Dutch chemicals and life sciences company DSM is taking steps toward shedding its caprolactam business entirely. Late last week, the Sittard-based company announced plans to sell all of the Fibrant joint venture owned by ChemicaInvest, its 35:65 joint venture with private equity investor CVC Capital Partners, to China’s Highsun Holdings Group.
DSM estimates that it will receive about €200 million in cash from the transaction due to be completed in this year’s third quarter following regulatory approvals and consultation with the Dutch workforce.
The sale is to include all shares in Fibrant BV, which operates the caprolactam plant in Geleen, the Netherlands, and 60% of the shares in Fibrant Co. Ltd., operator of the caprolactam plant in Nanjing, China. Fibrant BV’s minority interest in Geleen-based Sitech, a technical service provider, is also to be included, but not Fibrant LLC (USA).
All employees of the affected businesses will transfer to the new Chinese owner, and current management also will stay in place.
Under the terms, Highsun Holdings will assume the drawing rights and supply contracts of Fibrant, and Fibrant will continue to provide at least 80% of the caprolactam feedstock needs of its subsidiary DSM Engineering Plastics (DSMEP) in Europe and North America until 2030.
This supply contract, DSM said, will preserve the plastics producer’s backward integration and allow it to maintain its strategic and competitive position. Among other things, DSMEP has PA 6 in its portfolio.
Highsun’s operating company produces super absorbers for diapers and disposable plastic bags.
Following the sale, DSM and CVC Capital Partners will still own 35% and 65% respectively of ChemicaInvest’s two remaining business units, Aliancys (composite resins) and AnQore (acrylonitrile). The two subsidiaries together generated almost €700 million in revenue in 2017 and had an EBITDA margin of about 12% in 2017. DSM did not reveal figures for the caprolactam business.
Fibrant was spun off from DSM in early 2016
Becoming part of a large and integrated international player such as Highsun “will allow the company to remain successful in the long term,” said Fibrant’s CEO, Pol Deturck.
Highsun, group chairman Chen Jianlong said that through the acquisition his company will “realise a new step in our ambition to become a leading player in the nylon 6 value chain.” The Chinese company’s portfolio also includes super absorbers for diapers as well as disposable plastic bags.
Tomra Sorting Recycling Reports Increased Interest In Sorting Technologies At Ifat 2018
Tougher new regulations and consumer concerns are reflected in enquiries received at the leading trade fair for environmental technologies
TOMRA Sorting Recycling experienced high levels of interest in its sensor-based sorting technologies at IFAT 2018, the world’s leading trade fair for environmental technologies, which concluded on 18 May.
The five-day event at Messe Munchen, Germany, which is known for attracting more than 130,000 people from almost 200 countries, was again very busy. Many visited TOMRA’s exhibition stand to learn about the company’s latest sorting solutions, showcased on the ‘Metal Recycling’ and ‘Waste’ sections of the stand, and to hear about TOMRA’s expectations for future innovations, spotlighted on the ‘Circular Economy’ and ‘Future’ areas of the stand.
Tom Eng, Senior Vice President and Head of TOMRA Sorting Recycling, commented: “The huge number of industry professionals attending IFAT 2018, and the high quality of enquiries received by TOMRA, show how demand is growing for sorting solutions. This is partly due to tougher new regulations, such as China’s National Sword policy, but also reflects the increasing environmental awareness of consumers.
“More countries around the world are calling-out for effective sorting and recycling technologies, and there’s real interest in future progress through innovation. TOMRA believes the most significant near-future advancements will be in the increased sophistication of artificial intelligence, which is already integrated in TOMRA’s machines to a greater extent than in any other manufacturer’s.”
TOMRA’s pillars of innovation
TOMRA’s entire way of thinking is motivated by various aspects of innovation – not only in the machines TOMRA develops and manufactures, but also in the company’s vision for our planet’s more sustainable future.
Innovative technology continues to be the central focus for TOMRA Recycling. A recent example of this is TOMRA’s new Laser Object Detection (LOD) system, capable of detecting material that near infrared technology (NIR) cannot. This enables waste and scrap recycling operations to reach previously unattainable final-product purity levels – an even more desirable advantage now that China has introduced its tough National Sword policy, which bans the importation of 24 types of solid waste, including various plastics and unsorted mixed papers. Another recent example of TOMRA’s innovative technology is AUTOSORT BLACK, the first machine to recover valuable black polymers from packaging materials.
Another pillar of innovation is in revolutionary developments in a broad range of applications. A good example is how TOMRA Sorting Solutions has enhanced AUTOSORT so that it is now possible to separate single-layer PET trays from PET bottles. This new application enhances AUTOSORT’s previous capability to separate multi-layer trays.
