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MOSCOW (MRC) -- Lotte Chemical has
recently completed its due diligence on potential acquisition of JSR’s
elastomers business, according to Chemweek with reference to a local press report
from Business Korea.
Lotte Chemical has selected Nomura Securities as its
lead manager for the acquisition, says the report.
JSR’s elastomers unit
produces emulsion styrene-butadiene rubber (E-SBR), solution styrene-butadiene
rubber (S-SBR), polybutadiene rubber, and isoprene rubber. IHS Markit data says
that JSR is the largest producer of SBR in Japan, accounting for a combined
capacity of 210,000 metric tons.
Lotte Chemical established a joint
venture (JV) with Versalis (Milan), the chemicals arm of Eni (Rome), and has
been operating 100,000-metric tons/year S-SBR facilities for high-performance
tires since 2017.
The press report says that the JV has been making
losses in this business. It is not easy for new companies to enter the S-SBR
sector due to difficult quality certification procedures set by existing
customers such as automakers, adds the report. The report says that the
acquisition will help Lotte Chemical to meet product standards required by
global tire manufacturers.
Lotte’s flagship products include butadiene
and styrene monomer, used as raw materials for synthetic rubber. Lotte will be
able to enjoy huge synergies by absorbing the elastomers division from JSR, says
the report.
It says that JSR plans to sell its elastomers business for a
price of up to 1 trillion South Korean won (USD908 million). Press reports
quoting industry experts say that JSR’s elastomers business suffered a loss in
the aftermath of COVID-19 in 2020, a factor that will be reflected in price
calculation.
As MRC reported before,
South Korea’s Lotte Chemical has restarted its fire-hit naphtha-fed steam
cracker in Daesan. Thus, the facility begins trial runs of naphtha on 7
December, 2020, and the company achieved commercial production on 8
December. The cracker was shut on March 4,
2020m following an explosion, which injured more than 30
people.
Lotte
Chemical runs two naphtha crackers in South Korea. One cracker is located in
Daesan county in Seosan which can produce 1.1 million tonnes per year of
ethylene with the other 1.2 million tonnes per year cracker in the southwestern
city of Yeosu.
Styrene is the main feedstock for the production of
polystyrene (PS).
According to MRC's ScanPlast
report, Russia's estimated consumption of PS and styrene plastics
totalled 454,990 tonnes in the first eleven months of 2020, which corresponds to
the last year's figure. November estimated consumption of PS and styrene
plastics grew by 4% year on year to 45,830 tonnes. |
