Geomembrane maker GSE prepares for sale, opens China plant

By Michael Lauzon
Correspondent

Published: March 28, 2014 9:41 pm ET
Updated: April 2, 2014 11:59 am ET

Image By: GSE Environmental GSE Environmental has started production of polyethylene geomembranes at its new plant in Suzhou, China.

Related to this story

Topics Mergers & Acquisitions, Film & Sheet, Extrusion, Geomembranes/landfill

Geomembrane major GSE Environmental is expanding as it nears a deadline for a sale of the company.

GSE of Houston has started up a geomembrane extrusion line in Suzhou, China, its first for the country. The new operation complements an existing plant in Rayong, Thailand, to supply China and other Asian markets, said GSE vice president of marketing Steve Eckhart in a March 28 phone interview.

Separately, the company recently announced an agreement to exclusively distribute Tenax Group geogrids used in mining and environmental applications.

GSE has an April 21 deadline to finalize a sale of the company agreeable to its lenders. Private equity firm CHS Capital LLC of Chicago has been the major shareholder of GSE since 2004. GSE is publicly traded but its public float is less than 50 percent of shares.

GSE sales in 2012 were about $468 million, 62.6 percent higher than in 2004 when CHS bought into the company. When the sale of two subsidiaries in 2009 and 2010 are taken into account, GSE’s sales for continuing operations grew 80.8 percent in the 10-year span.

The company was founded as Gundle Corp. in 1981 and has grown internally and through acquisitions. Its last major acquisition was  two manufacturing lines from Poly-America LP of Grand Prairie, Texas, in early 2012. GSE funded the purchase with proceeds from its initial public offering a month earlier.

“Several companies are in the mix and we are evaluating [potential offers],” said Eckhart. “We may have an announcement in a few weeks.”

Eckhart did not reveal which companies are in the hunt for GSE but rivals in the geomembrane industry aren’t party to negotiations. GSE claims to be the biggest company of its type in the world. CHS has occasionally looked to divest its stake in GSE over the last several years but financial markets weren’t encouraging.

GES has a global reach with production plants in the United States, Chile, Germany, Egypt and Thailand. Its U.S. plants are in Houston, Spearfish, S.D., and Kingstree, S.C. As well, it has sales and engineering offices around the world.

Eckhart said the highest growth potential for geomembrane products is in emerging nations. North America and Europe are fairly mature markets but North American demand is gaining from trends in oil and gas fracturing projects, which use geomembranes for drilling pads, fracking fluid flow-back ponds and fresh water ponds.

The China plant produced its first commercial quality roll of geomembrane liner earlier this month. Eckhart said the first roll was high density polyethylene liner made on the flat-cast line. The line can make 25-foot wide geomembranes with up to three layers. China’s market is primarily HDPE but it also requires low density PE types. Eventually Suzhou will add geonets production for the local market

GSE broke ground on the Suzhou plant in January 2013. The operation has capacity to make 44 million pounds of geomembranes annually.

GSE’s Houston plant can make 31-foot wide geomembranes in a blown film process. GSE also can make geotextiles. Markets for GSE products include environmental applications, mining, water, wastewater and aquaculture, wherever there is a need for containment and management of liquids, solids and gases. HDPE geomembranes are its largest single product category.

Tenax based in Vigano, Italy, is a global leader in geogrids used for soil reinforcement and stabilization where soils are weak or are steeply sloped as in landfills, embankments, retaining walls and bridge abutments. They can also contain rock debris in tunneling and mining. Tenax’s other offices are in the United States, Germany, Switzerland and China.

“Over the last several months, with the help of Moelis & Co. LLC, the company has been engaged in a robust process with respect to the [GSE sale],” stated GSE President and CEO Chuck Sorrentino in a news release. The deadline for a sale was extended to April 21 after the firm and its senior lenders agreed to amendments to GSE’s credit facilities.


Comments

Geomembrane maker GSE prepares for sale, opens China plant

By Michael Lauzon
Correspondent

Published: March 28, 2014 9:41 pm ET
Updated: April 2, 2014 11:59 am ET

Post Your Comments


Back to story


More stories

Image

American Renolit sees steady gains in the film market

September 16, 2014 11:51 am ET

American Renolit Corp. has changed its product mix, changed its customer base and managed to grow in a market that was initially skeptical about the...    More

Image

Flexibility for complexity key for Brampton

September 16, 2014 11:26 am ET

Blown film machinery maker Brampton Engineering Inc. is well positioned to meet growing demand for complex film structures, highly customized...    More

Image

Primex finds success among diverse product offerings

September 15, 2014 3:09 pm ET

What was once a run-down stretch of road in Richmond, Ind., has given way to building after building of extrusion machinery at Primex Plastics Corp....    More

Image

Primex names new tech center after John Farber, a steady supporter

September 15, 2014 3:00 pm ET

RICHMOND, IND. — John J. Farber was there when Primex Plastics Corp. was founded in 1965. And he has been a steady source of...    More

Image

Here's a peek behind our 2014 film & sheet ranking

September 15, 2014 1:22 pm ET

Today Plastics News publishes its annual ranking of North American Film and Sheet Manufacturers. Let's look at some interesting numbers behind the ran...    More

Market Reports

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

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

Upcoming Plastics News Events

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

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

More Events