Mexico’s Alpek to buy NOVA's EPS plants; Braskem PP sales back to normal; Sept. data shows retail recovery, construction strenght; Ontario makes business easier for petrochemicals
Mexico’s Alpek to buy NOVA's expandable styrenics business
Mexico-based Alpek agreed to buy from NOVA Chemicals Corp. their expandable styrenics business through the purchase of BVPV Styrenics, which ows assets including a 123,000 tonne/year expandable polystyrene (EPS) facility in Pennsylvania.
The Monaca, Pennsylvania plant also has capacity to produce 36,0000 tonnes/year of the registered trademark foam Arcel, and another plant in Ohio with capacity to produce 45,000 tonnes/year of EPS.
“By adding two new EPS sites in the U.S., Alpek will now be able to serve its existing and new customer base with increased efficiency,” and lower logistics costs, a company press release said on Oct. 19.
Alpek did not disclose any transaction amount.
The Mexican company said the purchase fits plans to expand its construction and packaging segments, both of which involve demand for EPS. Arcel is an EPS-polyethylene copolymer with packaging applications including protection of electronics.
The Monaca facility includes a research department that Alpek said will work to develop more sustainable products like biodegradable EPS.
“This acquisition is both attractive from a financial perspective as well as fully aligned with Alpek’s long-term growth strategy,” said Alpek’s CEO Jose de Jesus Valdez. Alpek will complete the transaction by year-end.
Alpek, with $6.2 billion in 2019 revenue, operates 28 plants in several countries. NOVA is headquartered in Canada. Alpek is a leading EPS producer in the Americas.
Braskem Sept. PP sales reach 365,000 tonnes in Brazil, 140,000 tonnes in North America
Braskem said on Oct. 6 that following Covid-19 related declines earlier in the year in the operation rates of polypropylene (PP) assets fully “returned to normal” leading to 140,000 tonnes of sales of PP in the North American market.
The company’s PP sales within the Brazilian market reached a new record high of 365,000 tonnes in September, it added.
Braskem has production assets for PP in the U.S. Gulf Coast, including a new plant started in September, as well as in the Northeast.
Brazilian construction company Odebrecht, the majority owner of the company, plans a sale of up to its total equity in Braskem.
September brings recovery to U.S. retail and food services
Overall retail and food sales in the U.S. showed a recovery in the third quarter, particularly in September, but the data shows two sides with activity much weaker than last year in department stores and food services while supermarkets and non-store retailer sales surged.
Total retail and food sales showed an on-year increase of 5.4% in September, comparing with a 0.6% on-year increase for July and August 2020, the U.S. Census Bureau said on Oct. 16.
The July-September period posted a 3.6% on-year increase while the total for the first nine months of 2020 is down 0.8% compared with the previous year, it added.
The nine-month, on-year comparison shows clothing stores hit hardest with a nearly 33% decline. Department stores showed nearly 18% lower figures, food services and drinking services were down 20% and gasoline stations fell just over 16%.
Non-store retailers have seen for the January-September period an increase of over 20% while food and beverage stores such as supermarkets and liquor stores have seen a 12% on-year gain.
Food and retail affects demand for packaging including polyethylene for bags or expandable polystyrene in packages to protect electronics, apart from plastics contained in products. Expanded polystyrene demand is related to take-out food and drink containers.
New residential construction shows strength in September
U.S. Census Bureau data on housing released on Oct. 20 shows strength amid the Covid-19 pandemic, with a trend toward increased activity.
Privately owned housing starts in September were at a seasonally adjusted rate of 1.4 million, or 1.9% higher than the revised August estimate, and an 11% on-year gain, the U.S. Census Bureau reported.
Privately owned housing completions in September were 15% above the August estimate and a 26% on-year gain.
Building permits for new private home constructions were nearly 1.6 million in September, or 5.2% higher than August, and 8.1% higher than September 2019.
Home construction leads to higher demand for chemicals including PVC for tubing as well as multiple others used in insulation, paint or fixtures.
Ontario makes business easier for petrochemicals, CIAC says
The Chemistry Industry Association of Canada (CIAC) said on Oct. 8 that the province of Ontario, with a C$24 billion total chemical industry, has taken several actions to make government required documentation procedures less burdensome for companies.
“CIAC firmly supports the Ontario government’s commitment to streamline duplicate regulations that impact the competitiveness of the chemicals and plastics manufacturing sectors,” the CIAC said. Moving some processes to electronical filing is one such move, it added.
Chemistry is the third-largest manufacturing industry in Ontario. Ontario’s plastic manufacturing alone is a C$18-billion industry that provides 49,000 jobs in 800 businesses, it added.
North American rail shows on-year gains in intermodal, but declines in carloads
The Association of American Railroads (AAR) said on Oct. 14 that U.S. rail traffic for the week ended October 10 showed an intermodal volume on-year gain but that for carloads, used to ship goods including petrochemical commodities like resins, was lower.
For the week ending October 10 there were 230,964 carloads, down 5.2% compared with the same week in 2019. U.S. weekly intermodal volume was 289,488 containers and trailers, up 8.4% compared last year.
North American rail volume for the week ending October 10, on 12 reporting U.S., Canadian and Mexican railroads totaled 329,614 carloads, down 3.5% compared with the same week last year, and 384,502 intermodal units, up 6.9% compared with last year.
Canadian railroads reported 79,435 carloads for the week, up 1.2% on-year, and 79,211 intermodal units, up 8.5% on-year.
Mexican railroads reported 19,215 carloads for the week, a 1.1% on-year decline, and 15,803 intermodal units, down 20%.
By Reuters Events