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NOVA Chemicals to sell expandable styrenics business to Alpek

October 21/2020

MOSCOW (MRC) -- Nova Chemicals (Calgary, Alberta, Canada) has agreed to sell its expandable styrenics business to a subsidiary of Alpek (Monterrey, Mexico) for an undisclosed sum, said Chemweek.

The transaction is expected to close in the fourth quarter, it says. The sale encompasses Novas expandable polystyrene (EPS) and Arcel-brand resin product lines, with manufacturing facilities in Monaca, Pennsylvania, and Painesville, Ohio, as well as commercial operations in Asia, it says. The plant at Monaca has an EPS production capacity of 123,000 metric tons/year, with 36,000 metric tons/year of capacity for Arcel, as well as an R&D pilot plant. The facility at Painesville has an EPS capacity of 45,000 metric tons/year, according to Alpek subsidiary Styropek, which is acquiring Novas business.

Nova, a wholly owned subsidiary of Mubadala Investment Co. (Abu Dhabi, UAE), says the sale is an important step in its plan to focus on its olefin and polyethylene (PE) business, which includes additional investments to advance a circular economy for plastics. The transaction, if it proceeds to completion, would see Nova entirely exit the styrenics sector.

The sale will provide the company with immediate cash generation to further strengthen our balance sheet, says Luis Sierra, Novas president and CEO, and enable it to focus on the completion and start-up of its 450,000-metric tons/year PE plant under construction in Ontario. The new plant, as well as the expansion of the companys existing Corunna steam cracker that will supply ethylene feedstock to the adjacent PE facility, is scheduled for completion in late 2021.

Alpek sees strong business opportunities associated with this purchase, says Jose de Jesus Valdez, Alpeks CEO. Our team is focused on executing a seamless integration to welcome our new team members, while quickly capitalizing on all the identified synergies and business opportunities, he says.

The company says it will optimize costs at its newly acquired facilities and that the additional sites will allow it to serve both existing and new customers with increased efficiency and lower logistics costs. It intends to continue growing its business in the construction and reusable packaging segments, both of which require long-term use of EPS, as well as developing more sustainable products, such as biodegradable EPS, it adds.

According to ICIS-MRC Price Report, Russian HIPS and GPPS producers traditionally did not adjust their prices of material in the middle of the month. A shortage of Nizhnekamskneftekhim's material remained in the domestic market. The situation with the shortage of Russian polystyrene (PS) is also expected to remain in November.

Alpek operates two main business segments, focused on polyester, and plastics and chemicals, and is a leading producer of purified terephthalic acid (PTA) and polyethylene terephthalate (PET). It is also the largest EPS manufacturer in the Americas.
Author:Anna Larionova
Tags:EPS, GPPS, styrene, HIPS, Alpek, Nova Chemicals.
Category:General News
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