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Alpek deal marks turnaround on debt

December 06/2019

MOSCOW (MRC) -- Alpek has finalized the sale of two co-generation plants in Mexico to ContourGlobal for USD801mn in what is the latest move by the Mexican plastics and polyester maker to shed assets and shore up its balance sheet, as per Bnamericas.

Alpek is the petrochemical business of Mexican industrial conglomerate Alfa. "This transaction represents the largest divestment in our history," Alpek CEO Jose de Jesus Valdez said in a conference call.

The company estimates it made USD40mn from the co-generation plants in 2019. One is in Cosoleacaque, Veracruz, and the other in Altamira, Tamaulipas state.

The companies reached an initial agreement on the sale early this year.

ContourGlobal, a UK-based power company with nearly 4,100MW of capacity across Europe, Latin America and sub-Saharan Africa, took over operations at both Cosoleacaque and Altamira on November 25. Despite the sale, Alpek and its parent Alfa will remain large customers of the plants. 

"We consume all of the steam at the co-generation plant, and about 35% of power generation of the plant, so were an important buyer," Valdez said. The purchase power contract extends for 11.5 years.

Also, Alpek is starting talks with ContourGlobal to move the two plants toward zero emissions output.

The sale comes as the global petrochemicals sector absorbs the impact of successive tariff escalations between the US and China. The spat has seen demand for production move to Mexico as a third-party producer.

As MRC informed earlier, Alpek has signed a deal to fully acquire a British plant from Lotte Chemical UK Limited. The plant, a unit of South Koreas Lotte Chemical, has the capacity to produce 350,000 tonnes of polyethylene terephthalate (PET) per year and is located at Wilton, Teesside.

According to MRC's ScanPlast report, Russia's estimated PET consumption dropped in September 2019 by 10% year on year, totalling 58,210 tonnes. Overall, 551,320 tonnes of PET was processed in Russia in the first nine months of 2019, up 9% year on year.
Author:Anna Larionova
Tags:PET-granulate, PET bottles, PET films, PET preforms, Alpek.
Category:General News
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