ICI Polyurethanes and Shell Chemicals Ltd. have signed a letter of intent regarding the formation of a strategic alliance in the global rigid polyurethane (PU) foam market. Within the alliance Shell chemicals companies would focus on the supply of rigid polyether polyols based on their technology positions in both propylene oxide and polyols. ICI would focus on technical development and marketing of all rigid PU foam chemicals, enhancing its position in MDI. Subject to approval by the relevant authorities and contract finalisation both parties expect the alliance to come into effect in the first quarter of 1999.

Under the arrangement Shell chemicals companies would acquire rights to ICI's rigid polyol manufacturing technology. In Europe Shell companies would supply ICI Polyurethanes with rigid polyether polyols from ICI's Rozenburg and Shell Nederland Chemie's Pernis facilities, the combined capacity of which is 75 ktpa. At the Rozenburg facility, the rigid polyether polyols would be produced under a toll manufacturing agreement between Shell Nederland Chemie and ICI Holland. In the USA, polyols would be manufactured at ICI's Geismar facility in Louisiana.

ICI would acquire rights to Shell application technology in rigid PU foam and would integrate the Shell customer portfolio into its established global rigid PU foam business. This would include Shell's volume of MDI produced at the Bayer Shell Isocyanate joint venture plant in Antwerp, Belgium.

"This is a great opportunity for both companies," said Steve Hubrecht, ICI Polyurethanes' rigid foam business manager. "We both have our particular areas of expertise and this alliance allows us to focus our efforts and provides synergies that will benefit both companies." Shell Chemicals' Phil Parker also welcomed the agreement: "This alliance lets us concentrate our efforts on the manufacturing of rigid polyether polyols. With ICI to market the products, we are confident we have a solid platform for growth in this key segment of the PU business."