Extending the companies European joint venture to North America, Nova Chemicals Corp. and Ineos have announced that they will combine their sytrenics assets in the U.S. as part of a 50:50 joint venture. The deal includes Ineoss styrene and polystyrene plants and Novas Styrenix business, and other styrenics polymer assets. In particular, this would include the Nas, Zylar, and Dylark brands from Nova and Ineoss Avantra specialty products. The transaction is expected to close in the third quarter of 2007, creating a business with $3.5 billion in annual sales. Ineos will retain full ownership of its European styrene business, including a manufacturing plant in Marl, Germany.
Originally created from the assets of BP spinoff Innovene, Ineos joined with the European division of Nova in 2006, with the partners acquiring the U.S. and Canadian polystyrene businesses of BASF (see Sept. 2006 Material Thoughts for initial report). Its been a tough stretch for polystyrene, which has suffered under record high costs for key feedstock benzene. In a presentation during Chemical Market Associates Inc.s (CMAI, Houston) World Petrochemical Conference (March 20-22; Hilton Americas, Houston), Vince Sinclair, the director of styrenics and phenol for Asia, made the case that extremely volatile benzene prices have led to demand destruction, with the resin growing at an average annual rate of only 1%. In 1996, Sinclair reported that polystyrene made up 52.2% of all styrene demand; by 2006 the figure was 42.7%, and by 2011 CMAI forecasts it will dip further to 40.2%.[email protected]