Styron exiting North American commodity polycarbonate market

By Frank Esposito
Senior Staff Reporter

Published: May 30, 2014 11:49 am ET
Updated: May 30, 2014 1:37 pm ET

Image By: Styron LLC

Related to this story

Topics Materials, Materials Suppliers, United States, Mexico, Canada

Styron LLC no longer will sell commodity grades of polycarbonate resin in North America.

Berwyn, Pa.-based Styron will end its PC supply agreement with Dow Chemical Co. in the fourth quarter of this year. Dow had produced PC for Styron on a contract basis at a plant in Freeport, Texas, since Styron was spun off from Dow and acquired by private equity firm Bain Capital in 2011.

Commodity PC grades — including those used in sheet, bulk extrusion and optical media — “tend to be lower-margin,” Styron spokeswoman Catherine Maxey said in a May 30 phone interview. So Styron will no longer serve those markets.

Styron will continue to market higher-margin compounds and blends that are toll-produced by PolyOne Corp. These materials are sold into medical devices, lighting, automotive and similar applications. PC used in those blends will be sourced from an unidentified third-party supplier and from a Styron PC plant in Stade, Germany, Maxey said.

“Our [compound and blends] customers won’t see any change, and no Styron jobs will be affected,” she added.

According to Maxey, Dow will discontinue PC production in Freeport, where Styron had been its sole customer. Dow will close and dismantle its PC unit there, she said. Officials with Dow in Midland, Mich., could not be reached for comment.

In a recent filing with the Securities and Exchange Commission, Styron officials said the firm would have saved $35 million in 2013 by ending its contract with Dow and altering some raw material contracts at its Stade plant.

Styron’s exit from the commodity PC market will leave Sabic Innovative Plastics and Bayer MaterialScience as North America’s only remaining regional producers of that material. BMS parent Bayer AG of Leverkusen, Germany, has been seeking a buyer for that unit, according to media reports.

Styron posted mixed results in the first quarter of 2014. Sales fell 2 percent to $1.36 billion, but the firm registered a $17.1 million profit after losing $9.7 million in the same quarter last year. In addition to engineered polymers, Styron’s products include styrenic resins, synthetic rubber and latex. The firm’s assets include a 50 percent stake in Americas Styrenics, a joint venture it operates with Chevron Phillips Chemical Co.

Styron also earlier this year filed for an initial public offering at an unspecified date. The firm hopes to raise as much as $200 million through the IPO. The firm had filed for an IPO in June 2011, but withdrew that filing in June 2013. After the IPO, Styron plans to operate as Trinseo SA.

Funds raised by the stock offering would be used to pay down debt, for working capital and for general corporate purposes, officials said in the filing. No stock exchange or target per-share price was listed in the filing.

Styron employs 2,100 worldwide and posted sales of just over $5.3 billion in 2013.


Comments

Styron exiting North American commodity polycarbonate market

By Frank Esposito
Senior Staff Reporter

Published: May 30, 2014 11:49 am ET
Updated: May 30, 2014 1:37 pm ET

Post Your Comments


Back to story


More stories

Image

Ferro sells another piece of its plastics business

December 19, 2014 3:33 pm ET

Ferro Corp. has sold its North American polymer additives business to a private equity firm for $154 million in cash.    More

Image

Judge limits scope of jury verdict against JM Eagle

December 19, 2014 2:30 pm ET

A federal judge in Los Angeles said Dec. 18 that last year's jury verdict issued against J-M Manufacturing Co. — now JM Eagle — for...    More

Image

Jarden hiring for new plastics plant

December 19, 2014 1:45 pm ET

Consumer products conglomerate Jarden Corp. is hiring plastics technicians for a new operation in Erlanger, Ky.    More

Image

Antimicrobial polymers firm TiFiber launching pilot production in Ark.

December 19, 2014 10:58 am ET

TiFiber Inc., which makes synthetic compounds to control dangerous microorganisms, will locate a pilot production facility and its future company...    More

Image

Patel named LyondellBasell CEO

December 19, 2014 9:56 am ET

Bhavesh V. “Bob” Patel has been named CEO of Houston-based polyolefins producer LyondellBasell Industries NV, effective Jan. 12.    More

Market Reports

Flexible Packaging Trends in North America

Our latest RESEARCH report examines trends in FLEXIBLE PACKAGING impacting the North American market including a review of economic conditions, key drivers of growth, materials pricing, M&A activity, sustainability challenges and the outlook for 2015.

Learn more

Plastics in Brazil - State of the Industry Report

This in-depth report examines the Brazilian plastics industry from a historical and geographical context. Our analysts provide insight on economic trends and forecasts, growing manufacturing sectors that utilize plastics, private investment opportunities, market environment challenges, and innovations in R&D.

Data tables and charts on producer prices, trade, plastics production and end market indicators is also included.

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

Upcoming Plastics News Events

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

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

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

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

October 27, 2015 - October 29, 2015Plastics Financial Summit - New York - 2015

More Events