DAK settling into post-acquisition phase

By Frank Esposito
Senior Staff Reporter

Published: April 4, 2012 6:00 am ET

Related to this story

Topics Materials, Suppliers, NPE 2012

ORLANDO, FLA. (April 4, 7:25 p.m. ET) — DAK Americas LLC (Booth 24030) has entered into a “post-acquisition phase” as it absorbs the two major purchases it’s made in the last 18 months.

In late 2010, Charlotte, N.C.-based DAK bought the PET business of Eastman Chemical Co., including a plant in Columbia, S.C., for $600 million in cash. Then in mid-2011, DAK paid $185 million for the PET business of Wellman Inc., including a 950 million-pound capacity PET plant in Bay St. Louis, Miss.

Those moves — combined with Indorama Public Ventures Co. Ltd.’s purchase of a PET business from Invista — placed 90 percent of North American PET capacity in the hands of only three firms: DAK (the largest with 40 percent), Indorama and M&G Group.

“We’ve now got a pool of manufacturing technology that we can optimize across our asset base, and use those attributes in all of our plants,” specialty polymers vice president Tom Sherlock said in an interview at NPE2012.

“We’ve also been able to expand our product grades and get more offerings into our major market segments,” he added. “The two acquisitions have been very good for us. The Eastman deal has been more challenging since it was more complex and bigger. We also had to make new work processes and culture work in Columbia.”

Resins vice president Jon McNaull added that he believes the Columbia site now feels “more empowered” and that DAK “has got through all of it in a positive way.”

Contrary to what some in the industry had expected, DAK plans to keep the plants it’s acquired operating at their current capacity levels.

“The intention is to keep growing,” McNaull said. “From a trade leadership perspective, we’ll run the resins with the best attributes at the plants that fit those attributes and that serve the business well.”

For example, he added, the former Wellman plant – known as the Pearl River plant – is best suited to serve West Coast markets, so resins used by West Coast customers would best be produced there.

And even with only three major players in North American PET, Sherlock said that the market “is still a very competitive arena.” McNaull added the concentration of production could result in better materials available to the carbonated soft drink (CSD) sector and other end markets.

At NPE 2012, DAK is spotlighting several products, including Array, a specialty polymer with potential uses in fibers, nonwovens, film and packaging and similar markets.

In the broader PET field, DAK officials said that North American demand could increase 4.5 percent this year after growing at just over 5 percent in 2011. Starting next year, growth should average 3.5 percent for the next several years, as the region’s economic recovery slows a bit.

Some sizable tea brands switched from glass to PET, which helped growth. Bottled water also continued to grow at a 4-5 percent rate. And energy drinks “increased dramatically,” Sherlock said. These categories offset the behemoth CSD field, which was flat to declining.

PET now also could gain from volatility and higher prices in polypropylene, Sherlock added.

“People want out that volatile (PP) situation,” he said.

DAK operates U.S. PET plants in Charleston, S.C.; and Wilmington and Fayetteville, N.C. In 2008, the firm bought a pair of PET plants from Eastman in Cosoleacaque, Mexico; and Zárate, Argentina.

DAK is part of the Alpek unit of Mexican conglomerate Alfa SAB de CV. Alpek’s other products include polypropylene, expanded polystyrene, nylon and nylon feedstock caprolactam. Other units owned by Alfa make frozen foods, aluminum auto parts and telecommunications products.


Comments

DAK settling into post-acquisition phase

By Frank Esposito
Senior Staff Reporter

Published: April 4, 2012 6:00 am ET

Post Your Comments


Back to story


More stories

Image

Windmöller & Hölscher looking to continued growth in China

July 21, 2014 3:40 pm ET

With 2013 global sales of 600 million euros, China has grown into an important export market for Windmöller & Hölscher KG, second only to the United...    More

China launches investments in Belarus

July 21, 2014 10:10 am ET

China is preparing to invest in a major bottle grade PET production project planned by the Belarus PET and polyester fibers producer...    More

Image

Thermoforming Technology Group adds Lyle Industries to its portfolio

July 18, 2014 2:48 pm ET

Thermoforming Technology Group LLC has expanded its thermoforming equipment presence with the acquisition of Lyle Industries Inc.    More

Image

Polynt, CCP create composite resins giant

July 18, 2014 10:13 am ET

France's Total SA has agreed to sell CCP Composites to Polynt Group SpA, based in Italy, for an undisclosed price.    More

Image

PET prices climb 2 cents

July 17, 2014 2:22 pm ET

After holding their ground in May, North American PET prices rebounded to show an average increase of 2 cents per pound in June.    More

Market Reports

Injection Molders Market Report & Ranking 2014

This special package contains our 132-page 2014 Market Report on the Injection Molding segment and our exclusive 2014 RANKINGS database of 500+ Injection Molders for a discounted package price.

Learn more

Plastics Recycling Market Review & Outlook 2014

This special report from Plastics News examines the North American plastics recycling industry and provides insight into indicators that impact market viability, including Resin pricing trends for virgin and recycled market material and historical Resin production trends for post- consumer and industrial waste.

Learn more

Shale Gas Market - Analysis of North American Region

This report highlights the impact of shale-based natural gas on the North American plastics market and features an in-depth analysis of production trends in the United States during 2013 and a forecast for 2014 and beyond.

Learn more

Upcoming Plastics News Events

September 10, 2014 - September 12, 2014Plastics Caps & Closures 2014

February 4, 2015 - February 6, 2015Plastics News Executive Forum 2015

More Events