By continuing to focus on the future of innovation, TOMRA has taken great strides in further enhancing its digital approach to supporting customers. To demonstrate this, the ‘Future’-themed consulting station on TOMRA’s IFAT stand enabled visitors to interact with live data using TOMRA Insight. This sophisticated software and telematics system provides customers with remote, real-time information about the management and performance of their recycling machines.
The circular economy continues to drive TOMRA’s commitment to a sustainable future. As an illustration of this, in 2017 TOMRA signed-up to the New Plastics Economy, a three-year initiative led by the Ellen MacArthur Foundation. This brings together businesses, governments, scientists and citizens to accelerate the transition towards a global plastics system guided by the principles of the circular economy.
Additives Color Effects PET Packaging Additives Color Effects PET Packaging Additives Color Effects PET Packaging Additives Color Effects PET Packaging Additives Color Effects PET Packaging Additives Color Effects PET Packaging Additives Color Effects PET Packaging
Additives: New Color Effects for PET Packaging
Penn Color has developed some unique color packages in collaboration with Husky and PET Engineering.
Unusual color effects for PET packaging have been developed by Penn Color, Doylestown, Penn., the newest additions to the company’s Penneffex portfolio of colors and effects. Key among them are bicolor, thermocromic and phosphorescent PET bottles for the beverage market.
Developed in collaboration with Husky Injection Molding Systems and designed and engineered by PET Engineering, these unique packages use proprietary pigment compounds developed by the Penneffex team, introduced in a multi-layer structure.
According to marketing manager Phil Riccardi, the company developed a proprietary pigment masterbatch that will not cause delamination when using thermocromic or fluorescents in the middle layer.
New glow-in-the-dark special effect masterbatches used in the middle layer and new brushed-metal special effects used in the outer layer were also displayed.
According to Riccardi, the company’s focus in on developing new bottle concepts and will soon expand to formulations for HDPE bottles, with the installation of a new three-layer HDPE blow molding line at new R&D center now underway.
R&D / Leverage, a specialist in tooling for injection stretch blow moulding of PET bottles, has replaced desiccant dryers on seven Nissei ASB and Aoki injection stretch blow moulding lines with LPD vacuum dryers from Maguire Products.
The company says the switch from desiccant dryers to vacuum dryers has benefitted the company by reducing energy use and decreasing startup and changeover times.
“While the desiccant dryers needed four to six hours to dry material, the LPD dryers take only one hour and twenty minutes from a cold startup and in subsequent drying cycles this is reduced to forty minutes,” Alan Tolley, Managing Director at R&D / Leverage.
“The LPD dryers give us much more flexibility when testing different grades of resin on one tool, because we are not a production-scale facility with long product runs, the desiccant dryers were always a challenge for us, posing problems with getting the material dried properly.”
Five of Seven LPD Dryers at R&D Leverage
The LPD dryers also display improved resin filtration, which provides enhanced bottle clarity due to less contamination and more flexible throughput control for the single-cavity pilot tool versus high-cavitation production tools.
R&D / Leverage has also installed a central Maguire Weigh Scale Blender, delivering to the moulding process precisely controlled batches of virgin and recycled polymer, colorants and additives.
Tolley added: “In the past we were forever having to change desiccant every six months because we were doing so much stopping and starting of our moulding processes. That meant added cost and added maintenance.”
Paul Edmondson, Managing Director of Maguire Europe: “Considering that drying polymer can account for 15 per cent of the total process energy of a moulding operation, a compelling reason for using vacuum dryers is that they consume up to 80 per cent less energy than desiccant systems.”
European expectations USA PE imports European expectations USA PE imports European expectations USA PE imports European expectations USA PE imports European expectations USA PE imports European expectations USA PE imports European expectations USA PE imports
European expectations for US PE imports loom large but no prompt supply
LONDON (ICIS)–European polyethylene (PE) buyers are waiting for imports from new US capacities to arrive in the region, but volumes have been sparse and most sources do not expect much significant supply for weeks yet.
Many European buyers visited the recent NPE plastics show in Orlando, Florida, eager to show interest in new volumes being produced in the US.
“We didn’t really manage to secure any volumes, but it was interesting to see how producers have different approaches,” said one buyer.
“Some are budgeting their volumes to each market, and others are just sending as much as they can to Asia.”
Netbacks are clearly of interest to producers of new volumes, and Europe remains resolutely weaker compared to other regions in many grades.
Free on board (FOB) US levels are often higher than net delivered prices in Europe.
US product is also subject to a 6.5% import duty, the same as from countries in the Gulf Cooperation Council (GCC).
The above graph shows the FOB US high density polyethylene (HDPE) blowmoulding price, the China cost and freight (CFR) level, and the net spot northwest Europe (NWE) blowmoulding level, minus costs and 6.5% duty, to give a an idea of an equivalent CFR price into Europe.
European prices in dollar terms are lower than formerly because of the weakness in the euro compared with the US currency.
Europe saw an incursion by one US seller in April, and C4 (butene based) linear low density polyethylene (LLDPE) led to a bout of fierce resistance from local suppliers, who did not intend to give up any market share.
