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Petrochemicals05-Dec-2024
PARIS (ICIS)–Global specialty chemicals
producer Arkema aims to supercharge growth in
key targeted markets by leveraging proprietary
chemistries to develop new products with clear
sustainability and performance benefits.
From France-based Arkema’s spinoff from energy
giant Total (now TotalEnergies) in 2006, the
company has undergone a major transformation
from a diversified chemical company with a
mixed bag of commodity, intermediates and
specialty businesses, to nearly a pure play
specialty and materials business today.
“We had to revisit the strategy of the company
in-depth, and we had a strong belief at that
time that there was an exponential growth
[opportunity] in innovative and high
performance materials,” said Thierry Le Henaff,
chairman and CEO of Arkema, in a
video interview with ICIS.
“So our strategy was to focus on specialty
materials around three segments – adhesives,
coatings solutions, and also high performance
additives and polymers in order to make Arkema
a pure specialty player,” he added.
Le Henaff is the 2024 ICIS CEO of the Year,
having been selected in a vote among his peers
– the CEOs and senior executives in the ICIS
Top 40 Power Players.
M&A STRATEGY AND LATEST
DEALSThe latest move in the
company’s transformation is the acquisition of
Dow’s flexible packaging laminating adhesives
business for $150 million which just closed on
2 December.
The deal adds about $250 million in sales to
Arkema’s Bostik adhesives business, and Le
Henaff calls it a “step change” for Bostik in
the flexible packaging adhesives market, giving
it a unique opportunity to be a key partner for
customers across the packaging industry.
Arkema will spend around $50 million in
implementation costs or capex related to the
acquisition and is targeting about $30 million
in annual cost and development synergies after
five years.
“We are going to continue to invest in… cost
optimization, but at the same time continue to
change the portfolio, which means to invest in
M&A,” said Le Henaff.
The Dow deal comes on top of major acquisitions
such as a 54% stake in South Korea-based PI
Advanced Materials (polyimide films for mobile
devices and electric vehicles) in December 2023
and US-based Ashland’s performance adhesives
business (pressure-sensitive adhesives for auto
and buildings) in February 2022.
While the company will now focus more on
organic growth, bolt-on acquisitions will be an
important part of Arkema’s strategy in the
coming years, he noted.
One such smaller bolt-on deal was the April
2024 acquisition of a 78% stake in
Austria-based Proionic, a start-up company for
the development of ionic liquids, a key
component for the next generation of EV
batteries.
HYPER GROWTH
SUBMARKETSSpeaking of organic
growth, the Arkema CEO has an ambitious goal of
growing sales in certain parts of its specialty
businesses at a rate triple that of its overall
business through 2028.
These high growth areas are green energy and
electric mobility; advanced electronics;
efficient buildings and homes; sustainable
lifestyle; and water filtration, medical
devices and crop nutrition.
“It is really with this combination of our
technologies [in] these submarkets… where we
want to multiply by three, the average growth
of Arkema. This means that in this market, we
could deliver 12% organic growth while for the
average of Arkema it would be 4%,” said Le
Henaff.
Arkema aims to grow these businesses from
around 15% of sales in 2023, to 25% of total
sales, which are projected to be around €12
billion, by 2028.
These high growth areas with three times higher
sales than the group average will account for
50% of the company’s R&D budget.
“We have about 15 technologies, superior
technologies, where we can really differentiate
ourselves. Our strategy is really to take
advantage of this sustainability trend,” said
Le Henaff.
“In fact, the answer to climate change is
through the solutions we can develop for
customers. This is really the core of our
strategy,” he added.
Within electric mobility, in addition to the
acquisition of a majority stake in Proionic,
Arkema in January 2024 took a stake in Tiamat,
a pioneer in sodium-ion battery technology – a
potential alternative to lithium-ion batteries.
RENEWABLE RAW MATERIALS AND
DECARBONIZATIONArkema is also
undertaking organic growth projects in these
hyper growth submarkets.
One key project is in bio-based polyamide 11,
used in bicycle helmets, consumer goods, wire
and cable and medical equipment.
“We are adding more and more renewable raw
materials in the product range we are offering
to our customers. One good example and very
emblematic [of our strategy] is this polyamide
11 made from castor oil, which is a fully
sustainable, renewable, bio-sourced, high
performance polymer,” said Le Henaff.
