General News

Arkema continues speciality focus with tin stabiliser exit

Site in Brazil acquired for additives, emulsions

Arkema, which has recently completed the sale of its Vinyls ‘pole’, has continued its ongoing move in the direction of specialities, by agreeing the sale of its tin stabiliser business to the US-based PMC Group, a maker of performance chemicals and plastics. Speculation about a possible takeover of the group by one of its peers in the sector continues to grow.

The divested business comprises all of Arkema’s organometallic products within the Functional Additives business unit. These include Thermolite tin stabilisers for PVC production, Fascat catalysts, which are mostly used in the automotive sector, and fine chemicals. Combined these activities had sales of about €180 million last year.

The transfer involves sites at Carrollton, Kentucky, and some assets at Mobile, Alabama, and Beijing. Arkema will continue to run the tin stabiliser operations at Vlissingen, Netherlands, on behalf of PMC. All 234 employees are expected to transfer. The deal is expected to be completed in the autumn. Consultations with employees at Vlissingen are now going on.

As a result of all this, the Functional Additives business unit, which accounted for 10% of Arkema’s sales in 2011, will focus on organic peroxides used as reaction initiators for commodity polymers, a field in which Arkema is the world number two, plus acrylic impact modifiers and glass coating chemicals for the manufacture of flat glass and bottles.

Separately, via its Coatex subsidiary, Arkema is to acquire an additives and emulsions production site at Araçariguama, on the outskirts of Saõ Paulo, Brazil, from the Brazilian firm Resicryl. Plans are to adapt it immediately to manufacture Arkema’s and Coatex’s full range of rheology additives and waterborne emulsions.

This facility, including existing Coatex sales in Brazil, will generate sales of about $20 million/year. Arkema is seeking to tap into strong growth in the mineral industry, paper, construction, water treatment, and paint and adhesives markets in Latin America. The transaction is expected to close within 2H 2012.

Earlier, together with French oil and gas giant Total and SoGeBi, a Total and GDF-Suez subsidiary which manages the site at Lacq, southern France, Arkema had officially inaugurated the Lacq Cluster Chimie 2030 (LCC30) project there. The three will be investing €154 million to transform Lacq into “a pole of excellence in fine chemicals and speciality chemicals”.

The new facilities will be operational from mid-2013, ahead of Total’s planned shutdown of the commercial operation of the gas field later that year. As part of the investment, in which Arkema’s share will be €36 million, equipment will be designed to supply chemicals producers, mainly Arkema itself, with gas, electricity, hydrogen sulphide and energy from steam. This will preserve about 1,000 jobs. In the longer term, SoGeBi aims to attract other manufacturing companies to Lacq.

The sale of the loss-making Vinyls ‘pole’ to the Klesch Group, which was originally last November, was also completed in June. This makes the company much more focused on speciality chemicals. This will probably make it even more of a takeover target and rumours about an impending bid were swirling in early July.

According to sources cited by the Financial Times’s Alphaville blog, DuPont and BASF are likely to be in the running, among others, and Sabic had also been interested last year. The approaches are said to value Arkema at over €5.5 billion. The company’s shares have tended to trade at a discount to those of its peers but could now reach €90/share instead of the €70/share often suggested in the past.