Chemicals are buoyant in Q3, controversy over the Lyondell resurrection, VW drives ahead, a new truck deal for Cat and Navistar, and Valvoline chooses Prista.
Chemical barrelsThe petrochemical sector showed a dramatic recovery in Quarter 3 with announcements of increased profits and positive forecasts for the rest of the year. Afton Chemical, and their parent company Newmarket, revealed a significant improvement over the first nine months of this year. Newmarket's net income more than doubled to $113m over the period compared to the previous year with liquidity also dramatically improved taking cash reserves to $133.8m from just $21.8m in 2008. Newmarket's petroleum additives business, under Afton's brand, showed an almost four-fold increase in Q3 operating profits of $96.3m from $28.1m in the same period last year.
Dow Chemicals also showed improvement, with Third Quarter profits of $799m from $440m last year even though sales were down by some 22%. The increase was attributed mainly to cost cutting and new global markets. Lubrizol were also in celebratory mood with their Q3 results showing a leap in operating profits from $63.2m in 2008 to $170m this year. Speciality chemical firm Albermarle took the shine off a little, showing a slight reduction in Q3 net income from $56.2m to $52.1m, although they were able to pay off $113m of debts in the first nine months of this year.
Elsewhere, a complex legal battle may be brewing after speciality producer LyondellBasell entered into multiyear agreements with Calumet for the latter to exclusively market Lyondell's naphthenic base oil and white mineral oil products. The deal was struck after Lyondell, who filed for bankruptcy at the beginning of 2009, requested the US Bankruptcy Court to reject similar existing agreements with other companies including Schumann Steier and Sweden's Nynas.
Nynas were surprised but not unprepared for the news, stating that they would increase supplies from their own production to plug the gap in losing Lyondell's Tufflo products. However, according to Lubes News' George Gill, both Nynas and Schumann will not give up without a fight and have both filed legal objections to the Lyondell Calumet move.
In the automotive sector, Volkswagen's increased share of a contracting global market saw them report operating profits of €1.5bn ($2.2bn) in the first nine months of the year which, although down from €4.9bn for the same time last year, still defied an automotive sector that has been devastated by the economic downturn. Volkswagen's expansion into new markets was reinforced by the increase to full production at their Russian Kaluga plant.
Meanwhile Caterpillar and Navstar agreed a joint venture, to be named NC2 Global LLC, which will produce and market commercial trucks to a range of markets outside North America under the Cat and International brand names. Joint work on developing a Cat-branded heavy-duty, purpose built vocational truck for the North American market is already underway.
Finally, lubricants news includes Total's purchase of ExxonMobil's Vietnam lubes business, making Total the biggest lubes supplier in the country; Gulf Oil Marine added Israel's Delek to its Sealub Alliance Network to cover the Israeli sea ports; and Valvoline named Prista Oil Group as its distributor for engine oils and car care products in Eastern Europe.