Westlake Chemical Corporation files registration statement for Initial Public Offering
Westlake Chemical Corporation announced that it has filed a registration statement with the Securities and Exchange Commission for a proposed initial public offering of its common stock. The number of shares to be offered and the price range for the offering have not yet been determined. Prior to the offering, the company plans to simplify its ownership structure and combine it with its parent companies. The company plans to use the proceeds of this offering for general corporate purposes, including the repayment of debt.
Credit Suisse First Boston, J.P. Morgan Securities, and Deutsche Bank Securities will act as joint book-running managers for the proposed IPO. Westlake Chemical Corporation is an international manufacturer and supplier of petrochemicals, polymers, and fabricated products with headquarters in Houston, Texas. The company’s range of products includes ethylene, polyethylene, styrene, vinyl intermediates, PVC and PVC pipe, windows, and fence.
Comments: The Westlake Group is a member of Chao Group, which also includes its sister company, the Titan Group in Malaysia. Chao Group is a global manufacturer of petrochemicals and plastics. Chao Group entered the North American market as Westlake Group with the acquisition of a polyethylene plant in Sulphur, LA. Westlake Group headquartered in Houston, TX has 16 operating facilities in North America. The Westlake Group owns and operates facilities for the manufacture of petrochemicals, plastics, and fabricated plastic products in North America, with sales on a global basis.
The Westlake Group is comprised of companies in chemicals/petrochemicals and companies in fabricated products. The companies in chemicals/petrochemicals include (1) Westlake Petrochemical Corporation, (2) Westlake Polymers Corporation, (3) Westlake Monomers Corporation,(4) Westlake PVC Corporation, (5) Westlake Styrene Corporation, and (6) Westlake CA & O. The companies in fabricated products include: (1) North American Pipe Corporation, (2) Ameriflow (PE pipe), (3) Westech Fence, (4) Engineered Profiles Limited, and (5) Fiberlux. Westlake’s polyolefins operations are limited to LDPE and LLDPE. Westlake began its operations in 1986 with an LDPE capacity of 220 million pounds. Since then LDPE capacity has expanded to 750 million pounds. In 1998, Westlake entered the LLDPE market by acquiring a license from BP for the Innovene process.
Westlake Group remained one of the few privately held major chemical groups along with Formosa and Huntsman.
Mitsui, Idemitsu to merge polyolefins businesses
Mitsui Chemicals and Idemitsu Petrochemical have announced their plans to merge their polyolefins businesses, creating a $2 billion-per-year venture that will be Japan’s largest polyolefins producer. The new firm, to be 65% owned by Mitsui, is expected to be up and running in April 2005.
The move was expected following the firms’ disclosure in February that they were studying ways to cooperate more closely in Chiba, where their petrochemical plants are adjacent. By combining operations, the companies expect to achieve annual savings of $50 million by 2008. The new company will have 1.35 million metric tons per year of polypropylene capacity, 45% of the Japanese market, and 714,000 metric tons of polyethylene capacity.
Comments: Mitsui & Idemitsu had earlier announced that they were conducting feasibility studies regarding the merger of their polyolefins business. The companies have now decided against the merger.
Mitsui Chemicals’ merger with Idemitsu would create Japan’s No. 1 polypropylene and No. 2 polyethylene producer. The new joint venture company will have total sales of about ¥220 billion. The total PP production capacity under the joint venture company will be 1,360 KT/year. Mitsui Chemical operates a PP plant having 670 KT, while Idemitsu has a PP capacity of 400 KT, and 290 KT PP will be toll produced by Ube Polypropylene and Tokuyama Polypro. The joint venture will have a market share of about 44% in domestic capacity making it the largest producer of PP. The joint venture will have an LDPE capacity of 70 KT/year, LLDPE capacity of 306 KT/year, and HDPE capacity of 338 KT, making it the second largest producer of polyethylene in Japan.
Mitsui and Idemitsu’s chemical operations are essentially an outgrowth of their oil company parentage. Mitsui has attempted in vain to merge its operations with Sumitomo for the last four/five years.
The merger of the chemical operations of Mitsui and Idemitsu can be closely compared to the merger of Exxon Chemical Company with Mobil Chemical Company. The feedstock synergies, R&D programs, and extensive innovations will create another power horse in Japan.
