"The additive industry has failed to really innovate at the same speed as the polymer industry," Peter Smith, Addivant president and CEO, told PlasticsToday. "Additives are, on average, decades old and really have not advanced; we're in the process of launching the next generation of additives, and they will have higher performance than the workhorse products that we still sell."
Addivant will operate as an independent portfolio company of private equity firm SK Capital, which finalized the purchase from Chemtura on May 1. On January 25, Chemtura agreed to sell its antioxidants and UV stabilizer business to SK for $200 million. Of that, approximately $97 million was payable in cash at closing and $9 million would be in preferred stock issued by Addivant, with the assumption of pension, environmental and other liabilities totaling approximately $93 million.
|Peter Smith, Addivant president and CEO.|
Full R&D pipeline
Smith, a longtime plastics veteran with stints at Dow Chemical and the former GE Plastics, joined Chemtura in 2008, running the additives unit from 2009 on. Smith noted that the purchase by SK was a total business buyout, including everything from computer systems to the R&D pipeline.
New products are already flowing from that R&D pipeline, according to Smith, including a new system based on liquid antioxidants that eliminates blooming in the cast-film extrusion process and the subsequent plating at the die that requires intermittent line shutdown and clean up.
Weston 705 has already received European approval for food-contact applications, and it is in the final stages of securing FDA approval. Commercial in Europe, Smith said it should be available in the U.S. in the fourth quarter of this year. Based on proprietary chemistry, Weston 705 has been designed to replace trinonylphenyl phosphite (TNPP) in those instances where a TNPP alternative is sought. Long cleared by the FDA and European Union, TNPP is a derivative of nonylphenol (NP), and in some instances trace quantities of NP can migrate out of the polymer matrix at levels not proven to be harmful.
A new start as a standalone company
Addivant's pedigree includes Great Lakes Chemical, Uniroyal Chemical, and GE Specialty Chemicals with applications in antioxidants, UV stabilizers, rubber additives, polymer modifiers, coupling agents, polymerization inhibitors, and alkylphenols. Despite those established brands and technologies, a press release announcing the finalized deal stressed what is new about the company, namely that it is going from a "non-core business within a large public company to a stand-alone organization."
Focus on regulatory approval
In addition to new products, Smith said Addivant is also pushing the need to stay out in front of potential regulatory crackdowns. "We are seeing a trend in this industry towards demanding more and more investment in regulatory activities," Smith said. "The requirements are becoming tighter and tighter, and we have to invest in regulatory activity and toxicology. We already saw this with REACH, but that was just the beginning. Companies are looking for partners than can service their needs globally but also be confident that they also have all the regulatory requirements in play now and in the future."
Getting additives up to speed
Smith said Addivant's goal is create additives that are as advanced as the materials and processes they're used with. "Given the demands of the polymer producers, with newer technologies in materials, like metallocene catalysts and advanced extrusion processes like co-extrusion, the next generation of additive is required to really let industry take advantage of what the materials and equipment can do," Smith said. "People learn to live with certain performance issues, but really there's no need for it. We're going to be supporting the industry and challenging ourselves-can we down gauge; can we run the extrusion lines faster."
Addivant will be headquartered in Connecticut and maintain its workforce and global footprint with 11 plants on five continents and nine existing technology centers and application testing centers worldwide.
The company is also investing in existing joint-venture sites in Saudi Arabia and South Korea, boosting capacity. At Al Jubail, the focus will be on its ANOX NDB stabilizer blend technology that enables up to eight components to be delivered in a single homogeneous blend. Smith said this allows upstream polymer producing customers to input the product directly into the manufacturing process. In South Korea, production will be boosted thanks to new, undisclosed, process technology.