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

Mold maker Moldworx building in Arizona to bring in more molding

March 5, 2015 10:13 am ET

Moldworx LLC has begun leasing more space in Gilbert, Ariz., to allow it to grow its injection molding business.    More

Image

Best Places To Work: No. 6, Colors For Plastics

March 4, 2015 12:35 pm ET

Colors For Plastics, which now employs 115 people, started with one man who handled everything.    More

Image

Best Places To Work: No. 7, CMD Corp.

March 4, 2015 12:27 pm ET

There's a lot of innovating going on at the No. 7 company on Plastics News' Best Places to Work ranking.    More

Image

Ineos to combine ABS unit with Styrolution in Americas

March 4, 2015 10:03 am ET

Global materials firm Ineos Group will combine its ABS resin business with its Styrolution unit in the Americas.    More

Image

Obituary: Guido Ghisolfi, PET company executive

March 4, 2015 9:47 am ET

Guido Ghisolfi — a top executive with global PET resin leader Mossi & Ghisolfi Group — has died from an apparent suicide.    More

Market Reports

Flexible Packaging Trends in North America

North America represents about 30 percent of the global consumption of flexible packaging. Annual growth in this region is forecast at 4 percent during the next 5 years.

For more insight on growth opportunities, drivers of growth and the outlook for 2015, download this report.

Learn more

Plastics Recycling Trends in North America

This report is a review and analysis of the North American Plastics Recycling Industry, including key trends and statistics based on 2013 performance. We examine market environment factors, regulatory issues, industry challenges, key drivers and emerging trends in post-consumer and post-industrial recycling.

Learn more

Plastics in Mexico - State of the Industry Report

This report analyzes the $20 billion plastics industry in Mexico including sales of machinery & equipment, resins and finished products.

Our analysts provide insight on business trends, foreign investment, top end markets and plastics processing activity. The report also provides important data on exports, production, employment and value of plastics products manufactured.

Learn more

Upcoming Plastics News Events

June 2, 2015 - June 3, 2015Plastics Financial Summit - Chicago 2015

September 16, 2015 - September 18, 2015Plastics Caps & Closures - September 2015

More Events