The deal includes Genovique manufacturing operations in Chestertown, MD; Kohtla-Järve, Estonia; and its joint venture in Wuhan, China. All will become part of Eastman's Performance Chemicals and Intermediates (PCI) segment. Arsenal purchased the business in 2005 and later rebranded the company as Genovique, changing the name from Velsicol Chemical Corp. in October 2008.
Eastman estimates the world-wide plasticizer market at approximately $9 billion and believes regulatory changes and shifting consumer preferences are driving greater demand for non-phthalate solutions. In North America and Europe, Eastman believes demand volume for non-phthalate plasticizers is expected to increase at a compounded annual rate of 7% over the next five years. Eastman is currently a supplier in North America and Europe of general-purpose non-phthalate plasticizers for flexible polyvinyl chloride (PVC) applications. Genovique's technology for non-phthalate plasticizers is based on benzoic acid for water-based adhesives, a new product for Eastman. The company's brands include Benzoflex and Admex.
When Arsenal acquired Genovique in 2005, it set about to emphasize adhesives, flooring, and non-phthalate plasticizers. Its manufacturing base was expanded through a joint venture in China that opened in 2006, and annual revenues were pushed to $135 million. —Tony Deligio