“We are very proud of it, and we have just
invested in a plant in Singapore to accelerate
the growth of this polymer,” he added.
Its Rilsan bio-based PA 11 has an 80% lower
carbon footprint versus traditional polyamide
resins using fossil-based raw materials and
conventional energy sources, according to the
company.
Arkema also recently launched more sustainable
adhesive solutions, including its Kizen LIME
range of packaging adhesives made with a
minimum of 80% renewable ingredients, and
Bostik Fast Glue Ultra+ for do-it-yourself
(DIY) applications with 60% bio-based
materials.
Along with helping its customers decarbonize,
the company is also decarbonizing its own
operations, targeting a 48.5% reduction in
Scope 1 and 2 emissions, and a 54% reduction in
Scope 3 emissions by 2030 versus a 2019 base.
One major project is to decarbonize its
acrylics production in Carling, France by
installing new purification technology. The
€130 million project should result in a 20%
reduction in CO2 emissions at the site by 2026.
GLOBAL FOOTPRINTAlong
with its transformation into pure play
specialties, Arkema has also diversified its
global footprint, with more exposure in North
America than Europe.
Today Arkema is a global player with close to
40% of sales in North America, 25% in Asia and
around a third in Europe, versus Europe at
about 60% of sales when it was spun off in
2006, the CEO pointed out.
“I still believe in Europe, but it’s clear that
we have a gap in competitiveness and also in
demand. The pace of demand is slower for Europe
than it is for the rest of the world,” said Le
Henaff.
“It’s very important that our governments and
the European Commission understand that the
cost of doing business in Europe is too high
compared to what it is in the rest of the world
because of legislation, because of the cost of
energy, because of the cost of raw materials,”
he added.
There is much work to do on this front to get
Europe back to competitiveness and growth,
especially for chemicals, he said.
DEMONSTRATING
RESILIENCEArkema’s geographic
diversification and specialties focus has made
it more resilient to challenging macroeconomic
markets.
In Q3, sales rose 2.9% year on year to €2.39
billion and adjusted earnings before interest,
tax, depreciation and amortization (EBITDA)
increased 5.4% to €407 million, the latter
driven by 9.0% growth in specialty materials,
offsetting a 7.3% decline in intermediates
segment. Its overall EBITDA margin expanded to
17.0% versus 16.6% a year ago.
A strong focus on efficiency and a healthy
balance sheet has served it well.
“Arkema over 20 years has doubled in size and
we have a set number of headcount. This means
that competitiveness and productivity is very
important for Arkema, even if we are less vocal
than other companies on this topic,” said Le
Henaff.
On the balance sheet side, net debt of around
€3.11 billion is “tightly controlled” at a
conservative two times last 12 months EBITDA.
TRANSFORMATION NEVER
OVERKey to success for Arkema is
to continuously evolve, be nimble and be open
to growth opportunities.
“It’s never over. The status quo in this world
is not possible, because the world is changing
all the time, because of demography, because of
geopolitics, for plenty of reasons, so we have
to move forward,” said Le Henaff.
“There are plenty of opportunities, but the
opportunities of today won’t be the
opportunities of tomorrow. So we really need to
have a company which is structured to be able
to catch these new opportunities which arise
all the time,” he added.
Meanwhile, on the macro-outlook for 2025, he is
cautiously optimistic.
“We are all cautious because we thought 2023
would be the year of the rebound and also 2024,
so we have to be cautious for 2025. But I’m
cautiously optimistic,” said Le Henaff.
“I still think that we should have some kind of
rebound for 2025. We’ll see if I’m right or
not, but in the meantime, I would say the most
important thing is we need to continue
[evolving]. We are very glad to be in a unique
position because at the end of 2024, we will
have nearly fully financed billions of euros of
projects, including external growth and organic
growth,” he added.
PEOPLE AND CULTUREKey to
any ongoing transformation is of course the
people involved. Arkema deems it critical to
keep its people engaged with the mission.
“I think, in a world which is quite volatile,
quite changing, it’s very important to have
fixed points,” said Le Henaff.
