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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 Nova’s 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 Nova’s 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, Nova’s 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
company’s 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, Alpek’s 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. |
