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Arkema to close deal for divestment of functional polyolefins business to SK Global Chemical in Q2 2020

January 13/2020

MOSCOW (MRC) -- Arkema has recently announced the proposed divestment of its Functional Polyolefins business to SK Global Chemical, a subsidiary of SK, the major South Korean corporation. The proposed disposal, which is subject to an information and consultation process involving Arkemas employee representative bodies and to the approval of the relevant antitrust authorities, is expected to be finalized in second quarter 2020, reported Chemical Engineering.

With this project, Arkema continues its shift towards specialty chemicals and advanced materials.

Part of the PMMA Business Unit (Industrial Specialties division), the Functional Polyolefins activity represents sales of some EUR250 million. It comprises ethylene copolymers and terpolymers for the food packaging, cable, electronics and coatings markets, and leverages well-known brands: Evatane, Lotryl, Lotader, Orevac.

This activity employs around one hundred people in France and has an international sales network of around thirty people.

A subsidiary of South-Korean group SK, SK Global Chemical reported sales of USD11.9 billion in 2018, and operates around ten production sites around the world.

Offering a highly complementary fit with SK Global Chemicals existing portfolio of activities, Arkemas Functional Polyolefins would enable the company to consolidate its position in the packaging market and enter new industrial markets such as cable manufacturing.

The transfer of the business from Arkema France to SK Global Chemical would lead to the creation of a French subsidiary of the South-Korean group. The offer received is based on an enterprise value of EUR335 million.

This project, part of the program to divest non-strategic activities initiated in 2015, contributes to Arkemas objective to increase the share of specialties in its portfolio, in line with its ambition for these businesses to exceed 80% of Group sales by 2023.

As MRC informed earlier, in October 2019, Arkema successfully brought on stream a new 90,000-ton acrylic acid reactor at its Clear Lake, Texas site to support the growth of its North American customers in the superabsorbents, paints, adhesives and water treatment markets.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,904,410 tonnes in the first eleven months of 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments increased from both domestic producers and foreign suppliers. The PP consumption in the Russian market was 1,161,830 tonnes in January-November 2019, up by 7% year on year. Deliveries of all grades of propylene polymers increased, with the homopolymer PP segment accounting for the largest increase.

Arkema is a global manufacturer in specialty chemicals and advanced materials, with 3 business segments - High Performance Materials, Industrial Specialties, and Coating Solutions - and globally recognized brands. The Group reports annual sales of EUR8.8 billion. Buoyed by the collective energy of its 20,000 employees, Arkema operates in close to 55 countries.
Author:Margaret Volkova
Tags:Europe, PP, PE, paints and coatings, Arkema, SK global chemical, Russia, USA, South Korea.
Category:General News
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