First, the long-term strategy and vision has to
be attractive. But equally as important is
having a corporate culture with clear and
simple values. These five values for Arkema
are: Solidarity, Performance, Simplicity,
Empowerment and Inclusion.
It is the culture that amplifies the inherent
strengths in an organization, including
technology, and smooths the path for continued
successful transformation in an uncertain
world, he said.
Interview article by Joseph
Chang
Watch the exclusive Q&A video
interview with Arkema CEO Thierry Le Henaff on
the
2024 ICIS CEO of the Year landing
page.
Polyethylene Terephthalate05-Dec-2024
HOUSTON (ICIS)–Announced this week,
beverage giant The Coca-Cola Company has
updated many of their 2030 sustainability
goals, in some cases delaying and minimizing
targets, in other cases removing tangible goals
all together.
All goals have now been extended to a 2035
timeline.
In support of this move, the company notes that
they have assessed progress and identified
challenges to achieving their original 2030
goals. This comes as companies grapple with the
premium often associated with sought after
food-grade, clear recycled resins, especially
amid a weaker global macroeconomic environment.
“These challenges are complex and require us to
drive more effective and efficient resource
allocation and work collaboratively with
partners to deliver lasting positive impact,”
noted Bea Perez, Executive Vice President and
Global Chief Communications, Sustainability
& Strategic Partnerships Officer at The
Coca‑Cola Company.
This comes as the company has faced rocky unit
case sales volumes in the North American market
over the last several quarters. Most recently,
the company posted flat quarter on quarter
results, an improvement over negative volumes
the prior quarter.
In relation to packaging, the original goal of
50% recycled content by 2030 has been
downgraded to a target of 35-40% recycled
content in primary packaging. Specifically,
they aim to reach 30-35% recycled content in
their plastic packaging, which makes up nearly
50% of their packaging mix by number of units.
In
2023, the company noted 27% of their
primary packaging material by weight came from
recycled content, 17% of which was recycled
plastic.
This now leaves a 10-year runway to achieve an
additional increase of just 8% to reach their
new recycled content target and 13% to reach
their recycled plastic target.
Additionally, the company has reduced their
beverage container collection target from 100%
by 2030 to 70-75% by 2035. As of 2023, the
company noted 62% of the equivalent bottles and
cans introduced into the market were collected
for recycling or reuse.
When looking at packaging design, the company
noted they had converted more than 95% of their
packaging to recyclable formats, nearing the
100% by 2025 goal.
As many other converters and brand companies
have also reckoned with, it can be very
difficult to convert the final items, ones
which typically require a complete re-design or
additional cost to comply with recycling
requirements.
The company has now removed a virgin resin
reduction goal, amid a poor result in 2023,
where virgin plastic use actually increased due
to business related growth.
The prior reuse and refill goal was also
removed.
Coca-Cola now joins several other brand
companies, such as Unilever, PepsiCo who have
delayed or reduced their original ambitious
goals amid bottom line pressure.
It is uncertain how brand companies will
demonstrate their commitment to packaging
circularity sustainability in the long term,
especially as leaders around the globe continue
negotiating towards a global treaty on plastic
pollution.
While voluntary goals have boosted demand for
recycled plastics markets, many recyclers and
suppliers note that actual procurement efforts
have been inconsistent. Many believe regulatory
requirements are the only solution to securing
long term demand for these materials.
Crude Oil05-Dec-2024
SINGAPORE (ICIS)–South Korea is preparing to
activate a market stabilization fund worth won
(W) 40 trillion ($28 billion) following the
country’s brief dalliance with martial law,
with its slowing economy facing the prospect of
increased US tariffs in 2025.
KOSPI index falls
for second day
Prospective US tariffs to hurt exports
Q3 GDP growth slows to 1.5% on year, up
0.1% on quarter
At 06:30 GMT, the KOSPI composite index fell by
0.90% to close at 2,441.85, after shedding 1.4%
in the previous session.
The Korean won, meanwhile, was trading at
W1,415 to the US dollar, off the lows of more
than W1,440 on 3 December.
While the fallout of the political crisis on
the financial markets appears to be contained,
South Korea may be bracing for further
volatility next year.