This also follows the extensive global mergers and acquisition trend that started in North America and extended to Europe and Japan. This brings the number of polyolefin companies in Japan from over 22 in the early 80s to less than 5 – a trend toward “Global Workable Competition”. For more information, please refer to our “Global Polyolefins & Elastomers – Vol. 2, Issue 8.
Maruzen to purchase half of Ube’s polyethylene business
Maruzen Petrochemical plans to acquire a 50% stake in Ube Industries’ polyethylene (PE) business. Ube will spin off its PE operation into an independent subsidiary, and sell a 50% stake in the new company to Maruzen by October 2004. The PE operations of Ube and Maruzen are both located in Chiba, Japan.
Comments: Ube currently has a total polyethylene capacity of 200 KT per year. Maruzen Polymer, a wholly owned Maruzen subsidiary, has a 50% stake in the Keiyo Polyethylene joint venture with Chisso, which has 111,000 MT/year of high-density PE capacity at Chiba.
Maruzen Petrochemical was formed in 1964 by Ube Industries, Chisso Corporation, Denki Kagaku Kogyo K.K, Nissan Chemical Industries, Ltd., and Nippon Soda Co., Ltd. In 1981, Nissan Maruzen Polyethylene Co., Ltd. was established as a joint venture for the production and sales of high-density polyethylene which was later renamed Maruzen Polymer Co., Ltd. in 1991. Maruzen has close ties with Equistar, the major HDPE player in North America.
The company produces several chemicals including (1) p-octyl phenol, (2) p-test-butyl phenol, (3) butyl alcohol, (4) MEK, (5) DCPD, and others. Maruzen’s acquisition of a 50% stake in Ube will increase its involvement in the polyolefins market.
Uhde to construct PetroChina’s HDPE unit
Uhde announced that it had been awarded a contract by PetroChina to build a 300,000 MT/year high-density polyethylene (HDPE) plant at the Jilin, China complex of PetroChina subsidiary Jilin Chemical Industrial. The plant will use Basell’s Hostalen technology and is scheduled for completion in 2005.
Comments: China has been experiencing significant growth over the last five years. This has led to capacity increases and new projects for feedstock, monomers, and polymers. HDPE capacity has continuously increased in China in the last few years. The total HDPE capacity in China in the year 2000 was 1,325 KT and is estimated to reach 1,920 KT by the end of 2004. This is an increase of 45% in four years. By the end of 2008, HDPE capacity in China is expected to increase by another 30%.
The contract awarded to Uhde confirms the growth of demand and capacities in China. As the Chinese economy grows similar additions can be expected in the future.
HDSM Dyneema opens new PE fiber production line in the US
DSM Dyneema opened its first yarn production line at the US Dyneema facility in Greenville, North Carolina. The production line has a capacity of 600 to 750 tons per annum, depending on the product mix. DSM will now produce both fiber and unidirectional bullet-resistant material in the US, which DSM Dyneema sees as its second home market.
Although the Greenville site will serve clients globally, DSM Dyneema plans to serve US military requests first, due to the current situation of increased demand for personal security and protection against terrorism in the US.
Besides the new Dyneema yarn line, DSM Dyneema recently also put two new Dyneema UD lines (producing unidirectional bullet-resistant materials) in operation, one of which is located at the Greenville site, the other in Heerlen, the Netherlands. In the U.S., DSM Dyneema operates three lines, one Dyneema yarn line, and two Dyneema UD lines. Over the past period, both UD lines in the U.S. were fully dedicated to producing materials for bullet-resistant cockpit doors for airplanes. These three lines are part of DSM’s investment plan amounting to EUR100 million.
Comments: DSM Dyneema is the world’s largest producer of high-performance polyethylene fiber, marketed under the trade name Dyneema®, producing about 3,900 MT/year of fiber and 2000 MT/year of UD, depending on the product mix, in Heerlen (the Netherlands) and Greenville, North Carolina. Polyethylene fibers made from film fibers or monofilaments compete with polypropylene in cordage and twine, in bags and bagging, and in tarps and tentage applications. Polyethylene spun-bonded is used in paper replacement applications and, because of its poor dyeability and waxy hand, generally does not compete in the same markets as polypropylene spun-bonded monofilament fibers.
