PIE: DuPont, DSM and Lanxess want to sell their polyamide businesses – why?

Dimitrios Koranis: There is no one-size-fits-all answer to this. Each of the companies mentioned will have its own reasons. We often observe that corporate groups in particular divest themselves of individual business units from time to time. That is normal. I also think it is important and right that companies refocus on their core business on a regular basis. Sometimes this has economic reasons, sometimes it happens to strategically streamline the product portfolio.

PIE: So, these are not panic sales due to a reeling automotive industry?

Koranis: No, I can’t imagine that is the case. Companies like DuPont, Lanxess or DSM, with their large staff departments, do not make their decisions emotionally or based on gut instinct. What probably does play a role is the current situation: times of crises like these increase the readiness for reorientation. The top managers in the boardrooms are then more willing to turn everything upside down and scrutinise it.

PIE: How much calculation is behind the announcements?

Koranis: Good question. Perhaps the companies wanted to make a little noise and see what happens. The market for polyamide is tight. If they signal their intentions to sell, it might drive prices further up.

PIE: Who might possibly be interested in buying one of the polyamide businesses?

Koranis: First of all, of course, the sales price defines the circle of possible buyers. The higher the asking price, the fewer companies will be able to afford it. In principle, however, I can imagine a whole range of interested parties: for example, feedstock producers who want to forward integrate their value creation by purchasing PA production. But large compounders could also be interested. For them, it would be backward integration. Last but not least, it is also conceivable that a hitherto completely unknown third party will throw its hat into the ring. Especially in Asia, there are a number of companies in the plastics sector that can easily afford this financially.

PIE: Is the PA market also facing consolidation?

Koranis: It cannot be ruled out. This is exactly what we have observed with other engineering thermoplastics such as PBT. However, I do not think it is very likely that one of the three companies mentioned will buy the PA activities of the other two and unite them under its own roof – but it is not completely out of the question either.

Dimitrios Koranis is the founder and owner of Koranis Purchasing Solutions (Nuremberg / Germany; www.koranis.de). Among other things, he advises companies in the plastics industry on matters of positioning and strategic purchasing.