In preparation for the expected sale of its styrenic polymers business, Monsanto Co. moved its nylon polymers business to its Fibers Business unit, and out of its Plastics Group. Monsanto of St. Louis re-aligned its nylon resins business July 13 to make it part of a unit that includes the production of nylon fibers for industrial applications and carpeting.
As a former part of Monsanto's Plastics Group, the nylon business previously was coupled with the styrenic polymers business that Monsanto placed up for sale June 9, according to Monsanto Chemical Co. spokeswoman Christy Beckmann.
The announcement that its styrenic businesses are for sale fostered speculation on who may be potential buyers.
Monsanto is selling businesses that produce ABS, styrene acrylonitrile and styrene maleic anhydride, and ABS/nylon and ABS/polycarbonate alloys.
Paul Raman, chemicals industry analyst with S.G. Warburg of New York, said those businesses provide $550 million to $600 million in sales a year, with operating profit of $60 million to $70 million a year.
Raman and other industry analysts are pegging the following companies as the leading contenders in what they expect to be a bidding war for Monsanto's business:
Chi Mei Corp. of Taipei, Taiwan, which claims to be the largest producer of ABS in the world, and is seen as lusting after a position in the North American market.
BASF AG of Ludwigshafen, Germany, one of the leading producers of styrene, polystyrene and ABS in the world, which significantly could enhance its position in North America with the addition of Monsanto's business.
Bayer AG of Leverkusen, Germany, a producer of a wide range of engineering thermoplastics, including PC. Monsanto's businesses that are for sale include lines of PC/ABS alloys, and PC increasingly is seen as a replacement for neat ABS resins in growing numbers of applications. Analysts said Bayer made a bid for Monsanto's styrenics businesses before Monsanto decided to put them up for sale.
Huntsman Chemical Co. of Salt Lake City, considered a dark horse because of an existing joint venture with GE Plastics of Pittsfield, Mass. GE is a primary competitor of Monsanto's. In the joint venture, Huntsman supplies styrene to GE Plastics.
Some analysts also said another company-or a new business entity-could be formed by joining Monsanto's styrenics business and Sterling Chemical Co. of Houston. Sterling supplies styrene monomer, and counts Monsanto as a leading customer.
Such a combination of firms could form a vertically integrated supplier that analysts said would compete more effectively than Monsanto does on its own.
Monsanto said the businesses it has up for sale, including facilities in Belgium and Thailand, have 1 billion pounds of nameplate production capacity.
In North America, Monsanto has a nameplate capacity of 650 million pounds of ABS, but industry analysts and competitors said they believe Monsanto produced about 375 million pounds of ABS in 1994. It is the third-largest producer of ABS in North America, behind Dow Chemical Co. of Midland, Mich., and GE Plastics. Beckmann would not discuss the company's actual production figures.
Also in North America, Monsanto is seen to be the leader in the 125 million pound-per-year market for SAN, producing about 60 percent of the market's requirements. In SMA and the alloys businesses that are for sale, Monsanto is seen as a small supplier in North America, pro-viding less than 20 million pounds of each product a year.
