GEORGIA GULF
Acquisition of RWE-DEA´s US vinyls business / Atlanta group now in North America´s top three
Georgia Gulf Corporation (400 Perimeter Center Terrace, Ste. 595, Atlanta, Georgia 30346/USA) will pay $270m to acquire the vinyls business of Condea Vista (Houston), US subsidiary of German energy and petrochemicals producer RWE-DEA (Überseering 40, D-22297 Hamburg). The deal, set to close by the end of 1999, will make the Atlanta group North America´s third largest producer of of VCM and PVC and the continent´s second largest vinyls compounder.
RWE-DEA acquired the activities in 1991 through its takeover of US-based Vista. However, PVC is not one of its strategic fields. As the entire business is focused on the US, where “competition is keen and margins low,” board member Georg Schöning said there was “no realistic perspective” for long-term profitable operation.
The acquisition is a major step in Georgia Gulf ´s strategy to become a “more integrated manufacturer of chlorovinyl products,” said ceo Edward Schmitt. He said the timing is good, as PVC prices are rising. The deal will take the US group into dimensions rivalling such European vinyls majors as EVC and Solvin. It will have capacity to produce over 1.4m t/y of VCM, 1.2m t/y of PVC and 386,000 t/y of compounds, including PVC/ABS blends.
Condea Vista makes around 693,000 t/y of VCM, including its 50% of PHH Monomers, the joint venture with PPG Industries. The RWE subsidiary has capacity for almost 660,000 t/y of – mostly pipe grade – PVC polymer. It turns out some 63,600 t/y of flexible and rigid compounds. Following integration of the two businesses, PVC capacity will rise by around 5%, through process improvements and debottlenecking, said Schmitt. Some 25% of output will be earmarked for in-house compounding. Georgia Gulf claims to operate world´s largest PVC compounding plant, in Mississippi.
RWE-DEA acquired the activities in 1991 through its takeover of US-based Vista. However, PVC is not one of its strategic fields. As the entire business is focused on the US, where “competition is keen and margins low,” board member Georg Schöning said there was “no realistic perspective” for long-term profitable operation.
The acquisition is a major step in Georgia Gulf ´s strategy to become a “more integrated manufacturer of chlorovinyl products,” said ceo Edward Schmitt. He said the timing is good, as PVC prices are rising. The deal will take the US group into dimensions rivalling such European vinyls majors as EVC and Solvin. It will have capacity to produce over 1.4m t/y of VCM, 1.2m t/y of PVC and 386,000 t/y of compounds, including PVC/ABS blends.
Condea Vista makes around 693,000 t/y of VCM, including its 50% of PHH Monomers, the joint venture with PPG Industries. The RWE subsidiary has capacity for almost 660,000 t/y of – mostly pipe grade – PVC polymer. It turns out some 63,600 t/y of flexible and rigid compounds. Following integration of the two businesses, PVC capacity will rise by around 5%, through process improvements and debottlenecking, said Schmitt. Some 25% of output will be earmarked for in-house compounding. Georgia Gulf claims to operate world´s largest PVC compounding plant, in Mississippi.
15.09.1999 Plasteurope.com [17816]
Published on 15.09.1999