“As the domestic situation coincides with the
external uncertainty caused by the inauguration
of the new US administration, there is a
possibility that volatility will increase, so
the relevant agencies will closely monitor the
market situation together and take all possible
measures,” the Ministry of Economy and Finance
said on Thursday.
A task force has been created to check on the
country’s overall economic health.
Much of the concern stems from threats of US
tariffs on all imported goods, which would
affect Asia’s export-oriented economies
including South Korea.
Weak external demand caused the country’s
overall export growth in November to decelerate
to 1.4% year on year.
In Q3, South Korea’s annualized GDP growth
slowed to 1.5% year on year due to weakness in
both domestic demand and exports, official data
showed on Thursday.
This economic weakness prompted the Bank of
Korea (BoK) to cut its policy interest rates by
25 basis points twice in two months.
Full-year 2024 and 2025 growth forecasts were
trimmed to 2.2% and 1.9% respectively.
On a quarter-on-quarter basis, the fourth
largest economy in Asia barely expanded in Q3,
but the 0.1% growth represents a reversal of
the 0.2% contraction in April-June, according
to the central bank.
On the supply side, manufacturing increased by
0.2% on quarter mainly due to increases in
transportation equipment and machinery and
equipment.
Construction fell by 1.4% and services expanded
by 0.2% on a quarter-on-quarter basis.
Exports decreased by 0.2% on quarter as
shipments of motor vehicles and chemical
products dropped. Imports, on the other hand,
rose by 1.6% due to increased demand for
machinery and equipment.
The cloudy political
climate in the country is not expected to
affect South Korea’s sovereign ratings and
growth prospects, S Korean central bank
governor Rhee Chang-yong was quoted by local
news agency Yonhap as saying in a press
briefing.
“The martial law declaration was purely out of
political reasons. We can separate such
political events from economic dynamics,” Rhee
said.
He noted that the Korean won, which “weakened
due to the negative news” is forecast to
“gradually rise if there are no new shocks”.
The won tumbled to a near two-year low of
W1,444 against the US dollar on 3 December, but
eased after martial law was lifted some hours
later.
Impeachment motions
lodged at the National Assembly against South
Korean President Yoon Suk-yeol are up for
voting on 7 December.
“It is hard to forecast how things will unfold
regarding the impeachment process, which adds
uncertainties to the market.
“But I also believe that the matter is not
likely to give a shock to the market if history
serves as any guide,” the central bank chief
said, as reported by Yonhap.
In a separate development, unionized workers of
national railway operator Korea Railroad Corp
(KORAIL) launched a strike from Thursday after
failing to reach a wage agreement, according to
media reports.
Focus article by Pearl
Bantillo
Additional reporting by Fanny Zhang
Thumbnail image: Members of Korean
Confederation of Trade Unions (KCTU) and civic
groups hold placards and lighted candles during
a demonstration calling for the dismissal and
impeachment of South Korean president in Seoul,
South Korea, 4 December 2024. (JEON
HEON-KYUN/EPA-EFE/Shutterstock)
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Polypropylene05-Dec-2024
SINGAPORE (ICIS)–Indonesia has initiated an
antidumping investigation on imported
polypropylene (PP) homopolymer products,
according to a government document obtained by
ICIS on Thursday.
The products are under HS code 3902.10.40,
based on the document dated 4 December from the
Indonesian Anti-Dumping Committee (KADI).
The investigation was requested by PT Chandra
Asri Pacific and targeted at exporters from
Saudi Arabia, the Philippines, South Korea,
Malaysia, China, Singapore, Thailand and
Vietnam, according to the document.
Initial evidence suggests incidents of dumping
by these exporters, resulting in losses
suffered by players in the domestic industry in
Indonesia which are producing similar products,
KADI said.
A questionnaire will be sent to those involved
and interested parties can submit feedback or
request a public hearing no later than 17
December, two weeks from the date of the
notice.
(Adds paragraphs 3-4)
Polypropylene05-Dec-2024
SINGAPORE (ICIS)–Indonesia has initiated an
antidumping investigation on imported
polypropylene (PP) homopolymer products,
according to a government document obtained by
ICIS on Thursday.
The products are under HS code 3902.10.40,
based on the document dated 4 December from the
Indonesian Anti-Dumping Committee (KADI)
A questionnaire will be sent to those involved
and interested parties can submit feedback or
request a public hearing no later than 17
December, two weeks from the date of the
notice.
