authorities.
- The project, which includes 140 wind turbines and a total capacity of 1.5 GW, will become the world’s largest wind farm and supply power to BASF’s plant in Antwerp, Belgium, and other European sites.
- BASF and German utility RWE last month announced a potential €4B offshore wind project.
June 22, 2021
LyondellBasell CEO Bob Patel talks the greening of a chemical company
Marcy de Luna, Staff writerJune 14, 2021Updated: June 14, 2021 3:03 p.m. Comments 5
Bob Patel has played a pivotal part of LyondellBasell through two key chapters since joining the company in 2010: restructuring and growth. The third chapter, sustainability, is about to begin.
After 20 years at Chevron Phillips Chemical Co. Patel joined LyondellBasell in March 2010, formed with the merger of Houston’s Lyondell Chemical and Basell of the Netherlands in a leveraged buyout in 2007, as the Houston oil refiner and chemical company was about to emerge from bankruptcy on April, 30, 2010.
Thus began Chapter One of Patel’s career at LyondellBasell, restructuring.
As senior vice president of olefins and polyolefins Americas and later as executive vice president of that same segment for Europe, Asia and International, Patel helped consolidate and reorganize operations in the United States and Europe as the company worked to boost the capacity of its plants along the Gulf Coast.
Chapter Two included an ambitious investment plan crafted by Patel after becoming CEO in January 2015. The company purchased Ohio plastics maker A. Schulman in August 2018 for $2.2 billion, its first major acquisition since emerging from bankruptcy. That same month, the company began construction on a $3.4 billion plant in Channelview. Construction of the propylene oxide/tertiary butyl alcohol plant, slowed due to COVID-19, is expected to be completed in the fourth quarter of 2022.
In December 2020, amid the pandemic, LyondellBasell acquired 50 percent of South African company Sasol’s base chemicals business at Lake Charles for $2 billion.
Now, Chapter Three, sustainability, is about to begin. That includes part of a $25 million investment, in partnership with Michigan’s Dow Chemical hand Calgary-based Nova Chemicals, in the Closed Loop Circular Plastics Fund in May to update and modernize facilities and equipment that would source, process and return currently hard-to-recycle plastics to supply chains in the U.S. and Canada.
Q: In addition to the Closed Loop Circular Plastics Fund, what else is ahead for the company as it enters this next chapter?
A: We will continue to try and grow the company, but we now need to think about being a greener chemical company.
We have three prongs to our work around recycling. The first is mechanical recycling. We have a mechanical recycling plant in Europe. The small plant to further prove out the technology is through our joint venture with Suez, a waste-handling company in Europe, called Quality Circular Polymers. They bring waste to our facility, and then we sort the waste, wash it and create new recycled plastic from it that goes into things like the Magnum ECO Samsonite suitcase.
The second pillar in our recycling effort is called advanced recycling, or molecular recycling. What we’re aiming to do is take plastic waste and convert it back to a feedstock.
The third pillar is bio based feedstocks. We buy used cooking oil, for example, process it and make plastics.
Q: How big a part of the business do you see this being?
A: It is too early to say exactly what percentage of our business will come from this technology.
Without plastics, we can’t carry on everyday life. We’ve got to address the waste, and our company is leading the way in mechanical recycling and molecular recycling. My hope is that we’re building molecular recycling plants in Europe and Houston by the middle of the decade and, by the second half of the decade, we’ll build dozens of those around the world.
We’ll license it as well. We want to share that technology so the world can benefit from the ability to recycle waste. I hope that we’re the ones who develop that.
Q: The company saw no layoffs or furloughs during the pandemic, even with the near shutdown of the global economy. How did you manage that?
A: After going through all of the layoffs during bankruptcy, which I led, one of the things that I wrote down, when I was appointed to be CEO, was there will be no layoffs during my time as CEO.
We did a number of things on the cost front. For example, reducing non-safety related discretionary spending such as travel. We also slowed construction on our propylene oxide/tertiary butyl alcohol plant in Channelview.
