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

EPA fines RI polymer company

August 29, 2014 1:20 pm ET

A Rhode Island polymer manufacturer has reached a $60,000 settlement with the U.S. Environmental Protection Agency (EPA) for violating federal clean...    More

Image

Haitian's standardization efforts paying off

August 29, 2014 9:53 am ET

Streamlined design efforts and robust export sales helped propel Ningbo, China-based injection molding machine manufacturer Haitian International...    More

Image

Updating a travel icon for the professional millennial

August 29, 2014 11:44 am ET

As part of a drive to expand its customer base to include more millennials, Airstream Inc. turned to the Columbus College of Art & Design's...    More

Image

American Starlinger-Sahm begins work on new US headquarters

August 29, 2014 10:18 am ET

American Starlinger-Sahm Inc., which sells equipment for woven plastic bag production, PET recycling equipment, sheet extrusion and laminating lines...    More

Image

Chinese compounders seek market shares, often at the expense of margins

August 29, 2014 10:02 am ET

China's largest compounder, Kingfa Sci. & Tech. Co. Ltd., as well as its more automotive-focused counterparts Shanghai Pret Composites Co. Ltd. and Ch...    More

Market Reports

Thermoformed Packaging 2014 Market Review & Outlook North America

This in-depth report analyzes economic and market trends, legislative/regulatory activity impacting supply and demand, business opportunities and threats, materials pricing, manufacturing technology, as well as growth strategies being implemented by thermoformed packaging companies.

Learn more

Pipe, Profile & Tubing Extrusion in North America 2014

U.S. demand for extruded plastics is expected to grow by 3 percent in 2014, with PVC remaining the largest segment.

Plastic pipe will post the strongest gains through 2018, continuing to take market share from competing materials in a range of markets.

Our latest market report provides in-depth analysis of current trends and their financial impact on the pipe, profile and tubing extrusion industry in North America.

Learn more

2014 Injection Molding Industry Report

GROWTH, OPPORTUNITY IN SIGHT FOR INJECTION MOLDERS IN 2014

In the wake of the economic turbulence earlier in this decade, molders today find themselves in much better shape. Molders are gaining a competitive advantage by investing in people, equipment and seeking inroads into new markets on a global scale.

Growth in the injection molding industry is going to be driven by low financing costs and a continued move to reshore some business.

Learn more

Upcoming Plastics News Events

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

January 14, 2015 - January 14, 2015Plastics in Automotive

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

More Events