The physical properties of polypropylene and polyethylene, especially tensile strength, abrasion resistance, and inertness to most chemicals, including water, make them well-suited for functional applications. The major producers of PE fibers include (1) The American Group (Lafayette, LA), (2) Barbour Threads (Anniston, AL), (3) FiberVisions (Oxford, GA), (4) KoSa (Spartanburg, SC), (5) Nexcel Synthetics (Trussville, AL), (6) Polymer Group, and others.
Basell inaugurates polybutene-1 plant in The Netherlands
Basell inaugurated the first dedicated polybutene-1 (PB-1) plant to be built in Europe in Moerdijk, The Netherlands.
The 45 KT plant, the largest in the world, produces products used by customers for applications ranging from easy-open packaging to piping. PB-1 is used both as a pure material and as a blend with other polyolefins, such as polyethylene, to achieve specific properties and performance attributes. PB-1’s creep resistance, flexibility, and ability to retain mechanical strength at temperatures close to its melting point are desired by customers who use it in pure form. Many customers use PB-1 in blends with PE for film modification.
Comments: Until now Basell marketed polybutene-1 produced at Shell Chemicals’ Taft, LA unit which was shut down in 2002. The other producer of polybutene-1 is Mitsui Chemicals.PB-1 is mainly used in piping applications due to its inherent flexibility in combination with excellent creep and burst pressure resistance.
PB-1 is manufactured utilizing Ziegler-Natta-type catalysts which produce a highly isotactic thermoplastic. Polybutene-1 originally developed by Shell and Mitsui had three major applications: (1) hot water pipe, (2) heavy-duty film for bags and (3) blending resin for other polyolefins in adhesives and sealants.
PB-1 polymer, by nature, exists in two distinct crystalline forms. The transition from one crystalline form to another takes a long time (over 5-6 months), thus changing some of the physical characteristics during the shelf life.
The excellent heat deflection characteristics were instrumental in developing PB-1 pipes for hot water applications. A combination of Shell’s PB-1 with DuPont’s polyacetal fittings was developed for residential plumbing applications during the 70s and 80s. PB-1 plumbing was positioned against CPVC and brass successfully. However, the plumbing developed leaks over time, either as a result of material defects or the plumbers’ lack of knowledge. The class action suit against Shell and DuPont resulted in PB-1’s market demise in North America. PB-1 is still used in Europe and Asia mainly for under-the-floor heating.
The second largest application, heavy-duty bags faced the problem of shape changes during shelf storage and were discontinued.
Shell was in the process of developing applications for blending resins for adhesives and sealants. With the formation of Montell (Himont – Shell), the PB-1 became part of Montell, now the Basell. Currently, floor heating is the fastest-growing application for PB-1 in Europe and Japan. The US markets are relatively small.
Kuraray develops manufacturing technology for the production of acrylic thermoplastic elastomer
Kuraray has used its proprietary catalyst technology to develop the world’s first manufacturing process for an acrylic thermoplastic elastomer and has established mass-production technology for this material, which offers excellent transparency and weather resistance.
Kuraray is building a pilot plant in Kashima to facilitate confirmation of the technology and the creation of a market for this material. The Company will be moving forward with full-scale marketing shortly.
According to Kuraray, this thermoplastic elastomer has the transparency and weather resistance of PMMA (polymethylmethacrylate), adding to the elasticity and plasticity of rubber. It contains absolutely no low-molecular-weight components, which are a cause of pollution.
Comments: Kuraray has wide experience in producing and marketing thermoplastic elastomers with their Septon® grades which are hydrogenated styrenic block copolymers. Kuraray and other TPE manufacturers are aggressively trying to develop new grades that would have better performance properties. Kuraray’s Septon products have higher heat resistance and weather ability than the more common unsaturated SB copolymer and can be used in high-performance applications. Kuraray’s acrylic TPEs due to their clarity and wearability will open a wider market.
For more information on Kuraray’s market application please refer to “Global Polyolefins & Elastomers – Volume 2, Issue 3”
Dow’s new polymer modifier improves TPO processability
Dow Chemical has developed a new polymer modifier for improving the flow properties of TPO compounds without reducing the modulus or impact resistance of the material.
The modifier is based on the company’s Affinity polyolefin elastomer (POP) technology and is an ultra-low-viscosity ethylene-octene copolymer, produced using its Insite® single-site catalysts.