COVID-19, as a test for the company, proved that we’ve built something that’s really strong and resilient. We didn’t borrow a single dollar to pay a dividend, or to pay payroll. We funded everything from operating cash flow, and we did a $2 billion acquisition of Sasol in the middle of the pandemic.
My philosophy at the time was, I want to keep everything as normal as possible. Everything was business as usual. It expressed confidence to our employees. Part of my job as a leader during this whole period was to be honest and not sugarcoat things, but if I’m not confident, how do I expect our employees to be confident?
Q: Revenue last year was down 20 percent from 2019. Things have turned around this year, with first quarter revenue 21 percent higher than the first quarter of 2020.
A: As the recovery took hold in the U.S. last year, especially in the second half, we could see demand recovering. Through the pandemic, plastics demand increased because of all the (demand for) carryout food containers and packaging.
Where we got hit hard was on the fuel side with gasoline and jet fuel. Our refinery really struggled and is still struggling. But the rest of the business was actually pretty good through the pandemic.
Now, a reopening of the economy is happening and demand is going up even more.
Q: What new challenges came out of February’s historic winter storm?
A: We had the February freeze, which knocked out almost the whole chemical industry and refining industry for about 30 to 45 days. We’ve never had that kind of outage as an industry, ever. Even during hurricanes, we’re down for a week and then we’re back up again.
The power outages, because they were so sudden, damaged a lot of equipment. We need about two days to safely shut down a big chemical plant. We can’t shut down in three hours. So supply was curtailed for 45 days and there is hardly any inventory.
Q: When will the shortages in supply end?
A: Probably the middle of next year. It’s going to take some time because of the (high) reopening-related demand that’s still in front of us.
If you think about how many different products are short today – with automobiles, there’s not enough supply because of the chip shortages, people are deferring purchases of furniture because it’s not available, seat cushions are made out of propylene oxide, as in the new plant that we’re building in Channelview, appliances – it’s everything.
Q: Where do you see the company heading as the world comes out of the pandemic?
A: At some point, the inventory is going to have to be rebuilt. That will cause a one-time boost in demand to get the inventory back to where it should be. This points to a very strong global business environment well into next year before we get to a balance of supply and demand.
If there are plant shutdowns because of a hurricane, that’s just going to make things even tighter again.
June 22, 2021
LyondellBasell CEO Bob Patel talks the greening of a chemical company
Marcy de Luna, Staff writerJune 14, 2021Updated: June 14, 2021 3:03 p.m. Comments 5
Bob Patel has played a pivotal part of LyondellBasell through two key chapters since joining the company in 2010: restructuring and growth. The third chapter, sustainability, is about to begin.
After 20 years at Chevron Phillips Chemical Co. Patel joined LyondellBasell in March 2010, formed with the merger of Houston’s Lyondell Chemical and Basell of the Netherlands in a leveraged buyout in 2007, as the Houston oil refiner and chemical company was about to emerge from bankruptcy on April, 30, 2010.
Thus began Chapter One of Patel’s career at LyondellBasell, restructuring.
As senior vice president of olefins and polyolefins Americas and later as executive vice president of that same segment for Europe, Asia and International, Patel helped consolidate and reorganize operations in the United States and Europe as the company worked to boost the capacity of its plants along the Gulf Coast.
Chapter Two included an ambitious investment plan crafted by Patel after becoming CEO in January 2015. The company purchased Ohio plastics maker A. Schulman in August 2018 for $2.2 billion, its first major acquisition since emerging from bankruptcy. That same month, the company began construction on a $3.4 billion plant in Channelview. Construction of the propylene oxide/tertiary butyl alcohol plant, slowed due to COVID-19, is expected to be completed in the fourth quarter of 2022.
In December 2020, amid the pandemic, LyondellBasell acquired 50 percent of South African company Sasol’s base chemicals business at Lake Charles for $2 billion.
Now, Chapter Three, sustainability, is about to begin. That includes part of a $25 million investment, in partnership with Michigan’s Dow Chemical hand Calgary-based Nova Chemicals, in the Closed Loop Circular Plastics Fund in May to update and modernize facilities and equipment that would source, process and return currently hard-to-recycle plastics to supply chains in the U.S. and Canada.
