Two major North American-based resin manufacturers, Huntsman Chemical Corp. and Dow Chemical Co., plan to merge their Australian polystyrene operations to combat growing competition in Australia from Asian imports. The joint venture, scheduled to start Jan. 1, will cover marketing and distribution of general-purpose and high-impact PS in Australia and New Zealand.
Melbourne, Australia-based Huntsman Chemical Co. Australia Ltd. is managed and 50 percent owned by Huntsman Chemical Corp. of Salt Lake City.
Melbourne-based Dow Chemical (Australia) Ltd. is a subsidiary of Dow Chemical Co. of Midland, Mich.
Hugh Forrest, Huntsman Australia corporate affairs manager, said the venture is unusual because Huntsman and Dow are ``healthy competitors everywhere else in the world.''
``But we realize Australia is too small a market and is not big enough for us to compete,'' he added.
Currently, both Huntsman and Dow manufacture general-purpose PS and HIPS at their Melbourne plants.
Forrest said the joint venture will allow one plant to focus solely on general-purpose resin, and the other on high-impact resin. The companies have not decided which plant will produce which grade.
He said the joint venture also will allow increased production, but he would not reveal forecasted quantities.
The venture, which has not been named, has been approved by both companies' North American parents and Australia's corporate watchdog, the Australian Competition & Consumer Commission.
Canberra-based ACCC said that although the company will be the sole Australian PS manufacturer, it will not lessen competition substantially. Australian companies also import PS from South Korea, Taiwan and Singapore.
Forrest said imports now account for 15-20 percent of Australia's PS market.