Higher flow levels can reduce cycle times for TPOs, allow thinner walls, or permit the production of larger, more complex parts. The traditional routes to improve flow rates have been to use a high-flow PP or a high-flow elastomer. However, the former route typically leads to reduced modulus and impact resistance, while the latter also reduces impact performance.
The material is intended to replace around 25% of the elastomer, which in turn makes up 30% of the TPO compound. This means that the loading of Affinity POP in the complete compound is around 7.5%.
Tests have shown that this loading gives a decrease in viscosity of 10% to 30%, depending on the Affinity grade used. Other potential benefits include improved surface gloss and enhanced paintability, because of surface modification effects.
Comments: The technology to manufacture TPO was developed based on EPDM as the elastomeric component. For many years, the growth of EPDM was partially linked to the growth of TPO/TPV in the automotive sector. The advent of metallocene technology, especially the very low-density products, in the last few years, has made the suppliers of EPDM to the TPO industry very vulnerable to these new materials. The usage of EPDM has been largely impacted in physically blended TPOs and to a lesser extent in TPVs. The manufacturer of physically blended TPOs prefers metallocene-catalyzed plastomers/elastomers to EPDM because they process more easily, provide comparable performance, and in some cases provide a significant cost advantage. In 2003, approximately 92 million pounds of metallocene-catalyzed plastomers/elastomers products were used in TPO/TPV blends compared to 125 million pounds of EPDM. It is forecasted that within the next 5 years, the usage of plastomers/ elastomers in TPO/TPV blends will surpass that of EPDM. For some applications, metallocene-catalyzed products have already eliminated or significantly reduced the usage of EPDM.
Penetration of TPOs into non-traditional markets/applications is prompting the need to develop customized TPO blends with enhanced processing and performance characteristics. End-users are starting to develop complex parts that warrant the use of high-flow materials. To meet the needs of the TPO industry, resin suppliers have started to market products to enhance the flow characteristics without sacrificing performance. Assuming a loading level of 7.5%, polymer modifiers for improving the flow properties of TPO/TPV compounds have a market potential of approximately 20-30 million pounds in North America.
Don’t miss the special presentation on the polypropylene-based elastomers session planned for FlexPO2004 on September 15-17, 2004. The objective is to bring together the best of the trendsetters in PP elastomers including Dow, ExxonMobil, SEP, DuPont Dow, BP, and others with Chemical Market Resources, Inc. background, to discuss the future trends in the technology.
Solvay Engineered Polymers introduces the NexPrene 9000® series of fully vulcanized thermoplastic elastomer materials
Solvay Engineered Polymers introduced a new series of fully vulcanized thermoplastic materials. The series will be identified by the NexPrene® 9000 brand name. There are currently nine materials in the series, ranging in hardness from 40 Shore A to 50 Shore D.
This new series of thermoplastic vulcanizate (TPV) materials complements the NexPrene 1000 family of general-purpose elastomers that have gained acceptance for applications in the automotive, medical, construction, and plumbing industries throughout the world.
The new NexPrene 9000 series employs a proprietary cure technology for dynamically cross-linking the elastomer-phase component that is dispersed in a continuous thermoplastic polyolefin matrix. The use of this technology results in materials that offer processing and performance advantages to designers and producers of products that require soft-touch surfaces in bright colors.
Comments: TPVs are essentially TPOs where the elastomeric/rubber phase has been crosslinked using peroxides or silane-grafting during the dynamic vulcanization process. The crosslinking step involves: (1) adding chemical crosslinking agents such as peroxides, (2) phase compatibilizers, and (3) high-shear mixing. The resulting product has a higher heat resistance, oil resistance, and lower compression set compared to TPOs. TPVs are used for various automotive and non-automotive applications.
In the last few years, there has been a market pull from consumers toward soft-touch applications. This has prompted the development and commercialization of soft TPOs. Soft TPOs are an extension of the TPO product line having low flex modulus and low Shore A hardness. Soft touch TPOs are classified purely based on Shore A hardness at the end product level. They are used in various applications requiring a soft feel such as soft toys, grips, automotive interior skins, and others.
Solvay Engineered Polymers’ new TPV grade will take advantage of these faster-growing newer applications that require soft thermoplastic elastomers.
