Leading styrenic block copolymers producer Kraton (Houston, Texas / USA; www.kraton.com) is reviewing “strategic alternatives” for its “Cariflex” polyisoprene elastomers portfolio with an eye to selling the business and concentrating on core high-end plastics. No timetable for action has been set. CEO Kevin Fogarty said management believes the high-margin business and its attractive growth prospects are not appropriately valued as part of Kraton. Fogarty added that Cariflex could have strategic value for several players better positioned to realise its potential, without commenting whether the company is currently in talks. The majority of proceeds from any full or partial monetisation of the business would be used to reduce debt in accordance with the goal of deleveraging as a means of increasing financial flexibility, he said.

“Over the last few years, we have driven down costs, generated cash to reduce indebtedness and expanded our leadership position in our polymer business, while adding a highly complementary chemicals segment,” Fogarty said. “Nevertheless, Cariflex for the most part is a standalone business at Kraton, with minimal revenue or cost overlap with our polymer and chemicals segments.” With non-core products carved out, he said, the company’s focus going forward could be on innovation in order to drive market development, continued margin expansion and further sustainable differentiation for its customers.

Kraton's polymers are used in a wide range of applications, including adhesives, coatings, consumer and personal care products, sealants and lubricants as well as medical, packaging, automotive, paving and roofing products. The business was carved out of Shell Chemicals at the beginning of the millennium and has been consistently in private equity ownership.