Crude Oil04-Dec-2024
HOUSTON (ICIS)–Crude and chemical markets have
had little reaction so far to developments in
France. The government of President Emmanuel
Macron fell after members of Parliament (MPs)
voted to oust Prime Minister Michel Barnier.
Barnier was appointed by Macron in September
and was voted out by a combination of left- and
right-wing MPs after the opposition parties
objected to the budget put forth by the prime
minister, according to French media reports.
Macron has vowed to remain in office until his
term expires in 2027 and will need to appoint a
new prime minister before work on putting
together a new government.
European stock markets closed higher ahead of
the vote as investors prepared for the
no-confidence vote.
Brent and WTI crude prices fell by more than a
dollar, because of expectations that OPEC will
extend its output cuts when it meets this week
and on US government data showing a build in
gasoline and distillate inventories that
countered a drawdown in crude oil supplies.
Speciality Chemicals04-Dec-2024
HOUSTON (ICIS)–US November sales of new light
vehicles ticked higher from the previous month
and rose compared with the same month a year
ago, but proposed tariffs on Mexican and
Canadian imports by President-elect Donald
Trump could create further headwinds for the
industry.
Data from the US Bureau of Economic Analysis
(BEA) shows year-to-date sales up by 1.7%. The
following chart shows US auto sales from 1989
to present.
Note: Gray bars show when the US was in a
recession
Auto sales are important because the auto
industry is a key end market for chemicals
demand.
Although automobile sales and foreign truck
sales were weak, this was offset by a strong
gain in domestic light truck sales, according
to Kevin Swift, senior economist for global
chemicals at ICIS.
“Affordability has been an issue in this market
and is showing signs of improvement, which, if
continued, will provide further tailwinds,”
Swift said.
But shares of publicly traded US automakers
fell last week after Trump announced that he
plans on levying 25% tariffs on all products
from Canada and Mexico as well as an additional
10% tariff on goods from China – all three of
which are critical sources for the auto
industry’s global supply chain.
Swift said the latest report indicates that US
consumers continue to be in the market for new
vehicles and that continued improvement in
sales will benefit industrial production.
Swift said that inventories on dealer lots have
improved by almost 46% compared with the same
month a year ago, which should also help boost
sales.
CHEMS USED IN AUTOS
Demand for chemicals in auto production comes
from, for example, antifreeze and other fluids,
catalysts, plastic dashboards and other
components, rubber tires and hoses, upholstery
fibers, coatings and adhesives, Swift said.
Virtually every component of a light vehicle,
from the front bumper to the rear taillights,
features some chemistry.
The latest data indicate that polymer use is
about 423 pounds (192kg) per vehicle.
Meanwhile, electric vehicles (EVs) and
associated battery markets are an important
growth opportunity for the chemical industry,
with chemical producers separately developing
battery materials, as well as specialty
polymers and adhesives for EVs.
Please also visit the ICIS
topic page Automotive: Impact on Chemicals
Crude Oil04-Dec-2024
SINGAPORE (ICIS)–Days before the shock
declaration of martial law in South Korea by
President Yoon Suk-yeol, political wranglings
stalled the 2025 budget deliberations of Asia’s
fourth-biggest economy.
Opposition DPK wants heavy cut in 2025
national budget
Impeachment looms for President Yoon
No impact on petrochemical
operations/trades
“Tensions between the ruling PPP [People Power
Party] and main opposition Democratic Party of
Korea (DPK) have escalated as both sides have
been unable to come to a consensus on the
budget,” according to BMI Country Risk &
Industry Research, a unit of Fitch Solutions
Group in a note on Wednesday.
DPK has proposed heavy cuts – to the tune of
won (W) 4.1 trillion ($2.9 billion) – to the
Yoon administration’s proposed budget of W677.4
trillion for next year, which represents a 3.2%
increase from 2023.
“As things stand, Yoon’s proposed 2025 budget …
faces the risk of being watered down to
KRW673.3trn amid strong opposition from the DPK
which holds a parliamentary majority,” BMI
stated.