NOVA Chemicals’ STYROSUN® resins exclusively specified by RSL Inc. for the production of door light frames
NOVA Chemicals announced that RSL Inc. and its supplier, Champion Injection Molding, specified STYROSUN weatherable styrene polymers for the production of their entire door light frame line.
According to Nova, STYROSUN is an ideal material for applications such as RSL/Champion door lights because it is easily painted and stained, provides the required heat and impact properties, and is cost-effective.
Compared to acrylonitrile-styrene-acrylate (ASA), STYROSUN resins’ processing advantages add value while delivering UV stability, heat resistance, and toughness that is required for door light applications.
In other applications, such as outdoor signage, lawn irrigation systems, and truck air deflectors, STYROSUN outperforms UV-stabilized high-impact polystyrene (HIPS) and acrylonitrile-butadiene-styrene (ABS), displaying significantly lower yellowing and improved property retention when exposed to outdoor environments. STYROSUN is currently manufactured at Breda, the Netherlands facility.
Comments: This resin is reportedly a compounded blend of polystyrene (PS) and ethylene propylene diene monomer (EPDM). This seems to work well due to the inherently crosslinked nature of the EPDM phase also probably with a heavy dose of UV stabilizers. EPDM offers an advantage over some earlier systems in that the mechanical mixing allows for a better surface in final molding. EPDM is inherently glossier than SB impact modifier rubbers.
There was another similar product on the market years ago, a mixture of PS and Kraton G® (SEBS) which gave suitable weatherable prosperities but probably not as good as Styrosun. Lyondell’s AAS specialty monomers can give the same results but at a higher cost. There is probably a very good market potential for this new weatherable resin.
Zeon Chemicals introduces a new grade of nitrile rubber, Zetpol® 2000LL
Zeon Chemicals continues to expand its line of hydrogenated nitrile butadiene rubber (HNBR) elastomers with the addition of Zetpol® 2000LL. This HNBR grade has the lowest Mooney viscosity and the easiest processing performance of any fully-saturated HNBR.
Furthermore, Zetpol 2000LL has the highest tensile strength of the Zetpol 2000 series, while also retaining the advantages of all physical properties, heat resistance, and fluid aging performance. Ideal for injection molding, Zetpol 2000LL is suitable for an array of applications including seals, o-rings, blow-out preventers, and stators.
Comments: Hydrogenated nitrile rubber is a type of nitrile rubber. NBR is a copolymer of an unsaturated nitrile (acrylonitrile) and a conjugated diene, generally butadiene. The main advantages of nitrile rubber include (1) high resistance to oils (aliphatic hydrocarbons) over a wide temperature range, (2) high strength, (3) good abrasion resistance, and others. The major applications of nitrile rubbers include (1) automotive, (2) mechanical rubber goods, (3) footwear & apparel, and others. The global demand for nitrile rubber in 2003 was about 685 million pounds. Major producers of NBR include (1) Zeon, (2) Bayer, (3) DSM, (4) Enichem, and others. Zeon is the largest producer of nitrile rubber in the world with several manufacturing locations including: (1) Houston, TX, (2) Louisville, KY, (3) Akron, OH, (4) Barry, UK, and (5) Japan (4 manufacturing locations).
For an in-depth analysis of the nitrile rubber market, view/order Chemical Market Resources, Inc’s latest multiclient study titled “Worldwide Flexible Polymers, 2003-2008”. Contact us at 281-333-3313, or email: poe-sna@cmrhoutex.com.
DuPont and Tate & Lyle form a bio-products joint venture to create products from renewable resources
DuPont and Tate & Lyle PLC announced a joint venture to create products from renewable resources such as corn for numerous applications including clothing, interiors, engineered polymers, and textile fibers.
The new company – DuPont Tate & Lyle BioProducts, LLC – is equally owned by DuPont and Tate & Lyle and will be based in Wilmington, Del. The company plans to construct its initial commercial manufacturing plant adjacent to an existing facility in Loudon, Tenn., with startup scheduled for 2006. A pilot facility in Decatur, Ill. has been operating for several years.
The joint venture will use a proprietary fermentation and purification process developed jointly by DuPont and Tate & Lyle to produce 1,3 propanediol (PDO), the key building block for DuPont™ Sorona® polymer. As DuPont’s newest polymer platform, Sorona® offers unique properties such as stain resistance, exceptional softness, comfort stretch and recovery, and UV- and chlorine-resistance when compared to polyester and nylon. Sorona® can be used in a variety of applications including textile apparel, interiors, engineering resins, and packaging. The new bio-based technology uses less energy and employs renewable resources – replacing the need for traditional petrochemicals now used to produce 1,3 propanediol (PDO).