Some sources expect new US capacity to be absorbed with only a tweak down of existing production rates, but the skirmish that resulted in the recent foray into Europe suggested it might not be so simple.
The main question at present is when Europe can realistically expect to see more significant volume from new US capacities.
Traders have found it difficult to get hold of large volumes for import, and C4 LLDPE is the grade that seems to be most readily available, although volumes are not high, prices not cheap, and infrastructure problems are not unusual.
Some HDPE is on its way but via established channels, and to regular buyers, said one producer.
Another said it did not expect any HDPE spot offers from new production for months, given the current status of plant start-ups.
Recent/upcoming North American new PE plants
Capacity ‘000 tonnes
La Porte, Texas, US
mLLDPE, LLDPE (2 x 650)
Mont Belvieu, Texas, US
Sweeny, Texas, US
Freeport, Texas, US
Plaquemine, Louisiana, US
Lake Charles, Louisiana, US
Lake Charles, Louisiana, US
HDPE (400), LDPE (400)
Point Comfort, Texas, US
Seadrift, Texas; St Charles, Louisiana
While players are discussing potential arrival dates of new product imports for 2018, and where the best netbacks can be achieved, at some point exports from the US are expected to be more widespread once more capacity comes on stream.
A good portion of the new PE is destined for export.
PE is used in packaging, the manufacture of household goods, and also in the agricultural sector.
Pictured: US energy and petrochemicals major ExxonMobil’s Baytown new ethane cracker in the Gulf Coast
Forget About Oil at $80. The Big Rally Is in Forward Prices
By Catherine Ngai, Alex Longley, and Javier Blas
Brent crude oil grabbed all the attention after spot prices hit $80 a barrel last week. And yet, almost unnoticed, a perhaps more important rally has occurred in the obscure world of forward prices, with some investors betting the “lower for longer” price mantra is all but over.
The five-year Brent oil forward price, which has been largely anchored in a tight $55-to-$60 a barrel range for the past year and a half, has jumped over the last month, outpacing the gains in spot prices. It closed at $63.50 on Friday.
“For the first time since December 2015, the back end of the curve has been leading the complex higher,” said Yasser Elguindi, a market strategist at Energy Aspects Ltd. in New York. “It seems that the investor community is finally calling into question the ‘lower for longer’ thesis.”
Bob Dudley, the chief executive of oil giant BP Plc, coined the “lower for longer” mantra in early 2015, warning of a protracted period of cheap crude. He later clarified that he meant “lower for longer, but not for ever.”
More to Run
While spot prices fluctuate wildly, the five-year forward usually trades in a narrower range, anchored by longer views about future supply and demand. Over the past three years, long-dated prices had been weighed down by the belief the growth in U.S. shale production, combined with the adoption of electric vehicles, would keep prices under control.
Investors are now questioning that hypothesis, pushing up forward prices. Over the past month, Brent five-year forward futures gained 11 percent, compared with a 6.8 percent increase in futures for immediate delivery.
“We think there is more to go for the longer date contracts,” SEB chief commodities analyst Bjarne Schieldrop said. “This will send very positive price signals into the whole oil space with higher confidence, optimism and evaluations as a likely consequence.”
There are several reasons for the sudden surge in forward prices. Oil consumption is expanding much faster than anticipated, adding growth in two years that would normally three. At the same, oil investment has dropped significantly over the past three years, particularly in projects that take longer to develop such as ultra-deep water offshore, raising doubts about future supply growth despite the gains in Texas, North Dakota and other U.S. shale regions.
Moreover, a change in marine fuel oil specifications by 2020, which should increase significantly the demand for diesel-like refined products, is further reinforcing the belief among some investors that the oil market will be tighter than expected in the future.
The buying has sparked a rally in later-dated contracts in the past week and a half that traders say is even more impressive than Brent’s march past $80 a barrel. The grade for delivery in December 2022 has surged 10 percent since to beginning of the month to nearly $64 a barrel. The December 2023 has risen above $63 a barrel.
The higher forward prices are also catching the attention of some equity investors as they usually use longer-dated prices to value energy companies.
Despite the rally in forward prices, oil exploration and production companies, which typically hedge their production further out in the curve, have remained reticent to buy in, according to John Saucer, vice president of research and analysis at Mobius Risk Group in Houston. Oil producer selling typically puts pressure on the back of the curve.
Investors aren’t just buying outright long-dated futures, but also betting through the options market on much higher prices in the early part of next decade by buying call options. The contracts, which give investors the right to buy at a predetermined price, are popular among commodities hedge funds.
Call options that would profit from Brent rising to $130 a barrel by the end of 2020 traded 2,000 times on Friday. That follows a similar amount of $100 contracts for the same period trading over the past two weeks.
— With assistance by Jessica Summers, and Sheela Tobben