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LyondellBasell (LYB) Wraps Up Petroken Unit Sale to GIP

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Chemicals giant LyondellBasell IndustriesLYB has completed the divestiture of its Argentina-based fully-owned unit Petroken Petroquimica Ensenada S.A. to Grupo Inversor Petroquimica S.L. ("GIP") for $184 million.

Petroken operates a 180 kiloton polypropylene facility in Ensenada. It is a major polypropylene maker in Argentina.

The sale of the Petroken unit is a part of LyondellBasell's long-term growth strategy as it continues to focus on assets and markets that will create greater value for its shareholders.

LyondellBasell's adjusted earnings for fourth-quarter 2015, reported on Feb 2, topped the Zacks Consensus Estimate while sales missed. Revenues plummeted year over year in the quarter, hurt by weak product prices. LyondellBasell, in its fourth-quarter call, noted that it will remain focused on managing costs and improving operating efficiencies amid the challenging market environment.

LyondellBasell continues to benefit from the favorable North American natural gas environment. It is also expected to gain from its ethylene and polyethylene expansions.

The company is executing its expansion projects to leverage the U.S. natural gas liquids (NGLs) advantage. It remains on track with its multi-plant ethylene expansion programs across Channelview, La Porte and Corpus Christi facilities in Texas which benefit from shale gas production. The company recently said that it intends to complete an 800 million pound ethylene expansion project and engineer its 1 billion pound propylene oxide plant during 2016.

However, LyondellBasell is exposed to volatility in raw material and energy costs. Lower oil prices may continue to hurt its U.S. ethylene margins, thereby affecting its profitability. Moreover, its operations are subject to maintenance outages.

LyondellBasell is a Zacks Rank #3 (Hold).

Better-ranked companies in the chemical space include Koninklijke DSM N.V. RDSMY , KMG Chemicals Inc. KMG and American Vanguard Corp. AVD . While Koninklijke DSM and KMG sport a Zacks Rank #1 (Strong Buy), American Vanguard is a Zacks Rank #2 (Buy) stock.

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LYONDELLBASEL-A (LYB): Free Stock Analysis Report

KONINKLIJKE DSM (RDSMY): Free Stock Analysis Report

AMER VANGUARD (AVD): Free Stock Analysis Report

KMG CHEMICALS (KMG): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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