Sorona® is currently manufactured from petroleum-based PDO and is available commercially from DuPont. It is used to produce clothing and fabrics with superior softness, dyeability, and a natural stretch. Bio-PDO™ corn-derived chemical and Sorona® polymer made from Bio-PDO™ will be available in 2006.
Comments: Currently DuPont produces Sorona® polymers from 1,3-propanediol (PDO)which is produced from petrochemical feedstocks. However, the company has been working on producing PDO from natural resources which would make Sorona Another Unique Service From Chemical Market Resources, Inc. 1120 NASA Parkway, Ste 340, Houston, TX 77058 USA; Tel: 281-333-3313 Email: POE-SNA@CMRHouTex.Com Copyright © 2003 Page 18/27of Issue 11 – Volume 2 biodegradable. DuPont already produces biodegradable polymers based on polyethylene terephthalate (PET) technology and is commercially known as Biomax® hydro/biodegradable polyester. Depending on the application, up to three proprietary aliphatic monomers are incorporated into the polymer. The monomers create weak spots in the polymeric chains, thereby making them susceptible to degradation through hydrolysis. The large polymer molecules are cleaved by moisture into smaller molecules, which are then consumed by naturally occurring microbes and converted to carbon dioxide and water. Biomax® can be recycled, incinerated, or landfilled, but is intended mainly for disposal by composting and in-soil degradation.
There have been several biopolymers developed based on PET technology. Polyhydroxyalkanoates (PHAs) are a group of biologically produced polyesters by fermentation using corn or beet sugar (glucose) as the feedstock. The polymers are grown inside microbes such as Ralstonia eutropha which contain about 70% PHA. The cells are then broken open to harvest the product, and the PHA is separated from the biomass.
Uhde acquires the engineering company INVENTA-FISCHER
Uhde GmbH of Dortmund, Germany, has acquired a 100% shareholding in INVENTA-FISCHER, with branches in Domat/Ems, Switzerland, and Berlin, Germany. INVENTA-FISCHER is a member of the Swiss EMS group and employs in total some 160 employees. The transaction is subject to approval from the monopolies commission.
INVENTA-FISCHER designs and builds industrial plants for the production of synthetic fibers and polymers and has a large number of proprietary processes, including first-class processes for the production of PET bottle feedstocks, technical and industrial yarns, textile fibers, filaments, and tire cords. The technologies are constantly being refined to meet increasing product requirements at the company’s own research and development facilities.
Comments: Formed in 1924, Inventa-Fischer is an engineering and construction (E&C) company mainly focused on the design of synthetic fiber plants such as PET, and polyamides. Uhde, one of the leading engineering & construction services companies has several divisions including (1) fertilizers, (2) organic intermediates and polymers, (3) electrolysis plants, (4) gas technology, (5) plants for oil, coal, and residue gasification, coking technology and pharmaceuticals. Uhde’s acquisition of Inventa will provide the company with the ability to construct synthetic fiber plants.
Hungarian firm Pannonplast to close injection molding plant and eliminate more jobs
Hungarian processor Pannonplast plc announced its plans to close a plant in Szombathely due to decreasing market.
The shutdown of Moldin Ltd. will cut 230 jobs by the end of June 2004. Last year the injection molding plant, which makes automotive and electronic components, lost 1 billion Hungarian florints ($4.7 million). The production of the automotive products will be transferred to another plant in Székesfehérvár, Hungary.
Comments: Pannonplast Plc. is a leading plastic products manufacturing company in Hungary. The company consists of the following divisions: (1) consumer packaging, (2) technical plastic products, and (3) construction industry & infrastructure. Its products are primarily used in the field of the food industry, household chemical industry, entertainment electronics, computer technology, household and automotive industry, and construction industry and infrastructure.
Pannonplast has been losing money over the last two years. In 2003, the company lost about 1,844 MM HUF, and in 2002 the losses were 959 MM HUF. The company had undergone some restructuring in 2002. The company closed one of two mold-making plants operated by its subsidiary Dexter Mould Making, expanded Polifoam Plastic Processing Ltd. foam sheet production into Russia, and converted some Moldin Plastics Ltd. injection molding capacity to make up for shrinking orders in electronics.
