BASF / SOLVAY
Planned PVC joint venture would be Europe's No. 2 / Solvay to shut Ferrara plant
The consolidation of the European PVC market has reached a new peak with the announcement of plans by Solvay (HQ: Rue du Prince Albert 33, B-1050 Brussels) and BASF (D-67056 Ludwigshafen) to merge their PVC interests. The jv could be the region's number two player with 1.2m t/y of capacity, close behind the partnership between EVC International NV (HQ: Strawinksylaan 1535, NL-1077 XX Amsterdam) and Norsk Hydro (HQ: N-0212 Oslo). – See Plasteurope.com No. 13, 1998. Announcements of new deals will no doubt follow as the Asian crisis fuels competition and puts further pressure on prices.
A letter of intent signed at the beginning of October calls for Solvay to take the 75% majority and the industrial leadership in the partnership with BASF, which will start up at Brussels in early 1999, if EU competition authorities approve. The groups want to pool all European PVC-related activities except compounding. The backward integrated jv would extend upstream from PVC and PVDC resins into dichloroethane, VCM and VDCM. It also would own the parents' chlor-alkali electrolysis plants in Belgium. Sharing ethylene produced by the partners' own crackers would further flexibilise feedstock supply.
BASF is one of the smaller PVC players, with 170,000 t/y of capacity at Ludwigshafen and 130,000 t/y at Antwerp; annual sales total DEM 350m. The merger is "the ideal solution for BASF," said Jean-Pierre Dhanis, divisional manager for Polyurethanes/PVC. The group will be able to keep the polymer's starting materials in its integrated production setup. Solvay, with some 1.8m t/y of annual output, has DEM 2 bn in annual PVC sales.
Solvay's European PVC polymerisation capacity at Tavaux, France, Rheinberg, Germany, and Jemeppe, Belgium, now totals 1.2m t/y. The group is also strong in Latin America and has a plant in Thailand. It is not clear whether plants in Spain will belong to the jv. The situation there is "being analysed." Solvay will close its 95,000 t/y PVC polymerisation plant at Ferrara, Italy, on 1 Janaury 1999; however, it said it will maintain – and expand – PVC compounding there, as well as marketing activities. The group said the Italian plant is too small to be competitive, and it also lacks feedstock integration. Italian customers are to be supplied from other European sites.
A letter of intent signed at the beginning of October calls for Solvay to take the 75% majority and the industrial leadership in the partnership with BASF, which will start up at Brussels in early 1999, if EU competition authorities approve. The groups want to pool all European PVC-related activities except compounding. The backward integrated jv would extend upstream from PVC and PVDC resins into dichloroethane, VCM and VDCM. It also would own the parents' chlor-alkali electrolysis plants in Belgium. Sharing ethylene produced by the partners' own crackers would further flexibilise feedstock supply.
BASF is one of the smaller PVC players, with 170,000 t/y of capacity at Ludwigshafen and 130,000 t/y at Antwerp; annual sales total DEM 350m. The merger is "the ideal solution for BASF," said Jean-Pierre Dhanis, divisional manager for Polyurethanes/PVC. The group will be able to keep the polymer's starting materials in its integrated production setup. Solvay, with some 1.8m t/y of annual output, has DEM 2 bn in annual PVC sales.
Solvay's European PVC polymerisation capacity at Tavaux, France, Rheinberg, Germany, and Jemeppe, Belgium, now totals 1.2m t/y. The group is also strong in Latin America and has a plant in Thailand. It is not clear whether plants in Spain will belong to the jv. The situation there is "being analysed." Solvay will close its 95,000 t/y PVC polymerisation plant at Ferrara, Italy, on 1 Janaury 1999; however, it said it will maintain – and expand – PVC compounding there, as well as marketing activities. The group said the Italian plant is too small to be competitive, and it also lacks feedstock integration. Italian customers are to be supplied from other European sites.
15.10.1998 Plasteurope.com [18408]
Published on 15.10.1998