Page 34 - Plastics News January 2017

FEATURES
Will tax reforms prop up the Plastics Industry?
Anticipating oil prices to recover in 2017 India's Union Budget 2017-18 is expected to be different from
the previous ones amid high expectations to boost domestic and international investor confidence.
Will tax reforms prop up the Plastics Industry? Well
that’s the million dollar question and it remains
to be seen when the finance minister comes up with his
Pre-budget discussions.
Just to analyse the trend the last week of December
2016 witnesssed Brent crude oil trading at about US$56Â
a barrel and WTI about a dollar lower. The year started
on a disappointing note with crude prices falling to a 12
year low of $26.21 a barrel in Feb as investors worried
about the oversupplied market. Oil was below US$45 for
most of the first quarter. Prices have spiked to the US$55
range since November after a decision by OPEC that states
that with effect from January 2017, most members of
the Organization of the Petroleum Exporting Countries
and 11 other non-cartel producers will start scaling back
production. The reduction goal of roughly 1.8 mln barrels
will happen in phases.
This is seen as a bold but not unexpected move as well as
a desperate bid to put a floor on falling oil prices. Crude
futures continued their end-of-year rally, taking oil to its of Mexico
highest finish since July 2015 on expectations that global
oil producers will honor a landmark agreement to reduce
supply. It seems that oil prices are set to recover in 2017
as production cuts help to rebalance an oversupplied
market and that producers have established a monitoring
committee to ensure that output cuts are adhered to.
New capacity additions, expansions, mergers and
acquisitions in the polymer and plastics industry in 2016:
* The Rs.10,000 crore gas cracker project - Brahmaputra
Crackers and Polymers Ltd. at Lepetkata in Upper
Assam’s Dibrugarh district commenced production in
India. GAIL is the main promoter with 70% stake, while
Assam government, Oil India Ltd and Numaligarh Refinery
have 10%t stake each in the company. Capacity will
comprise 2,20,000 tpa of polyethylene and 60,000 tpa of
polypropylene.
* South Korea's Hyundai Chemical, a joint venture between
Hyundai Oilbank Co and Lotte Chemical, completed Â
building a US$1.02 bln condensate splitter to produce
• January 2017 • Plastics News 34
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mixed xylene and light naphtha. The 130,000 bpd
condensate splitter in Daesan on the country's west coast
will churn out 1.2 mln tpa of mixed-xylene and 1 mln tpa
of light naphtha.
* The petrochemicals complex of Egyptian Ethylene
and Derivatives Company (ETHYDCO) was unveiled in
Alexandria in mid-August with a total investment of US$1.9
bln. The complex is set to operate with the capacity of
460,000 tons of ethylene, 400,000 tons of polyethylene
divided into two production lines, a 200,000 tpa LLDPE/
HDPE swing line, a 200,000 tpa HDPE line, and 20,000
tons of butadiene.
* The largest petrochemical plant in Latin America
began operating in Nanchital, Veracruz. The US $5.2 bln
joint venture
project of
petrochemical
companies
Grupo IDESA
and Braskem
of Brazil,
Proyecto
Etileno XXI,
will address a
shortfall in the domestic supply of polyethylene.
* South Korea’s SK Advanced, a subsidiary of SK Gas,
embarked on the production of propylene at its newly built
factory in Korea in a bid to meet the burgeoning demand
for propylene in China. SK Advanced is a joint venture
between SK Gas Ltd. (45%), Saudi Arabia’s Advanced
Petrochemical Co. (30%) and Kuwait’s Petrochemical
Industries Co. (25%). The Ulsan facility is projected to
produce 600,000 tpa of propylene.
* The Chatterjee Group (TCG) led by New York-based
investor Purnendu Chatterjee signed an agreement to
acquire a 90% stake in Mitsubishi Chemical Corp.’s Indian
subsidiary, MCC PTA India Corp. Pvt. Ltd, for an estimated
US$48 mln. This sale is in line with Mitsubishi Chemicals'