Molding Ltd. had taken a major hit when Hewlett-Packard Co.’s decision to move all printer-part production to the Far East. Hence, finally, the company decided to shut down its underperforming plant to recover its losses.
Dutch company Kendrion to divest its automotive plastics businesses
Kendrion N.V. announced that it has entered into a pre-contract with an international group concerning the acquisition of the remaining Automotive Plastics activities of Kendrion. These activities are located in Germany, Portugal, Spain, and the Czech Republic, have a turnover of EUR 240 million and 1,800 employees.
Parties aim to negotiate and sign the final purchase agreement in the third quarter of 2004 after a satisfactory due diligence review. Closing of the transaction will be subject to customary closing conditions including approval by the competent antitrust authorities.
This divestment of Automotive Plastics fits in the strategy of Kendrion, which focuses on specific core activities in business-to-business markets. The divestment will also lead to an important reduction of outstanding debt of Kendrion.
Comments: Based in Amsterdam, Kendrion is a manufacturer of components for industrial customers, as well as components for the automotive industry. The company is organized into three divisions including (1) Kendrion Industrial: development and production of components and systems mainly in the area of electromagnetic components and fasteners, (2) Kendrion Distribution Services: trade in and distribution of plastic products such as foils and tapes, tubes and sheets, and (3) Kendrion Automotive: development and production of plastic and metal components in the areas of safety and convenience, interior and mechanical systems for the automotive market.
Kendrion entered the automotive plastics business in 1984 when it acquired several companies producing plastic products. These business areas profile themselves as exclusive supplier of components and modules in the areas of safety and convenience, particularly interior parts and mechanical systems. These include for instance seatbelts and seatbelt fastenings, air conditioning, and interior parts such as consoles and headrests.
Bemis joint venture acquires flexible packaging assets in Mexico
Bemis Company, Inc. announced that, together with its Mexican joint venture partner, it has completed the purchase of certain flexible packaging assets of Masterpak S.A. de C.V., including a converting facility in Tultitlan, Mexico. These assets produce flexible packaging for dry foods, personal care products, pharmaceuticals, confectionery, and bakery products. Recently reported annual sales related to the assets to be acquired were approximately $35 million. Bemis owns 51 percent of the acquired business. Specific terms of the acquisition were not disclosed.
The new flexible packaging business will focus on supplying the packaging needs of Mexican food and consumer goods markets. Bemis and its Mexican joint venture partner currently operate two other joint ventures in Mexico: Bolsas Bemis, a paper packaging facility, and MACtac Mexico, a pressure-sensitive materials facility.
Bemis Company is a major supplier of flexible packaging and pressure-sensitive materials used by leading food, consumer products, manufacturing, and other companies worldwide. Founded in 1858, the Company reported 2003 sales of $2.6 billion, of which $2.1 billion was from the flexible packaging business segment and $0.5 billion was from the pressure-sensitive materials business segment. Based in Minneapolis, Minnesota, Bemis employs about 11,500 individuals in 53 manufacturing facilities in 10 countries around the world.
Comments: Bemis is a leading producer and converter of polyolefinic films in North America with several manufacturing facilities. Bemis manufactures and markets specialized proprietary flexible polymer film for a variety of packaging and industrial use. Bemis manufactures a wide range of films including (1) BOPP, (2) polyester, (3) nylon, and specialty cast films which are used either as mono-layer or multi-layer films for food and industrial packaging. Bemis consumes its BOPP captively for food packaging applications. The main applications for food packaging include snack food, bakery products, candy products, cheese products, cracker processing, pet food packaging, pasta packaging, granola bars, coffee bags, and others.
Masterpak is a leading flexible packaging converter in Mexico and produces flexible packaging materials, label stock, and laminated tubes. Masterpak began cellophane production in 1955 through the acquisition of cast film technology from British Cellophane Ltd and the company operates five plants in Mexico: two converting plants, two base film plants, and one folding carton plant.
The acquisition of Masterpak will bring Bemis to the 6th largest producer of BOPP films in North America. Other major players in this industry include ExxonMobil, AET, Interplast, Vifan Canada, Toray, Simpro/BPX, 3M, Cryovac, and others.
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