QUITE AN UNEXPECTED MOVE
Most South Koreans, including players in the
petrochemical industry, like the rest of the
world, were baffled at Yoon’s declaration of
emergency martial law late on 3 December.
The last time the highly industrialized country
in Asia faced martial law was in 1979, and no
recent developments in the geopolitical and
financial sectors of the country indicated that
such a drastic measure would be taken.
At close to midnight, Yoon had declared martial
law – which meant military rule and curbs on
civil rights – on national television noting
that it was meant to crack down on pro-North
Korean forces and protect the constitutional
order in the country.
“Martial law was quite surprising for us to
hear because it hasn’t happened in the last 40
years,” said a soda ash distributor.
The declaration of martial law and its
withdrawal hours later has thrown South Korea
into political instability. It was highly
disruptive for market sentiment that for a
time, suspension of trading was mulled, but was
eventually called off when the martial law was
rescinded about six hours after it was
declared.
South Korea’s Ministry of Finance and Economy
and the Bank of Korea assuaged market fears of
disruption by offering “unlimited liquidity
support” to ensure market stability,
immediately after the martial law declaration.
The won weakened near two-year lows against the
US dollar on 3 December at around W1,440 but
recovered to around W1,412 levels as of
Wednesday afternoon.
The benchmark KOSPI composite index closed off
lows at 2,464.00, down 1.44% from the previous
day, after falling nearly 2% in intraday trade.
“For now, we expect limited implications for
the economy and financial markets as the Bank
of Korea and the Ministry of Finance have
responded swiftly by reassuring investors,” BMI
said.
“Notably, the central bank committed to
boosting short-term liquidity and enacting
measures to stabilise the FX [foreign exchange]
markets, which aligns with our view that risks
around the South Korean won, should remain
contained for now,” it added.
The central bank held an emergency monetary
policy meeting on Wednesday morning, with the
Monetary Board deciding “to keep all options
open and to actively take market stabilization
measures until markets are fully stabilized”.
In late November, the BoK issued its second
interest rate cut in as many months to prop up
the economy, while trimming its GDP growth
forecasts for this year to 2.2%, and for 2025
to 1.9%.
In Q3, the country’s GDP
growth decelerated to 1.5% from a 2.3% pace
set in Q2.
The South Korean economy is expected to face
added pressure next year amid US threats to
impose tariffs on all imported goods.
Like most of Asia, the country is heavily
reliant on exports, with China and the US as
its biggest trade partners.
South Korea’s export growth in November
weakened to 1.4% year-on-year to $56.4 billion,
while imports shrank by 2.4% to $50.7 billion,
indicating domestic weakness.
YOON’S FUTURE UNCERTAIN
Calls for Yoon’s resignation is mounting, with
lawmakers from DPK saying that if he does not
resign immediately, steps will be taken to have
him impeached.
“We anticipate heightened political uncertainty
in the near term. Yoon is now under intense
pressure to resign. If he does not, we expect
that it is only a matter of time before he is
impeached,” BMI said.
“If so, we believe Prime Minister Han Duck-soo
will step in as interim leader, paving the way
for elections to be held within 60 days, in
accordance with the constitution,” it added.
According to Korean news agency Yonhap,
opposition parties – DPK and five others,
including the Rebuilding Korea Party and Reform
Party, submitted on Wednesday afternoon a
motion to impeach President Yoon to the
National Assembly.
The motion – which was signed by 190 opposition
lawmakers and one independent lawmaker, with no
support from any ruling party lawmakers – will
be reported to a parliamentary plenary session
on 5 December and then put to a vote on either
6 December or 7 December.
South Korea’s law requires that an impeachment
motion be put to a vote between 24 and 72 hours
after the motion is reported to a plenary
session, Yonhap said.
Yoon, an inexperienced politician, became the
20th president of the country in May 2022 and
is currently serving the third of his five
years of office. Previously, he was South
Korea’s chief prosecutor.
In its note, BMI noted that PPP leader Han
Dong-hoon had urged Yoon to explain his
decision and to dismiss defense minister Kim
Yong-hyun, who advised the president to declare
martial law “even as the finance and foreign
ministers advised against it”.
“The silver lining we think is that the swift
reversal of the martial law underscores the
resilience of South Korea’s institutions,” it
said.
