Page 39 - Plastics News September 2017
P. 39
BUSINESS NEWS
Essar Oil to invest $250 million JBF set to sell Belgian PET
in U.K. refi nery plant to settle debt
ssar Oil UK plans to invest $250 million into its refi nery BF RAK, an offshoot of the Indian polyester and
Eat Stanlow, signalling its commitment to the refi nery Jpackaging group JBF Industries is understood to
and the British market more widely, in spite of the be ready to sell off its 400,000tpa PET plant in Geel,
challenges facing the business including from Brexit and Belgium to settle part of its outstanding debt. According
the government’s commitment to an electric future for to reports the fi rm, based in the United Arab Emirates
vehicles. According to the company this investment will in the Middle East, is in talks with potential buyers in
enable Essar Oil UK to raise its annual production to 75 a bid to dispose of the unit, only launched in 2014, for
million barrels from 68 million barrels, increase its basket up to €250m. The sale is one of several moves currently
of crude items, being discussed by the JBF subsidiary and banks, as JBF
and raise the RAK seeks to re-negotiate debt amounting to about
production of €457m. Discussions are also examining other possible
petrochemicals asset sales and management restructuring. In late
by 5%-10%. “This June, JBF’s United Arab Emirates-based subsidiary
investment JBF RAK suspended production at its 350,000pta
confirms polyester plant at Ras Al-Khaimah in the UAE after it
the group’ s experienced a shortage of working capital. JBF RAK
commitment to management was quoted in August by the Reuters
remain in the oil news agency as predicting the suspension would be
and gas sector and grow the Essar Oil UK business,” said short term and the plant was expected to resume
Chief Executive Offi cer S Thangapandian. The business production in September.Financial diffi culties began to
remains heavily focused on Britain, where it generates 85% mount for JBF after a new plant to produce the PET raw
of revenue, with the remainder of its product sold on the material PTA
European mainland. The company has invested more than in Mangalore,
$800 million into Stanlow since acquiring it from Shell in India was
2011, enabling it to raise hydrocarbon margins by more delayed for
than $5 a barrel, increase petrochemical production by almost two
10% and add 37 crude items to its portfolio. years. The new
“This investment will further open up our basket 1.25 million tpa
and reduce crude costs, with a higher focus on high- facility costing
yield product, you will see revenues improving, around €504m was planned to open in 2015 but was
and margin gains from where we are today,” fi nally commissioned early this year.
Mr. Thangapandian added. The company also has, over JBF was reported to have received investment of
time, reduced its North Sea dependence, from more around €135m from the US private equity fi rm KKR,
than 80% to between 50 and 75%. He said the company, but the plant operation was said to have been delayed
which supplies 16% of the U.K.’s road transport needs, further due to technical diffi culties. Mumbai-based JBF
would continue expansion into the direct aviation fuel Industries, quoted on India’s National Stock Exchange,
supply business, as it won contracts to supply Emirates, revealed last month that it was working with lenders
Etihad, Jet2.com and Oman Air. He added that it would to resolve cash fl ow diffi culties and admitted it was
also continue expanding its own U.K. retail network. It considering selling or restructuring its plants abroad to
currently has 36 retail outlets and plans to set up 400 reduce its debts. Domestic plants include a 608,000tpa
branded retail stations within the U.K. market in the bottle, textile and specialty grade PET chips facility in
next fi ve years. Sarigam, Gujarat state and polyester yarn production
in Silvassa region.
39 September 2017 | Plastics News