Q: In addition to the Closed Loop Circular Plastics Fund, what else is ahead for the company as it enters this next chapter?
A: We will continue to try and grow the company, but we now need to think about being a greener chemical company.
We have three prongs to our work around recycling. The first is mechanical recycling. We have a mechanical recycling plant in Europe. The small plant to further prove out the technology is through our joint venture with Suez, a waste-handling company in Europe, called Quality Circular Polymers. They bring waste to our facility, and then we sort the waste, wash it and create new recycled plastic from it that goes into things like the Magnum ECO Samsonite suitcase.
The second pillar in our recycling effort is called advanced recycling, or molecular recycling. What we’re aiming to do is take plastic waste and convert it back to a feedstock.
The third pillar is bio based feedstocks. We buy used cooking oil, for example, process it and make plastics.
Q: How big a part of the business do you see this being?
A: It is too early to say exactly what percentage of our business will come from this technology.
Without plastics, we can’t carry on everyday life. We’ve got to address the waste, and our company is leading the way in mechanical recycling and molecular recycling. My hope is that we’re building molecular recycling plants in Europe and Houston by the middle of the decade and, by the second half of the decade, we’ll build dozens of those around the world.
We’ll license it as well. We want to share that technology so the world can benefit from the ability to recycle waste. I hope that we’re the ones who develop that.
Q: The company saw no layoffs or furloughs during the pandemic, even with the near shutdown of the global economy. How did you manage that?
A: After going through all of the layoffs during bankruptcy, which I led, one of the things that I wrote down, when I was appointed to be CEO, was there will be no layoffs during my time as CEO.
We did a number of things on the cost front. For example, reducing non-safety related discretionary spending such as travel. We also slowed construction on our propylene oxide/tertiary butyl alcohol plant in Channelview.
COVID-19, as a test for the company, proved that we’ve built something that’s really strong and resilient. We didn’t borrow a single dollar to pay a dividend, or to pay payroll. We funded everything from operating cash flow, and we did a $2 billion acquisition of Sasol in the middle of the pandemic.
My philosophy at the time was, I want to keep everything as normal as possible. Everything was business as usual. It expressed confidence to our employees. Part of my job as a leader during this whole period was to be honest and not sugarcoat things, but if I’m not confident, how do I expect our employees to be confident?
Q: Revenue last year was down 20 percent from 2019. Things have turned around this year, with first quarter revenue 21 percent higher than the first quarter of 2020.
A: As the recovery took hold in the U.S. last year, especially in the second half, we could see demand recovering. Through the pandemic, plastics demand increased because of all the (demand for) carryout food containers and packaging.
Where we got hit hard was on the fuel side with gasoline and jet fuel. Our refinery really struggled and is still struggling. But the rest of the business was actually pretty good through the pandemic.
Now, a reopening of the economy is happening and demand is going up even more.
Q: What new challenges came out of February’s historic winter storm?
A: We had the February freeze, which knocked out almost the whole chemical industry and refining industry for about 30 to 45 days. We’ve never had that kind of outage as an industry, ever. Even during hurricanes, we’re down for a week and then we’re back up again.
The power outages, because they were so sudden, damaged a lot of equipment. We need about two days to safely shut down a big chemical plant. We can’t shut down in three hours. So supply was curtailed for 45 days and there is hardly any inventory.
Q: When will the shortages in supply end?
A: Probably the middle of next year. It’s going to take some time because of the (high) reopening-related demand that’s still in front of us.
If you think about how many different products are short today – with automobiles, there’s not enough supply because of the chip shortages, people are deferring purchases of furniture because it’s not available, seat cushions are made out of propylene oxide, as in the new plant that we’re building in Channelview, appliances – it’s everything.
Q: Where do you see the company heading as the world comes out of the pandemic?
A: At some point, the inventory is going to have to be rebuilt. That will cause a one-time boost in demand to get the inventory back to where it should be. This points to a very strong global business environment well into next year before we get to a balance of supply and demand.
If there are plant shutdowns because of a hurricane, that’s just going to make things even tighter again.
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