NO IMPACT ON PETROCHEMICAL
TRADESPlayers in the
petrochemical industry are monitoring the
political developments but noted no immediate
impact on the commodities markets.
“Politically, [it is] still unstable as the
President is getting pressure to resign,” a
source at a phenol/acetone producer said.
South Korea is a major exporter of ethylene, as
well as aromatics such as benzene, toluene and
styrene monomer (SM).
“At this moment the situation has settled down,
but we’ll see how the government will respond
to the issue,” the soda ash distributor said.
“From the industrial side there is no huge
impact because plants/factories are always
running at full capacity so now we don’t see
any impact,” he said.
“But long-term impact, we’ll need to see how
other foreign companies and assets may move out
of South Korea,” the distributor added.
For the time being, players are more
pre-occupied with unsteady port operations in
Daesan because of heavy winds which are
affecting trades and cargo deliveries.
Meanwhile, South Korea’s petrochemical industry
has its own troubles stemming from Asia’s
overcapacity.
In the case of of major player Lotte Chemical,
which swung into a net loss of W514 billion in
Q3 2024, the company is making big changes to
its portfolio, selling or closing
commodities businesses as it refocuses on
higher margin specialties.
South Korean industries, including chemicals,
rely heavily on exports to China, whose
self-sufficiency has grown over the years.
Insight article by Pearl
Bantillo
($1 = W1,414)
Additional reporting by Fanny Zhang,
Jonathan Chou, Evangeline Cheung, Helen Lee,
Shannen Ng, Josh Quah and Clive Ong
Speciality Chemicals04-Dec-2024
MUSCAT (ICIS)–Thailand’s PTT Global Chemical
(PTTGC) is expected to begin producing
sustainable aviation fuel (SAF) at its refinery
in Map Ta Phut early next year, the company’s
CEO Narongsak Jivakanun said.
“We are commissioning, although it is on a
small scale, but it is an important step – SAF
[production] in Q1 next year using our existing
oil refinery but blended with non-fossil fuel
based raw material,” Jivakanun told ICIS on the
sidelines of the 18th Annual Gulf
Petrochemicals and Chemicals (GPCA) Forum in
Muscat, Oman.
The company plans to produce 500,000 liters of
SAF per month, using up to 1,700 tonnes of used
cooking oil per month as feedstock.
SAF is used as a direct replacement for
traditional fossil-based jet fuel to power
aircraft.
Moreover, by leveraging the mass balance
approach, the change in how the refinery
accommodates use of alternative feedstock in
the production of SAF enables it to claim a
portion of its downstream aromatics, polymers,
and olefins output as non-fossil chemical
products, he said.
PTTGC is the first Thai company to upgrade its
refinery with advanced technology to
accommodate used cooking oil as feedstock.
The company’s biorefinery project is a
component of the company’s three-pronged growth
strategy – “Step Change, Step Out and Step
Up” – which, in part, prioritizes business
sustainability through decarbonization efforts,
according to Jivakanun.
PTTGC is also on track to fully start up a new
fully integrated polylactic acid (PLA)
unit at the Nakhon Sawan Biocomplex (NBC) by
the end of next year, he said.
The PLA project is being carried out by
NatureWorks, the equal joint venture firm
between the US’ Cargill and PTTGC and will use
sugarcane sourced locally as feedstock.
THAI SPECIALTIES HUB
AMBITIONS
Allnex, a global specialty chemicals subsidiary
of PTTGC, is currently planning to expand its
specialty resins production in Map Ta Phut with
an aim to develop the site to become a hub for
selected coating resins serving the southeast
Asia region, according to Jivakanun.
“The plan is to develop a hub in Map Ta Phut so
that they can share the infrastructure that
[PTT]GC already has, utilities, the engineering
and operational support,” he said.
“Expertise sharing between GC and allnex will
enhance potential of value engineering resulted
in cost savings into the project.”
The project is in the stage of finalizing the
scope with an aim to produce specialty resins
that most fit customer demands and requirements
Allnex specializes in the production of
industrial coating resins and additives.
“We will go through the feasibility study as
usual and we aim to confirm the investment for
allnex Map Ta Phut hub within next year,”
Jivakanun added.
Interview article by Nurluqman
Suratman
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