AKRON, OHIO - A. Schulman Inc. of Akron has announced two major pending acquisitions that will expand its reach as a leading resin compounder. Schulman said Jan. 12 that it is negotiating to buy the assets and business of the Orange, Texas-based Polymer Services Division of J.M. Huber Corp.
Separately, Schulman announced Jan. 16 that it signed a letter of intent to purchase most of the compounded polypropylene product lines of Eastman Chemical Co. of Kingsport, Tenn. The purchase involves colored and filled PP and foam concentrate product lines and customer lists, not the assets for thebusinesses.
Terms of the deals were not released.
Huber, a private, $1.2 billion firm headquartered in Edison, N.J., said in October it intended to sell the Orange compounding operations as part of its restructuring.
The Polymer Services Division has capacity to produce 145 million pounds of compounded polyolefins, engineered thermoplastics and specialty additives and concentrates a year. It employs 113, and operates 10 manufacturing lines in a 143,000-square-foot facility primarily dedicated to toll compounding.
Industry sources said the division has been using about 55 percent of its 145 million pounds of compounding capacity.
Schulman President Terry Haines said the acquisition of the Huber division will give his firm greater flexibility in its production capabilities, while putting it into a new business area, toll compounding.
Schulman, which derives less than 1 percent of its $748.8 million in sales from toll compounding, never had a large toll compounding operation, Haines said.
``This [Huber] facility is astate-of-the-art plant. It has 10 manufacturing lines, based on twin-screw extruders, and that gives it a great deal of flexibility,'' he said in a Jan. 16 telephone interview.
Haines said he expects the tolling operation to further Schulman's relationships with resin suppliers that the Huber division does business with, while giving Schulman extra capacity to produce its own compounds. Schulman now has a custom compounding facility in Orange, about five miles from the Huber toll compounding plant.
He said Schulman hopes to close the deal by the end of February.
The new PP compounds Schulman hopes to acquire from Eastman may be among the products made at the Huber plant, he said.
Eastman kept its PP compounding operations in Kings-port after it sold its PP production business to Huntsman Chemical Co. Eastman compounds PP primarily for applications in automotive interiors, small appliances and medical products.
Larry Kushkin, executive vice president for Schulman's International Automotive operations, said Eastman's PP compounds are similar to those Schulman makes.
``We are taking over Eastman's product lines for automotive colors, reinforced PP, filled PP and foam concentrates, and we will make them at Schulman plants in Akron; Bellevue, Ohio; Orange, Texas; and St. Thomas, Ontario,'' Kushkin said.
The acquisition will give Schulman access to formulations and customer lists, and will strengthen its position as a supplier to the automotive industry, he said. Schulman expects to continue to purchase neat PP resins from Huntsman, Kushkin noted.
Haines said Schulman hopes to close the acquisition by the end of the first quarter.
Neither Haines nor Kushkin would provide sales figures for the Eastman or Huber operations.
When the sale to Schulman is completed, Eastman will continue to make a small amount of PP compounds, company spokesman Tom Dickens said.
Eastman has a PP compounding facility that provides less than 5 million pounds of PP resins a year for recreational and utility applications, and the firm intends to keep that business, he said.
Schulman also announced Jan. 12 that it will spend $7 million to add 15,000 square feet of space and one compounding line to its Sunprene Co. joint venture in Bellevue. The line, which will cost $5 million, will have an annual capacity of 14 million pounds of resin.
Sunprene is a joint venture with MKV America Inc., an affiliate of Mitsubishi Chemical Corp.