Chevron Phillips Chemical Company (The Woodlands, TX) will divest its Ryton polyphenylene sulfide (PPS) business to Solvay Specialty Polymers USA ((Alpharetta, GA) for $220 million. The announcement comes at a time when incumbent and new players are investing aggressively in new polymerization and compounding capacity meaning despite strong market growth, suppliers are facing ever increasing competition.
|Chevron Phillips Chemical's Corn: "PPS business is a better strategic fit for Solvay."|
"As the inventors of the PPS production technology, Chevron Phillips Chemical is proud of the success story of Ryton PPS and how the business has served the industry for over 40 years," said Ron Corn, senior vice president of specialties, aromatics and styrenics for Chevron Phillips Chemical. "And to ensure its long-term success, Chevron Phillips Chemical determined its stand-alone PPS business is a better strategic fit for Solvay, a company with a strong engineering polymers portfolio."
As part of the transaction, Solvay intends to purchase Chevron Phillips Chemical's Ryton PPS resin manufacturing assets in Borger, Texas, its pilot plant along with its PPS research and development assets in Bartlesville, Oklahoma, its compounding plant in Kallo-Beveren, Belgium, and certain intellectual property relating to Chevron Phillips Chemical's Ryton PPS business. The compounding plant in La Porte, Texas, will remain part of Chevron Phillips Chemical and will be operated by Chevron Phillips Chemical exclusively for Solvay for some period of time.
"In addition, the Ryton PPS business currently has about 200 employees and most will have the opportunity to join Solvay," said Corn. "We intend to work with Solvay to enable safe and reliable operations and a smooth business transition for customers and employees."
Global demand for PPS compounds continues to grow at 6-8% annually according to Japanese supplier DIC Corp. (Tokyo), which recently announced it intent to expand capacity in China, where the market is growing even faster. Interestingly, DIC acquired the European PPS compounding business of Solvay in September 2011.
Toray Industries is also expanding its PP resin business through construction of a polymerization plant in Korea, while new entrants Teijin (Tokyo) and its Korean partner SK Chemicals (Seoul) have set up a joint venture to develop and market polyphenylene sulfide (PPS) resins and compounds in Ulsan, South Korea. Construction of a 12,000-tonnes/year PPS resin plant began in October 2013. Celanese Corporation (Dallas, TX), meanwhile, is beefing up its compounding capabilities in China.